How the Endowus HK portfolios performed in Q4 2024

For your core allocation needs, the launch of Endowus Flagship Portfolios in Hong Kong offers our most popular investment portfolio solution from Singapore. As part of our Discretionary Portfolio Management (DPM) offering, the Flagship Portfolios provide institutional-grade portfolio construction, ongoing monitoring, and updates by the Endowus Investment Office. This ensures that investors can benefit from professional management and timely adjustments to their portfolios.

Our Investment Office has curated and optimised other model portfolios using Best-In-Class Funds as building blocks for various investor needs. Investors in Hong Kong can use these pre-populated templates as a starting point for their portfolios; they can take the template as it is, or make changes to suit their preferences and needs.

Read on to find out how the model portfolios performed in the fourth quarter of 2024.

Endowus Flagship Portfolios 

About the Endowus Flagship Portfolios: The Endowus Flagship Portfolios are a one-stop solution to globally diversified portfolios, tailored for varying risk profiles and suitable for your core, long-term wealth accumulation. 

Key performance highlights: The Endowus Flagship Very Aggressive 100% Equity Portfolio experienced a challenging last quarter, posting negative returns down 1.6% and slightly underperformed its benchmark. In a one year period, the portfolio returned 15.8%, underperforming the benchmark by 0.5%. 

The 100% Equity Portfolio faced headwinds from its structural biases — being value-focused, and with a slight overweight to emerging markets and small caps in general -- and lagged its benchmark as a result. The US Index fund was the best performer in the equity sleeve, as it closely tracked the US indices. The portfolio's exposure to a fund investing in small-cap stocks across five developed markets countries in the Pacific region was the worst performing fund for the quarter and the year. 

The Very Conservative 100% Fixed Income Portfolio also declined 0.9% in Q4 and finished the year up 4.5%, outperforming the global fixed income markets by 1.1%. This outperformance was attributed to the portfolio’s lower duration and its exposure to high-yield bonds.

The Portfolio’s allocation to a short duration fund was a contributor to its fourth quarter’s relative performance. Short duration bonds outperformed longer duration bonds on the back of considerable volatility in the fixed income markets in the last quarter of 2024. The 10-year Treasury yield experienced a notable rise, finishing the year at 4.6% as there was market uncertainty regarding the Fed's future actions amidst rising expectations for inflation if President-elect Trump were to implement all his economic policies. On a credit front, high yield bonds, which the Portfolio had exposure to, outperformed their investment-grade counterparts driven by expectations of pro-business policies under the Trump administration. 

Over the one-year period, the portfolio's substantial allocation to Emerging Market Bonds enhanced its relative performance in 2024, as these bonds outperformed their developed market counterparts.

Read more: Introducing Flagship Portfolios

Endowus CashUp model portfolios 

About the Endowus CashUp Portfolios: Designed for short-term cash management, they are built using high-quality money market funds or ultra-short duration fixed-income funds.

Key performance highlights: The CashUp Portfolios delivered attractive, positive returns in Q4 2024.

CashUp Simple closed the year up 5.36%. This was supported by consistent monthly returns of approximately 0.4% to 0.5% throughout 2024, with strong contributions from the underlying funds (Ping An USD Money Market Fund and HSBC Global Money US Dollar).

CashUp Plus also generated positive performance, with a return of 5.39% in 2024. As the rates normalise, the returns of the CashUp Portfolios are starting to align with their respective risk profiles; CashUp Simple generated slightly lower returns than CashUp Plus in the year.

Our underlying fund managers employ a dynamic management approach aimed at minimising capital erosion while striving to generate returns comparable to prevailing money market rates. 

Lastly, investors are reminded that the CashUp Portfolios, along with any other investment products on Endowus, are not capital protected and their value may rise and fall with market movements.

CashUp Portfolios, primarily exposed to USD market rates, are seeing declining projected yields as markets enter a rate-cut cycle. Also, CashUp Plus has overtaken Simple in terms of projected yield, given the varying levels of duration and credit risk across the Portfolios. Investors are encouraged to review their investment goals and assess whether their current Cash Smart Portfolio remains aligned with their needs.

Read more: Introducing the newly launched CashUp Portfolios

Endowus IncomeUp model portfolios

About the Endowus IncomeUp model portfolios: The three IncomeUp model portfolios meet different income and capital preservation or growth needs for investors at different life stages.

‍Key performance highlights: 

The IncomeUp Steady model portfolio outperformed the broader credit market in a quarter challenged by a comeback of inflation concern and declined less (minus 0.9%) relatively. The portfolio’s shorter duration relative to the benchmark contributed to its better performance. Within the portfolio, Neuberger Berman Short Duration Emerging Markets Bond Fund was the only fund that had positive performance (0.8%) in a generally unfavourable environment in the fourth quarter. JP Morgan Income Fund delivered the second most resilient performance (-0.1%) as a result of its defensive duration positioning. 

