| Fund Company | Steadyhand Investment Funds |
| Fund Type | Canadian Focused Equity |
| Rating | C |
| Style | Growth |
| Risk Level | Medium |
| Load Status | No Load |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Ted Eccleston, CGOV Asset Management since inception |
| MER | 1.42% |
| Code | SIF 130 – No Load Units |
| Minimum Investment | $10,000 |
Analysis: It has often been said that if you want to beat the index, you can’t look like the index. That is a philosophy that is shared by all the management teams who manage funds for Steadyhand, including Toronto based CGOV, managers of the Steadyhand Equity Fund. CGOV focuses on buying high quality companies run by great management teams that are trading at a significant discount to its intrinsic value.
When analyzing a company for inclusion in the portfolio, they look at three distinct areas; people, business and price. Within the people segment, they focus on management and look for excellent management teams who are ethical and operate as a partner in the business. They must also have a demonstrated history of being good capital allocators.
The next thing that they look at is the quality of the business. At this stage, they look for well capitalized, quality companies with a sustainable competitive advantage, and the ability to generate strong and growing cash flows.
The final stage considers the valuation of the company compared to its expected true worth. Their goal is to limit the downside while providing significant upside potential for investors.
The result is a concentrated portfolio of the 25 best companies they can find. It is Canada focused, but they are not afraid to go outside of Canada to gain exposure to high quality investment opportunities. As of September 30, 56% of the fund was invested in Canada, 27% in the U.S. and the balance around the world.
The performance, particularly the shorter term, has been decent. The longer term numbers are not as impressive with part of the reason being that the fund lagged the index in both 2009 and 2010. Volatility is slightly lower than both the category average and the index. The MER is a very reasonable 1.35%, well below the category average.
In reviewing the fund and the process used by the manager, we expect that it will outperform in flat or down markets, but will lag when markets rally sharply higher. Longer term, we expect that performance will be above average.
A drawback to this fund is that it carries a minimum investment of $10,000. Despite this, we believe that it can be a good core equity holding for most investors.