Income Fund

December 31, 2025

Market Context

• The Canadian bond market rose 2.3% in 2025 (income and capital appreciation).  
• The 10-year Government of Canada yield ended the year at 3.4%, up from 3.2% at the start of the year. 
• Canadian equities were among the best performers in the year, up over 31.4%, led by banks and materials, while real estate lagged. 

Portfolio Specifics

• The fixed income component of the portfolio (75% of assets) gained 2.9% in the year. Holdings in corporate credit and provincial bonds offset the impact of rising government yields (bond prices fall when yields rise).
• Economic data in Canada improved toward year‑end, highlighted by stronger employment figures and moderate inflation. While inflation and employment risks have moderated over the year, some economic pressures remain which will serve to keep interest rates low. 
• The manager, Connor, Clark & Lunn, has reflected this outlook in how the portfolio is positioned by reducing some of its more defensive positions to reflect the improved outlook.
• Corporate bonds have been a consistent area of strength over the last 24 months, but the strong results mean limited upside potential going forward, even with the improving economic picture. The portfolio has shifted towards issuers with resilient cash flows and strong balance sheets in utilities and telecom. 
• The fund’s equities (25% of the portfolio) were the strongest performers in the year, increasing by over 23%. The banks, materials, and industrial holdings contributed to returns, particularly companies exposed to rising gold prices and AI-infrastructure spending.
• The fund paid total distributions of $0.53 per unit in 2025. 

Positioning

• Our focus remains on high‑quality bonds and dividend‑paying equities.
• Equities continue to provide diversification and income support within the fund. 

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.