The IncomeUp Plus model portfolio registered resilient performance, declining only by 0.2% in the fourth quarter, outperforming the global credit market by 1.3%. Its shorter duration and allocation to the high yield market contributed to the positive relative performance. The best-performing fund in the portfolio was Barings Global Senior Secured Bond Fund, which returned 0.9% over the quarter. 

The IncomeUp Growth model portfolio demonstrated resilience in the fourth quarter, outperforming the 40-60 Equity - Fixed Income Composite Index. Both its fixed income and equities sleeve did well on a relative basis. The fixed income component mirrored IncomeUp Steady. Its equity component outperformed the global equities market due to positive security selection by the underlying funds. Pinebridge US Large Cap Research Enhanced Fund was the best performing fund in the equities sleeve, returning 3.6% over the quarter, which was 1.2% above the return of the US equity market represented by the S&P 500 Index. 

On a full-year basis, all three portfolios delivered positive returns, outperforming their respective reference market’s performance. 

Read more: Introducing Endowus IncomeUp Portfolios

Endowus Satellite model portfolios

The Satellite model portfolios are designed to supplement the Core portfolios, and offer Hong Kong investors specific exposure to opportunities in selected regions, themes, asset classes, and trends. In taking a core-satellite approach, most investors should allocate the bulk of their asset allocation to the Core portfolios. 

‍China Equities model portfolio 

About the China Equity model portfolio: The China equity model portfolio aims to provide investors with holistic exposure to the China stock market, and consists of five Best-In-Class China equity funds.

Key performance highlights: 

The China Equity model portfolio registered negative returns in the fourth quarter of 2024. Despite the promising stimulus measures announced by the central bank in September, the market optimism eventually fizzled out over the quarter. A consequence of the lack of forceful fiscal policies at the National People’s Congress, as well as geopolitical woes following Trump’s presidency. Allocations to Funds with exposure to Greater China markets such as Taiwan aided in cushioning overall performance as the market declined. 

Read more: Introducing the China Equities model portfolio: capture Greater China’s high growth potential

Sustainability - Equities model portfolio 

About the Sustainability - Equities model portfolio: It offers access to ESG (environmental, social, and governance), sustainable, and climate equity funds so that investors can contribute to a better, sustainable future.

Key performance highlights: In the fourth quarter, the Sustainability - Equities model portfolio experienced negative returns. All the funds in the model portfolio performed below the non-ESG benchmark, with the BGF Sustainable Energy Fund, which has a more thematic focus, being the biggest detractor. On the other hand, the Schroder ISF Global Sustainability Growth Fund delivered a performance that was closest to the benchmark.

Both in the fourth quarter and throughout 2024, the model portfolio’s underweight position in the US had a negative impact on its performance.

Global Technology model portfolio 

About the Global Technology model portfolio: It aims to provide access to the most innovative technology and technology-related companies around the world, across various market capitalisations and sectors. The Technology model portfolio closed the year with a gain of nearly 46%.  

Key performance highlights: The Technology model portfolio delivered a 4.9% gain in Q4 2024.

During the quarter, the model portfolio delivered attractive returns despite market challenges. In October, portfolio return was in line with the broader tech sector, with the communications sector showing particular resilience amidst uncertainties surrounding the US election and moderating global growth. November was a strong month, as US tech companies and smaller non-US firms benefited from pro-growth sentiment following Trump's election and the easing of monetary policies. December also saw resilient returns, with larger and more established tech players generating positive performance despite a Fed-induced sell-off and volatility from Trump-driven tariffs.

Read more: Introducing the Global Technology model portfolio: ride the wave of tech innovatio

Future Trends model portfolio 

About the Future Trends model portfolio: It is a 100% equities portfolio made up of six Best-In-Class funds spanning the major themes of healthcare, technology, industrials, and more. It caters to investors seeking exposure to high-growth firms.

Key performance highlights: The last quarter of 2024 was an eventful one, with several key events in the US having a large impact on equity returns. Donald Trump’s victory in the US presidential election contributed to the positive return in November, as investors looked forward to lower taxes and a more business-friendly environment. However, the Fed’s hawkish stance in December shocked markets, resulting in 2024 ending on a sour note. 

The Future Trends model portfolio underperformed the benchmark over the quarter, with several themes struggling and impacting the model portfolio’s performance. Climate investing remained challenging, as sentiment continued to shift away from renewables with base interest rates staying elevated. Trump’s election victory further dampened the mood, due to his stated support for traditional energy sources. As such, climate-focused companies in the model portfolio performed poorly.

The healthcare and biotech sectors were some of the hardest-hit sectors by the Fed’s hawkish announcement, due to the sectors’ higher sensitivity to interest rates. Further adding to the uncertainty was Trump’s naming of Robert F. Kennedy, Jr., a perceived critic of traditional healthcare services, as the head of the Department of Health and Human Services. Consequently, the AB International Healthcare Fund declined by around 12% over the quarter.

