Endowus Flagship Portfolios — Cash/SRS

‍Key performance highlights: 

The Flagship Cash/SRS Equity Portfolio fell by -2.9% in Q1 2025, performing in line with broader global equity markets. The Portfolio's structural overweight to value stocks and emerging markets supported performance, but this was offset by a tilt toward smaller-cap companies, which underperformed over the quarter. Value stocks outpaced their growth counterparts as global investors shifted away from highly valued U.S. technology stocks.

The Amundi Prime USA Fund and iShares US Index Fund were the weakest performers in the equity sleeve, reflecting the underperformance of U.S. equities amid concerns over tariffs and investor reassessments of AI growth prospects following the release of China’s Deepseek.

Conversely, the Amundi Index MSCI Emerging Markets Fund and Dimensional Emerging Markets Large Cap Core Equity Fund delivered the strongest returns, benefiting from the robust performance of emerging market equities. Chinese and Korean equities led this rally, bolstered by favorable macroeconomic conditions and investor sentiment.

The 100% Fixed Income Portfolio outperformed the Bloomberg Global Aggregate Index by approximately 0.6 percentage points, rising 1.4% for the quarter. The Portfolio's gains were driven by allocations to securitised bonds through the PIMCO GIS Income Fund and emerging market debt via the PIMCO GIS Emerging Market Bonds Fund. The PIMCO GIS Income Fund was the top performer in the fixed income sleeve, returning 2.9%, with most of its gains occurring in the first two months of the quarter. It was closely followed by the PIMCO GIS Emerging Market Bonds Fund, which returned 2.7%, supported by a weaker U.S. dollar that boosted demand for emerging market debt.

Other funds in the Portfolio either matched or slightly exceeded their respective benchmarks, showcasing consistent performance across its diversified holdings. 

Endowus Flagship Portfolios — CPF 

Note: The Flagship CPF Portfolio allocations were updated in July 2024 with three new funds from Dimensional. 

Key performance highlights: 

The Flagship Cash/SRS Equity Portfolio declined by -3.2% in Q1 2025, slightly underperforming the broader global equity markets. The Portfolio's structural overweight to U.S. equities weighed heavily on performance, though this was partially mitigated by an overweight allocation to emerging markets and a slight tilt toward value stocks.

Emerging market equities outperformed their developed market counterparts during the quarter, with Chinese and Korean equities delivering strong gains. Reflecting this trend, the best-performing funds in the equity sleeve were the Schroders Global Emerging Market Opportunities Fund and the Dimensional Emerging Markets Large Cap Core Equity Fund. On the other hand, the Amundi Prime USA Fund was the weakest performer, as U.S. equities struggled amid concerns over tariffs and investor reassessments of AI growth prospects following the release of China’s Deepseek.

The 100% Fixed Income Portfolio performed in line with the broader fixed income market during Q1 2025. The Eastspring Singapore Select Bond Fund led gains in this segment, rising 1.6% over the quarter. Meanwhile, the Dimensional Global Core Fixed Income Fund was the weakest performer, posting a more modest increase of 0.6%.

Endowus ESG Portfolios 

Key performance highlights:  

In Q1 2025, the portfolio exhibited a resilient performance, outperforming the growth index benchmark and closely aligning with the overall non-ESG benchmark. 

However, two areas detracted from the Portfolio's overall performance. The Stewart Investors Global Emerging Markets All Cap Fund underperformed partly due to an overweight position in India, while other funds with high exposure to companies like Alphabet also faced the challenges of the IT sector in Q1. 

It is worth highlighting that the KBI Global Sustainable Infrastructure Fund, providing exposure to the defensive sector, made a positive contribution to the Portfolio's performance. This illustrates the importance of diversifying across sectors within the Portfolio.

The Fixed Income Portfolio outperformed the benchmark in the first quarter by 0.8%. Active management by PIMCO via the two underlying funds, the PIMCO GIS ESG Income Fund and th ePIMCO GIS Climate Bond Fund, proved to be additive to performance. 

Portfolio’s allocation to investment grade bonds via the Allspring Climate Transition Global Investment Grade Credit Fund also contributed to relative outperformance; high carry and gains from duration exposure more than offset the negative impact of credit spread widening in the first quarter. 

The Endowus ESG Portfolios not only focus on financial returns but also on promoting positive societal and environmental impact. We are committed to being responsible stewards of capital, as demonstrated by our active review of ESG data to inform our investment decisions.

For instance, the ESG 100% Equity Portfolio aligns better with the United Nations Sustainable Development Goals, showcasing lower greenhouse gas emissions and enhanced board gender diversity compared to the global equities.

Our ESG 100% Fixed Income Portfolio also emphasises investments that contribute to environmental sustainability and social well-being. 

The PIMCO GIS Climate Bond Fund allocates over 75% to green bonds. The PIMCO GIS ESG Income Fund tilts towards companies or issuers with positive ESG characteristics, seeks a lower carbon footprint and actively engages issuers. The Allspring Climate Transition Global Investment Grade Credit Fund targets to decarbonise the Fund by 2050 and excludes securities exposed to ESG risks. 

