Small-Cap Equity Fund

June 30, 2019

Market Context

  • The Canadian small-cap market (S&P/TSX SmallCap Index) fell 0.3% in the quarter. U.S. small-caps (Russell 2000 Index) were unchanged in Canadian dollar terms.
  • Energy stocks, which are a large component of the market, were particularly weak.

Portfolio Specifics

  • The fund consists of 24 companies, ranging from very small (e.g. Waterloo Brewing) to medium-sized businesses (e.g. Stantec). While the majority of holdings are Canadian, there are four U.S. stocks which make up 18% of the portfolio.
  • The fund had a positive quarter while the market declined. Performance was helped by the fact that the portfolio has only modest exposure to the energy sector, which had a tough quarter (its sole oil & gas producer is Cardinal Energy). The manager, Galibier Capital Management, doesn’t find a lot of compelling ideas in the sector, as companies are beholden to the price of a commodity they have no control over.
  • Premium Brands Holdings’ price jump also helped performance. The company continues to acquire new brands and add customers to its food distribution business. Some of Premium Brands’ recognizable names include Piller’s, Freybe, and Grimm’s. The company also manufactures and delivers prepared foods such as sandwiches for larger companies. Starbucks is one of its major customers.
  • Points International and Stericycle both gave back some gains after a strong start to the year. Galibier continues to like the long-term prospects of both companies.
  • Two new stocks were added to the portfolio, Interfor and Finning International. Interfor is a Canadian lumber producer with operations across North America. There has been limited new housing construction in the U.S. since the 2008-09 financial crisis. The manager believes construction is poised to increase in the coming years with lumber stocks standing to benefit. Further, Interfor’s stock price has fallen considerably over the past year, offering an attractive entry point. Finning is the world’s largest dealer of Caterpillar equipment. Caterpillar manufactures heavy duty industrial machinery including excavators, dozers, pipelayers, and power systems. It operates in Western Canada, the U.K., and South America.
  • WABCO Holdings was sold. The airbrake manufacturer’s stock rose sharply in the first quarter and is now fully valued in the manager’s view.
  • The fund currently has a cash position of 1%.


  • The portfolio has a unique composition, with key areas of investment being capital goods, transportation, and commercial & professional services. Food & beverage and consumer companies are also important components of the fund. This is in contrast to the small-cap market’s heavy focus on resource companies.

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.