Portfolio commenced 24 October 2014
OBJECTIVE:
To outperform inflation.
STRATEGY:
Actively managed with a long-term bias to real assets e.g. equities. The Portfolio normally invests in a wide range of ETFs to gain significant diversification and exceptional liquidity at very low cost.
| Top 10 Holdings | % of Portfolio |
|---|---|
| iShares Core MSCI EM IMI UCITS ETF | 13.7 |
| Amundi UK Equity All Cap UCITS ETF | 11.5 |
| iShares Core FTSE 100 UCITS ETF | 10.3 |
| iShares Core UK Gilts UCITS ETF | 7.7 |
| ISHARES II PLC-USD TREAS BD 7-10YR | 6.7 |
| Amundi MSCI Japan UCITS ETF | 6.3 |
| Invesco FTSE RAFI US 1000 UCITS ETF | 4.5 |
| Vanguard FTSE 250 UCITS ETF | 4.4 |
| SPDR MSCI EM Small Cap UCITS ETF | 4.2 |
| VANGUARD INV SER-UK GILT UCITS ETF | 4.1 |
| No. Holdings | Yield to Maturity | Maturity | Duration | S&P Rating |
|---|---|---|---|---|
| 151 Govt. Bonds 1,523 Corp. Bonds | 5.02% | 8.58 | 5.96 | A |
| No. Holdings | Yield to Maturity | Maturity | Duration | S&P Rating |
|---|---|---|---|---|
| 4,812 | 3.2% | 1.7 | 14.7 | 11.9% |
| SCM 50/50 Absolute Return/Long-Term Return | 8.7% |
|---|---|
| UK Corp Bonds (iBoxx Large Cap TRI Index) | 9.8% |
| UK Equities (MSCI UK) | 10.4% |
| UK Gilts (Bloomberg UK Govt All>1 Yr) | 10.8% |
| Japan (MSCI Japan) | 12.3% |
| UK Index-Linked Gilts (Barclays UK Infl Linked) | 12.8% |
| Europe Excl UK (MSCI Eur. Ex UK) | 12.8% |
| US Equities (MSCI USA) | 15.5% |
| Em Markets (MSCI EM) | 17.1% |
| Asia Pacific Ex. Japan (MSCI Asia Ex Jap) | 19.2% |
| 12m to 30/06/2020 | 12m to 30/06/2021 | 12m to 30/06/2022 | 12m to 30/06/2023 | 12m to 30/06/2024 | 12m to 30/06/2025 |
|---|---|---|---|---|---|
| -3.8% | 17.4% | -11.2% | 5.3% | 11.0% | 6.5% |
Source: SCM Private LLP
The performance of the 50/50 portfolios has been calculated as the average performance of the two underlying portfolios after costs, from the common date of inception.
Past performance is not a guide to future returns. The value of investments and the income from them can go down as well as up, so investors may not recover the amount of their original investment.
| ALL Fees & Charges | Percentage |
|---|---|
| SCM Discretionary Fund Management Charge | 0.40% |
| Underlying ETF costs (KIID Ongoing Charge) | 0.15% |
| Transaction Costs of buying/selling funds | 0.12% |
| Transaction Costs within funds | 0.05% |
| Custody & Administration Fee | 0.12% |
| Total Fees & Charges | 0.84% |
June concluded a volatile second quarter with surprising composure across global equity and bond markets. Despite enduring tariff headlines, geopolitical tensions in the Middle East, and increasing fiscal concerns in the US, equities posted gains, credit spreads held firm, and inflation data continued to come in softer than expected.
In response to these developments – and notably the persistent slide in the US dollar – SCM took the decision to switch US equity exposure, where held, from GBP hedged to unhedged, locking in currency gains and repositioning our Portfolios more favourably for the second half of the year.
The switch followed sterling’s rally from $1.22 to $1.37 – an 11% gain since the original hedge was introduced in January – marking one of the steepest half-year moves in decades. This tactical reversal protected Portfolios from further FX drag while preserving long-term US equity exposure, consistent with our strategic positioning.
The chart below shows asset performance across major global markets in June:
Currency Shift, Resilient Equities
Markets were supported by a combination of resilient economic data and falling inflation expectations. The Federal Reserve held rates steady, while UK inflation showed further signs of moderation. In equities, the S&P 500 climbed to new highs, reversing its April losses, with most gains concentrated in US mega-cap technology stocks. European and Japanese equities also rose modestly, while UK markets were more subdued.
The US dollar extended its sharp decline, its worst first-half performance since 1973, which impacted hedged international assets. By removing the GBP hedge on US equity holdings, SCM effectively neutralised this currency drag while retaining exposure to the world’s most liquid and innovative equity market. The decision reflects our view that sterling strength has likely peaked for now, and that hedging costs may become less favourable going forward.
SCM Portfolios: Valuation-Led, Currency-Aware
The shift from GBP hedged to unhedged US equity exposure was the key Portfolio change in June. All other allocations remained unchanged. Portfolios remain diversified across UK, US, Europe, Japan and emerging markets, with a measured tilt towards quality, dividend sustainability, and valuation discipline. We maintain a cautious view on overvalued growth names, preferring broader-based strategies including fundamental indexing and factor-based exposure.
While market volatility eased in June, we remain attentive to potential risks ahead, including the delayed impact of tariffs, divergence in global monetary policy, and the sustainability of the current equity rally. SCM will continue to focus on disciplined rebalancing, FX management, and long-term value creation.
The long-term investment framework — as outlined in our blogs How Far Can You Stretch an Elastic Band Before It Snaps? and When the Elastic Band Snaps — remains central to our approach as market momentum continues to unwind across several regions and sectors.
Alan Miller, Chief Investment Officer
17 July 2025
Empowering women to take control of their financial future.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the past performance is not a guide to future returns. Exchange rates may cause the value of overseas investments and the income arising from them to rise or fall. Neither MoneyShe nor SCM Direct gives personal advice. We aim to provide investors with simple, understandable information so they can make fully informed decisions. If you are unsure about the suitability of our investment portfolios, please contact an independent financial adviser. The information contained on the site may not be reproduced or distributed in any format without the express written approval of SCM Private LLP. We improve our products and advertising by using Microsoft Clarity to see how you use our website. By using our site, you agree that we and Microsoft can collect and use this data. Our privacy policy has more details. MoneyShe and SCM Direct are trading names of SCM Private LLP, which is authorised and regulated by the Financial Conduct Authority to conduct investment business no 497525. Registered in England and Wales, OC342778, with its registered office at Michelin House, 81 Fulham Road, London, SW3 6RD. © 2024 SCM Private LLP. All rights reserved.