Equity Fund

December 31, 2024

Market Context

  • The Canadian stock market (Morningstar Canada Index) rose 22.2% in 2024. Most sectors posted positive returns, with technology and financial services stocks leading the way. Materials and consumer staples were also areas of strength.
  • Global stocks, as measured by the Morningstar Developed Markets Index, gained 28.2% in Canadian dollars.

Portfolio Specifics

  • The portfolio consists of 27 stocks, of which 15 are headquartered in Canada, 10 in the U.S., and 2 overseas.
  • The fund rose 17.8% in 2024, a solid return in a strong year for stocks. We have a hard time keeping pace in hot markets that are driven by a sector or two, which was the case this year. The technology and financial sectors saw big gains, benefiting from the hype around AI and talk of deregulation in the U.S. once Trump takes office. Our tech holdings performed well, notably Constellation Software, as did many of our financial services investments (TMX Group, Intact Financial, Visa). However, our lower exposure to technology held back performance.
  • Our retailing stocks were a notable area of strength over the year. Costco Wholesale, Dollarama, and Loblaw Companies were all up nearly 50%, while TJX Companies and Metro gained a third. Costco, Dollarama, and TJX cater to the value-conscious shopper and benefited from strong demand and solid earnings growth. Grocers Loblaw and Metro also executed well.
  • RB Global was another standout, rising 45%. The world’s largest auctioneer of commercial assets and vehicles has turned in excellent operating results and effectively expanded its global footprint and broadened its digital marketplace with last year’s acquisition of online vehicle salvage specialist IAA.
  • Nestlé, CN Rail, and TD Bank were the greatest detractors to performance. Nestlé fell over 20% on weak sales growth and poor execution. The world’s largest food & beverage company alienated consumers with aggressive price increases and lost market share to competitors. Nestlé has revamped its leadership with a new CEO. CN Rail (-10%) saw its profits impacted by labour disputes and wildfires, and TD Bank (-6%) was punished by the U.S. Department of Justice, and investors, for its involvement in a drug money laundering case.
  • Royal Bank was added to the fund in the fourth quarter. Our manager, Fiera Capital, likes the company’s leading position in wealth management and capital markets.

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.