Endowus Factor by Dimensional Portfolios

Key performance highlights: The Factor 100% Equity Portfolio outperformed in line with its benchmark over the quarter, while the Factor 100% Fixed Income performed in line with the global fixed income markets.

The Portfolio's performance during the quarter was driven by the strong contributions from regional allocations, particularly the Dimensional Emerging Markets Sustainability Core Equities Fund and the Dimensional Pacific Basin Small Companies Fund. These investments played a significant role in boosting the Portfolio's overall performance. However, the recent macro uncertainty in the U.S. had a detracting effect on the U.S. Core Equity fund allocation.

In the Fixed Income Portfolio, the performance aligned with the Bloomberg Global Aggregate Index. Although the short-duration fund delivered a performance on the lower side, its consistent performance compensated for it. On the other hand, the Global Core Fixed Income fund rebounded strongly in February after experiencing negative performance in January.

Factor premia are long-term in nature, and investors who maintain exposure to them over a longer-term horizon are generally rewarded. However, this means potential short-term underperformance from time to time.

Endowus Satellite Portfolios

Launched in November 2021, the Endowus Satellite Portfolios are designed to supplement the core portfolios and offer clients 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 Equity Portfolio

Key performance highlights: The China Equity Portfolio posted a gain of 1.3% in March 2024, bringing the Q1 2025 return to 2.9%.

The market, especially tech and growth stocks, experienced a significant boost at the end of January and throughout February. This was driven by the emergence of DeepSeek, which renewed confidence in China’s innovation capabilities. Additionally, President Xi's meeting with private tech entrepreneurs was seen by investors as a positive, pro-business move. The market also performed better than other global markets, with the impact of US tariffs being less severe than expected and positive economic indicators, like manufacturing growth, keeping investors optimistic through March.

The benchmark (Morningstar China All Cap Index) outperformed due to its high concentration in tech stocks such as Tencent and Alibaba, with weights of 14% and 10% respectively, which benefited from these market tailwinds. In contrast, our Portfolio lagged due to its more cautious allocation strategy, avoiding large bets exceeding 10% in a single stock. Regardless, our Portfolio performed better than other common market indices like the CSI 300 (-1.8% for Q1 2025 in SGD terms).

Clients who opted in for the Recommended Portfolio Change (“RPC”) in November 2024 will be pleased to see that the new version of the Portfolio outperformed the older version in 2024 and through Q1 2025. Clients who have not yet opted in may do so at any time via the Endowus app. More information can be found here: Latest enhancements to Endowus Satellite Portfolio - China Equities. 

Megatrends Portfolio 

Key performance highlights: The Portfolio started 2025 on a bright note, with most funds outperforming the index in January, amidst strong performances from Janus Henderson Biotech and DWS Global Agribusiness. However, with the onset of volatility driven by President Trump’s tariff program, almost all of the underlying funds reversed their gains and ended the quarter in negative territory.

Thematics AI and Robotics and Janus Henderson Biotech were the main detractors over the quarter. With a core focus on the technology sector, the Thematics AI and Robotics experienced a larger drawdown compared to the broader equity index and other funds in the Portfolio. On the biotech front, the Trump administration’s actions continued to hurt the sector. Vocal vaccine sceptic Robert F. Kennedy Jr.’s confirmation as the head of the United States Department of Health and Human Services in February caused dismay, while the resignation of a key Food and Drug Administration official led to a further sell-off in biotech stocks. 

On a brighter note, the DWS Global Agribusiness Fund managed to generate a positive return for the quarter. Robust earning results, along with a likely ‘flight to safety’ to the Fund’s more defensive companies, allowed the Fund to outperform the broader market. 

Technology Portfolio

Key performance highlights: The Tech Portfolio delivered a -9.8% loss in March 2024, bringing Q1 2025 return to -12.2%, in line with the broader technology market index.

The first quarter presented challenges for the tech sector, driven by a mix of factors. Uncertainty surrounding US tariffs, potential spending cuts by the Department of Government Efficiency, rising inflation, and weakening consumer confidence all contributed to a cautious market outlook. Additionally, continued concerns about the sustainability of capital expenditure in artificial intelligence (AI) further dampened investor sentiment. These factors led to a "risk-off" approach across various assets, triggering selloffs in technology. Our portfolio was directly impacted by these market headwinds as the technology sector as a whole struggled. 

Regardless, clients who opted in for the Recommended Portfolio Change (“RPC”) in November 2024 will be pleased to see that the new version of the portfolio outperformed the older version in 2024 and through Q1 2025. Clients who have not yet opted in may do so at any time via the Endowus app. More information can be found here: Latest enhancements to Endowus Satellite Portfolio - Technology. 

Global Real Asset Portfolio

Key performance highlights: 

The Endowus Real Assets portfolio delivered a solid performance in Q1 2025, gaining 2.0% and outperforming the broader market, which saw global equities decline by 2.9% during the quarter.

Most of the underlying components of the portfolio outperformed their respective benchmarks, with the commodity-related components being the best absolute performers, followed by the infrastructure equities. 

