Small-Cap Equity Fund

March 31, 2021

Market Context

  • The Canadian small-cap market (S&P/TSX SmallCap Index) gained 9.7% in the first quarter. U.S. small-caps (Russell 2000 Index) rose 11.3% in Canadian dollar terms.
  • Energy and industrial stocks were key areas of strength.

Portfolio Specifics

  • The fund consists of 24 companies, ranging from very small (Waterloo Brewing) to medium-sized businesses (Cargojet). While the majority of holdings are Canadian, there are three U.S. stocks which make up 13% of the portfolio.
  • The fund had a strong quarter and has seen significant appreciation over the past 12 months (+81.3%). Over this period, the portfolio held a balance of companies that have benefited from an uptick in ecommerce and the work from home phenomenon, as well as more economically-sensitive companies positioned to prosper as the global economy continues to reopen. It is these latter businesses that were the top contributors to performance in the first quarter.
  • Engineering and construction firms Fluor and SNC-Lavalin saw healthy gains partly due to investors seeking stocks that will benefit from an industrial recovery and increased spending on infrastructure projects in North America. Oshkosh, a maker of specialty heavy-duty trucks, also saw strong demand from investors.
  • Ag Growth International, which specializes in crop processing and handling, was the greatest contributor to performance, rising nearly 50% in Q1. The stock was the fund’s worst performer last year but has rebounded nicely, thanks in part to a better outlook for the agricultural cycle and more money in farmers’ pockets.
  • With the strong gains in many stocks, several positions were trimmed, including Interfor, Spin Master, Finning, Badger Daylighting, Oshkosh, and Ag Growth. As well, Intertape Polymer was sold following a good price recovery. Some of the proceeds were used to purchase additional shares in Torex Gold Resources and Henry Schein, two stocks which have lagged in the recovery. Our manager (Galibier Capital), though, is content to hold more cash in the current environment.
  • The newest addition to the fund is Savaria (purchased late last year). The company engineers accessibility products such as home elevators, wheelchair lifts and stairlifts, and is a leader in the space. The outlook for this industry is promising given our demographics and the trend of more seniors electing to “age in place”, in part due to COVID-19 failures in long-term care facilities.
  • The fund currently has a cash position of 7%.


  • The portfolio has a unique composition, with key areas of investment being capital goods, food & beverage, consumer, and engineering services. 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.