Founders Fund

September 30, 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

• The fund was up 5.7% in the quarter and has gained 10.3% so far this year, fueled by rising stock markets and declining interest rates. All the underlying funds were meaningful contributors in the quarter.
  
• Founders’ asset mix remains unchanged from last quarter and is close to its long-term target. Stocks are slightly below the 60% level and the bond weighting, which has edged higher, is now close to a full allocation at 33%. The fund would have done even 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 its stated goal of ‘capital growth and income’. Founders is designed to be an all-weather fund.
  
• Despite yields falling this quarter, we are still positive on our fixed income holdings, which come mostly through the Income Fund. Bonds provide Founders with above-inflation income and will be good diversifiers the next time we have a period of weak stock prices. We have a meaningful position in the Savings Fund for similar reasons – income and downside protection. It’s a money market fund and doesn’t have the same return potential as our income and equity funds, but it enhances Founders’ diversification.
  
• We don’t make big or sudden moves to the fund’s 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 economic and market fundamentals. It’s important to keep in mind, however, that while the mix of funds in Founders is important, it’s the performance of the underlying funds that drives returns. Through these 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 Tokyo Century Corp. (Japan), Azbil (Japan), and Integral Corp. (Japan); and the sale of Topdanmark (Denmark), and Huhtamaki (Finland).
  

Positioning

• We’re prepared for a range of market outcomes. Our approach is not to predict what will happen next, but to be in position to take advantage of whatever comes our way.
  

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.