15 July 2025
Written by MYTHEO
1. Growth Portfolio
MYTHEO’s Growth Portfolio was up by 4.98% (up by 3.89% in MYR) in June 2025.
MYTHEO’s Growth portfolio delivered another strong month, extending its upward momentum for the second consecutive period. The portfolio showed resilience even as global markets navigated escalating geopolitical tensions.
The month was shaped by a series of geopolitical events in the Middle East. On June 13, Israel initiated military action against Iran. The conflict intensified on June 22, 2025, when the United States entered the confrontation with targeted strikes on three Iranian nuclear facilities. Despite the volatility, markets responded positively to a ceasefire announcement by President Trump on June 23, triggering a shift to risk-on sentiment.
Market performance during this period lacked a clear pattern. Outperformers and laggards appeared to move without strong thematic drivers, suggesting a more sentiment-driven environment.
Within the MYTHEO Growth portfolio, the strongest gains came from Growth stocks and Emerging Markets. The Vanguard Growth ETF (VUG) led with a return of 5.35%, followed by the Vanguard FTSE Emerging Markets ETF (VWO), which rose 4.50%.
The only ETF in the portfolio to record a decline was the iShares MSCI United Kingdom ETF (EWU). Despite the absence of any negative headlines from the UK market, the drop likely reflects profit-taking. UK equities had posted an impressive 17.2% gain in the first half of the year, prompting some investors to realize gains amid the broader market rally.
2. Income Portfolio
In June 2025, MYTHEO’s Income Portfolio rose by 2.61% (an increase of 1.54% in MYR).
At the end of May, Goldman Sachs revised its interest rate outlook, now expecting three US rate cuts in 2025—September, October, and December—up from its earlier forecast of just one. This shift triggered a broad decline in bond yields across all maturities, with longer duration bonds seeing the largest gains due to their greater sensitivity to interest rate movements.
Within MYTHEO’s Income portfolio, the iShares 20+ Year Treasury Bond ETF (TLT), which holds US Treasuries with more than 20 years to maturity, posted the strongest performance, rising 3.63%. The rally highlights the impact of falling yields on long-duration assets.
A weaker US dollar further boosted global bond demand, particularly in non-US markets. Emerging market bonds, represented by the EMLC ETF, rose 2.59%, while international treasury bonds through the IGOV ETF gained 2.38%.
3. Inflation Hedge Portfolio
In June 2025, MYTHEO’s Inflation Hedge Portfolio recorded a gain of 2.69% (a gain of 1.62% in MYR).
Investor appetite for green energy stocks has strengthened in recent weeks, with increased interest across the nuclear, wind, and battery sectors. Reflecting this momentum, the iShares Global Clean Energy ETF (ICLN) climbed 4.13%, supported by growing optimism around the energy transition theme.
Industrial metals also posted solid gains, buoyed by renewed optimism following President Trump's announcement of a US-China trade deal. As China remains a key consumer of base metals and silver, the news triggered a rally across the sector.
Gold, which had delivered a strong performance earlier this year amid elevated geopolitical tensions and trade war concerns, saw a reversal in momentum. The recent ceasefire between Israel and Iran, along with tangible progress in US trade negotiations, has helped reduce market uncertainty. As a result, investor demand for gold eased, leading the iShares Gold Trust (IAU) to decline 2.21% over the period.
These developments reflect a shifting landscape where investor focus is moving from defensive assets toward sectors aligned with growth, stability, and long-term structural themes.
4. Global ESG Portfolio
MYTHEO’s Global ESG rose by 5.18% (rose by 4.09% in MYR) in June 2025.
President Donald Trump has signed his long-anticipated “One big and beautiful” budget bill, which passed the Senate and House votes on July 1 and July 5, respectively. The bill sets the federal budget for the next 10 years and includes provisions to end government support for green energy sectors such as electric vehicles (EV), solar, and wind.
Despite this major policy setback, clean energy stocks surprisingly rallied. This resilience may reflect investor sentiment that the sector has bottomed out after years of underperformance, with some positioning for a rebound. The optimism fueled a strong rally across almost all ETFs in MYTHEO’s ESG Global Portfolio.
Five out of six ETFs in the portfolio posted gains of at least 3%, highlighting renewed confidence in sustainable investments. The only laggard was the iShares ESG Aware MSCI EAFE ETF (ESGD), which dipped -0.38%. ESGD invests in large- and mid-cap companies across developed markets in Europe, Australasia, and the Far East.
The underperformance of ESGD is primarily due to its substantial holdings in banking and diversified financials, which make up around 25.6% of its portfolio. Many of these institutions operate in regions where interest rates are trending downward, leading to a contraction in net interest margins and putting pressure on profitability.
In contrast, the iShares ESG Aware MSCI USA ETF (ESGU), a US-focused counterpart, delivered strong results supported by its tech-heavy allocation. Technology stocks make up over 30% of ESGU’s holdings, while financials account for just 14%. This difference in sector composition likely contributed to the divergent outcomes between the two funds.
5. Essential Products Portfolio
MYTHEO’s Essential Products portfolio gains by 4.19% (increased by 3.10% in MYR) in June 2025.
The MYTHEO Essential Products portfolio delivered another strong showing this month, rising by 4.19%, building on last month’s already impressive 3.10% gain. The performance was broad-based, with every asset in the portfolio finishing the month in positive territory.
Green energy once again took center stage. Leading the charge were the Global X Lithium & Battery Tech ETF (LIT), which gained 6.90%, the First Trust Global Wind Energy ETF (FAN), up 5.34%, and the iShares Global Clean Energy ETF (ICLN), which rose 4.13%. These gains came in the face of persistent headwinds that have dominated headlines.
The electric vehicle battery sector continues to grapple with overcapacity, putting pressure on selling prices and profit margins. Meanwhile, President Donald Trump’s newly signed tax and spending legislation, known as the "One Big Beautiful Bill," includes provisions that roll back long-standing federal support for solar and wind power.
Despite these challenges, investor confidence in the sector appears to be firming. The resilience of green energy stocks suggests that markets may be pricing in a bottom, with valuations reflecting years of underperformance. For forward-looking investors, the risk-reward dynamic may now be shifting in favor of a long-term recovery.
This recent rally reflects growing belief that the worst may be behind for clean energy, and that current levels present a compelling entry point for exposure to one of the most transformative investment themes of the decade.
Chart 1: YTD 2025 Portfolio Return in % (MYR)
Source: GAX MD Sdn Bhd, June 2025
Note: Past performance is not an indication of future performance
Balanced allocation consists of 30% Growth, 47% Income and 23% Inflation Hedge
This material is subject to MYTHEO’s Notice and Disclaimer.
