Equity Fund

March 31, 2019

Market Context

  • The Canadian stock market (S&P/TSX Composite Index) rose 13.3% in the first 3 months of 2019, which was its strongest first quarter in almost 20 years.
  • Global stocks, as measured by the Morningstar Developed Markets Index, gained 10.1% in Canadian dollar terms.

Portfolio Specifics

  • The fund holds 24 stocks, of which 12 are headquartered in Canada, 7 overseas, 4 in the U.S., and 1 in Mexico.
  • After a rough finish to 2018, the portfolio started the new year on a strong note. Many holdings saw double-digit price gains, including CAE, CN Rail, Suncor Energy, Keyence, and Visa. Over the last few years, the fund hasn’t kept pace in hot markets but has provided better downside protection in weak periods.
  • The manager, Fiera Capital, reduced the fund’s exposure to U.S. companies as they are finding more attractively-valued stocks elsewhere. Visa was trimmed and Starbucks was sold, bringing the fund’s weighting in American stocks down to 17% (for context, they comprised 23% at this time last year). Starbucks is still a great company and was an excellent holding for us over the past seven years, but competition is heating up in China and the stock trades at a rich valuation.
  • With the strong rebound in the markets, stocks are again trading at above-normal valuations. Fiera’s focus in this environment is on world-leading businesses operating in stable industries. Examples include CCL Industries (the world’s leading label maker), Novozymes (a leader in biological solutions for food & household products) and Keyence (a manufacturer of vision systems and automation sensors).
  • We’d be remiss if we didn’t touch on a laggard. FEMSA has seen only a nominal gain over the past few years and hasn’t kept pace with the rest of the portfolio. That said, the manager feels it has strong upside potential. FEMSA is a well run retailer in Mexico and Latin America that is using technology, strategic partnerships and multi-decade thinking to strengthen its franchise in a fast-growing market.
  • One new company was purchased, Koninklijke Philips. The company is known for making light bulbs, TV’s and electronics, but has transformed itself into a leader in healthcare, focusing on diagnostic imaging (MRI machines), patient monitoring and consumer health (you may own one of their electric toothbrushes).
  • The fund currently has a cash position of 7%.


  • The fund is comprised of two dozen businesses operating in a diverse array of industries, from railroads to packaging to construction to enzyme production. Focus is on best-in-class companies that generate strong cash flows, have good growth prospects, are well financed and have proven leaders at the helm.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Important information about the Steadyhand funds is contained in our Simplified Prospectus. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.