| Fund Company | Steadyhand Investment Funds |
| Fund Type | Global Equity |
| Rating | F |
| Style | Large Cap Value |
| Risk Level | Medium |
| Load Status | No Load |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Edinburgh Partners Limited |
| MER | 1.78% |
| Code | SIF 140 – No Load Units |
| Minimum Investment | $10,000 |
Analysis: This global equity fund managed by Edinburgh Partners looks to identify and buy undervalued companies, and have the patience to hold them until share prices reflect their long-term earnings potential. To do this, they use a multi step process that first eliminates those companies that are overvalued compared to their growth prospects. Next, they conduct a detailed fundamental analysis on potential investment candidates that uses a standardized approach that reviews five year historic and five year forecasted data to determine the best and worst case scenarios for each company.
Ideally, they are looking for companies that offer a product or service that makes sense and can be expected to gain market share over the long term. The company must also have an appropriate risk/reward balance, a proven ability to generate strong and stable cash flows, and trades at a reasonable valuation.
Performance, particularly the longer term numbers have been somewhat disappointing, lagging both the index and the category in all timer periods. Shorter term numbers are on the upswing, gaining an impressive 9.1% in the latter half of 2012, compared with a 7% gain in the MSCI World Index. Volatility has been in line with both the index and the category average.
As of December 31, 24% of the fund was invested in Europe, with 21% in the U.S. and 20% in Asia, not including Japan. Technology, financials, and consumer discretionary are the dominant sectors, which combined make up nearly 60% of the fund. According to the December 31 fund commentary, they have been adding exposure to cyclical companies in anticipation of a period of modest economic growth. They have also been increasing exposure to Asia to benefit from rising consumer spending in the emerging markets.
Costs are reasonable with an MER of 1.78%, which is below the category average. The lower MER is to expected because the fund has no embedded advisor compensation.
While we typically like Steadyhand, this is not a fund that we can recommend at the moment. There are other global equity funds that offer what we believe to be more compelling risk reward profiles than this offering.