July Performance Update: Dividends Carry The Load As Growth Cools
July was another challenging month for the growth side of the portfolio. US Growth fell -10.9%, its second straight double-digit decline after June’s -14.1%, while Tactical ETFs slipped -2.0% for a second consecutive negative month. SG Dividend was the lone bright spot, rebounding +4.1% — its best month since April — and once again the only strategy in positive territory.
Despite back-to-back rough months, US Growth remains the year’s top performer at +28.0% YTD, though that lead has narrowed sharply. Back in June, US Growth’s H1 return of 38.9% was nearly 18 points ahead of SG Dividend’s 21.0%. That gap is now under 3 points, with SG Dividend at +25.1% YTD. Tactical ETFs trails at +6.3% YTD.
Macro And Markets
July’s macro backdrop stayed noisy. The Fed’s July 29 meeting ended in a 9-3 vote to hold rates at 3.5%–3.75%, with three regional presidents dissenting in favor of a hike — a sign that inflation, still running above the Fed’s 2% target, is keeping the committee split under new Chair Kevin Warsh. Markets briefly sold off around the decision before recovering into month-end.
Oil price volatility, driven by ongoing US-Iran military tensions, added another layer of uncertainty and kept crude prices elevated for the month. On the other hand, big tech earnings gave the market real support — strong Azure numbers from Microsoft and a standout Amazon report both helped power a late-month rally, and Apple briefly touched a $5 trillion market cap, overtaking Nvidia as the world’s most valuable company. Semiconductor names were far more turbulent, selling off hard in the back half of the month even as the broader index closed near its highs. Long-end rates were also in focus, with the 30-year Treasury yield pushing to its highest level since 2007 — a reminder that duration risk hasn’t gone away even as equities have mostly shrugged it off.
It’s the kind of environment that rewards selectivity over broad beta, which is part of why we’re leaning further into a more concentrated approach for US Growth (more on that below).
A Change Coming To US Growth
Off the back of extensive backtesting, we’re making a change to how US Growth is run. Starting in August, we’re moving from a broader momentum basket down to a concentrated portfolio of just 5 stocks, rebalanced monthly. This isn’t a reaction to July’s drawdown — it comes out of a longer data-driven research process comparing concentrated versus diversified momentum approaches, and the data consistently pointed to better risk-adjusted results from holding fewer, higher-conviction names rather than spreading capital thinly across a wider basket. We’ll share more on the mechanics and the backtest behind this shift in an upcoming post.
Closing Paragraph
July was a reminder that growth investing rarely moves in a straight line — and that diversification across strategies is doing exactly what it’s supposed to do. Two rough months for US Growth haven’t dented the YTD picture, and SG Dividend continues to prove its worth as the portfolio’s ballast. With a more concentrated approach coming to US Growth in August, we’re looking forward to sharing how that plays out.
Disclaimer: This article constitutes the author’s personal views and is for entertainment and educational purposes only. It is not to be construed as financial advice in any form. Please do your own research and seek advice from a qualified financial advisor. From time to time, I have positions in all or some of the mentioned stocks when publishing this article. This is a disclosure - not a recommendation to buy or sell stocks.