While thematic investing has continued to struggle in 2024 due to macro headwinds and the lack of breadth in gains seen in the equity market, it remains an attractive, long-term structural opportunity. Infrastructure spending, food security concerns and the increasing energy needs driven by AI are some of the tailwinds that should help support the growth of thematic investing in the mid to long-term.  

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How to access model portfolios on Endowus Hong Kong 

With Endowus, you can plan and manage your money with institutional-grade model portfolios that have been curated by our Investment Office, offering globally diversified exposure with Best-in-Class underlying funds as building blocks.

You can use these pre-populated portfolio templates as a starting point for your portfolio. You can either take the template as it is, or tweak the portfolio allocations to suit your personal risk appetite, preference, and goals.

Alternatively, on the Fund Smart platform, you can build your own do-it-yourself (DIY) portfolios from scratch, through Endowus’ proprietary portfolio creation tool. To learn more about Fund Smart, refer to this article.

If you are new to Endowus in Hong Kong, you can get started by opening an account with us.

Already have an account with Endowus HK? Here are a few simple steps to start using Fund Smart:

• Login to your Endowus account
• Click on “Invest |  Redeem”
• Click on “Add Goal”, and then follow the instructions to select the fund or portfolio of your choice, based on your investment horizon and objective.

Read more: 

• 2025 market outlook: Interest rates, Trump, and AI
• S&P 500 reaches a new all-time high. What’s next in 2025?
• Choosing Endowus when investing in Hong Kong

Risk Warnings

Investment involves risk. Past performance is not an indicator nor a guarantee of future performance or returns. Projected performance or returns is not guaranteed to materialise. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund. 

Risk related to discretionary management . As Flagship Portfolios are provided under discretionary services, Endowus will manage the assets under the portfolio subject to compliance with the terms and conditions of the DPM Services Agreement and on a fully discretionary basis; you will not have any role or right to make investment decisions, except for making contributions or withdrawals from the portfolio; it would not be mandatory for Endowus to provide the underlying fund prospectuses or other fund information to you for each and every investment decision made on behalf of you.  You should exercise caution before investing in discretionary managed portfolios. 

Flagship Portfolio may contain professional-investors only fund(s) and/or “Complex Product”.  In general, Professional-investors only funds are funds that have not been authorised, nor have the offering documents been reviewed by the SFC.  “Complex Products” (as defined by the Securities and Futures Commission, the “SFC”) refer to investment products (e.g. funds) whose terms, features and risks are not reasonably likely to be understood by retail investors because of their complex structures.  Professional-investor only funds and Complex Product in general may have higher risk than other retail and non-complex products.  Past performance is not indicative of future performance. All investments involve risks (including the possibility of loss of the capital invested) and the price of fund units may go up as well as down. This fund may invest in financial derivatives which may involve additional risks (e.g. market, counterparty, liquidity, leverage and volatility risks) and lead to higher volatility. In adverse situations, the fund may suffer significant losses. This fund is not principal protected. In the worst-case scenario, you may lose the entire invested amount. Do not invest in a complex product unless you understand and are willing to assume the risks associated with it, including (in some cases) the risk that you may lose more than the invested amount. Please refer to the “Important Information About Funds” for details of the risks involved.  If you are in any doubt, you should clarify with us or seek independent professional advice.

General risk warnings relating to collective investment schemes 

Before making an investment decision, you are reminded to refer to the relevant prospectus/ offering document for specific risk considerations and related fees and charges. Funds are not a bank deposit and not capital guaranteed, and is subject to investment risks, including the possible loss of the principal amount invested. Some of the funds also involve derivatives. Do not invest in them unless you fully understand and are willing to assume the risks associated with them.

Opinions

Whilst Endowus HK Limited (“Endowus”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or typographical errors.  Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endowus HK Limited (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus HK Limited, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.

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Nothing contained in this article should be construed as a solicitation, an offer to buy or sale, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction in any jurisdiction in which such solicitation, offer to buy or sale would be unlawful under the securities laws in such jurisdiction. No information included in this article is to be construed as investment advice or as a recommendation or a representation about the suitability or appropriateness of any advisory product or service; or an offer to buy or sell, or the solicitation of an offer to buy or sell, any security, financial product, or instrument; or to participate in any particular trading strategy. Investors should seek independent financial and tax advice before making any investment decision.

Product Risk Rating: Please note that any product risk rating (the “PRR”) provided by us is an internal rating assigned based on our product risk assessment model, and is for your reference only. The PRR is subject to change from time to time. The PRR does not take into account your individual circumstances, objectives or needs and should not be regarded as advice or recommendation to purchase, hold or sell any fund or make any other investment decisions. Accordingly, you should not solely rely on the PRR in making your investment decision in the relevant Fund.

This article  has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.