Founders Fund

March 31, 2025

Fund Overview

• The Founders Fund is a balanced fund with a target asset mix of 60% stocks and 40% fixed income. It gains this exposure from investing in Steadyhand’s other funds.
  
• Tom Bradley (Steadyhand Chair and co-founder) manages the fund along with Chief Investment Officer Salman Ahmed. They have considerable scope to adjust the portfolio although without extremes in valuation and investor sentiment, their bias is to stay near the target mix.
  

Portfolio Specifics

• In a turbulent first quarter, the portfolio fared well. It had a positive return of 1.4% with cash, bonds, and large-cap stocks contributing.
  
• As always, performance is driven by the six underlying funds. It’s through these funds that Founders holds bonds and stocks from a wide range of industries, geographies and currencies. Being diversified has served clients well through a variety of market conditions, although in recent years, the strategy has been easy to question. That’s because it was a remarkable period where a small number of stocks drove returns, and it seemed folly to own anything but the Magnificent 7. In general, non-U.S. stocks were a burden to portfolios. And why bother with bonds? Well, this year is a reminder of why.
  
• Strong markets early in the year and fund flows helped us fine tune the asset mix of the portfolio. We reduced the equity exposure (57% of total assets at quarter-end), increased the bond weighting (35%) and maintained a cash reserve (8%). These moves, which continued a pattern from last year, are in line with the fund’s goal of ‘capital growth and income’, and are helping it weather the Trump storm.
  
• Interest rates declined in the quarter, but with a lot of ups and downs along the way. We remain positive on the fixed income holdings in the Income Fund, the largest of Founders’ underlying funds. Bonds provide an above-inflation yield and are proving to be good diversifiers in periods of stock market weakness. We have a meaningful position in the Savings Fund for similar reasons – income, downside protection, and liquidity. It doesn’t have the same return potential as our income and equity funds, but enhances Founders’ diversification.
  
• The largest transactions in the underlying funds during the quarter included new holdings in Daikin Industries (Japan), Alphabet (U.S.), and MDA Space (Canada); and the sale of TD Bank (Canada), Michelin (France), and Chemed Corp. (U.S.).
  

Positioning

• Founders has been playing defense for a while. We expect to shift back to offense in the coming weeks and months. The economic dislocation caused by the trade war will have a real impact, but many stocks will overreact. Lower valuations and fearful investors will provide opportunities to allocate more of the fund into stocks.
  

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.