Edgar Filing: SCM Trust

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-05617

SCM Trust

(Exact name of registrant as specified in charter)

1875 Lawrence Street, Suite 300

Denver, CO 80202-1805

(Address of principal executive offices) (Zip code)

Stephen C. Rogers

1875 Lawrence Street, Suite 300

Denver, CO 80202-1805

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 955-9988.

Date of fiscal year end: December 31

Date of reporting period: December 31, 2018

ITEM 1. REPORTS TO STOCKHOLDERS

ANNUAL REPORT

December 31, 2018

Shelton BDC Income Fund

Shelton Real Estate Income Fund

Shelton Tactical Credit Fund

Shelton International Select Equity Fund

This report is intended only for the information of shareholders or those who have received the offering prospectus covering shares of beneficial interest of The SCM Trust which contains information about the management fee and other costs. Investments in shares of The SCM Trust are neither insured nor guaranteed by the U.S. Government.

Table of Contents

December 31, 2018

Historical Performance and Manager’s Discussion	2
About Your Fund’s Expenses	11
Top Holdings and Sector Breakdown	13
Portfolio of Investments	15
Statements of Assets & Liabilities	19
Statements of Operations	20
Statements of Changes in Net Assets	21
Financial Highlights	26
Notes to Financial Statements	33
Report of Independent Registered Public Accounting Firm	40
Additional Information	40
Board of Trustees and Executive Officers	41

Historical Performance and Manager’s Discussion (Unaudited)

December 31, 2018

Shelton BDC Income Fund (Portfolio Manager: William Mock)

The Shelton BDC Income Fund (“the Fund”, sym: LOANX/LOAIX) focuses its investments in securities of Business Development Companies (“BDCs”) including common stock, preferred stock, convertible bonds and other debt. Under normal market conditions, at least 80% of the Fund’s net assets will be invested in BDC related securities. The Fund’s investment objective is to provide a high level of income with the potential for capital appreciation.

For the one-year period ending December 31, 2018, the Fund’s Investor Class provided a -5.13% total return to shareholders, while the Fund’s Institutional Class provided a -4.80% total return to shareholders. The Fund’s benchmark, the Wells Fargo BDC Index (sym: WFBDC), returned -6.58% for the same period. At period-end, 100% of the Fund’s investments were in U.S. domiciled securities. The breakdown of the portfolio was 95.76% listed BDCs, 3.24% Specialty Finance & Asset Management, and 1.00% cash.

In 2018, BDCs traded sideways in January and then fell in early February, leaving the Fund down nearly 6% year-to-date. BDC fundamentals (earnings, yields, dividends) remained stable but there was pessimism on the prospect of rising interest rates and the potential impact of a global trade war on middle market companies. As these fears subsided and the focus shifted back to the fundamentals the sector rallied beginning in March, recovering the early losses and leaving the fund up over 7% year-to-date by the first week of August. There was very little volatility through the end of September, but that ended with a nearly 6% selloff and subsequent bounce back in October and early November. BDCs were caught in the broad market selloff in December that negatively impacted equities and corporate bonds, with both share classes of the Fund losing over 9% in the month of December. The selloff was across the sector, not driven by the fundamentals of each BDC, but fears of potential economic slowdown or recession and the impact it could have on the middle market companies that are financed by BDCs.

Despite the volatility and poor 4th quarter returns, Shelton Capital Management remains optimistic about long term performance of the industry and the Fund. Shelton Capital Management pays particular attention to management teams in selecting investments, targeting those teams that have most successfully managed past credit downturns and demonstrated the ability to generate attractive rates of return through their portfolio of loans/investments.

Finally, though the timing is uncertain, the removal of the current Acquired Fund Fees and Expenses (AFFE) disclosure requirement is widely anticipated by industry participants. A formal application for BDC exemption from the AFFE was filed in September 2018 by The Coalition for Business Development and several large BDC management firms. This SEC’s current requirement, passed in January 2007, requires a fund-of-funds’ prospectus to include the operating expenses of the underlying funds and has had the unintended consequence of making BDCs ineligible for indices such as the Russell 2000 and S&P 500. A potential overturn of the rule may be a large technical positive and expand institutional ownership of BDCs upon their inclusion in the major indices.

We thank you for your investment and the confidence you have placed in the Shelton BDC Income Fund.

Historical Performance (Expressed in U.S. Dollars) (Unaudited)

December 31, 2018

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the Fund. The information, data, and analyses presented do not constitute investment advice; are provided solely for informational purposes; and, therefore are not an offer to buy or sell a particular security. The data and/or information noted are from what we believe to be reliable sources. The estimates noted are as of a certain date and subject to change.

Current performance may be lower or higher than the performance data cited. For more recent performance information, visit our website at www.sheltoncap.com. Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on Fund distributions or on the sale of Fund shares.

INSTITUTIONAL SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception^*
Shelton BDC Income Fund	-4.80%	N/A	N/A	1.68%
Wells Fargo BDC Index	-6.58%	N/A	N/A	1.34%

INVESTOR SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception^*
Shelton BDC Income Fund	-5.13%	N/A	N/A	1.70%
Wells Fargo BDC Index	-6.58%	N/A	N/A	1.34%

^* Fund inception date is May 2, 2014.

Historical Performance and Manager’s Discussion (Unaudited)

December 31, 2018

Shelton Real Estate Income Fund (Portfolio Manager: William Mock)

The Shelton Real Estate Income Fund ("the Fund", sym: RENTX/RENIX) focuses its investments in real estate securities, including securities issued by real estate investment trusts (REITs). Under normal market conditions, at least 80% of its net assets will be invested in income producing real estate common equity, preferred equity and debt securities. The Fund’s investment objective is to provide a high level of income with the potential for capital appreciation.

For the one-year period ending December 31, 2018, the Fund’s Investor Class provided a (6.55)% total return to shareholders, while the Fund’s Institutional Class provided a (6.38)% total return to shareholders. During the same time, the bond market (as defined by the Bloomberg/Barclays US Aggregate Bond Index) produced a (3.79)% total return. The Fund had near full exposure to the U.S. stock market as of December 31, 2018, with a cash position at year-end of 7%.

REITs had a rough start to the year as the 10-year Treasury yield broke out of its trading range, headed steadily upwards from 2.41% at the start of the year to 2.95% by mid-February. This jolted REIT markets as financing costs for REIT managers rose and investors weighed the possibility that the low rate environment which has attracted swaths of capital to the space and delivered substantial returns was coming to an end. As the 10-year established a new range over the summer around 2.90%, REITs recouped their losses and more, following the S&P 500 higher as investors pounced on significantly diminished market valuations. This rally proved to be short-lived however, as the strong performance of equities and firm macro data solidified a steep Fed dot plot, thus pushing the 10-year still higher. REITs reacted sharply to the negative when the 10-year rose over 3.00% in September. Outflows from REITs were only compounded in October as US 3Q earnings emerged, appearing weaker than previous quarters and sparking calls of a global slowdown and the end of the business cycle. REITs, who some industry leaders had already prophesized to be in the later innings of the cycle, declined 6.70% in the fourth quarter. The Fund largely tracked the Index for the year, underperforming the Index ultimately by 187bps. This was due to the Fund’s exposure to some of the less defensive sectors of real estate such as Data Centers and Lodging which underperformed some of the more defensive sectors at the end of the year such as Triple-Net and Healthcare.

Moving forward, Shelton Capital Management remains cautiously optimistic about REIT valuations. We feel that commercial real estate fundamentals, while decelerating, remain sound. Supply did pick up in 2018 across most sectors, as well as new construction in gateway markets where development has historically been subdued. Despite these headwinds, there remain significant bright spots in the space such as the Industrial sector which is showing robust growth. As Amazon has disrupted retailing channels and negatively impacted the shopping center and mall real estate sectors, several beneficiaries have emerged in commercial real estate including industrial, data centers, and cell towers which the Fund is overweight. As the Fed has begun to shift back to a more dovish stance, we believe there is significant room for REITs as a sector to post solid risk-adjusted returns. Moreover, from a historical standpoint, REITs have demonstrated that if the Fed is raising rates for the right reasons (a thriving economy), they too can thrive.

We thank you for your support and the confidence you have placed in the Shelton Real Estate Income Fund.

Historical Performance (Expressed in U.S. Dollars) (Unaudited)

December 31, 2018

INSTITUTIONAL SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception (Annualized)^*
Shelton Real Estate Income Fund	-6.38%	6.15%	N/A	4.65%
S&P US REIT Index	-3.79%	7.78%	N/A	5.69%

INVESTOR SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception (Annualized)^*
Shelton Real Estate Income Fund	-6.55%	5.95%	N/A	4.45%
S&P US REIT Index	-3.79%	7.78%	N/A	5.69%

^* Fund inception date is June 7, 2013.

Historical Performance and Manager’s Discussion (Unaudited)

December 31, 2018

Shelton Tactical Credit Fund (Portfolio Manager: William Mock)

We are pleased to write the fourth full year shareholder letter for the Shelton Tactical Credit Fund (“the Fund”, sym: DEBTX/DEBIX) which launched in December 2014. The Fund’s investment objective is to seek current income and capital appreciation. We seek to achieve this objective using related credit assets on both the long and short side to generate an attractive rate of return and reduce risk. At times of elevated risk, the Fund may invest 100% of the portfolio in cash or cash equivalents in an effort to protect the portfolio against perceived risks. Portfolio construction is implemented with a relative value framework and looks across the entire balance sheet of a corporation from senior secured liabilities down through subordinated, equity-linked securities. This hedged approach is designed to generate performance that is less reliant on the direction of the overall market than a typical credit- based fund.

Market Review

●

High-yield bonds got off to a solid start in January amid a rally in equities that was tempered by a steady rise in the 10-year Treasury yield. After the 10-year settled at a multi-year high the following month, investor sentiment soured and equities and high-yield retreated, exhibiting significant volatility. High-yield continued sideways with significant volatility all the way into April as investors weighed the ramifications of the Tax Bill and the prospect of the Fed raising rates faster than anticipated. In mid-May, the 10-year reached still further highs and new speculation surrounding China trade, North Korea relations, OPEC policy, and Italian elections perpetuated market volatility. At the end of June, high-yield was flat on the year.

●

High-yield firmed up in July and delivered strong returns as China trade talks showed hope, 2Q earnings showed strength, and new issuance was very light. As the S&P 500 rallied throughout the rest of the summer, so did high yield, with spreads eventually compressing to their tightest in ten years in September. The rally came to an abrupt halt in October as the SPX suffered its sharpest monthly decline since September 2011. Global growth concerns emerged as the culprit with 3Q earnings particularly in tech showing to be weaker than 2Q. Additionally, little progress on China trade talks, fresh highs in the 10-year yield, and declining oil prices weighed on equities and high-yield.

