Global Equity Fund

December 31, 2024

Market Context

• Global stocks, as measured by the Morningstar Developed Markets Index, were up 28.2% in Canadian dollar terms in 2024.
  
• The U.S. market was a top performer (+36.4% in CAD) owing to the stellar returns of megacap technology stocks. Japan and China also saw strong gains while European markets were mixed, with Germany a leader and France losing ground.
  

Portfolio Specifics

• The fund owns 48 stocks, of which 21 are domiciled in the U.S., 12 in Europe, 8 in Japan, 3 in Asia-Pacific, 2 in the U.K., and 2 in Canada. Companies range in size from mega-cap Microsoft to small-cap FirstCash Holdings.
  
• The portfolio gained 10.9% in 2024. Technology stocks, and more specifically those involved in artificial intelligence, drove much of the U.S. market’s return this year, accounting for roughly half of its gain. Our modest exposure to the group held back performance. Our manager, Aristotle Capital, recognizes that they miscalculated the initial magnitude and duration of the AI infrastructure build-out. Their focus, however, is on what the next few years will look like rather than looking back in time.
  
• Many of our holdings in Europe and Asia were strong contributors in 2024. MonotaRO (Japanese e-commerce leader in industrial supply products) gained 75%, Otsuka Holdings (Japanese pharmaceutical) and Erste Group (Austrian financial services provider) were up 60%, and MunichRe (German insurer) gained 30%. Canadian alternative investment manager Brookfield Corporation also gained more than 50%. These investments are testament that there are attractive opportunities outside AI.
  
• Our American investments were an area of weakness. Microchip Technology was a key detractor, falling 35%. The maker of microchips for consumer devices had a slump in sales. It’s an attractive business, however, with a new CEO intent on returning it to growth. Software maker Adobe lost 25% despite reporting strong operating results, as investors were hoping for a better outlook. Dolby Laboratories, FMC, Amgen, and Oshkosh also traded lower. Aristotle believes these are all excellent businesses that have fallen out of favour with investors, which was emblematic of our U.S. holdings in 2024. Two exceptions were PayPal and Norwegian Cruise Line, which gained roughly 40% and 30%, respectively.
  
• Turnover was low in 2024, sticking with Aristotle’s buy-and-hold approach. One stock was purchased, Tokyo Century Corp., while KDDI and Veralto were sold.
  

Positioning

• Investments are spread across industries, both fast-growing and steady-eddy, in companies that have a strong market position. Aristotle looks for quality businesses with competitive advantages, pricing power, and proven executives.
  

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.