Frequently Asked Questions
The Funds
Will you ever add more funds to your line-up?
Possibly. Our goal is to provide a simple and straightforward line-up of funds, and we feel that our current offering covers the waterfront. We are not in the business of offering sector funds or specialty funds. All of our funds are well diversified and invest in the major asset classes that we believe (1) most investors should have exposure to and (2) we have a good chance of adding value versus the market. That said, if we feel that our clients would benefit from the introduction of a new fund that has long-term investment merit, we would consider adding such a fund to our line-up.
Why don’t you offer a pure Canadian equity fund or U.S. equity fund?
We believe that the Canadian market is led by a few sectors and lacks the breadth that is required to build a well diversified fund. While there are a number of world-class businesses in Canada in the financial sector, oil patch, and mining field, our market lacks depth in industries such as health care, consumer products and information technology. Therefore, we feel it makes greater sense to offer a fund that invests in a core group of Canadian equities that are complemented by a handful of foreign stocks to ‘fill the gaps’ left in the domestic market.
We don’t offer a pure U.S. equity fund for one simple reason: the market is too tough to beat. Along with being the largest market in the world, the U.S. is also the most efficient market in the world. All of our equity funds own select U.S. stocks that play an important role in their overall diversification. But for investors who want broad exposure to this market, we feel that a low-cost ETF is the way to go. Our fund line-up is focused in areas where we feel we can add long-term value for our clients.
What are the benchmarks for each of the funds?
Our funds are absolute-return oriented, meaning that they don’t seek to track common industry benchmarks or indices. The objective of each of our equity funds is to provide capital appreciation at a pace that significantly exceeds inflation. Our managers do not add securities to our funds with reference to a stock or bond’s weight in the index. They put our clients money where they think it will provide the best long-term return. As such, our funds look noticeably different than any benchmark against which they may be compared. Put simply, they are non-benchmark oriented.
That said, if our funds were categorized according to the benchmarks of the asset classes and regions in which they invest, the best representations would be as follows:
Savings Fund - DEX 91 Day T-Bill Index
Income Fund - 75% DEX Universe Bond Index; 25% S&P/TSX Composite Index
Equity Fund - 60% S&P/TSX Composite Index; 40% MSCI World Index
Global Equity Fund - MSCI World Index
Small-Cap Equity Fund - 80% BMO Small-Cap Blended Index; 20% Russell 2000 Index
Do any of your funds use derivatives, and can they short securities?
Yes and no. As is written in our prospectus, all of our funds are permitted to use derivatives for hedging purposes to protect against losses and for non-hedging purposes as a substitute for direct investment or to generate income. In practice, our funds will rarely use derivatives. As for the second part of the question, our funds are not permitted to short sell securities.
What is the performance history of your funds/managers?
Because our funds are relatively new, they do not have detailed performance histories.
However, our managers are well seasoned and have track records that are reflective of the mandates that we have assigned them. To learn more about their investment management capabilities, feel free to give us a call or send us an email.
Why do you use external managers to run your funds?
We hire external managers (i.e., independent investment management firms) to manage our funds so that we have the advantage of selecting the best money makers, in their particular area of expertise, to manage your money. It’s difficult for a firm with in-house managers to excel at managing money in all asset classes, as most firms tend to specialize or allocate resources to one or two asset classes in which they have a competitive advantage or particular expertise.
The managers of our equity funds focus solely on managing one mandate, be it North American equities (CGOV), global equities (Edinburgh Partners) or small to mid-cap equities (Wutherich & Company). The manager of our fixed income funds (Connor, Clark & Lunn) is well known for their expertise in managing bonds and income-equities, and they’ve been adding value for clients in this arena for over 20 years.
Our Managers
Do your fund managers operate their own funds as well?
Our managers focus primarily on managing money for high net worth individuals. They all have model portfolios upon which all client accounts, and the Steadyhand funds, are driven. The manager of our Equity Fund (CGOV) operates a pooled fund that is similar to the Equity Fund, but it has a minimum investment requirement of $2 million and is non-prospectused. Similarly, the manager of our Global Equity Fund (Edinburgh Partners) manages a closed-end investment trust that is available to investors in the U.K.
Why wouldn’t I go directly to the manager?
Investors can go directly to all of our managers, but they have much higher minimum investment requirements than Steadyhand (think seven figures in most cases).
Do your managers have an ownership interest in your company, or vice-versa?
No. All of our managers are independently owned and do not have an ownership interest in Steadyhand. Similarly, Steadyhand is employee-owned and we do not have an ownership interest in any of our managers.
Can you fire your fund managers?
Yes. However, we were very diligent in selecting the managers of our funds and would only consider making a change under exceptional circumstances. Such circumstances could include a material change in personnel, a change in their investment philosophy or process, or a prolonged period of poor performance.
How were the managers selected?
Our managers were selected through a combination of screening, qualitative and quantitative analysis, interviews with key employees, and on-site visits. The most important criteria in our manager search were: each manager had to have an investment philosophy similar to ours; they had to have experienced people calling the shots; they had to have a proven record of success; and they had to be agile (i.e., flexible enough to pursue opportunities in the market).
General
Do you offer advice?
Yes. We are happy to provide you with advice as to which Steadyhand funds are best suited for your particular circumstances. Keep in mind, however, that we are not in the business of financial planning and we do not provide advice in areas such as estate planning or taxation.
Who owns Steadyhand?
Steadyhand is employee-owned.
Can I purchase your funds through my investment advisor or discount broker?
It depends on which advisor or discount broker you deal with. At present, our funds can be purchased through the following institutions:
- BMO InvestorLine
- BMO Nesbitt Burns
- CIBC Wood Gundy
- CIBC Investor's Edge
- Dundee Wealth Management
- Edward Jones
- HSBC Securities
- HSBC InvestDirect
- National Bank Discount Brokerage
- National Bank Financial
- NBCN
- Odlum Brown
- Penson Financial Services
- Questrade
- Qtrade
- Raymond James
- RBC Direct Investing
- Scotia Capital
- Scotia iTRADE
- ScotiaMcLeod Direct Investing
- Sprott Securities
- TD Waterhouse (Phone purchases only. Call 1-800-465-5463)
- United Financial
- Wellington West Capital
The Fund codes for the Steadyhand funds are as follows:
Steadyhand Savings Fund - SIF110
Steadyhand Income Fund - SIF120
Steadyhand Equity Fund - SIF130
Steadyhand Global Equity Fund - SIF140
Steadyhand Small-Cap Equity Fund - SIF150
How secure is the ‘clients only’ section of the site?
Very secure. We use the same level of encryption as our friends at the big banks.