Global Balanced Investment Fund

SMIF’s current asset allocation reflects a cautiously constructive market outlook, balancing selective growth opportunities with downside protection amid slowing economic growth, persistent inflation, and monetary policy uncertainty. During our spring allocation review, we moved underweight fixed income after identifying risks from ongoing geopolitical conflicts and rising U.S. deficit spending, both of which could sustain inflationary pressures, increase Treasury issuance, and place upward pressure on long-term yields. We have maintained fixed income as underweight, alongside a significant allocation to gold as a hedge against inflation, geopolitical uncertainty, and potential dollar weakness. Within equities, our overweights in software and hardware reflect conviction in long-term AI investment, digital infrastructure, and technological innovation, while our exposure to utilities and basic materials provides opportunities tied to rising electricity demand and infrastructure spending.

We believe the traditional 60/40 portfolio remains a useful foundation but offers less reliable diversification when inflation and rising yields pressure equities and bonds simultaneously. Rather than relying primarily on fixed income for downside protection, SMIF maintains a more diversified allocation incorporating commodities, real estate, and international exposure. Our benchmark of 60% equities, 30% fixed income, and 10% commodities and alternatives reflects this philosophy, with our continued emphasis on gold providing an additional source of diversification during periods of market stress. This positioning supports our dual mandate of capital preservation and long-term capital appreciation, allowing us to participate in structural growth opportunities while managing inflation, interest rate, and geopolitical risks.