Our Past Performance.

Portfolio Returns Since Mid-2016.

2018 saw the return of volatility to equity markets as the world of politics and global economies remained unpredictable. Thanks to our risk-based approach and globally diversified portfolios, we’ve helped our clients to remain invested and enjoy the benefits as markets have recovered in 2019.

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Past performance and future projections are not indicative of future performance.

Portfolio Performance Over Time.

It’s been nearly three years since the launch of our UK business and, so far, we have been pleased with the performance of our ETF portfolios. Despite the return of market volatility in 2018, which brought our first negative year of returns gave back some of the gains generated in 2016 and 2017, portfolios have rebounded in 2019 and our focus on controlling risk and continually optimising clients’ portfolios has delivered strong results.

Portfolio Performance by Risk Category

Performance Chart Dec 2018

The period over Brexit (23rd June 2016) saw a lot of growth as our globally diversified approach benefited from the weakening Pound Sterling.

Our higher-risk strategies were launched on 20th June 2016 but the 5% and 10% VaR categories were launched a month later. Markets performed well over this month in particular and losing out on this strong performance is part of the reason for the gap in performance between the lower and higher-risk categories.

Over the full year of 2018, our higher-risk categories (20% to 25% VaR) saw losses of around 6.7%. Our medium risk categories (10% VaR to 19% VaR) fell by 3.9% to 6.6% and our low risk categories (5% VaR to 9% VaR) fell from 1% to 3.8%.

As could be expected, the negative market moves across the board in 2018 had a negative impact on our portfolios and produced our first negative year of returns. However, thanks to diversification and risk management, we were able to dampen the negative effect of the market sell-off and help our clients to remain invested and experience the rebound as markets recovered in 2019.

Past performance and future projections are not indicative of future performance.
Explanatory Note

Observation Period: 20.06.2016 to 31.12.2018 (except for VaR 5% and VaR 10%, for which the observation commenced 20.07.2016 and 04.07.2016, respectively). Past performance and future projections are not indicative of future performance.

The performance of a risk category equals the aggregated daily median returns of all portfolios within this category. Data takes our fixed fee of 0.75% and all ETF fees into consideration. Taxes to be paid are not taken into account. Tax bands are dependent on individual circumstances, therefore they do not facilitate a fair performance comparison. Please contact your tax advisor, should you have any questions regarding tax issues.

Our Dynamic Risk Management Controls Losses.

A good way to analyse the stability of portfolios is by looking at their maximum drawdown (MD). MD describes the greatest fall that the portfolio has experienced over a given time period - i.e. the greatest peak to trough movement. Across our range of displayed strategies, the MD ranged from 3.5% to 9.6%; this is significantly lower than the MDs experienced by the majority of the individual asset classes in which we invest.

Maximum Drawdown of the Scalable Capital Portfolios Since 20.06.2016
Compared to Individual ETFs

MDD

Having been managing client portfolios for nearly 3 years you can see that typically higher risk asset classes have demonstrated higher MDs, which is to be expected. This wasn’t always the case during 2016 and 2017 as equity markets saw a particularly strong period of growth. It was anticipated that this period would not continue forever and this was realised with the drawdowns experienced in 2018. This is why our approach to risk management is so important for our clients. We take great pride in our ability to adhere to a client’s chosen risk category, no matter the market conditions. The end result is a smoother investment experience which is supportive of long-term investment success. Please visit “Better Risk Management” or “Portfolio Optimisation” for more information about our approach to keeping risk under control.

Observation Period: 20.06.2016 to 31.03.2019 (except for VaR 5% and VaR 10%, for which the observation commenced 20.07.2016 and 04.07.2016, respectively). Past performance and future projections are not indicative of future performance.

How Scalable Capital Performed vs. the Market.

It’s important for our clients to know not only that we adhered to their risk levels and delivered strong returns, but also how those returns compared to similar services. In this chart we show our performance over the two year period compared with the performance of the Morningstar fund benchmarks. The Morningstar benchmarks provide unique insight into the actual returns being generated by fund managers for clients within their fund, based on real performance numbers of the funds in the Morningstar database.

We have aligned the Morningstar benchmarks as closely as possible to our risk categories. The risk of the different categories and benchmarks increases on the chart from left to right as they are not an exact match. For example, the Morningstar Adventurous Benchmark holds over 80% equities, whereas our 25% VaR portfolio holds just 70% on average, so in general less risk than the nearest benchmark comparison.

Portfolio Returns on Par With or Better
Than Our Peers

Portfolio returns from June 2016 to March 2019*

SC vs MSNew

* Observation Period Morningstar Benchmark & Scalable Capital Portfolios:
20th June 2016 to 31st March 2019.

Past performance and future projections are not indicative of future performance.

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