Founders Fund

December 31, 2024

Fund Overview

  • The Founders Fund is a balanced fund with a target asset mix of 60% stocks and 40% fixed income. It gains this exposure from investing in Steadyhand’s other funds.
  • Tom Bradley (Steadyhand Chair and co-founder) manages the fund along with Chief Investment Officer Salman Ahmed. They have considerable scope to adjust the portfolio although without extremes in valuation and investor sentiment, their bias is to stay near the target mix.

Portfolio Specifics

  • Throughout 2024, the Founders Fund was driven by rising stock prices. It was up 10.2%, with all the underlying funds contributing.
  • The fund’s asset mix remains unchanged from previous quarters and is close to its long-term target. Stocks account for 59% of total assets, slightly below the 60% level, and the bond weighting is close to a full allocation at 34%. The fund would have done slightly better over the last year if we’d let markets take the equity weighting higher, but we’ve been regularly rebalancing to stay aligned with the stated goal of ‘capital growth and income’. Founders is designed to be an all-weather fund.
  • Despite a bumpy few months in the bond market, we remain positive on the fixed income holdings in the Income Fund (one of the underlying funds in the portfolio). Bonds provide an above-inflation yield and will be good diversifiers during the next period of stock market weakness. We have a meaningful position in the Savings Fund for similar reasons – income and downside protection. It doesn’t have the same return potential as our income and equity funds, but tracks a steady course and when needed, is a ready source of liquidity.
  • We don’t make big or sudden moves to Founders’ asset mix, but rather gradual, deliberate changes based on bond and stock valuations, market sentiment (a contrarian indicator of value), and our fund managers’ views of the economic and market fundamentals. Through the underlying six funds, Founders owns a mix of bonds and stocks across a wide range of industries, geographies, and currencies.
  • The largest transactions in the underlying funds during the quarter included new holdings in EQB Inc. (Canada) and Lattice Semiconductor (U.S.); and the sale of Generac Holdings (U.S.), and Kobe Bussan (Japan).

Positioning

  • Founders’ mix reflects our 5-year view of where returns will come from. Our approach is not to predict what will happen next (which can’t be done reliably), but rather to be in position to take advantage of whatever comes our way.
  • Our fund managers are being cautious, given the heightened speculation. This doesn’t mean they’re avoiding stocks but rather looking for opportunities in unloved areas, keeping an eye on profits, being mindful of valuations, and staying well diversified.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Important information about the Steadyhand funds is contained in our Simplified Prospectus. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.