●

In late November, high-yield bond prices seemed to have bottomed as the Fed took a more dovish stance and a temporary ceasefire in China trade talks was established. However, in December, the decline resumed and accelerated as the cumulative worries of global growth slowing, a hawkish Fed, trade disputes, and falling WTI compounded.

●

CCC-rated bonds outperformed higher-rated credits for a third consecutive year in 2018.

●

Primary market activity decreased significantly in 2018, with a volume of $185 billion, versus $322 billion in 2017.

●

The top-performing sectors in US high-yield were Healthcare, Telecom, and Retail.

Portfolio Commentary

The Fund’s investor class returned -1.61% and the institutional class returned -1.39% for the fiscal year ending December 31, 2018, versus the Fund’s benchmark, the Barclays U.S. Aggregate Bond Index, which returned 0.01% during this period.

After what was a complacent and listless 2017 for high-yield, our belief was that there remained significant value in the high yield markets given the favorable effects of tax reform on corporate fundamentals. Furthermore, this reform particularly benefited more leveraged businesses. Additionally, default rates remained very low and capital markets remained open. With these dynamics in mind, we added some lower-rated CCC credits to our portfolio at the onset of the year which we believed to be attractive from a relative-value standpoint.

After the first couple months of the year, it was clear that the 2017 era of complacency was over. As volatility picked up significantly in equities, high-yield, and interest rates, we deployed our tactical rotational trade with success in February and March. The fund performed strongly in the first half of the year, as investors came around to CCC bonds.

A central driver of volatility throughout the year remained interest rate speculation. As the strength of the US economy appeared in various macro data, commodities percolated, and inflation rose modestly, the certainty of near-term rate hikes increased. Investors in the post-2008 era know not to “fight the Fed” and so thus this steepening of expected rates incited a couple of market tantrums in 2018, in February and then in the fourth quarter. Amid this rate uncertainty, the Fund kept to its strategy of owning shorter duration, high coupon bonds with an emphasis on companies with tangible assets and high relative cash flows.

The fourth quarter of this year was a tough one. The Fund was tested as high-yield experienced its worst quarter in some time. We deployed our rotational trade a couple times as prices declined to try and capitalize on what we believed to be an overdone sell-off, but our timing was poor, and prices continued further downward. Due to the market sell-off in Q4 2018, especially with respect to high yield bonds, the Fund management made the tactical decision to hold a high cash balance in the Fund. Throughout the quarter we believed in the fundamentals underpinning credit markets and saw no major idiosyncratic issues in any of our credits. Looking ahead, we believe credit markets, and the portfolio, are back on track in 2019, and we will be particularly focused on mitigating volatility. We strive to manage a consistent portfolio from a long-run perspective and we will continue to invest with this objective in mind.

The top industry concentrations for the Fund were Industrials, Services, and Telecom. The Fund continues to avoid Oil, Commodity, Financials, and Real Estate sectors.

In an environment that can change on a dime, we believe portfolio construction that includes tactical investing, active hedging, and relative liquidity will be paramount. Keeping an “ear to the ground” will be as important as ever. The strategy of simply “owning the market” will not work. We believe passive investing will underperform a more active approach. The foundation of portfolio construction in uncertain times must be predicated on capital preservation and one which includes a wide set of investment tools. Delivering attractive risk adjusted returns will necessitate hedging, tactical re-allocation between asset classes, a laser focus on liquidity, and the flexibility to change investment direction quickly.

We thank you for your support and the confidence you have placed in the Shelton Tactical Credit Fund.

Historical Performance (Expressed in U.S. Dollars) (Unaudited)

December 31, 2018

INSTITUTIONAL SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception (Annualized)^*
Shelton Tactical Credit Fund	-1.39%	N/A	N/A	4.67%
Barclays US Aggregate Bond Index	0.01%	N/A	N/A	1.71%

INVESTOR SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception (Annualized)^*
Shelton Tactical Credit Fund	-1.61%	N/A	N/A	4.40%
Barclays US Aggregate Bond Index	0.01%	N/A	N/A	1.71%

^* Fund inception date is December 15, 2014.

Historical Performance and Manager’s Discussion (Unaudited)

December 31, 2018

Shelton International Select Equity Fund (Portfolio Manager: Andrew Manton)

Since 2009, the team has been investing together using rigorous, bottom-up, fundamental stock selection to deliver attractive risk-adjusted returns for our investors.

For the Shelton International Select Equity Fund (“the Fund”, sym: SISLX/SISEX) our investment philosophy is centered around the concept of the competitive corporate life cycle. Our framework establishes a level global playing field from which to assess a company’s ability to create value for shareholders. We recognize that companies evolve over time, and that the risks they face and the opportunities they capitalize on will differ at the various stages of their development. We directly measure this relationship between a company’s competitive opportunities and challenges, its economic performance, and its valuation in the equity market as it travels along the corporate life cycle. And, in doing so, we believe we have established a solid framework from which to generate more consistent excess returns for our investors over time.

Market Overview

For international equity investors, the twelve-month period ending December 31, 2018 was the worst year of this decade, with the benchmark MSCI All Country World Ex-US index returning -14.20%. Both politicians and central bankers contributed to the negativity, along with investor concern that the current global economic boom may be peaking.

Among the year’s biggest market moving news, US-China acrimony turned into a full-on trade war in 2018. President Donald Trump began the year by slapping tariffs on solar panels and washing machines, next steel and aluminum, and then $50 billion more of Chinese goods in March. China retaliated later in March with tariffs on US agriculture products, which resulted in another round of U.S. tariffs.

The tit-for-tat looked like it would subside on Dec. 1, when Presidents Trump and Xi agreed to a truce until March 1, 2019—which postponed Washington’s plan to tax $200 billion more of Chinese imports. But a few days later, Canadian authorities, at the request of the US, arrested the CFO of Huawei Technologies, the Chinese telecom giant at the eye of the intellectual-property storm that is rocking US-China relations. Both Chinese and US markets tumbled after that, as investors feared more trade hostilities would disrupt the global economy and specifically hit China as it groans under an increasingly heavy debt burden.

Across the Atlantic, Theresa May continued to fight in vain for a deal with the EU on how the UK will exit the EU—and to get her own party and Parliament to agree to that same deal. Though she survived a no-confidence motion in December, the British public and investors still have no confidence with what the “Brexit” will look like. Meanwhile, leadership in the European mainland’s three largest economies has begun weakening: Angela Merkel is stepping down from her party’s top spot in Germany, Emmanuel Macron is losing popularity in France and Italy’s two-party populist coalition is further bickering.

Amid this political uncertainty came monetary instability. By the fourth quarter, the European Central Bank became the latest major central bank to announce an end to their quantitative easing program – adding further pressure to a system that was already showing signs of economic strain. By the end of the year, central banks came under considerable political pressure to ease their hawkish stance and continue to supply plenty of liquidity to the banking systems.

As important, investors have also begun asking if earnings will start to fall or at least decelerate soon. Euro zone GDP in 2018 grew at its slowest pace since 2014, Japanese GDP ground to a halt in the third quarter of 2018 after 13 consecutive quarters of positive results, and there are signs the US economy is catching a cold as analysts continued to decrease earnings expectations for 2019.

No region was spared this pessimism, though it came at different times. For most of the year, China fears had emerging markets faring worse. Then, monetary tightening refocused the pessimism on developed markets, with both ending the year down 14-15%. Perhaps thanks to its still-easy monetary policy, Japan managed to be the least bad major market, followed by South America and Eastern Europe. On the other end of the spectrum, China fell more than 20%, and Turkey, with a currency in crisis and politics turning dangerously authoritarian, saw a 40% drop in US dollar terms in its main equity index.

In terms of sectors, only something as defensive as utilities withstood the volatility. Ending the year flat made it the best-performing sector. Healthcare, with its earnings visibility, was the next best. Then came energy, as crude oil rallied till early October—OPEC cut output, while the US got tough on Iran—but then gave up all of the year’s gains and then some, during the last quarter. The sectoral declines intensified with real estate, industrials and materials, linked to the macro cycle. And they worsened with technology and consumer discretionary (which includes consumer Internet), the two sectors that have been most buoyed by the past decade of cheap money and broader economic optimism.

Performance Review

The Fund returned -13.17% (Institutional class–no load), -13.41% (Investor class–no load) for the year ending December 31, 2018, outperforming the Fund’s benchmark, the MSCI ACWI ex US Index, which returned -14.20% during this period.

Shelton International Selection Equity Fund Top Contributors and Detractors:

Largest Contributors	Total Return (%)	Contribution (%)
Ambu	34.11	1.90
Wirecard.	36.00	1.46
CyberAgent, Inc.	17.12	0.21
ZOZO, Inc.	9.79	0.15
Thales SA	9.86	0.09

Largest Detractors	Total Return (%)	Contribution (%)
Tencent Holdings Ltd.	-34.26	-0.91
Komatsu	-38.72	-0.93
BNP Paribas SA Class A	-36.27	-1.02
ING Groep NV	-38.60	-1.06
Valeo SA	-59.72	-1.33

We are happy to report the portfolio outperformed across major regions such as Asia Pacific ex-Japan and the UK in 2018. The top country-specific

Historical Performance and Manager’s Discussion (Unaudited) (Continued)

December 31, 2018

contributors to outperformance were Germany, Denmark and South Korea, with tactical stock selection boosting performance in Germany and Denmark, and outperformance in South Korea assisted by an underweight allocation. The portfolio underperformed across major regions including Western Europe, China, Japan and Latin America. Lastly, the Fund contributed positively across North America, Eastern Europe and Middle East and Northern Africa (MENA).

Overall, the portfolio delivered sector-based outperformance across Healthcare, Technology, Consumer Staples, Communication Services and Real Estate. Outperformance in Healthcare was generated by superior stock selection, and was the largest positive contributor to returns. Relative gains in Technology, Consumer Staples, Communication Services and Real Estate also added to performance. Finally, Consumer Discretionary, Financials, Industrials, Materials and Energy detracted from the Fund’s performance. Underperformance in Industrials and Energy was the result of sector and stock-specific volatility during the U.S. and China trade talks and slumping crude oil prices during the Fourth Quarter.

