Equity Fund

June 30, 2024

Market Context

• The Canadian stock market (Morningstar Canada Index) declined 0.5% in the second quarter. Banks, healthcare, and telecom stocks were areas of weakness, while the energy and materials sectors were strong.
  
• Global stocks, as measured by the Morningstar Developed Markets Index, gained 3.2% in Canadian dollars.
  

Portfolio Specifics

• The portfolio consists of 26 stocks, of which 14 are headquartered in Canada, 10 in the U.S., and 2 overseas.
• The fund had a positive quarter, rising 1.1%, and is up 9.0% this year. Top performers in Q2 included low-cost consumer retailers Dollarama (+21%), Costco Wholesale (+16%), and TJX Companies (+9%). All three have benefited from shoppers becoming more price conscious.
  
• While technology stocks continue to be a key driver of returns in the U.S. market (AI-related businesses in particular), the portfolio benefited from broader contributions by stocks across sectors. For example, Thomson Reuters (information conglomerate), S&P Global (financial information and analytics) and Constellation Software (diversified software) were solid contributors in the period, in addition to the consumer names above.
  
• TD Bank had a difficult quarter, falling 7%. It announced it was being investigated by the U.S. Department of Justice for its involvement in a drug money laundering case. Our manager, Fiera Capital, has spent considerable time analyzing the situation. While the bank’s compliance failures are frustrating, Fiera has seen positive signs from TD in dealing with the challenges. It also finds the current price attractive for what continues to be one of Canada’s leading banks.
  
• CN Rail also detracted from performance (-9%). The rail company’s auto container volumes were a little softer and talk of a strike is hanging over the stock. The business continues to have attractive fundamentals and a solid long-term outlook, as rail transportation has high barriers to entry and remains an effective and environmentally friendly way of moving goods. Our holdings in CN Rail and Canadian Pacific Kansas City comprise 8% of the fund.
  
• There were no stock transactions in the quarter.
  

Positioning

• The fund is comprised of a concentrated group of best-in-class businesses operating in a range of industries with solid long-term demand profiles. Focus is on market leaders that generate steady profits 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.