20 December 2024
Written by MYTHEO
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In this monthly report, we will assess the performance of MYTHEO’s portfolios in light of the financial market developments in November 2024.

1. Growth Portfolio

‍MYTHEO’s Growth Portfolio was up by +3.31% (up 4.95% in MYR) in November 2024.

The Growth portfolio showcased a remarkable performance in November 2024, riding the wave of strong momentum in the global equity market. An impressive seven out of the nine ETFs within our portfolio concluded the month with positive returns.

‍Throughout November, investors fervently pursued riskier asset classes to maximize their profits. This strategic shift led to the standout performer in our portfolio: the iShares Russell Mid-Cap Growth ETF (IWP), which invest mainly in mid-sized companies whose earnings are expected to grow at an above-average rate relative to the market.
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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 November 2024.

2. Income Portfolio

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‍MYTHEO’s Income Portfolio recorded a marginal gain of +0.80% (up by 2.40% in MYR) in November 2024.

In November 2024, the income portfolio benefitted from the Federal Open Market Committee's (FOMC) decision to cut interest rates during their scheduled meeting. While short-term Treasury yields remained flat, the 10-year Treasury yield dropped by 9 basis points (0.09%), providing a significant boost to long-term Treasury holdings in the portfolio.

As a result, the 20-year Treasury ETF (TLT) surged by 1.99%, making it the top performer in the income portfolio. This month also saw heightened investor interest in US papers compared to international ones. Both high-quality US corporate paper (LQD) and lower-quality US corporate paper (SJNK) showed strong performance, with gains of 1.79% and 1.44%, respectively.

On the downside, the laggards in the income portfolio were mainly international Treasuries (IGOV) and emerging market paper traded in local currencies (ELMC).
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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 November 2024.

3. Inflation Hedge Portfolio

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In November 2024, MYTHEO’s Inflation Hedge Portfolio recorded a slight decline of 0.42% in USD returns but recorded a positive return of 1.48% increase in MYR.

This month's performance in USD was impacted primarily by notable declines in key holdings such as Silver, Gold, and Clean Energy, each dropping by more than 3%. The portfolio's total allocation to Gold (IAU) and Silver (SLV) at 19.10% faced a temporary setback as investors moved away from safe-haven assets after a robust rally in riskier asset classes. Additionally, the Clean Energy ETF (ICLN) experienced a dip following Donald Trump's victory in the US presidential election, given his well-known opposition to green energy.

‍Despite some negative performances within the portfolio holdings, the overall performance of the portfolio in MYR was positive, supported by a 1.49% gain in the USD against the MYR.
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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 November 2024.

4. Global ESG Portfolio

MYTHEO’s Global ESG portfolio is up by 2.28% (up by 3.90% in MYR) in November 2024.

While Trump's victory in the US presidential election might initially seem negative for the portfolio, given his well-known opposition to green incentives, the impact was minimal. Out of the six asset holdings in the portfolio, only two ETFs recorded negative returns. These were the ETFs with exposure outside the US and Canada markets (ESGD) and ESG Emerging Market ETFs (ESGE).

This outcome clearly indicates MYTHEO's strategic preference and exposure of around 60% to the US market. The US's prominent role in Environmental, Social, and Governance (ESG) investments, coupled with its well-established track record, has supported the performance of MYTHEO's portfolio.

As such, MYTHEO will continue to maintain a higher allocation to US markets. This approach not only recognizes the maturity of these markets but also underscores MYTHEO's commitment to effective 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 November 2024.

5.  Essential Products Portfolio

MYTHEO’s Essential Products portfolio was up by 1.81% (+3.42% in MYR) in November 2024.

The portfolio emphasizes ETFs that reflect pivotal themes of food, water, and energy, encompassing both new and traditional energy resources. With around 60% allocated to the US market, this strategic positioning aims to seize promising investment prospects arising from technological innovations and evolving business models within these sectors on a global scale.

Overall, the portfolio delivered a solid performance. Only two out of the seven ETFs in the portfolio recorded negative returns. These were the Wind Energy ETF (FAN) and the Clean Energy ETF (ICLN), primarily due to Trump's victory in the US presidential election.

Despite these setbacks, the portfolio still delivered a decent return as MYTHEO reaped the benefits of strategic diversification, managed automatically by our well-crafted algorithm. The exposure to the energy sector (XLE) and water (FIW) greatly supported the portfolio's performance, with both assets appreciating by more than 5.0% during the month.
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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 November 2024.

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

Source: GAX MD Sdn Bhd, November 2024
Note: Past performance is not an indication of future performance
Balanced allocation consists of 30% Growth, 47% Income and 23% 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, 47% to the Income portfolio and 23% to the Inflation Hedge Portfolio, the actual portfolio return in MYR for November would be 2.95%, calculated as follows: [(30% x 4.95%) + (47% x 2.40%) + (23% x 1.40%)].

Our Thoughts
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November 2024 was a remarkable month for global equity investors. The MSCI World Index, the most widely followed global equity benchmark, surged by 3.6%. In the US, markets hit new all-time highs multiple times, with the S&P 500 and Nasdaq 100 indices climbing by 5.7% and 5.2%, respectively. Donald Trump’s US presidential election victory served as the primary catalyst for the rally in US stocks. Expectations of deregulation in the financial sector and the pro-business stance of the incoming administration fueled optimism among investors.

‍During the month, a US economic report indicated higher inflation at 2.60% for October. Despite this, the Federal Open Market Committee (FOMC) opted for a cautious approach, lowering the benchmark interest rate by 25 basis points to a range of 4.50%-4.75%.

‍The treasury market responded positively to the FOMC’s recent actions, particularly for longer-duration securities. The 10-year Treasury yield declined to 4.19% at the end of November, down from 4.28% at the end of October. In contrast, the shorter end of the curve remained largely unchanged, with the 2-year Treasury yield holding steady at 4.17%.
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The movement in both long-term and short-term yields indicates that inflation is not seen as an immediate concern. As a result, the FOMC is unlikely to reverse its current stance of policy loosening in the near future, despite the potential risk of inflationary pressures resurfacing in the US economy.

The US Dollar strengthened against the Malaysian Ringgit, appreciating 1.49% to 4.4000. The price action of the US Dollar in November was largely driven by post-election sentiment. The USD had been relatively weak throughout the month before spiking upon the announcement of Trump’s victory, rising by 3.20% within ten days following the result.

In the commodities market, soft commodities and natural gas saw unusual gains due to adverse weather conditions. Coffee rallied to its highest level in 50 years after Brazil was hit by its worst drought in 70 years. Meanwhile, excessive rainfall in the Ivory Coast affected the global supply of cocoa. Brazil, the world’s largest coffee producer, commands around one-third of total production, while the Ivory Coast is the largest producer of cocoa, holding a 45% market share globally. Natural gas also rallied due to cooler-than-expected weather in the US and Europe.

In the metals market, gold dropped by 3.3% in November as investors moved away from safe-haven assets amid the equity rally. Silver also fell by 6.3%, driven by concerns over potential trade tensions affecting global economic growth.

The crude oil market was relatively uneventful. Brent crude closed at USD 72.94 at the end of November, slightly lower than the USD 73.16 recorded a month earlier. Investors remained on the sidelines in the crude oil market ahead of the Organization of the Petroleum Exporting Countries Plus (OPEC+) meeting scheduled for December 5, 2024.

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.