As always, the Shelton International Select Equity strategy seeks to deliver its excess returns over time through superior stock selection. Amongst the top performers over the course of the year was Ambu. Based in Denmark, Ambu is the world’s leading provider of single use endoscopes with an addressable market of 90 million procedures in 2020 and limited competition. As healthcare governing bodies around the world continue to warn doctors about the increase in infections caused by contaminated, reusable endoscopes, Ambu is well-positioned to take market share from firms specializing in reusable scopes. Another top contributor was Wirecard, the German provider of internet-based and mobile payment and processing services. Wirecard has established itself as a leading player in European payment processing space among small firms, and has expanded its business in both developed and emerging markets. Given 85% of global payments are still made in physical cash, we expect that Wirecard should continue to see its client base grow as more payments become digitized. Lastly, Japanese media giant, CyberAgent, continued to engage new users within its television streaming and gaming segments. However, we became skeptical of the gaming segment’s ability to sustain new user growth without higher-than-expected capital investment towards new titles. Given CyberAgent’s shares’ rapid price appreciation and uncertainty regarding future performance in gaming, we decided that additional upside was limited and exited the position in the fourth quarter.

French auto-supplier Valeo underperformed the overall portfolio and detracted from performance as the sector was hit by Chinese tariffs and President Trump threatening similar duties on the EU. While declining auto sales in major markets and trade talks between the U.S. and China are temporary headwinds, Valeo’s focus on innovative technologies, along with its diligent management team, place the company in a strong position to benefit in an industry seeking more energy efficiency. Another significant detractor was Dutch bank ING Groep, which experienced weak trading revenues, margin pressure and cost efficiencies amidst challenging market conditions. Despite a difficult year, the bank remains on target to meet its capital buildup target, and is seeing positive momentum in loan growth and customer gains. Should cost discipline remain stable, ING Groep will be in position to achieve its 2020 financial targets. Lastly, French lender BNP Paribas lagged the market as it continued to combat weak performance in French and Italian retail, as well as disappointing fixed income and equity trading revenues.

We thank you for your investment in the Fund and for your continued support of our firm.

Historical Performance (Expressed in U.S. Dollars) (Unaudited)

December 31, 2018

INSTITUTIONAL SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception
Shelton International Select Equity Fund	-13.17%	N/A	N/A	6.89%
MSCI ACWI Index (US)	-14.20%	N/A	N/A	4.58%

INVESTOR SHARES

Average Annual Total Returns
for years ended 12/31/18

Fund/ Benchmark	One Year	Five Year (Annualized)	Ten Year (Annualized)	Since Inception
Shelton International Select Equity Fund	-13.41%	N/A	N/A	6.64%
MSCI ACWI Index (US)	-14.20%	N/A	N/A	4.58%

The statements and opinions expressed in the Manager Discussion commentaries are those of the authors, are as of the date of this report, are subject to change, and may not reflect the authors’ current views. These commentaries contain certain forward-looking statements. We use words such as “expects”, “anticipates”, “believes”, “estimates”, “forecasts”, and similar expressions to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially and/or substantially from any future results, performance or achievements expressed or implied by those projected in the forward-looking statements for any reason. Past performance does not guarantee future results. There is no assurance that the investment process will consistently lead to successful investing. Asset allocation and diversification do not eliminate the risk of experiencing investment losses.

About Your Fund’s Expenses (Unaudited)

December 31, 2018

The Funds’ advisor, Shelton Capital Management (“Shelton Capital”), believes it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions, redemption fees, and exchange fees; and (2) ongoing costs, including management fees, distribution fees and other Fund expenses. Operating expenses, which are deducted from the Funds’ gross income, directly reduce the investment return of the Funds. The Funds’ expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. This example is intended to help you understand your ongoing cost (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2018 to December 31, 2018.

Actual Expenses

The first line of the tables below provide information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses you have paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The Funds do not charge any sales charges. There is a redemption fee of 2% for shares of the Greater China Fund purchased that are held for 90 days or less from the date of purchase.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional cost, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the tables are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

More information about the Funds’ expenses can be found in this report. For additional information on operating expenses and other shareholder costs, please refer to the Funds’ prospectus.

About Your Fund’s Expenses (Unaudited) (Continued)

December 31, 2018

	Beginning Account Value July 1, 2018 (in U.S. Dollars)	Ending Account Value December 31, 2018 (in U.S. Dollars)	Expenses Paid During Period^* (in U.S. Dollars)	Net Annual Expense Ratio
BDC Income Fund
Institutional Shares
Based on Actual Fund Return	$ 1,000	$ 908	$ 6.07	1.26%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,019	$ 6.42	1.26%
Investor Shares
Based on Actual Fund Return	$ 1,000	$ 925	$ 7.34	1.51%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,017	$ 7.69	1.51%

Real Estate Income Fund
Institutional Shares
Based on Actual Fund Return	$ 1,000	$ 943	$ 5.68	1.16%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,019	$ 5.90	1.16%
Investor Shares
Based on Actual Fund Return	$ 1,000	$ 942	$ 6.90	1.41%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,018	$ 7.17	1.41%

Tactical Credit Fund
Institutional Shares
Based on Actual Fund Return	$ 1,000	$ 951	$ 7.03	1.43%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,018	$ 7.27	1.43%
Investor Shares
Based on Actual Fund Return	$ 1,000	$ 948	$ 8.25	1.68%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,017	$ 8.54	1.68%

International Select Equity Fund
Institutional Shares
Based on Actual Fund Return	$ 1,000	$ 857	$ 5.48	1.17%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,019	$ 5.95	1.17%
Investor Shares
Based on Actual Fund Return	$ 1,000	$ 855	$ 6.45	1.38%
Based on Hypothetical 5% Return before expenses	$ 1,000	$ 1,018	$ 7.02	1.38%

^*	Expenses are equal to the Fund’s expense ratio annualized.

Top Holdings and Sector Breakdowns (Unaudited)

December 31, 2018

Shelton BDC Income Fund

Security		Market Value (in U.S. Dollars)		Percentage of Total Investment
1	Ares Capital Corp		$1,890,649		19.8	%
2	Solar Capital Ltd		1,384,923		14.5	%
3	PennantPark Floating Rate Capital Ltd		798,330		8.4	%
4	Apollo Investment Corp		764,782		8.0	%
5	Hercules Capital BDC Inc		763,003		8.0	%
6	TriplePoint Venture Growth BDC Corp		752,259		7.9	%
7	BlackRock TCP Capital Corp		684,600		7.2	%
8	TPG Specialty Lending Inc		616,869		6.5	%
9	Oaktree Strategic Income Corp		513,538		5.4	%
10	Goldman Sachs BDC Inc		435,238		4.6	%

Shelton Real Estate Income Fund

Security		Market Value (in U.S. Dollars)		Percentage of Total Investment
1	Blackstone Mortgage Trust Inc		$439,318		8.8	%
2	American Tower Corp		359,091		7.2	%
3	Alexandria Real Estate Equities Inc		350,330		7.1	%
4	AvalonBay Communities Inc		345,141		6.9	%
5	Sun Communities Inc		344,797		6.9	%
6	Crown Castle International Corp		311,768		6.3	%
7	Duke Realty Corp		283,605		5.7	%
8	EPR Properties		244,979		4.9	%
9	CyrusOne Inc		240,868		4.8	%
10	CubeSmart		220,052		4.4	%

Top Holdings and Sector Breakdowns (Unaudited) (Continued)

December 31, 2018

Shelton Tactical Credit Fund

Security		Market Value (in U.S. Dollars)		Percentage of Total Investment
1	CSC Holdings LLC		$1,995,000		12.3	%
2	Golden Nugget Inc		1,885,000		11.7	%
3	Kinetic Concepts Inc / KCI USA Inc		1,605,000		9.9	%
4	DJO Finance LLC / DJO Finance Corp		1,545,000		9.6	%
5	Scientific Games International Inc		1,522,500		9.4	%
6	Banff Merger Sub Inc		1,372,500		8.5	%
7	Icahn Enterprises Finance Corp		1,237,500		7.7	%
8	Icahn Enterprises Finance Corp		1,203,125		7.4	%
9	BCD Acquisition Inc		1,027,500		6.4	%
10	Jefferies Finance LLC		997,500		6.2	%

Shelton International Select Equity Fund

Security		Market Value (in U.S. Dollars)		Percentage of Total Investment
1	AIA Group Ltd		$1,927,746		4.5	%
2	Bangkok Bank PCL		1,759,754		4.1	%
3	Taiwan Semiconductor Manufacturing Co Ltd		1,660,950		3.9	%
4	Unilever NV		1,630,463		3.8	%
5	Santen Pharmaceutical Co Ltd		1,548,199		3.6	%
6	Nestle SA		1,547,065		3.6	%
7	Givaudan SA		1,505,328		3.5	%
8	KBC Group NV		1,411,208		3.3	%
9	Intertek Group PLC		1,363,262		3.2	%
10	ITOCHU Corp		1,361,345		3.2	%

Shelton BDC Income Fund

Portfolio of Investments (Expressed in U.S. Dollars)

December 31, 2018

Security Description	Shares		Value
Common Stock (99.51%)

Financial (99.51%)
Diversified Financial Services (0.68%)
Newstar Financial Inc CVR^(a⁾		100,410	$	65,668

Investment Company (90.89%)
Apollo Investment Corp		61,676		764,782
Ares Capital Corp		121,351		1,890,649
BlackRock TCP Capital Corp		52,500		684,600
Goldman Sachs BDC Inc		23,680		435,238
Main Street Capital Corp		3,000		101,430
Medley Management Inc		65,000		250,900
New Mountain Finance Corp		26,800		337,144
Oaktree Strategic Income Corp		66,263		513,538
PennantPark Floating Rate Capital Ltd		69,000		798,330
PennantPark Investment Corp		31,000		197,470
Solar Capital Ltd		72,169		1,384,923
TPG Specialty Lending Inc		34,100		616,869
TriplePoint Venture Growth BDC Corp		69,078		752,259
				8,728,132


Venture Capital BDC (7.94%)
Hercules Capital BDC Inc		69,050		763,003

Total Common Stock (Cost $10,991,950)				9,556,803

Total Investments (Cost $10,991,950)^(b) (99.51%)			$	9,556,803
Other Net Assets (0.49%)				46,587
Net Assets (100.00%)			$	9,603,390

(a)	Level 3 security fair valued under procedures established by the Board of Trustees, represents 0.68% of net assets. The total value of the fair value security is $65,668.

(b)	Aggregate cost for federal income tax purpose is $11,060,125

At December 31, 2018, unrealized appreciation/(depreciation) of securities for federal income tax purposes is as follows:

Unrealized appreciation	$	26,222
Unrealized depreciation		(1,529,544	)
Net unrealized depreciation	$	(1,503,322	)

See accompanying notes to financial statements.

