New High By the 4th of July
Defying many expectations after a rough spring, equity indexes kicked off the summer with new all time highs in June (S&P 500 +5.1%, Nasdaq 100 +6.3% MTD) after trade and geopolitical tensions eased and economic data mostly held firm. Encouragingly, even the latest reading on inflation showed no sign of pressure from rising tariffs, helping to bolster the case for another round of rate cuts from the Fed later this year. All in all, US equities have shown remarkable resilience thus far in 2025, even shrugging off a surprise US attack on Iranian nuclear facilities on its way to new highs to close the month.
As is so often the case, investors who have tuned in to the market’s message and ignored the headlines this year have been rewarded and TCM portfolios are no exception. In fact, not only has TCM’s tactical risk management approach put Tactical Beta (+7.1% YTD) and Tactical Q (+9.2% YTD) ahead of their unhedged benchmarks on the year, but it has been consistent enough to produce outperformance for Tactical Beta relative to its major peers* on every standard time frame since inception and remarkably, even relative to the market itself since its launch nearly nine years ago- a rare feat in the hedged equity world (chart).
Net Total Return as of 6/30/25. Source: TCM, barchart.com. Click for larger image
Applying the same framework to other asset classes, TCM strategies from the non-US exposure of Emerging Market Smart Index (+17.9% YTD) to the concentrated stock Hedged Disruptor portfolio (+17.5% YTD) and the multi-asset class Legacy Navigator (+14.5% YTD) have seen similar outcomes.
These results stand out because unlike most risk management strategies, TCM’s is based on the belief that attractive long-term results require avoiding both too much and too little volatility- and that this balance is best measured over time by total return. More than just a saying, this outlook has enabled many of TCM’s clients to actually achieve something like the market return without having to face the maximum distress of crisis periods and to us, this is the real benchmark.