The second quarter of 2025 saw my rules-based SIF model portfolio enjoy a V-shaped recovery from the tariff travails of April.
It’s too soon to be sure if this recent momentum will persist during the second half of the year. But as I explained in a recent article, I think there’s reason to be optimistic about the prospects for the FTSE 250 and SmallCap indices at the moment.
Despite some recent strong runs, valuations still look relatively attractive to me. A plethora of recent takeover offers suggest private buyers can also see attractions.
SIF’s tilt to income this year has slightly altered my stock selection criteria, but not by much. I’m hopeful that the formula which has allowed the portfolio to outperform the market over the last nine years will continue to work in the uncertain global conditions we seem to be seeing at the moment.
How the SIF folio works: as a quick reminder, here is a summary of the rules I use to run this portfolio:
I select shares to buy from this stock screen through a weekly review, adding new shares when possible while taking into account diversification by sector and the number of existing holdings;
Shares are held for a minimum of nine months. However, if they issue a profit warning or fall by more than 25% below the portfolio’s cost price, they’re sold at the next weekly review;
After nine months, I test shares against this stock screen. If they pass they remain in the portfolio subject to a rolling monthly review. If they fail, they’re sold.
Here’s a review of the portfolio’s H1 performance and Q2 trading activity. (You can find my Q1 2025 review here.)
SIF H1 25 Performance Review
The capital value of the SIF portfolio rose by 11.9% during the second quarter of 2025, compared to a gain of 3.2% for the FTSE All Share index. Unfortunately, this outperformance only served to cancel out SIF’s underperformance during the first quarter of the year.
The end result at the end of June was that the portfolio was neck and neck with its FTSE All Share benchmark, with both up by around 6.6% year to date:
Taking a longer view, here’s…