Shelton Real Estate Income Fund

Portfolio of Investments (Expressed in U.S. Dollars)

December 31, 2018

Security Description	Shares		Value
Common Stock (91.58%)

Financial (91.58%)
REITS- Diversified (2.41%)
Liberty Property Trust		3,080	$	128,990

REITS- Health Care (2.87%)
Healthcare Trust of America Inc		6,056		153,277

REIT- Hotel & Resort (5.86%)
Host Hotels & Resorts Inc		6,900		115,023
Sunstone Hotel Investors Inc		15,250		198,403
				313,426

REIT- Industrial (6.86%)
Duke Realty Corp		10,950		283,605
Rexford Industrial Realty Inc		2,820		83,105
				366,710

REIT-Mortgage (14.57%)
Apollo Commercial Real Estate Finance Inc		13,107		218,363
Blackstone Mortgage Trust Inc		13,789		439,319
Starwood Property Trust Inc		6,156		121,335
				779,017

REIT-Office (6.55%)
Alexandria Real Estate Equities Inc		3,040		350,330

REIT-Residential (17.02%)
American Homes 4 Rent		2,178		43,233
AvalonBay Communities Inc		1,983		345,141
Equity Residential		1,340		88,453
Essex Property Trust Inc		360		88,276
Sun Communities Inc		3,390		344,797
				909,900

REIT-Retail (6.51%)
Retail Value Inc		290		7,421
Simon Property Group Inc		1,065		178,909
SITE Centers Corp		2,904		32,147
Tanger Factory Outlet Centers Inc		6,400		129,408
				347,885

REIT-Specialized (28.92%)
American Tower Corp		2,270		359,091
Crown Castle International Corp		2,870		311,768
CubeSmart		7,670		220,052
CyrusOne Inc		4,555		240,868
EPR Properties		3,826		244,979
Equinix Inc		480		169,229
				1,545,987

Total Common Stock (Cost $4,851,870)				4,895,522

Preferred Stock (1.37%)

Financial (1.37%)
REIT-Retail (1.37%)
Cedar Realty Trust Inc 7.250% (cost $72,889)		3,171		73,472


Total Investments (Cost $4,924,759)^(a) (92.95%)			$	4,968,994
Other Net Assets (7.05%)				376,625
Net Assets (100.00%)			$	5,345,619

(a)	Aggregate cost for federal income tax purpose is $4,930,262

At December 31, 2018, unrealized appreciation/(depreciation) of securities for federal income tax purposes is as follows:

Unrealized appreciation	$	323,394
Unrealized depreciation		(284,662	)
Net unrealized appreciation	$	38,732

See accompanying notes to financial statements.

Shelton Tactical Credit Fund

Portfolio of Investments (Expressed in U.S. Dollars)

December 31, 2018

Security Description	Par Value		Rate			Maturity		Value
Corporate Debt (41.08%)

Communications (5.69%)
CSC Holdings LLC (144A)	$	2,000,000		7.500	%		04/01/2028	$	1,995,000
CenturyLink Inc		250,000		7.500	%		04/01/2024		241,250

Total Communications									2,236,250

Consumer, Cyclical (11.27%)
BCD Acquisition Inc (144A)		1,000,000		9.625	%		09/15/2023		1,027,500
Golden Nugget Inc (144A)		2,000,000		6.750	%		10/15/2024		1,885,000
Scientific Games International Inc		1,500,000		10.000	%		12/01/2022		1,522,500

Total Consumer, Cyclical									4,435,000

Consumer, Non-Cyclical (10.13%)
DJO Finance LLC / DJO Finance Corp (144A)		1,500,000		8.125	%		06/15/2021		1,545,000
Herc Rentals Inc (144A)		803,000		7.500	%		06/01/2022		833,113
Kinetic Concepts Inc / KCI USA Inc (144A)		1,500,000		12.500	%		11/01/2021		1,605,000

Total Consumer, Non-Cyclical									3,983,113

Financial (10.50%)
Icahn Enterprises Finance Corp		1,250,000		6.375	%		12/15/2025		1,203,125
Icahn Enterprises Finance Corp		1,250,000		6.750	%		02/01/2024		1,237,500
JFIN Co-Issuer Corp (144A)		750,000		7.250	%		08/15/2024		693,750
JFIN Co-Issuer Corp (144A)		1,000,000		7.500	%		04/15/2021		997,500

Total Financial									4,131,875

Technology (3.49%)
Banff Merger Sub Inc (144A)		1,500,000		9.750	%		09/01/2026		1,372,500

Total Corporate Debt (Cost $16,448,575)									16,158,738

Total Investments (Cost $16,448,575)^(a) (41.08%)								$	16,158,738
Other Net Assets (58.92%)									23,173,878
Net Assets (100.00%)								$	39,332,616

(a)	Aggregate cost for federal income tax purpose is $17,517,835

Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. Unless otherwise noted, these securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended December 31, 2018 is $11,954,363, which represents 30.4% of net assets.

At December 31, 2018, unrealized appreciation/(depreciation) of securities for federal income tax purposes is as follows:

Unrealized appreciation	$	165,405
Unrealized depreciation		(1,524,502	)
Net unrealized depreciation	$	(1,359,097	)

See accompanying notes to financial statements.

Shelton International Select Equity Fund

Portfolio of Investments (Expressed in U.S. Dollars)

December 31, 2018

Security Description	Shares		Value
Common Stock (90.92%)

Belgium (2.98%)
KBC Group NV		21,780	$	1,411,208

China (4.21%)
Alibaba Group Holding Ltd^*		6,905		946,468
Ping An Insurance Group Co of China Ltd		118,200		1,043,960

Total China				1,990,428

Colombia (2.15%)
Bancolombia SA		26,750		1,019,175

Denmark (2.71%)
Ambu A/S		53,400		1,281,021

France (13.80%)
BNP Paribas SA		22,778		1,027,877
L’Oreal SA		5,529		1,271,680
Safran SA		8,000		963,904
Thales SA		11,030		1,286,113
TOTAL SA		14,212		750,261
Valeo SA		42,200		1,230,627

Total France				6,530,462

Germany (9.57%)
adidas AG		6,345		1,323,000
Beiersdorf AG		12,150		1,266,147
MTU Aero Engines AG		5,900		1,068,343
Wirecard AG		5,740		871,392

Total Germany				4,528,882

Great Britain (10.95%)
Intertek Group PLC		22,300		1,363,262
Rio Tinto PLC		20,580		997,718
Royal Dutch Shell PLC		40,447		1,188,670
Unilever NV		30,306		1,630,463

Total Great Britain				5,180,113

Hong Kong (4.07%)
AIA Group Ltd		232,200		1,927,746

Indonesia (2.84%)
Bank Rakyat Indonesia Persero Tbk PT		5,292,750		1,343,431

Ireland (1.92%)
CRH PLC		34,426		909,080

Japan (11.15%)
Daikin Industries Ltd		7,400		788,798
ITOCHU Corp		80,000		1,361,345
Komatsu Ltd		39,500		851,636
Santen Pharmaceutical Co Ltd		107,100		1,548,199
Yaskawa Electric Corp		29,500		725,434

Total Japan				5,275,412

Netherlands (4.88%)
ASML Holding NV		8,100		1,260,522
ING Groep NV		97,332		1,047,005

Total Netherlands				2,307,527

Norway (1.38%)
Aker BP ASA		25,900		652,050

Singapore (2.77%)
DBS Group Holdings Ltd		75,450		1,311,380

Switzerland (8.33%)
dormakaba Holding AG		1,481		890,884
Givaudan SA		652		1,505,328
Nestle SA		19,109		1,547,065

Total Switzerland				3,943,277

Taiwan (3.51%)
Taiwan Semiconductor Manufacturing Co Ltd		45,000		1,660,950

Thailand (3.72%)
Bangkok Bank PCL		276,800		1,759,753

Total Common Stock (Cost $41,744,782)				43,031,895

Total Investments (Cost $41,744,782)^(a) (90.92%)			$	43,031,895
Other Net Assets (9.08%)				4,296,183
Net Assets (100.00%)			$	47,328,078

^*	Non-income producing security.

(a)	Aggregate cost for federal income tax purpose is $41,817,929

At December 31, 2018, unrealized appreciation/(depreciation) of securities for federal income tax purposes is as follows:

Unrealized appreciation	$	4,566,556
Unrealized depreciation		(3,358,827	)
Net unrealized appreciation	$	1,207,729

See accompanying notes to financial statements.

Statements of Assets and Liabilities

December 31, 2018

	Shelton BDC Income Fund			Shelton Real Estate Income Fund			Shelton Tactical Credit Fund			Shelton International Select Equity Fund
Assets
Investments in securities
Cost of investments	$	10,991,950		$	4,924,759		$	16,448,575		$	41,744,782
Market value of investments (Note 1)		9,556,803			4,968,994			16,158,738			43,031,895
Cash		94,584			392,592			23,177,752			4,038,967
Interest receivable		—			—			283,247			—
Dividend receivable		94,018			49,618			1,373			13,781
Reclaim Receivable		—			1,147			—			283,112
Receivable from investment advisor		10,669			16,615			10,515			10,658
Receivable for fund shares sold		4,246			102			—			84,334
Prepaid expenses		6,647			2,780			752			4,473
Total assets	$	9,766,967		$	5,431,848		$	39,632,377		$	47,467,220

Liabilities
Payables and other liabilites
Payable for fund shares repurchased		3,499			67,229			200,376			39,455
Payable to investment advisor		7,993			4,827			43,454			30,173
Distributions payable		134,831			—			9,417			—
Accrued 12b-1 fees		1,155			381			8,367			3,600
Accrued Administration fees		781			426			3,709			4,077
Accrued Audit fees		9,315			7,771			23,033			24,896
Accrued CCO fees		453			139			825			1,363
Accrued Custody fees		652			908			267			1,131
Accrued Expenses		185			367			1,825			716
Accrued Fund Accounting Fees		1,568			1,739			2,667			3,492
Accrued Printing fees		1,437			1,147			3,734			3,481
Accrued Reorganization Expense		—			—			—			24,225
Accrued Shareholder Servicing fees		—			—			—			252
Accrued Transfer Agent fees		1,204			812			1,638			1,812
Accrued Trustee fees		504			483			449			469
Total liabilities		163,577			86,229			299,761			139,142

Net assets	$	9,603,390		$	5,345,619		$	39,332,616		$	47,328,078

Net assets at December 31, 2018 consist of
Paid-in capital		14,633,295			7,011,438			43,741,424			100,561,548
Distributable earnings/(loss)		(5,029,905	)		(1,665,819	)		(4,408,808	)		(53,233,470	)
Total net assets	$	9,603,390		$	5,345,619		$	39,332,616		$	47,328,078

Net assets
Institutional Shares	$	1,173,292		$	6,001		$	18,670,519		$	41,424,121
Investor Shares	$	8,430,098		$	5,339,618		$	20,662,097		$	$5,903,957

Shares outstanding
Institutional Shares (no par value, unlimited shares authorized)		151,428			777			1,926,480			2,257,718
Investor Shares (no par value, unlimited shares authorized)		1,076,241			674,294			2,133,983			322,859

Net asset value per share
Institutional Shares	$	7.75		$	7.72		$	9.69		$	18.35
Investor Shares	$	7.83		$	7.92		$	9.68		$	18.29

See accompanying notes to financial statements.

