By Tom Bradley

Steadyhand Increases its Fund Lineup by 20%!

Yes, we’re introducing a new addition to our lineup - the Founders Fund. The fund is a balanced mix of our income and equity funds (it is a fund of funds) that best reflects my views on market fundamentals, valuation and ultimately asset mix. The fund’s target asset mix is 60% equities and 40% fixed income.

Our clients, and advocates of the firm, have been asking for a vehicle that captures all of what we do – the ‘undexing’ approach to fund management and professional oversight on asset allocation and rebalancing. We’ve been slow to react, rightly or wrongly, because the words balanced fund have always made me cringe. Balanced funds carry with them perceptions of mass market, over-diversification and steep fees (the balanced category of mutual funds is one of the most overpriced). But the fact is, a balanced fund that has a clear investment approach, an experienced manager, charges a low fee and is not pinned down to a rigid mandate makes good sense. As we grow, there are an increasing number of Steadyhand clients who fit the profile of the Founders Fund.

One of the key features of the fund is that I will be making tactical shifts based on my long-standing approach to asset allocation, which I call ‘Approximately Right’. A majority of the time, I’ll run the Founders Fund at or close to its Strategic Asset Mix, or SAM, which is an educated guess as to what will be the best asset mix for the fund holders over the long term. Unless there are extremes in the market, I’ll stick close to it and let our fund managers do their thing. When inordinate opportunities or risks arise, however, I will act. Conceivably, the fixed income portion could be as low as 25% and as high as 60%, while the equity portion may range from 40% to 75%.

The video below provides further info on how the fund is currently positioned and who it may (and may not) be appropriate for. You can also visit the Founders Fund page on our website for further details on the fund.