This week I spoke to Tom Bradley, president of Steadyhand Investment Funds Inc., a Vancouver-based, mutual-fund group launched in April, 2007. He wanted to fill me in on what his funds were all about (I had inadvertently overlooked them in an article I did on low-fee funds awhile back).
Normally, I tend to avoid actively managed funds, but Steadyhand is trying to break away from the industry mold and add value. To keep fees down, the firm doesnt pay trailers to financial planners and brokers; instead the funds are sold directly to consumers. Accordingly, the MER is 0.65% on the money-market fund, 1% on the bond fund, 1.35% on the equity fund, and 1.7% on both the global and small-cap funds. That’s pretty good for Canada.
Second, Steadyhand aims to go back to the days when mutual funds didnt track the indexes and build up assets through marketing campaigns and trailer fees. Their money managers are non-benchmark oriented and run concentrated portfolios with low turnover. In other words, they arent constrained to buying market portfolios and being closet indexers.
One thing that makes Steadyhand interesting is Bradley himself. He is the former CEO of Phillips, Hager & North Ltd. and played a key role in building up that low-fee, direct-to-consumer mutual-fund franchise. PH&N has been good to its clients over the years and has top offerings in bond and dividend funds.
Bradley reports Steadyhand has about 750 accounts with $90 million in assets under administration. He says his funds did manage to grow assets during the recent bear market but the increase was not as great as hoped for.
It been a tough slog, Bradley adds. Our timing [launching the funds on the eve of the bear market] was not great. So he intends to keep plugging away at building awareness and growing the client base until there is sufficient critical mass.
The equity fund is trailing the market but this is where active management may actually be a positive. The funds holdings are focused on a more diversified and higher quality group of companies (consistently generate cash and moat-like) than the resource- and financial-laden TSX. Rather than loading up on these more economically-sensitive stocks to match the index, [the fund] focuses on the best that Canada has to offer and looks outside our borders to add more growth and balance to the portfolio [rise in loonie has offset gains on U.S. holdings], notes commentary from the fund managers.