Statements of Operations
For the Year Ended December 31, 2018

	Shelton BDC Income Fund			Shelton Real Estate Income Fund			Shelton Tactical Credit Fund			Shelton International Select Equity Fund
Investment income
Interest income	$	2,563		$	6,757		$	2,400,766		$	93
Dividend income (net of foreign tax witheld: $—, $1,700, $—, and $133,581 respectively)		1,159,167			295,809			45,189			1,005,477
Other Income		—			—			43			—
Total		1,161,730			302,566			2,445,998			1,005,570

Expenses
Management fees (Note 2)		113,856			57,923			427,466			359,036
Administration fees (Note 2)		11,037			6,733			36,551			48,518
Transfer agent fees		11,082			7,472			4,462			8,548
Accounting services		21,200			17,399			29,378			41,435
Custodian fees		1,490			535			5,545			29,996
Legal Fees		4,495			8,126			2,361			20,149
Adudit Fees		20,452			14,705			24,858			18,707
CCO fees (Note 2)		1,598			1,009			5,173			7,317
Trustees fees		5,092			4,406			4,817			4,336
Insurance		805			548			255			3,569
Printing		10,526			5,568			10,648			17,354
Reorganization		—			—			—			78,250
Registration and dues		24,018			22,039			49,537			19,999
12b-1 fees Investor Shares (Note 2)		27,717			17,787			43,343			11,388
Total expenses		253,368			164,250			644,394			668,602
Less reimbursement from manager (Note 2)		(66,114	)		(62,318	)		(76,454	)		(91,289	)
Net expenses		187,254			101,932			567,940			577,313
Net investment income		974,476			200,634			1,878,058			428,257

Realized and unrealized gain (loss) on investments
Net realized gain (loss) from security transactions		(476,503	)		(278,382	)		(2,247,740	)		6,151,978
Change in unrealized appreciation (depreciation) of investments		(1,014,830	)		(455,237	)		(1,058,462	)		(13,778,371	)
Net realized and unrealized gain (loss) on investments		(1,491,333	)		(733,619	)		(3,306,202	)		(7,626,393	)

Net increase (decrease) in net assets resulting from operations	$	(516,857	)	$	(532,985	)	$	(1,428,144	)	$	(7,198,136	)

See accompanying notes to financial statements.

Statements of Changes in Net Assets

	Shelton BDC Income Fund						Shelton Real Estate Income Fund
	Year Ended December 31, 2018			Year Ended December 31, 2017			Year Ended December 31, 2018			Year Ended December 31, 2017
Operations
Net investment income/(loss)	$	974,476		$	901,875		$	200,634		$	421,013
Net realized gain/(loss) on investments and foreign currency transactions		(476,503	)		1,082,001			(278,382	)		86,842
Change in unrealized appreciation/(depreciation) of investments		(1,014,830	)		(1,501,151	)		(455,237	)		(44,486	)
Net increase/(decrease) in net assets resulting from operations		(516,857	)		482,725			(532,985	)		463,369

Distributions to shareholders
Distributions^(a)
Institutional Shares		(134,151	)		—			(2,956	)		—
Investor Shares		(903,402	)		—			(201,492	)		—
Distributions from net investment income
Institutional Shares		—			(81,809	)		—			(12,436	)
Investor Shares		—			(823,864	)		—			(378,226	)
Distributions from return of capital
Institutional Shares		—			—			(1,677	)		—
Investor Shares		—			—			(110,383	)		—
Total Distributions		(1,037,553	)		(905,673	)		(316,508	)		(390,662	)

Capital share transactions
Increase (decrease) in net assets resulting from capital share transactions		(3,937,860	)		1,484,333			(3,852,015	)		(5,831,563	)
Total increase (decrease)		(5,492,270	)		1,061,385			(4,701,508	)		(5,758,856	)

Net assets
Beginning of year		15,095,660			14,034,275			10,047,127			15,805,983
End of year^(b)	$	9,603,390		$	15,095,660		$	5,345,619		$	10,047,127

(a)	The SEC eliminated the requirement to disclose components of distributuons paid to shareholders effective November 5, 2018.

(b)

End of year net assets includes accumulated undistributed net investment income/(loss) of $61,253 and losses of ($13,036) for the year ended December 31, 2017 for Shelton BDC Income Fund and Shelton Real Estate Income Fund, respectively. The SEC eliminated the requirements to disclose undistributed net investment income effective November 5, 2018.

See accompanying notes to financial statements.

Statements of Changes in Net Assets

(Continued)

	Shelton Tactical Credit Fund
	Year Ended December 31, 2018			Period Ended December 31, 2017^(a)			Year Ended April 30, 2017^(b)
Operations
Net investment income/(loss)	$	1,878,058		$	1,067,722		$	2,000,787
Net realized gain/(loss) on investments and foreign currency transactions		(2,247,740	)		37,752			105,714
Net realized gain/(loss) on written options contracts		—			—			119,872
Net realized gain/(loss) from short sale transactions		—			—			(4,002	)
Total net realized gain/(loss)		(2,247,740	)		37,752			221,584

Change in unrealized appreciation/(depreciation) of investments		(1,058,462	)		(637,943	)		364,538
Net change in unrealized appreciation/(depreciation) of written options		—			—			(15,735	)
Total net change in unrealized appreciation/(depreciation) of investments		(1,058,462	)		(637,943	)		348,803
Net increase/(decrease) in net assets resulting from operations		(1,428,144	)		467,531			2,571,174

Distributions to shareholders
Distributions^(c)
Institutional Shares		(1,023,254	)		—			—
Investor Shares		(861,326	)		—			—
Distributions From net investment income
Institutional Shares		—			(748,463	)		(1,135,785	)
Investor Shares		—			(475,435	)		(1,028,152	)
Class C Shares		—			—			(99,729	)
Total Distributions		(1,884,580	)		(1,223,898	)		(2,263,666	)

Capital share transactions
Increase/(Decrease) in net assets resulting from capital share transactions		16,942,621			(9,262,057	)		5,945,473
Total increase/(decrease)		13,629,897			(10,018,424	)		6,252,981

Net assets
Beginning of year		25,702,719			35,721,143			29,468,162
End of year^(d)	$	39,332,616		$	25,702,719		$	35,721,143

(a)	For the eight month period ending December 31, 2017.

(b)	Effective after the close of business on March 17, 2017, Class I Shares and Class A Shares were renamed to Institutional Shares and Investor Shares, respectively. Class C Shares merged into investor shares. See Note 5.

(c)	The SEC eliminated the requirement to disclose components of distributuons paid to shareholders effective November 5, 2018.

(d)

End of year net assets includes accumulated undistributed net investment income of $12,572 and $168,748 for the period ended December 31, 2017 and for the year ended April 30, 2017, respectively. The SEC eliminated the requirements to disclose undistributed net investment income effective November 5, 2018.

See accompanying notes to financial statements.

Statements of Changes in Net Assets

(Continued)

	Shelton International Select Equity Fund
	Year Ended December 31, 2018			Period Ended December 31, 2017^(a)(b)			Year Ended April 30, 2017^(b)
Operations
Net investment income/(loss)	$	428,257		$	220,091		$	582,141
Net realized gain/(loss) on investments and foreign currency transactions		6,151,978			3,419,712			1,816,087
Change in unrealized appreciation/(depreciation) of investments		(13,778,371	)		4,873,836			3,499,770
Net increase/(decrease) in net assets resulting from operations		(7,198,136	)		8,513,639			5,897,998

Distributions to shareholders
Distributions^(c)
Institutional Shares (Advisor Class I Shares)		(412,083	)		—			—
Investor Shares (Class A Shares)		(27,801	)		—			—
Distributions from net investment income
Institutional Shares (Advisor Class I Shares)		—			(808,165	)		(505,743	)
Investor Shares (Class A Shares)		—			(72,892	)		(52,217	)
Distributions from return of capital
Institutional shares		—			(23,185	)		—
Investor shares (Class A Shares)		—			(2,091	)		—
Total Distributions		(439,884	)		(906,333	)		(557,960	)

Capital share transactions
Increase/(Decrease) in net assets resulting from capital share transactions		8,357,579			(4,223,528	)		(14,737,108	)
Total increase/(decrease)		719,559			3,383,778			(9,397,070	)

Net assets
Beginning of year		46,608,519			43,224,741			52,621,811
End of year^(d)	$	47,328,078		$	46,608,519		$	43,224,741

(a)	For the eight month period ending December 31, 2017.

(b)	Effective after the close of business on March 17, 2017, Class I Shares and Class A Shares were renamed to Institutional Shares and Investor Shares, respectively. See Note 5.

(c)	The SEC eliminated the requirement to disclose components of distributuons paid to shareholders effective November 5, 2018.

(d)

End of year net assets includes accumulated undistributed net investment income/(loss) of ($1,273) and $672,089 for the period ended December 31, 2017 and for the year ended April 30, 2017, respectively. The SEC eliminated the requirements to disclose undistributed net investment income effective November 5, 2018.

See accompanying notes to financial statements.

Statements of Changes in Net Assets

(Continued)

Shelton BDC Income Fund	Institutional Shares
	Year Ended December 31, 2018						Year Ended December 31, 2017
	Shares			Value			Shares			Value
Shares sold		80,073		$	712,971			163,416		$	1,540,708
Shares issued in reinvestment of distributions		2,576			22,205			1,926			17,810
Shares repurchased		(111,651	)		(941,893	)		(31,072	)		(289,683	)
Net increase (decrease)		(29,002	)	$	(206,717	)		134,270		$	1,268,835

	Investor Shares
	Year Ended December 31, 2018						Year Ended December 31, 2017
	Shares			Value			Shares			Value
Shares sold		167,319		$	1,500,230			518,679		$	4,933,025
Shares issued in reinvestment of distributions		50,375			428,838			46,680			437,007
Shares repurchased		(638,068	)		(5,660,211	)		(546,388	)		(5,154,534	)
Net increase (decrease)		(420,374	)	$	(3,731,143	)		18,971		$	215,498

Shelton Real Estate Income Fund	Institutional Shares
	Year Ended December 31, 2018						Year Ended December 31, 2017
	Shares			Value			Shares			Value
Shares sold		13,242		$	111,869			14,323		$	126,012
Shares issued in reinvestment of distributions		561			4,633			1,420			12,436
Shares repurchased		(28,224	)		(236,833	)		(103,476	)		(927,519	)
Net increase (decrease)		(14,421	)	$	(120,331	)		(87,733	)	$	(789,071	)

	Investor Shares
	Year Ended December 31, 2018						Year Ended December 31, 2017
	Shares			Value			Shares			Value
Shares sold		8,216		$	68,996			122,004		$	1,084,989
Shares issued in reinvestment of distributions		30,212			256,117			36,235			320,416
Shares repurchased		(480,772	)		(4,056,797	)		(724,943	)		(6,447,897	)
Net increase (decrease)		(442,344	)	$	(3,731,684	)		(566,704	)	$	(5,042,492	)

Shelton Tactical Credit Fund	Institutional Shares^(a)
	Year Ended December 31, 2018						Period Ended December 31, 2017^(b)						Year Ended April 30, 2017
	Shares			Value			Shares			Value			Shares			Value
Shares sold		1,196,154		$	12,563,633			422,690		$	4,457,159			1,168,883		$	12,347,311
Shares issued in reinvestment of distributions		97,468			996,413			69,814			727,118			103,675			1,081,813
Shares repurchased		(1,032,946	)		(10,654,684	)		(673,568	)		(7,116,851	)		(969,322	)		(10,181,672	)
Net increase (decrease)		260,676		$	2,905,362			(181,064	)	$	(1,932,574	)		303,236		$	3,247,452

See accompanying notes to financial statements.