The PIMCO GIS Commodity Real Return Fund and Ninety One Global Natural Resources Fund were standout performers, both rising over 9.5% during the quarter. This strong performance was driven by commodities emerging as one of the best-performing asset classes, bolstered by a notable 19% surge in gold prices.

Conversely, the Janus Henderson Horizon Global Property Equities Fund was the portfolio's weakest performer for the quarter. However, its performance was in line with its benchmark.

The portfolio's diversified strategy highlights its resilience, delivering positive returns consistently across all three months.

In September 2024, we conducted a Recommended Portfolio Change (“RPC”) to the Global Real Asset Portfolio, previously known as the Global Real Estate Portfolio. Through this RPC, the Portfolio was repositioned to seek exposure to real assets. More information can be found here: Introducing Endowus Real Assets Portfolio. 

Endowus Income Portfolios 

‍Key performance highlights: 

The Stable Income Portfolio gained 2.0% in the first quarter, outperforming the broader credit market. Most of the positive returns were registered in the first two months of the year, while in March, the portfolio managed to be relatively resilient despite the jittery in the market due to tariff and recession concerns. Most of the underlying funds contributed to relative outperformance, with PIMCO GIS Income Fund being the best performer, returning 2.9% during the quarter. 

The Higher Income Portfolio gained 1.1%, outperforming the 20-80 benchmark. The fixed income component of the portfolio outperformed the broader credit market. The investment grade allocation contributed to the outperformance, while the high yield allocation detracted from relative performance. Spread widened for the high-yield market, especially in March, as the market priced in higher recession risk. 

The equity component of the portfolio outperformed the broader equities market as well. Currency hedging of the underlying funds was a positive contributor as USD depreciated against SGD in Q1. The portfolio’s overweight exposure to emerging market equities and Asian equities helped as both markets outperformed the US equities market in Q1 2025. Its overweight exposure to the real estate sector was also a notable contributor. 

The Future Income Portfolio delivered a positive 0.5% return, outperforming the 40-60 benchmark in the first quarter. The fixed income component mirrors the Stable Income Portfolio. Its equity component also outperformed the broader equities market. Similar to the Higher Income Portfolio, currency hedging of some of the underlying equity funds, as well as its overweight position to emerging markets equities and European equities contributed. 

• Actual payouts have remained stable despite the fluctuation of prices across the three portfolios. Volatility in price returns will result in mark-to-market changes (decrease or increase) in the portfolio value, but will not impact the actual coupon payments or dividend payouts from the underlying funds. 
• Yields in the fixed income market have risen meaningfully following the increase in global interest rates, creating a higher yield environment for income-seeking investors. 
• The changing interest rate environment has resulted in a divergence between the respective payout yields of Stable Income and Higher Income. This divergence is a reflection of the enhanced ability of investment grade flexible income funds to generate income in the current environment of elevated interest rates, compared to high yield and equity funds. These dynamics were pivotal in the Recommended Portfolio Change in November 2023, where we improved the credit quality of all three portfolios while maintaining the target payout levels. As we continue to monitor these evolving market conditions, it's crucial to acknowledge that the Higher Income Portfolio is strategically crafted to yield a higher total return than the Stable Income Portfolio over the long term.

Endowus Cash Smart Portfolios

Key performance highlights: The Cash Smart portfolios delivered positive and attractive returns in Q1 2025.

As the rate environment normalises, we observe that the returns of the three Cash Smart Portfolios are aligning with their respective risk profiles. Cash Smart Secure generated the lowest returns, followed by Enhanced, and Ultra concluded the first quarter with the highest returns.

‍Cash Smart Secure closed the quarter up 0.7%. This performance was supported by consistent monthly returns of approximately 0.2-0.3% throughout the first three months of 2025. The two underlying funds, Fullerton SGD Cash Fund and LionGlobal SGD Enhanced Liquidity Fund, proved to be resilient liquidity management options during the volatile quarter. Notably, both funds have proven to generate stable positive returns on a daily basis even in the extremely volatile month of April (i.e. amidst US tariff turmoil, as of 6 April 2025), offering a relatively safer option for investors seeking to shelter their investments during volatile market periods.

Cash Smart Enhanced reported a return of 0.9% in the first quarter. All underlying funds contributed positively in Q1, although the United SGD Fund experienced bouts of volatility due to broader market turmoil towards the end of March and extending into early April. Overall, the portfolio generated a "middle ground" return within the Cash Smart suite, aligning with its design to offer greater return potential than Secure with slightly added risk.

Cash Smart Ultra generated a return of 1.1% in Q1 2025, despite experiencing some dampening due to tariff-driven volatility, particularly at the end of March and into early April. Overall, the Ultra portfolio finished the quarter with the strongest return among the Cash Smart range, achieving 1.1%. This performance highlights its suitability for investors willing to take on added risk for higher return potential to manage short-term cash. However, investors seeking to avoid exposure to market volatility for their liquidity investments may consider switching to lower-risk portfolios such as Secure or Enhanced.

Cash Smart Portfolios, primarily exposed to USD and SGD market rates, are seeing declining projected yields as markets enter a rate-cut cycle. 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.

For more on the market outlook, click here. Watch our webinar on Q1 performance and market insights at this link.

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