Global Small-Cap Equity Fund

June 30, 2020

Market Context

  • The global small-cap market (S&P Global SmallCap Index) rose 19.2% in the second quarter in Canadian dollar terms.
  • Technology, energy and mining companies were strong performers while utilities and real estate lagged.

Portfolio Specifics

  • The fund is managed by New York-based TimesSquare Capital Management, which specializes in small-cap investing. The portfolio is expected to hold between 40-50 stocks around the globe. It’s currently invested in 40 companies. Seventeen are in the U.S., 11 in Europe, 6 in Japan, 4 in the U.K., and 2 in Australia.
  • Most holdings performed well in the quarter as equity markets around the world rebounded. Notably, Kobe Bussan (Japanese discount supermarket), Nordic Entertainment (Swedish broadcaster), and FinecoBank (Italian investment service provider) were up more than 40%.
  • Financial services and technology stocks comprise a large part of the portfolio (24% and 15%, respectively). The manager has found compelling investments in the insurance industry (Topdanmark, RenaissanceRe, Steadfast). Its highly regulated nature and customers’ preference for established players makes it difficult for new entrants. Technology holdings are broad in scope and include Gartner (consulting), ITT (engineered components for the transportation and energy markets), and J2 Global (internet information & services).
  • Three stocks were sold in the quarter: Japanese clothing retailer Zozo due to missteps by management; Woodward (a manufacturer of airline components) due to a slower growth outlook despite its leadership position; and Horiba (makes precision instruments for measurement and analysis), as its car testing division is under pressure.
  • The manager also trimmed real estate company Cushman & Wakefield and Japanese shoe retailer ABC-Mart. Both are high quality companies, but face increased uncertainty in the current economic environment.
  • The proceeds from the sales/trims were used to add to stocks that had come under pressure but have solid long-term potential, including Nordic Entertainment, Apollo Global Management (private debt and equity management), en-Japan (human resource placement), Zynga (mobile games), and WEX (payment processing and fleet management).
  • The fund currently has a cash position of 5%.


  • The fund invests in businesses with a clear competitive edge, a record of consistent earnings growth, and management that has clear goals and a record of success.

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.