Statements of Changes in Net Assets

(Continued)

	Investor Shares⁽^a⁾
	Year Ended December 31, 2018						Period Ended December 31, 2017^(b)						Year Ended April 30, 2017
	Shares			Value			Shares			Value			Shares			Value
Shares sold		2,116,973		$	22,181,644			237,943		$	2,492,290			1,728,782		$	18,230,300
Shares issued in reinvestment of distributions		84,684			861,241			45,543			473,115			94,055			981,885
Shares repurchased		(886,689	)		(9,005,626	)		(985,625	)		(10,294,888	)		(1,389,678	)		(14,563,404	)
Net increase (decrease)		1,314,968		$	14,037,259			(702,139	)	$	(7,329,483	)		433,159		$	4,648,781

	Class C Shares⁽^a⁾
	Period May 1, 2016 to March 17, 2017
	Shares			Value
Shares sold		31,312		$	333,349
Shares issued in reinvestment of distributions		9,626			99,729
Shares repurchased		(226,582	)		(2,383,838	)
Net increase (decrease)		(185,644	)	$	(1,950,760	)

Shelton International Select Equity Fund	Institutional Shares^(c)
	Year Ended December 31, 2018						Period Ended December 31, 2017^(b)						Year Ended April 30, 2017
	Shares			Value			Shares			Value			Shares			Value
Shares sold		404,517		$	8,389,760			131,505		$	2,520,264			340,283		$	5,634,219
Shares issued in connection with merger of European Growth and Income Fund (Note 5)		255,732			5,433,116			N/A			N/A			N/A			N/A
Shares issued in reinvestment of distributions		18,763			399,273			40,564			807,223			28,733			468,912
Shares repurchased		(428,116	)		(8,947,676	)		(313,889	)		(6,169,368	)		(995,347	)		(16,147,861	)
Net increase (decrease)		250,896		$	5,274,473			(141,820	)	$	(2,841,881	)		(626,331	)	$	(10,044,730	)

	Investor Shares^(c)
	Year Ended December 31, 2018						Period Ended December 31, 2017^(b)						Year Ended April 30, 2017
	Shares			Value			Shares			Value			Shares			Value
Shares sold		29,894		$	603,645			2,971		$	60,349			3,796		$	61,537
Shares issued in connection with merger of European Growth and Income Fund (Note 5)		180,163			3,818,373			N/A			N/A			N/A			N/A
Shares issued in reinvestment of distributions		1,022			21,696			3,118			61,964			2,648			43,243
Shares repurchased		(65,942	)		(1,360,608	)		(77,447	)		(1,503,960	)		(292,063	)		(4,797,158	)
Net increase (decrease)		145,137		$	3,083,106			(71,358	)	$	(1,381,647	)		(285,619	)	$	(4,692,378	)

(a)	Effective after the close of business on March 17, 2017, Class I Shares and Class A Shares were renamed to Institutional Shares and Investor Shares, respectively. Class C Shares merged into investor shares. See Note 5.

(b)	For the eight month period ending December 31, 2017.

(c)	Following the reorganization on July 28, 2017, Class A Shares and Class I Shares were renamed Investor Shares and Institutional Shares, respectively. See note 5.

See accompanying notes to financial statements.

Financial Highlights

For a Share Outstanding Throughout Each Year or Period

Shelton BDC Income Fund	Institutional Shares									Formerly AR Capital BDC Income Fund
	Year Ended December 31, 2018			Year Ended December 31, 2017			Period Ended December 31, 2016^(a)(b)			Year Ended March 31, 2016^(c)			Period Ended March 31, 2015^(c)(d)
Net asset value, beginning of year	$	8.92		$	9.11		$	8.40		$	9.65		$	10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(e)		0.71			0.59			0.44			0.80			1.55
Net gain/(loss) on securities (both realized and unrealized)		(1.10	)		(0.22	)		0.72			(1.36	)		(1.40	)
Total from investment operations		(0.39	)		0.37			1.16			(0.56	)		0.15
LESS DISTRIBUTIONS
Dividends from net investment income		(0.78	)		(0.56	)		(0.45	)		(0.69	)		(0.50	)
Distributions from capital gains		—			—			—			—			—
Total distributions		(0.78	)		(0.56	)		(0.45	)		(0.69	)		(0.50	)
Net asset value, end of year	$	7.75		$	8.92		$	9.11		$	8.40		$	9.65

Total return		(4.80	)%		3.94	%		14.07	%^(j)		(5.76	)%^(f)		1.59	%^(f)

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	1,173		$	1,610		$	420		$	443		$	106
Ratio of expenses to average net assets:^(g)
Before expense reimbursements		1.78	%		1.78	%		2.53	%^(h)		2.47	%		10.23	%^(h)
After expense reimbursements		1.26	%		1.25	%		1.24	%^(h)		1.25	%		1.25	%^(h)
Ratio of net investment income/(loss) to average net assets⁽ⁱ⁾											9.30	%		17.58	%^(h)
Before expense reimbursements		7.56	%		5.82	%		5.26	%^(h)
After expense reimbursements		8.08	%		6.34	%		6.55	%^(h)
Portfolio turnover		30	%		118	%		38	%^(j)		166	%		33	%^(j)

(a)	For the nine months ended December 31, 2016.

(b)	Following the acquisition on November 4, 2016, advisor class and class A were renamed Institutional and Investor Class.

(c)	Audited by other independent registered public accounting firm.

(d)	The inception date of Shelton BDC Income Fund is April 22, 2014; the commencement of operations and start of performance for Institutional Class and Investor Class is May 2, 2014.

(e)	Calculated based upon average shares outstanding.

(f)	Total returns shown exclude the effect of applicable sales loads/redemption fees. If the Adviser did not reimburse/waive a portion of the Fund’s expenses, total return would have been lower. Returns are not annualized.

(g)	Does not include expenses of investment companies in which the Fund invests.

(h)	Annualized

(i)	Recognition of net investment income by the Fund is affected by the timing in which the Fund invests. The ratio does not include the net income of the investment companies in which the Fund invests.

(j)	Not annualized

See accompanying notes to financial statements.

Financial Highlights

For a Share Outstanding Throughout Each Year or Period
(Continued)

Shelton BDC Income Fund	Investor Shares									Formerly AR Capital BDC Income Fund
	Year Ended December 31, 2018			Year Ended December 31, 2017			Period Ended December 31, 2016^(a)(b)			Year Ended March 31, 2016^(c)			Period Ended March 31, 2015^(c)(d)
Net asset value, beginning of year	$	9.01		$	9.21		$	8.51		$	9.66		$	10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(e)		0.68			0.54			0.44			0.70			0.77
Net gain/(loss) on securities (both realized and unrealized)		(1.11	)		(0.19	)		0.71			(1.17	)		(0.62	)
Total from investment operations		(0.43	)		0.35			1.15			(0.47	)		0.15
LESS DISTRIBUTIONS
Dividends from net investment income		(0.75	)		(0.55	)		(0.45	)		(0.68	)		(0.49	)
Distributions from capital gains		—			—			—			—			—
Total distributions		(0.75	)		(0.55	)		(0.45	)		(0.68	)		(0.49	)
Net asset value, end of year	$	7.83		$	9.01		$	9.21		$	8.51		$	9.66

Total return		(5.13	)%		3.73	%		13.74	%^(j)		(4.83	)%^(f)		1.56	%^(f)

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	8,430		$	13,486		$	13,614		$	12,853		$	11,658
Ratio of expenses to average net assets:^(g)
Before expense reimbursements		2.03	%		2.04	%		2.82	%^(h)		2.66	%		7.61	%^(h)
After expense reimbursements		1.51	%		1.50	%		1.50	%^(h)		1.45	%		1.50	%^(h)
Ratio of net investment income/(loss) to average net assets⁽ⁱ⁾											7.89	%		8.94	%^(h)
Before expense reimbursements		7.13	%		5.21	%		5.16	%^(h)
After expense reimbursements		7.65	%		5.73	%		6.48	%^(h)
Portfolio turnover		30	%		118	%		38	%^(j)		166	%		33	%^(j)

(a)	For the nine months ended December 31, 2016.

(b)	Following the acquisition on November 4, 2016, advisor class and class A were renamed Institutional and Investor Class.

(c)	Audited by other independent registered public accounting firm.

(d)	The inception date of Shelton BDC Income Fund is April 22, 2014; the commencement of operations and start of performance for Institutional Class and Investor Class is May 2, 2014.

(e)	Calculated based upon average shares outstanding.

(f)	Total returns shown exclude the effect of applicable sales loads/redemption fees. If the Adviser did not reimburse/waive a portion of the Fund’s expenses, total return would have been lower. Returns are not annualized.

(g)	Does not include expenses of investment companies in which the Fund invests.

(h)	Annualized

(i)	Recognition of net investment income by the Fund is affected by the timing in which the Fund invests. The ratio does not include the net income of the investment companies in which the Fund invests.

(j)	Not annualized

See accompanying notes to financial statements.

