Latest Factsheet and Market Commentary as at 31 August 2025
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 UK Gilts UCITS ETF | 13.1 |
| ISHARES II PLC-USD TREAS BD 7-10YR | 11.5 |
| iShares Core MSCI EM IMI UCITS ETF | 7.3 |
| VANGUARD INV SER-UK GILT UCITS ETF | 6.8 |
| Invesco GBP Corporate Bond UCITS ETF | 6.3 |
| Amundi UK Equity All Cap UCITS ETF | 6.3 |
| iShares Core FTSE 100 UCITS ETF | 5.7 |
| iShares Core £ Corp Bond UCITS ETF | 5.1 |
| Invesco FTSE RAFI US 1000 UCITS ETF | 4.7 |
| Lyxor Smart Overnight Return UCITS ETF | 4.4 |
| Number of Holdings | Yield to Maturity | Maturity | Duration | S&P Rating |
|---|---|---|---|---|
| 143 Govt. Bonds 1,538 Corp. Bonds | 5.21% | 8.19 | 5.66 | A |
| Number of Holdings | Best Dividend Yield Forward 12m | Best Price to Book Forward | Best P/E Ratio * | Best LTG EPS |
|---|---|---|---|---|
| 5,489 | 3.1% | 1.8 | 15.3 | 12.0% |
| 50/50 Bond Reserve/Long-Term Return | 6.9% |
|---|---|
| Asia Pacific Ex. Japan (MSCI Asia Ex Jap) | 17.1% |
| Em Markets (MSCI EM) | 15.1% |
| US Equities (MSCI USA) | 13.6% |
| Europe Excl UK (MSCI Eur. Ex UK) | 11.5% |
| UK Index-Linked Gilts (Barclays UK Infl Linked) | 11.4% |
| Japan (MSCI Japan) | 11.3% |
| UK Equities (MSCI UK) | 9.9% |
| UK Gilts (Bloomberg UK Govt All>1 Yr) | 8.1% |
| UK Corp Bonds (iBoxx Large Cap TRI Index) | 6.7% |
| 12m to 31/08/2020 | 12m to 31/08/2021 | 12m to 31/08/2022 | 12m to 31/08/2023 | 12m to 31/08/2024 | 12m to 31/08/2025 |
|---|---|---|---|---|---|
| -0.5% | 10.7% | -11.1% | 2.8% | 10.3% | 4.8% |
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) | 0.14% |
| Transaction Costs of buying/selling funds | 0.12% |
| Transaction Costs within funds | 0.03% |
| Custody & Administration Fee | 0.12% |
| Total Fees & Charges | 0.81% |
No changes were made to the Portfolio in August.
Markets remained steady in August, with equities broadly flat and bond yields drifting higher as investors reassessed the likelihood of imminent US rate cuts. Economic data continued to signal underlying resilience, while inflation data remained mixed. Against this backdrop, SCM/MoneyShe continues to question the consensus narrative around easing. While market pricing remains tilted towards a soft landing, we believe the Fed may remain cautious about the rate of further rate cuts – particularly if is reacceleration in core inflation.
The US dollar held its gains from July, with modest strength against most G10 currencies. Treasury yields edged higher mid-month before easing slightly ahead of the Fed’s September meeting. The chart below shows asset performance across major global markets in August:
Sticky Inflation and Cautious Central Banks
August’s inflation data offered little clarity. While headline CPI remains contained, services inflation and tariff-sensitive categories continue to show signs of pressure. The Fed maintained its “data dependent” stance, with Chair Powell reiterating at Jackson Hole that the Fed would remain patient and vigilant. Markets interpreted this as a potential signal of policy stability, though recent inflation trends suggest the path to 2% remains uncertain.
Our View: Rate Cuts Remain Uncertain
Despite some renewed optimism in rate-sensitive assets, we remain cautious. Bond markets continue to price in a benign path, but we see limited justification for aggressive easing unless inflation slows more decisively. At the same time, earnings momentum appears to be fading outside a handful of large-cap names, particularly in US technology. Partly due to the concentration of the US market in a handful of Magnificent 7 stocks with high valuations, the US equity market is looking very stretched as the chart below shows the S&P 500 CAPE ratio with 10 yr total returns (real and nominal) from the high and low valuation points illustrates. SCM/MoneyShe continues to have very low exposure to the large the US Mag 7 stocks across our portfolios.
Investor positioning is beginning to reflect this divergence. Equity volatility remains low, yet options markets show elevated demand for downside protection – an indication of fragility beneath the surface. We view this as a warning that sentiment may be overly reliant on a narrow set of assumptions.
SCM/MoneyShe Portfolios: Disciplined, Diversified, Cautious
SCM/MoneyShe Portfolios remain positioned conservatively. Equity allocations are diversified by region and style, with a preference for valuation discipline and quality earnings. Our US equity exposure within various portfolios remains unhedged, having benefited from sterling’s prior strength. We continue to avoid the more speculative corners of the market, including overconcentrated tech or thematic trades.
Fixed income exposure remains focused on high-quality sterling and US dollar corporate bonds, with selective exposure to gilts and Treasuries. Our Ethical Portfolios, which exclude sovereign debt, continue to favour ESG-compliant corporates.
Looking ahead, we will continue to monitor central bank communication, corporate earnings trends, and inflation developments. SCM/MoneyShe remains committed to a long-term investment philosophy grounded in prudent diversification, risk awareness and valuation discipline.
Alan Miller, Chief Investment Officer
19 September 2025
