The portfolio consists of only 20 to 25 holdings, constituting the firm’s
“best ideas.” This approach, for which CGOV is known, creates a unique
“competition for capital” within the portfolio. Before a new idea is
included in the portfolio, an existing holding must be sold to make room.
This forces the managers to remain objective on the portfolio holdings at
The managers first screen the investment universe on liquidity and quality
factors, and then drill down using different criteria, including management
quality, fundamentals, and valuation.
Valuation is key, and to be considered, a stock must be trading well below
what the managers believe it to be worth, providing investors with a strong
margin of safety.
The result is a portfolio made up of high-quality companies that have
sustainable business models, a growing and sustainable dividend yield, and
excellent management teams with a history of generating strong levels of
free cash flow.
While the portfolio is built on a bottom-up basis, there are controls in
place to ensure proper diversification. For example, the fund must be
invested in at least eight of the Global Industry Classification Standard
(GICS) sectors, and the maximum weight in any sector is capped at 30%.
Performance has been excellent over both the long and short terms. Its
5-year average annual compounded rate of return to Aug. 31 is 12.0%,
outpacing both the index and peer group. Volatility has been below average,
and the fund has done an excellent job protecting capital in down markets.
As with other Steadyhand funds, the costs are rock bottom, with an MER of
1.42%. One drawback is that the concentrated, differentiated portfolio
could see periods where performance differs dramatically from the index or
Still, the Steadyhand Equity Fund is an excellent fund that could be a
solid core equity holding for most investors.
Steadyhand Equity Fund
Steadyhand Investment Funds
Canadian Focused Equity
FundGrade A+ Awards:
2012, 2013, 2014, 2016, 2017
Large Cap Growth
Gordon O’Reilly since Feb. 2007
SIF130 (No load)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
Notes and Disclaimer
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associated with fund investments. Please read the simplified prospectus
before investing. Mutual funds are not guaranteed and are not covered by
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insurer. There can be no assurances that the fund will be able to maintain
its net asset value per security at a constant amount or that the full
amount of your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated. No guarantee of
performance is made or implied. This article is for information purposes
only and is not intended as personalized investment advice.