Financial Highlights

For a Share Outstanding Throughout Each Year or Period
(Continued)

Shelton Real Estate Income Fund	Institutional Shares^(a)									Formerly AR Capital Real Estate Income Fund
	Year Ended December 31, 2018			Year Ended December 31, 2017			Period Ended December 31, 2016^(b)			Year Ended March 31, 2016^(c)			Year Ended March 31, 2015^(c)			Period Ended March 31, 2014^(c)(d)
Net asset value, beginning of year	$	8.64		$	8.82		$	10.65		$	11.40		$	10.22		$	10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(e)		0.19			0.28			0.23			0.26			0.27			0.25
Net gain/(loss) on securities (both realized and unrealized)		(0.72	)		0.07			0.07			0.02	^(f)		1.58			0.23	^(f)
Total from investment operations		(0.53	)		0.35			0.30			0.28			1.85			0.48
LESS DISTRIBUTIONS
Dividends from net investment income		(0.23	)		(0.53	)		(0.38	)		(0.48	)		(0.60	)		(0.18	)
Distributions from return of capital		(0.14	)		—			(0.18	)		—			—			—
Distributions from capital gains		(0.02	)		—			(1.57	)		(0.55	)		(0.07	)		(0.08	)
Total distributions		(0.39	)		(0.53	)		(2.13	)		(1.03	)		(0.67	)		(0.26	)
Net asset value, end of year	$	7.72		$	8.64		$	8.82		$	10.65		$	11.40		$	10.22

Total return		(6.38	)%		3.98	%		3.15	%⁽ⁱ⁾		2.90	%⁽^g)		18.71	%⁽^g⁾		5.01	%⁽^g⁾

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	6		$	131		$	908		$	703		$	15,295		$	17,533
Ratio of expenses to average net assets:
Before expense reimbursements		2.02	%		2.10	%		2.49	%^(h)		2.01	%		2.21	%		3.97	%^(h)
After expense reimbursements		1.16	%		1.17	%		1.14	%^(h)		1.15	%		1.15	%		1.15	%^(h)
Ratio of net investment income/(loss) to average net assets											2.40	%		2.54	%		3.09	%^(h)
Before expense reimbursements		1.61	%		2.20	%		1.61	%^(h)
After expense reimbursements		2.26	%		3.13	%		1.34	%^(h)
Portfolio turnover		38	%		41	%		137	%⁽ⁱ⁾		99	%		104	%		86	%⁽ⁱ⁾

(a)	Following the acquisition on November 4, 2016, advisor class and class A were renamed Institutional and Investor Class.

(b)	For the nine months ended December 31, 2016.

(c)	Audited by other independent registered public accounting firm.

(d)	The inception date of Shelton Real Estate Income Fund is June 4, 2013; the commencement of operations and start of performance is June 7, 2013.

(e)	Calculated based upon average shares outstanding.

(f)	Net realized and unrealized gain on investments per share does not correlate within the financial highlights for the periods ended March 31, 2016 and March 31, 2014, due to the timing of shareholder subscriptions and redemptions.

(g)	Total returns shown exclude the effect of applicable sales loads/redemption fees. If the Adviser did not reimburse/waive a portion of the Fund’s expenses, total return would have been lower. Returns are not annualized.

(h)	Annualized

(i)	Not annualized

See accompanying notes to financial statements.

Financial Highlights

For a Share Outstanding Throughout Each Year or Period
(Continued)

Shelton Real Estate Income Fund	Investor Shares^(a)									Formerly AR Capital Real Estate Income Fund
	Year Ended December 31, 2018			Year Ended December 31, 2017			Period Ended December 31, 2016^(b)			Year Ended March 31, 2016^(c)			Year Ended March 31, 2015^(c)			Period Ended March 31, 2014^(c)(d)
Net asset value, beginning of year	$	8.88		$	8.85		$	10.66		$	11.40		$	10.21		$	10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(e)		0.23			0.31			0.21			0.30			0.26			0.28
Net gain/(loss) on securities (both realized and unrealized)		(0.79	)		0.01			0.07			(0.03	)		1.57			0.18	^(f)
Total from investment operations		(0.56	)		0.32			0.28			0.27			1.83			0.46
LESS DISTRIBUTIONS
Dividends from net investment income		(0.24	)		(0.29	)		(0.35	)		(0.46	)		(0.57	)		(0.17	)
Distributions from return of capital		(0.14	)		—			(0.17	)		—			—			—
Distributions from capital gains		(0.02	)		—			(1.57	)		(0.55	)		(0.07	)		(0.08	)
Total distributions		(0.40	)		(0.29	)		(2.09	)		(1.01	)		(0.64	)		(0.25	)
Net asset value, end of year	$	7.92		$	8.88		$	8.85		$	10.66		$	11.40		$	10.21

Total return		(6.55	)%		3.72	%		3.02	%⁽ⁱ⁾		2.79	%⁽^g⁾		18.47	%⁽^g⁾		4.83	%⁽^g⁾

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	5,340		$	9,916		$	14,898		$	11,396		$	20,677		$	14,362
Ratio of expenses to average net assets:
Before expense reimbursements		2.27	%		2.35	%		2.72	%^(h)		2.22	%		2.46	%		4.22	%^(h)
After expense reimbursements		1.41	%		1.42	%		1.39	%^(h)		1.36	%		1.40	%		1.40	%^(h)
Ratio of net investment income/(loss) to average net assets											2.75	%		2.41	%		3.47	%^(h)
Before expense reimbursements		1.92	%		2.53	%		1.41	%^(h)
After expense reimbursements		2.78	%		3.46	%		2.74	%^(h)
Portfolio turnover		38	%		41	%		137	%⁽ⁱ⁾		99	%		104	%		86	%⁽ⁱ⁾

(a)	Following the acquisition on November 4, 2016, advisor class and class A were renamed Institutional and Investor Class.

(b)	For the nine months ended December 31, 2016.

(c)	Audited by other independent registered public accounting firm.

(d)	The inception date of Shelton Real Estate Income Fund is June 4, 2013; the commencement of operations and start of performance is June 7, 2013.

(e)	Calculated based upon average shares outstanding.

(f)	Net realized and unrealized gain on investments per share does not correlate within the financial highlights for the periods ended March 31, 2016 and March 31, 2014, due to the timing of shareholder subscriptions and redemptions.

(g)	Total returns shown exclude the effect of applicable sales loads/redemption fees. If the Adviser did not reimburse/waive a portion of the Fund’s expenses, total return would have been lower. Returns are not annualized.

(h)	Annualized

(i)	Not annualized

See accompanying notes to financial statements.

Financial Highlights

For a Share Outstanding Throughout Each Year or Period
(Continued)

Shelton Tactical Credit Fund Institutional Shares^(a)	Year Ended December 31, 2018			Period Ended December 31, 2017^(b)			Year Ended April 30, 2017			Year Ended April 30, 2016^(c)			Period Ended April 30, 2015^(c)(d)
Net asset value, beginning of year	$	10.36		$	10.62		$	10.46		$	10.38		$	10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(e)		0.55			0.39			0.67			0.56			0.12
Net gain/(loss) on securities (both realized and unrealized)		(0.68	)		(0.20	)		0.27			(0.08	)		0.34
Total from investment operations		(0.13	)		0.19			0.94			0.48			0.46
LESS DISTRIBUTIONS
Dividends from net investment income		(0.54	)		(0.45	)		(0.78	)		(0.37	)		(0.08	)
Distributions from capital gains		—			—			—			(0.03	)		—
Total distributions		(0.54	)		(0.45	)		(0.78	)		(0.40	)		(0.08	)
Net asset value, end of year	$	9.69		$	10.36		$	10.62		$	10.46		$	10.38

Total return		(1.39	)%		1.79	%		9.35	%		4.78	%		4.60	%

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	18,671		$	17,256		$	19,609		$	16,139		$	4,448
Ratio of expenses to average net assets:
Before expense reimbursements		1.64	%		1.67	%		2.34	%		2.66	%		6.35	%
After expense reimbursements		1.43	%		1.42	%		1.39	%		1.61	%		1.42	%
Ratio of net investment income/(loss) to average net assets
Before expense reimbursements		5.10	%		5.27	%		5.42	%
After expense reimbursements		5.31	%		5.51	%		6.37	%		5.54	%		3.22	%
Portfolio turnover		518	%		239	%		246	%		695	%		532	%

Shelton Tactical Credit Fund Investor Shares^(a)	Year Ended December 31, 2018			Period Ended December 31, 2017^(b)			Year Ended April 30, 2017			Year Ended April 30, 2016^(c)			Period Ended April 30, 2015^(c)(d)
Net asset value, beginning of year	$	10.31		$	10.59		$	10.47		$	10.38		$	10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(e)		0.51			0.38			0.63			0.55			0.11
Net gain/(loss) on securities (both realized and unrealized)		(0.66	)		(0.22	)		0.26			(0.08	)		0.35
Total from investment operations		(0.15	)		0.16			0.89			0.47			0.46
LESS DISTRIBUTIONS
Dividends from net investment income		(0.48	)		(0.44	)		(0.77	)		(0.35	)		(0.08	)
Distributions from capital gains		—			—			—			(0.03	)		—
Total distributions		(0.48	)		(0.44	)		(0.77	)		(0.38	)		(0.08	)
Net asset value, end of year	$	9.68		$	10.31		$	10.59		$	10.47		$	10.38

Total return		(1.61	)%		1.58	%		8.84	%		4.66	%		4.57	%

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	20,662		$	8,447		$	16,112		$	11,392		$	126
Ratio of expenses to average net assets:
Before expense reimbursements		1.89	%		1.91	%		2.61	%		2.91	%		6.60	%
After expense reimbursements		1.68	%		1.67	%		1.65	%		1.86	%		1.68	%
Ratio of net investment income/(loss) to average net assets
Before expense reimbursements		4.73	%		5.10	%		4.99	%
After expense reimbursements		4.94	%		5.34	%		5.96	%		5.29	%		2.97	%
Portfolio turnover		518	%		239	%		246	%		695	%		532	%

(a)	As of March 17, 2017 Class A shares and I shares were renamed to Investor shares and Institutional shares, respectively (Note 5).

(b)	For the eight month period ended December 31, 2017.

(c)	Audited by other independent registered public accounting firm.

(d)	Fund commenced operations December 16, 2014.

(e)	Calculated based upon average shares outstanding.

See accompanying notes to financial statements.

