07 May 2024
Written by MYTHEO
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Key Takeaways
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• Equities market decline due to a shifting interest rate outlook, following higher than expected inflation data
• The Income Portfolio remained under pressure due to the prolonged period of elevated interest rates, posing challenges for yield-seeking investments  within the portfolio
• Precious metal rose in value due to geopolitical tensions propelled gold and silver prices to a record high

In this monthly report, we will assess the performance of MYTHEO’s portfolios in light of the financial market developments in April 2024.

1. Growth Portfolio

‍MYTHEO’s Growth Portfolio was down by 3.25% (down 2.58% in MYR) in April 2024.

‍In March 2024, MYTHEO AI-Assist initiated a move, reallocating half of the portfolio exposure in an Asia Pacific ETF to US ETFs. Subsequently, in April, MYTHEO AI-Assist reversed this decision. Both actions, strategically timed, effectively minimized losses for the portfolio.

‍The portfolio’s allocation to the Emerging Markets ETF (about 15%) was the key contributor to the overall portfolio performance during the period.
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Top 3 ETFs performance (Growth portfolio)

Bottom 3 ETFs performance (Growth portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of April 2024.

2. Income Portfolio

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‍MYTHEO’s Income Portfolio recorded a loss of 2.12% (down by 1.44% in MYR) in April 2024.

In April 2024, the income portfolio underwent its quarterly re-optimization, strategically boosting the allocation of U.S preferred stock ETF to bolster its yield. The portfolio maintains significant positions in short-term duration corporate bonds and treasury bonds, carefully offset by longer-term US Treasury holdings for balance. Presently, the yield-to-maturity of the bond ETFs in the portfolio (excluding preferred stock) stands at approximately 5.19%.

The portfolio’s exposure to senior loan (about 10%) was the key contributor to the overall portfolio performance during the period.
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Top 3 ETFs performance (Income portfolio)

Bottom 3 ETFs performance (Income portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of April 2024.

3. Inflation Hedge Portfolio

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MYTHEO’s Inflation Hedge Portfolio recorded a negative USD return in April 2024, down by 0.80% (-0.12% in MYR).

The core holdings of this portfolio are structured to emphasize resilience amidst market volatility, particularly in equities and bonds. With a focus on US real estate and inflation-linked bonds, the allocation to these assets is strategically designed to withstand fluctuations. US real estate, infrastructure, and base metals allocations are selected for their resilience in mitigating long-term inflation risks, while investments in inflation-linked bonds and gold offer additional stability and diversification benefits, buffering against turbulent equity and bond markets.

‍The portfolio’s allocation to base metals (about 11%) was the key contributor to the overall portfolio performance during the period.
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Top 3 ETFs performance (Inflation hedge portfolio)

Bottom 3 ETFs performance (Inflation hedge portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of April 2024.

4. Global ESG Portfolio

MYTHEO’s Global ESG portfolio is down by -3.41% (-2.74% in MYR) in April 2024.

In line with the growth portfolio, the preference and exposure to the US market stand at approximately 60%. Considering the significant footprint of the United States in Environmental, Social, and Governance (ESG) investments, coupled with its established track record, MYTHEO Global ESG portfolio carries a higher weighting in US markets. This strategic choice not only acknowledges the maturity of the US market but also highlights MYTHEO's dedication to rigorous risk management strategies.
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Top 3 ETFs performance (Global ESG portfolio)

Bottom 3 ETFs performance (Global ESG portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of April 2024.

5.  Essential Products Portfolio

MYTHEO’s Essential Products portfolio was down by 2.77% (-2.10% in MYR) in April 2024.

The portfolio continues to prioritize ETFs that mirror crucial themes of food, water, and energy (comprising both new energy and energy resources). With approximately 60% exposure to the US market, this allocation is meticulously calibrated to capitalize on promising investment opportunities stemming from technological advancements and the evolution of business models within these pivotal sectors worldwide.
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Top 3 ETFs performance (Essential products portfolio)

Bottom 3 ETFs performance (Essential products portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of April 2024.

Chart 1: April 2024 - Portfolio Year-to-Date Rate of Return in % (MYR)

Source: GAX MD Sdn Bhd, May 2024
Note: Past performance is not an indication of future performance
Balanced allocation consists of 30% Growth, 45% Income and 25% Inflation Hedge

How to calculate MYTHEO Omakase actual monthly portfolio return

For MYTHEO Omakase, the actual portfolio returns derive from the combined weighted returns of each allocated functional portfolio.
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For instance, assuming allocations of 30% to the Growth portfolio, 45% to the Income portfolio and 25% to the Inflation Hedge Portfolio, the actual portfolio return in MYR for April would be -1.45%, calculated as follows: [(30% x -2.58%) + (45% x -1.44%) + (25% x -0.12%)].

Our Thoughts
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The recent drop in the US stock market amid concerns about inflation and the Federal Reserve's response reflects the delicate balance between economic growth and inflation control. Although the Consumer Price Index (CPI) moderated from its 2022 peaks, March still witnessed a year-over-year increase of 3.5%, surpassing the Federal Reserve's 2% target. Meanwhile, the kick-off of the first-quarter earnings season for US companies, showcasing a 3.5% year-over-year earnings growth, paints a nuanced picture. While this growth underscores corporate resilience, lingering worries persist regarding inflation's impact on future earnings and overall economic stability.

‍The US Federal Reserve's decision to maintain the target rate at 5.25-5.50%, coupled with the USD strengthening against the MYR by 0.7% in April, has tempered market exuberance, resulting in a retreat in fixed-income asset performance.

‍In the commodities market, geopolitical tensions propelled gold prices to a record high, surpassing USD2,400 per ounce. Simultaneously, crude oil sustained a six-month upward climb, surpassing USD87 per barrel, driven by ongoing supply constraints imposed by major oil-producing nations. Additionally, OPEC+ opted to maintain its oil supply policy while urging certain countries to enhance compliance with output cuts.
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As market dynamics continue to evolve, MYTHEO remains committed in providing investors with options aligned with their financial goals. As a digital investment platform, MYTHEO is prepared to support you in achieving your long-term financial objectives through diversified investments, seamlessly and cost-effectively. Discover how MYTHEO can enhance your portfolio diversification today, and embark on your financial journey with confidence. Take the first step towards your financial goals now.

This material is subject to MYTHEO’s Notice and Disclaimer.