by Scott Ronalds
If you attended our client presentation last month, you heard about our investment process, how our funds have performed, and our take on the current investing environment (you can watch a recording of the Vancouver event here if you missed it). Below is our annual update on some of our other business metrics you might be interested in.
Performance
There was little that could slow stocks down last year, as global markets charged higher and Canadian stocks had their best showing in a decade. Our clients fared well, with all our equity funds posting double-digit returns and our Founders Fund gaining over 11%. More recently, however, equities have given back some of their gains as concerns mount over the spread and uncertain impact of the coronavirus (for a deeper dive on this topic, see Tom Bradley’s latest Financial Post article).
When we take all our clients’ statements and average their returns for 2019, their accounts grew by 12.8% in the year (using the money-weighted methodology). Over the last five years, the number is 5.3% (per year), and over 10 years it’s 7.6%.
Assets under management
At the end of the year, we managed $906 million for investors. Our asset base grew by $118 million, or 15%, over the year.
Clients
We welcomed aboard 263 new clients in 2019. Of those, 178 are working with us directly and 85 purchased our funds through third-party dealers (e.g. discount brokers).
Our client base is now over 3,500 investors strong, stretching from B.C. to Ontario. Our average client is 57 years old and holds two of our funds.
Notable events
We increased our fund lineup by 25% last year with the addition of two new funds — Steadyhand Global Small-Cap Equity Fund and Steadyhand Builders Fund. This was a rare occurrence for us as we believe in keeping our offering simple and focused. The last time we launched a new fund was in 2012 (Founders Fund), based on strong demand from our clients for an all-in-one balanced solution. The purpose of the Builders Fund is similar in that it’s a one-stop solution for growth investors and offers a simpler way to invest across our equity lineup. And our Global Small-Cap Fund is unique in that it gives our clients exposure to a high-growth asset class that’s hard to access at a reasonable price.
While we never put a lot of emphasis on short-term returns, we’re comforted by the strong start that the Global Small-Cap Fund has had. According to Morningstar, it was the #1 fund in its category over the past year (ending February 29).
Another notable event last year was an upgrade to our client portal. We migrated the portal to new software which shows you more information about your portfolio’s performance and will better allow us to add new features and improved usability going forward. This required a password change for all clients, which we know was a pain (sorry!).
Lastly, we announced a management change late in the year, with Neil Jensen being appointed CEO and Tom Bradley becoming Chair and Chief Investment Officer.
2020 and beyond
Consolidation continues to be a theme in our industry, with discount broker E*Trade recently being acquired by Morgan Stanley, TD Ameritrade bought by Charles Schwab and asset manager Legg Mason snapped up by Franklin Templeton. CI Financial also completed its acquisition of robo-advisor WealthBar last year and bought WisdomTree’s Canadian ETF business.
The landscape is sure to change further going forward, as the banks look to get even bigger, robo-advisors struggle to gain traction, and regulators re-evaluate how investment products can be sold (securities regulators in every province except Ontario recently adopted a ban on deferred sales charges, or DSCs).
We’re happy to be in a category of our own — an independent, low-fee, direct-to-client investment fund company that also offers advice — as we carry out our vision of being the most investor-centric firm in Canada.
We were recently called one of the “best mutual fund companies you’ve never heard of” by industry veteran Jonathan Chevreau. We’ll take it. Although we do want more Canadians to know about us and spread the word (nudge, nudge).
Management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rates of return are the historical annual total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns.
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