Global Equity Fund

September 30, 2021

Market Context

  • Global stocks, as measured by the Morningstar Developed Markets Index, were up 2.2% in Canadian dollar terms in the third quarter.
  • North America and Europe were up slightly while emerging markets trailed.

Portfolio Specifics

  • The fund holds 43 stocks, of which 16 are based in the U.S., 14 in Europe, 8 in the U.K., 4 in Asia, and 1 in Canada.
  • The portfolio had a flat quarter (-0.3%) and is up 8.1% in 2021. While the Q3 number suggests a quiet period, there were some significant stock movements.
  • Two holdings were the subject of acquisition, Meggitt and Cerved Group. Meggitt, a British supplier of braking components for the aerospace industry, received a takeover offer from Parker Hannifin. The stock was up 60% in the quarter on the news. Cerved, an Italian provider of credit data, received a takeover offer in March, which was subsequently increased in August. We sold our shares following the increased bid as it was in line with our manager’s (Velanne Asset Management) estimate of the value of the company. The takeovers were vindication of Velanne’s belief that the businesses were undervalued and had attractive upside.
  • BrightSphere Investment Group also had a strong quarter for a similar reason, a sale of assets. The Boston-based asset manager completed the sale of three affiliates (including a forestry management company), bringing in gross proceeds of over $250 million. The stock has doubled in value over the past year as BrightSphere has refocused its efforts on its core institutional investment management business.
  • Three holdings were the primary detractors to performance: Dairy Farm International, Grifols , and NCR (each stock declined between 15-20%). Dairy Farm is a Hong Kong-based retailer that has suffered from weaker earnings attributable in part to COVID-driven shutdowns. Investors have likewise soured on Grifols due to slower earnings growth, while NCR pulled back following a strong run. All three stocks continue to have attractive fundamentals in Velanne’s view and additional shares were purchased in each.
  • One new stock was bought: Tate & Lyle. The British company is a leader in artificial sweeteners and texturants. It has a seasoned management team that has been restructuring the business in recent years and reinvesting in high-growth areas including its cash cow Splenda brand.
  • The fund currently has a cash position of 4%.


  • The fund is focused on quality companies that generate large amounts of cash flow but are facing temporary headwinds and are trading below their true value. Key areas of investment include industrial goods & services, financial services and healthcare.

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.