To substantially outperform cash whilst aiming to reduce downside risk. Please note that whilst we aim to achieve positive returns over three-year rolling periods, there is no guarantee that such a return will be achieved over this or any other period.
Actively managed and may be all equity, all bonds or all cash. It normally invests in a wide range of ETFs to gain significant diversification and exceptional liquidity at very low cost.
| Top 10 Holdings | % of Portfolio |
|---|---|
| VANGUARD INV SER-UK GILT UCITS ETF | 11.5 |
| iShares Core UK Gilts UCITS ETF | 11.3 |
| iShares Core MSCI EM IMI UCITS ETF | 10.9 |
| Amundi UK Equity All Cap UCITS ETF | 9 |
| iShares Core FTSE 100 UCITS ETF | 8.1 |
| SPDR Sterling Corporate Bond UCITS ETF | 6 |
| Invesco GBP Corporate Bond UCITS ETF | 5.5 |
| ISHARES II PLC-USD FLTG RATE BOND U | 5.2 |
| Amundi MSCI Japan UCITS ETF | 5 |
| iShares Core £ Corp Bond UCITS ETF | 4.4 |
| Number of Holdings | Yield to Maturity | Maturity | Duration | S&P Rating |
|---|---|---|---|---|
| 155 Govt. Bonds 1,547 Corp. Bonds | 4.99% | 8.64 | 5.71 | A/A- |
| Number of Holdings | Best Dividend Yield Forward 12m | Best Price to Book Forward | Best P/E Ratio * | Best LTG EPS |
|---|---|---|---|---|
| 4,486 | 3.3% | 2.0 | 13.9 | 13.9% |
| Absolute Return | 6.6% |
|---|---|
| Asia Pacific Ex. Japan (MSCI Asia Ex Jap) | 14.2% |
| Em Markets (MSCI EM) | 13.5% |
| US Equities (MSCI USA) | 12.2% |
| Japan (MSCI Japan) | 10.9% |
| UK Index-Linked Gilts (Barclays UK Infl Linked) | 10.7% |
| Europe Excl UK (MSCI Eur. Ex UK) | 10.2% |
| UK Equities (MSCI UK) | 9.3% |
| UK Gilts (Bloomberg UK Govt All>1 Yr) | 7.4% |
| UK Corp Bonds (iBoxx Large Cap TRI Index) | 5.8% |
Performance is based on the monthly performance of the first client discretionary portfolio after all charges. Individual client portfolios may differ due partly to differences in the timing of initial investment or withdrawals or rebalancing. The SCM Absolute Return (GBP) Benchmark is the Barclays Benchmark Overnight GBP Cash Index. Competitor data is based on the performance of the IA Targeted Absolute Return Sector and the comparison is offered as a guide only.
| 12m to 30/11/2020 | 12m to 30/11/2021 | 12m to 30/11/2022 | 12m to 30/11/2023 | 12m to 30/11/2024 | 12m to 30/11/2025 |
|---|---|---|---|---|---|
| 1.6% | 6.6% | -5.1% | 3.7% | 9.8% | 12.3% |
Source: SCM Private LLP
| 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 | 0.05% |
| Custody & Administration Fee | 0.12% |
| Total Fees & Charges | 0.83% |
No changes were made to the Portfolios during November.
While equity markets ended the month broadly higher, the picture beneath the surface is increasingly fractured. The market narrative remains focused on a possible soft landing, with optimism growing around US growth and interest rate cuts in 2026. However, SCM remains more sceptical. We believe this late-year rally masks a growing dependence on a single theme – artificial intelligence – and a growing vulnerability across credit markets.
Most of the SCM portfolios have performed exceptionally well relative to peers throughout 2025, particularly in our mixed-asset strategies. This performance has been achieved not through risk-taking, but through careful asset allocation, selective rebalancing and progressive de-risking. Over the course of the year, we have systematically reduced equity exposure across many portfolios, reallocating the proceeds into bonds and, where possible, into high-quality sovereign bonds rather than corporate credit. This tilt has helped protect clients from the speculative volatility that now characterises much of the US equity market.
Key Themes and Trends – AI Fragility, Credit Risk, Seasonality Stalls
The most crucial structural development in global markets remains the dominant role of AI in the US equity rally. The “Magnificent 7” tech stocks fell 1.1% in November, marking their first monthly decline since March. This came despite strong headline earnings from Nvidia, which fell by more than 12% during the month. Meta also continued to weaken following its October decline, amid concern over the scale and sustainability of its AI-related capex.
Of note was Oracle, which reported better-than-expected revenue growth from its cloud infrastructure division, yet saw its shares fall sharply as markets questioned the company’s ability to fund its aggressive expansion plans. Recent bond issuance linked to AI infrastructure is now trading closer to high-yield levels, and the cost of insuring Oracle debt jumped 45% in November. This serves as a warning that the AI capex cycle may not deliver the returns investors are banking on, particularly given the rapid pace of technological change and potential supply-demand mismatches in the data centre market. The dramatic fall in the market cap of Oracle is shown below:
Beyond tech, concerns have also surfaced in credit markets. Several companies in the AI ecosystem have issued substantial debt to finance speculative infrastructure projects. At the same time, investors have continued to pour capital into thematic ETFs at historically elevated valuations. In our view, this points to a classic late-cycle dynamic: narrative trumps fundamentals, and capital is increasingly misallocated.
Bitcoin, Seasonality, and the Shift in Risk Appetite
Crypto markets also reflected a broader deterioration in speculative risk sentiment. Bitcoin fell over 16% in November, its most significant monthly decline since April. While some of the decline was linked to ETF outflows, the broader narrative of blockchain enthusiasm has faded in recent months. As before, SCM Portfolios retain no exposure to Bitcoin or other digital assets due to their high volatility and speculative nature.
Seasonality has also failed to support equities. Historically, November and December have been among the strongest months for equities, but 2025 has so far bucked that trend. While the S&P 500 eked out a small gain, the Nasdaq and AI-linked stocks underperformed, suggesting that momentum in key market segments may be weakening. This is consistent with our view that valuations have run too far ahead of earnings reality.
SCM View: Markets Underestimating Risk
Despite a softer inflation print and falling Treasury yields in November, markets may be overestimating the scope for monetary easing. The Fed has continued to push back against expectations for early rate cuts, and the broader inflation outlook remains complicated by tariff pass-through, sticky services inflation, and labour market tightness. Recent data have shown only limited progress in underlying inflation, and bond markets have begun to acknowledge this, with the expected path of rate cuts now flatter than earlier in the autumn.
We believe this environment calls for restraint and discipline. Much of the US equity market’s strength this year can be attributed to narrow leadership and sentiment, not fundamentals. And the longer this persists, the more vulnerable markets become to disappointment.
SCM Portfolios: Strong Returns, Cautious Risk Profile
While no allocation changes were made in November, SCM Portfolios remain cautiously positioned following the equity reductions made in early October. These changes helped protect strong YTD returns while reducing exposure to highly concentrated and richly valued parts of the market.
In non-ESG portfolios, we have prioritised sovereign bonds over corporate credit, reflecting our view that higher-quality duration offers better protection should risk sentiment deteriorate.
Looking ahead, we expect markets to remain increasingly vulnerable to shifts in interest rate expectations and AI-related sentiment. Our focus remains on preserving capital, managing downside risk, and maintaining valuation discipline amid exuberance.
