Global Small-Cap Equity Fund

December 31, 2023

Market Context

  • The global small-cap market (Morningstar Developed Markets Small Cap Index) rose 14.3% in Canadian dollar terms in 2023.
  • Technology and industrial stocks were notable areas of strength while the utilities and healthcare sectors lagged.

Portfolio Specifics

  • The portfolio is currently invested in 50 companies. 20 are based in the U.S., 12 in Europe, 8 in Japan, 4 in the U.K., 2 in South America, 2 in Australia, and 2 in Canada.
  • The fund rose 7.2% in 2023. While it was a solid year in absolute terms, the fund lagged the small-cap market. Our U.S. investments were our strongest performers, with The AZEK Company (outdoor decking and trim products) nearly doubling in price following a weak 2022, and Clean Harbors (hazardous waste disposal) gaining more than 50%. Boat builder Brunswick also saw a nice rebound, while construction businesses EMCOR Group and ESAB were up more than 40%.
  • Our European and Japanese holdings were more mixed. Italian online bank FinecoBank, Danish pharmaceutical Alk-Abello, and Japanese logistics specialist AZ-COM Maruwa were key detractors to performance. On the other hand, German warehouse automation leader KION Group saw a strong rebound and Tokyo-based internet provider Internet Initiative Japan turned in a solid return.
  • We increased our investments in Japan in 2023, from 7% of the fund to 13%. Six new stocks were purchased, in a number of different industries. Our manager, TimesSquare Capital, believes there is a positive shift in Japanese corporate culture taking place and an overdue digitization of the economy underway.
  • Industrial goods & services companies remain an area of interest and comprise the largest portion of the portfolio (40%). We increased our exposure to the construction and aerospace sectors, where investments include EMCOR (mechanical and electrical construction services), ESAB (welding and cutting equipment), SAAB (aerospace and defense), and new additions Willscot Mobile Mini (mobile office and construction trailers) and Hexcel (carbon fiber for aircraft).
  • It was an active year for transactions, with 19 stocks purchased and 14 sold. We moved on from a few businesses where management hasn’t executed well and/or their outlook has weakened, including Kennedy-Wilson, Future, Patria Investments, Alk-Abello, and WNS Holdings. The new additions, meanwhile, represent a diverse collection of companies with greater upside potential.


  • The fund invests in businesses with a clear competitive edge that offer products and services the world needs, 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.