by Scott Ronalds
2020 was a rather dull, uneventful year.
Only kidding, of course. By this point, you’ve probably read or watched more about 2020 than any year in history. We’ll spare a recap of the happenings around the globe and in the financial markets. Our objective here is to bring you inside the Steadyhand tent by sharing some metrics on our performance, client base, growth, and initiatives we’re working on.
If you’re interested in a deeper dive on the markets and our assessment of some of the current opportunities and challenges investors face, I encourage you to check out our Where to From Here? series of videos published last month.
In spite of experiencing one of the quickest bear markets in history in the first quarter, stocks had a pretty decent year. Bonds, too. Investors with balanced portfolios enjoyed returns in the neighbourhood of 5-10%, generally speaking. Our clients fared well, with our Founders Fund gaining 8.5% (many investors in the fund earned a higher return thanks to our fee reductions).
When we take all our clients’ statements and average their returns for 2020, their accounts grew by 8.0% in the year (using the money-weighted methodology). Over the last five years, the number is 6.3% (per year), and over 10 years it’s 7.4%.
Assets under management
At the end of the year, we managed $984 million for investors. Our asset base grew by $79 million, or 9%, over the year. Steadyhand employees account for over $35 million of AUM as our team has 94% of their own wealth invested alongside our clients in the Steadyhand funds.
We welcomed aboard 323 new clients in 2020. Of those, 260 are working with us directly and 63 purchased our funds through third-party dealers (e.g. discount brokers). The majority of new clients were referred to us by our existing investors or their financial planners.
Our client base is now over 3,600 investors strong, stretching from B.C. to Ontario. Our average client is 57 years old and holds two of our funds.
Our growth, particularly in Ontario, has led to us to begin the search for a third Investor Specialist in our Toronto office. We look forward to welcoming aboard our 18th team member at some point in 2021.
Delivering attractive investment returns continues to be our #1 priority. One of our recent initiatives was to conduct an in-depth review of our fund managers and assess how they navigated through one of the most challenging years in recent memory. Our findings leave us confident that we’ve got the right group of professionals selecting the companies that will grow your wealth over time.
Last year, we also concluded that integrating an assessment of environmental, social and governance (ESG) issues into our investment process can have a positive impact on performance. As such, we have established a new initiative coined Sustainable Steadyhand and have embraced a form of responsible investing known as ESG-integration.
Today, all our fund managers subscribe to this approach. You will not notice significant turnover in our portfolios as a result of this endeavour; rather, it means that our stock pickers will consider more criteria in their research and set a higher bar for companies that lag their peers in the important areas of E, S and G.
The world changed in 2020 and we were all forced to adjust. We adapted well to the new reality: we maintained a high service level during the March meltdown and throughout the rest of the year; communicated frequently and openly; and moved forward on new projects, all while most of our employees were working from home. We believe it speaks to the quality and commitment of our team.
Our priorities in 2021 are to continue to push forward with Sustainable Steadyhand and to revisit our efforts around better promoting our firm and services — we’re ambitious and believe that more Canadians would benefit by knowing about us. Of course, we don’t plan to skip a beat on delivering top-notch service, ensuring we’re as accessible as ever to our clients, and keeping you informed about the world of investing. Never a dull moment.
Management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rates of return are the historical annual total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns.
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