Global Small-Cap Equity Fund

December 31, 2022

Market Context

  • The global small-cap market (S&P Global SmallCap Index) declined 12.6% in 2022 in Canadian dollar terms.
  • The communication services, technology, and consumer discretionary sectors were notable areas of weakness, while energy stocks had a strong year.

Portfolio Specifics

  • The portfolio is currently invested in 45 companies. Eighteen are based in the U.S., 12 in Europe, 7 in the U.K., 3 in Japan, 2 in Australia, 2 in Brazil, and 1 in India.
  • The fund had a weak year, falling 18.2%. Our European and U.K. investments were the main detractors to performance. Stocks in the region struggled, weighed down by higher energy and labour costs, and consumer belt tightening. Specifically, Kion Group (German forklift manufacturer), Viaplay (Nordic entertainment provider), and Future (British specialty content publisher) turned in poor results and saw sharp declines. Our Japanese holdings were also an area of weakness. The Yen depreciated considerably (-7%), which exacerbated declines in Canadian dollar terms.
  • On a positive note, many of our consumer staples and financial services holdings turned in solid results. Performance Food Group (food products distributor) and Viscofan (casings for meat products) reported good revenue growth and strong guidance. Insurance provider Renaissance Re exceeded expectations, and PJT Partners (investment banking advisory services) continued to shine against its peers. Italian FinTech company FinecoBank and Australian insurance broker Steadfast Group also had a positive year.
  • It was an active year for transactions, with our manager, TimesSquare Capital, purchasing 12 new stocks. The additions include Viscofan, Tate & Lyle (food & beverage ingredients), Internet Initiative Japan (internet service provider), and Casella Waste Systems (waste management). These are businesses that provide goods & services that we all need and use on a recurring basis, which is a common theme in the portfolio. Other notable additions include WNS (data analysis), Visteon (automotive screens & in-vehicle experiences), and Exponent (engineering & scientific consulting), with the common thread being an eye towards the future.
  • 11 stocks were sold. TimesSquare re-evaluated its thesis and moved on from a handful of businesses that disappointed from an operating perspective. These included Orpea, Prosegur Compania de Seguridad, Food & Life Companies, Nippon Shinyaku, and Viaplay. On the bright side, Zynga and HomeServe received takeover offers, after which we sold our positions.


  • The fund invests in businesses with a clear competitive edge, a record of consistent top line (revenue) and bottom line (earnings) growth, and management that has experience, clear goals and integrity.

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.