Financial Highlights

For a Share Outstanding Throughout Each Year or Period
(Continued)

Shelton International Select Equity Fund Institutional Shares^(a)	Year Ended December 31, 2018			Period Ended December 31, 2017⁽^b⁾			Year Ended April 30, 2017			Year Ended April 30, 2016^(c)			Year Ended April 30, 2015^(c)			Year Ended April 30, 2014^(c)
Net asset value, beginning of year	$	21.34		$	18.03		$	15.90		$	21.20		$	23.53		$	20.59
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(d)		0.19			0.10			0.22			0.25			0.24			0.20
Net gain/(loss) on securities (both realized and unrealized)		(2.97	)		3.61			2.13			(5.01	)		(2.36	)		2.92
Total from investment operations		(2.78	)		3.71			2.35			(4.76	)		(2.12	)		3.12
LESS DISTRIBUTIONS
Dividends from net investment income		(0.21	)		(0.39	)		(0.22	)		(0.54	)		(0.21	)		(0.15	)
Distributions from return of capital		—			(0.01	)		—			—			—			—
Distributions from capital gains		—			—			—			—			—			(0.03	)
Total distributions		(0.21	)		0.40			(0.22	)		(0.54	)		(0.21	)		(0.18	)
Redemption Fees		—			—			—			—			—	^(e)		—	^(e)
Net asset value, end of year	$	18.35		$	21.34		$	18.03		$	15.90		$	21.20		$	23.53

Total return		(13.17	)%		20.74	%		14.89	%^(f)		(22.36	)%^(f)		(8.94	)%^(f)		15.18	%^(f)

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	41,424		$	42,824		$	38,737		$	44,133		$	369,610		$	347,791
Ratio of expenses to average net assets:
Before expense reimbursements		1.36	%		1.32	%		1.76	%^(g)		1.28	%^(g)		1.20	%^(g)		1.20	%^(g)
After expense reimbursements		1.17	%		0.99	%		0.99	%		1.23	%		1.20	%		1.24	%
Ratio of net investment income/(loss) to average net assets
Before expense reimbursements		0.73	%		0.41	%
After expense reimbursements		0.92	%		0.74	%		1.32	%		1.36	%		1.11	%		0.92	%
Portfolio turnover		65	%		24	%		41	%		40	%		8	%		6	%

(a)	As of July 28, 2017 Class A shares and I shares were renamed to Investor shares and Institutional shares, respectively (Note 5).

(b)	For the eight month period ended December 31, 2017.

(c)	Audited by other independent registered public accounting firm.

(d)	Calculated based upon average shares outstanding.

(e)	Amount is less than $0.005 per share.

(f)

Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes
reinvestment of dividends and distributions, if any. For Investor Shares (Formerly Class A Shares), total investment return does not reflect the impact of the
maximum front-end sales load of 5.75%. If reflected, the return would be lower.

(g)	During the period, certain fees were waived and/or reimbursed; or recouped, if any. If such fee waivers and/or reimbursements or recoupments had not occurred, the ratios would have been as indicated.

See accompanying notes to financial statements.

Financial Highlights

For a Share Outstanding Throughout Each Year or Period
(Continued)

Shelton International Select Equity Fund Investor Shares^(a)	Year Ended December 31, 2018			Period Ended December 31, 2017⁽^b⁾			Year Ended April 30, 2017			Year Ended April 30, 2016^(c)			Year Ended April 30, 2015^(c)			Year Ended April 30, 2014^(c)
Net asset value, beginning of year	$	21.30		$	18.02		$	15.88		$	21.16		$	23.48		$	20.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss)^(d)		0.11			0.08			0.17			0.19			0.17			0.14
Net gain/(loss) on securities (both realized and unrealized)		(2.94	)		3.60			2.13			(4.97	)		(2.34	)		2.92
Total from investment operations		(2.83	)		3.68			2.30			(4.78	)		(2.17	)		3.06
LESS DISTRIBUTIONS
Dividends from net investment income		(0.18	)		(0.39	)		(0.16	)		(0.50	)		(0.15	)		(0.09	)
Distributions from return of capital		—			(0.01	)		—			—			—
Distributions from capital gains		—			—			—			—			—			(0.03	)
Total distributions		(0.18	)		(0.40	)		(0.16	)		(0.50	)		(0.15	)		(0.12	)
Redemption Fees		—			—			—			—	^(e)		—	^(e)		—	^(e)
Net asset value, end of year	$	18.29		$	21.30		$	18.02		$	15.88		$	21.16		$	23.48

Total return		(13.41	)%		20.53	%		14.55	%^(f)		(22.51	)%^(f)		(9.18	)%^(f)		14.90	%^(f)

RATIOS / SUPPLEMENTAL DATA
Net assets, end of year (000s)	$	5,904		$	3,785		$	4,488		$	8,488		$	31,583		$	46,435
Ratio of expenses to average net assets:
Before expense reimbursements		1.56	%		1.59	%		2.02	%^(g)		1.53	%^(g)		1.45	%^(g)		1.45	%^(g)
After expense reimbursements		1.38	%		1.24	%		1.24	%		1.48	%		1.45	%		1.49	%
Ratio of net investment income/(loss) to average net assets
Before expense reimbursements		0.33	%		0.23	%
After expense reimbursements		0.51	%		0.58	%		1.06	%		1.11	%		0.75	%		0.67	%
Portfolio turnover		65	%		24	%		41	%		40	%		8	%		6	%

(a)	As of July 28, 2017 Class A shares and I shares were renamed to Investor shares and Institutional shares, respectively (Note 5).

(b)	For the eight month period ended December 31, 2017.

(c)	Audited by other independent registered public accounting firm.

(d)	Calculated based upon average shares outstanding.

(e)	Amount is less than $0.005 per share.

(f)

(g)	During the period, certain fees were waived and/or reimbursed; or recouped, if any. If such fee waivers and/or reimbursements or recoupments had not occurred, the ratios would have been as indicated.

See accompanying notes to financial statements.

SCM Trust

Notes to Financial Statements

December 31, 2018

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SCM Trust (the “Trust”), a Massachusetts business trust formed in July 1988 is registered as an investment company under the Investment Company Act of 1940, as amended. The Trust currently consists of four separate series, each of which is included in these financial statements.

Shelton BDC Income Fund (“BDC Income Fund”) is an open-end, non-diversified series of the Trust. The inception date is April 22, 2014, and the commencement date of operations is May 2, 2014. The investment objective is to provide a high level of income with the potential for capital appreciation. Effective July 1, 2016, Shelton Capital Management, a California limited partnership (“Shelton” or the “Advisor”) became the advisor to the Fund.

Shelton Real Estate Income Fund (“Real Estate Income Fund”) is an open-end, non-diversified series of the Trust. The inception date is June 4, 2013, and the commencement date of operations is June 7, 2013. The investment objective is to provide current income with the potential for capital appreciation. Effective July 1, 2016, Shelton became the advisor to the Fund.

Shelton Tactical Credit Fund (“Tactical Credit Fund”) is an open-end, non-diversified series of the Trust. The inception date is December 16, 2014. The Fund’s investment objective is to seek current income and capital appreciation. Effective July 1, 2016, Shelton became the advisor to the Fund. The Tactical Credit Fund is a successor to a series of the FundVantage Trust, a Delaware statutory trust, pursuant to a reorganization that took place after the close of business on March 17, 2017. Prior to March 17, 2017, the Successor Fund had no investment operations. As a result of the reorganization, holders of Class A Shares and Class C Shares of the former Tactical Credit Fund received Investor Shares of the successor Tactical Credit Fund and holders of Advisor Class Shares of the former Tactical Credit Fund received Institutional Shares of the successor Tactical Credit Fund.

Shelton International Select Equity Fund (“International Select Fund”, and together with the BDC Income Fund, the Real Estate Income Fund, and the Tactical Credit Fund, each a “Fund” and collectively, the “Funds”) is an open-end, diversified series of the Trust. The inception date is July 31, 2009. The Fund’s investment objective is to achieve long-term capital appreciation by creating a portfolio composed of primarily large capitalization international equity growth stocks. Effective July 18, 2016, Shelton became the advisor to the Fund. The International Select Fund is a successor to a series of the FundVantage Trust, a Delaware statutory trust, pursuant to a reorganization that took place after the close of business on July 28, 2017. Prior to July 28, 2017, the Successor Fund had no investment operations. As a result of the reorganization, holders of Class A Shares of the former International Select Fund received Investor Shares of the successor International Select Equity Fund and holders of Class I Shares of the former International Select Equity Fund received Institutional Shares of the successor International Select Equity Fund.

On August 24, 2018, the Shelton European Growth and Income Fund (“European Growth and Income Fund”) was reorganized with and into the International Select Fund, each a series of SCM Trust. On July 25, 2018, the shareholders of the European Growth and Income Fund’s approved the reorganization. As part of the reorganization, each shareholder of the Class K and Direct Class shares of the European Growth and Income Fund received shares of, respectively, the Investor Class and Institutional Class shares of the International Select Fund. After the reorganization, the European Growth and Income Fund was dissolved.

The Trust follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, “Financial Services – Investment Companies”.

(a) Security Valuation — Inputs used to value corporate debt securities generally include relative credit information, observed market movements, sector news, U.S. Treasury yield curve or relevant benchmark curve, and other market information, which may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data, such as market research publications, when available (“Other Market Information”). Equity securities listed on a national or international exchange are valued at the last reported sales price. Futures contracts are valued at the settle price, depending on the exchange the contract trades on, typically as of 4:15 p.m., Eastern Time. Municipal securities are valued by an independent pricing service at a price determined by a matrix pricing method. This technique generally considers such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings and general market conditions. U.S. government securities for which market quotations are readily available are valued at the mean between the closing bid and asked prices provided by an independent pricing service. U.S. agency securities consisting of mortgage pass-through certificates are valued using dealer quotations provided by an independent pricing service. U.S. Treasury Bills are valued at amortized cost which approximates market value. Securities with remaining maturities of 60 days or less are valued on the amortized cost basis as reflecting fair value.

Securities for which market quotes are not readily available from the Trust’s third-party pricing service are valued at fair value, determined in good faith and in accordance with procedures adopted by the Board of Trustees. The Board has delegated to the Advisor’s Pricing Committee the responsibility for determining the fair value, subject to the Board oversight and the review of the pricing decisions at its quarterly meetings. For a description of the Advisor, see Note 2.

(b) Federal Income Taxes — No provision is considered necessary for federal income taxes. The Funds intend to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and to distribute all their taxable income to shareholders.

(c) Security Transactions, Investment Income and Distributions to Shareholders — Security transactions are recorded on the trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Withholding taxes on foreign dividends have been provided for, in accordance with the Trust’s understanding of the applicable country’s tax rules and rates. Discounts or premiums on debt securities are accreted or amortized to interest income over the lives of the respective securities using the effective interest method. Distributions to shareholders are recorded on the ex-dividend. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for PFICs, wash sales, REIT adjustments and post-October capital losses.

Distributions received from investments in securities that represent a return of capital or capital gains are recorded as a reduction of cost of investment or as a realized gain, respectively. The calendar year-end amounts of ordinary income, capital gains, and return of capital included in distributions received from a Fund’s investments in real estate investment trusts (“REITs”) are reported to the Fund after the end of the calendar year; accordingly, the Funds estimate these amounts for accounting purposes until the characterization of REIT distributions is reported to the Fund after the end of the calendar year. Estimates are based on the most recent REIT distribution information available.