Endowus May 2026 Portfolio Performance Review

Endowus Core-Flagship Cash/SRS Portfolio

The 100% Equity Portfolio gained 5.1% in May and performed in line with the broader equity market.

• Global equities continued to trend higher in May 2026, driven by strong corporate earnings and the continued AI-driven rally. Additionally, investors continued to grow more hopeful that the Middle East Conflict would reach a ceasefire towards the end of the month, further contributing to the constructive backdrop for the asset class. Overall, global equities ended the month up 5.1%.
• The Flagship Cash/SRS 100% Equity Portfolio rose 5.1% in May, in line with the global equity market. The Portfolio’s overweight to emerging market equities was a key contributor, with Korea and Taiwan leading gains across the region. Both countries continued to benefit from the growing AI demand. However, relative performance was dragged down by the Portfolio’s overweight to value stocks, which underperformed their growth counterparts due to increased investors’ risk appetite during the month. 
• The Amundi Core MSCI Emerging Markets Fund was the portfolio's strongest contributor, returning 9.8% for the month. The fund passively tracks the broad emerging market index, which also posted strong returns over the period. On the other hand, the Dimensional Pacific Basin Small Companies Fund was the weakest performer, gaining 2.7% due to its emphasis on small cap stocks, as well as its overweight to Australia stocks.

The 100% Fixed Income Portfolio gained 0.6% in May, outperforming the broader fixed income market by 0.2%.

• Global bonds experienced heightened volatility in May 2026, but ended the month in positive territory. Inflationary pressures from the Middle East conflict remained a concern, with government bond yields rising to concerning levels mid-month as tensions in the Middle East grew. However, bond yields decreased toward the end of the month as a potential ceasefire deal appeared imminent. As for credit, strong corporate fundamentals resulted in a tightening of credit spreads, leading corporate and high yield bonds to outperform government bonds. Overall, global bonds ended the month up 0.4%.
• The Flagship Cash/SRS 100% Fixed Income Portfolio gained 0.6% in May, outperforming the broader fixed income market. The Portfolio’s overweight to emerging market bonds and credit exposure drove outperformance. 
• Within the Portfolio, the iShares Emerging Markets Government Bond Index Fund was the best performer, ending the month up 1.1%. In contrast, the iShares Global Aggregate 1-5 Year Bond Index Fund was the laggard, ending the month up 0.2%. The Fund passively tracks the 1-5 Year bond index, and saw more muted performance due to its slightly lower exposure to credit.

Endowus Core-Flagship CPF Portfolio

The 100% Equity Portfolio gained 5.5% in May, outperforming the global equity benchmark by 0.4%.

• The 100% Equity Portfolio’s overweight to US and emerging market equities drove its outperformance, as both US and emerging market countries continue to benefit strongly from the Technology driven rally.
• Within the Portfolio, the Schroder Global Emerging Markets Opportunities Fund was the best performer, ending the month with a 11.0% gain, driven by its stock selection and the robust performance of emerging market equities. In contrast, the Dimensional Global Core Equity III Fund was the weakest performer, ending the month up 3.9%. The Fund underperformed its global peers due to its emphasis on value stocks.

The 100% Fixed Income Portfolio rose 0.5% in May, outperforming the global fixed income benchmark by 0.1%.

• The 100% Fixed Income Portfolio outperformed the global fixed income benchmark due to its overweight to credit.
• Within the Portfolio, the Dimensional Global Core Fixed Income III Fund was the best performer, gaining 0.8% during the month due to its larger credit exposure. On the other hand, the UOB United SGD Fund was the weakest performer, rising 0.2% during the month. 

Endowus Income Portfolios

The Endowus Stable Income Portfolio returned 0.3% in May, underperforming the Bloomberg Global Aggregate Credit Index. 

• The multi-sector income holdings broadly delivered gains but trailed global credit benchmarks. While spread compression in credit and securitised assets bolstered performance, exposure to interest rate duration acted as a drag throughout the month.
• Relative returns were further dampened by Asian credit, which saw stagnant performance and underperformed global counterparts. 

The Endowus Higher Income Portfolio returned 1.5% in May, performing in line with the 20-80 equity-fixed income composite benchmark.

• The fixed income component, representing 80% of the allocation, mirrored the positive performance of Stable Income; the Allianz Global High Yield Fund was the top performer as high yield credit spreads narrowed throughout the month.
• Propelled by the robust rally in risk markets, the 20% equity sleeve served as the primary performance engine, successfully outpacing the broader global equity benchmark. The UBS US Total Yield Fund notably bolstered these relative gains, complemented by the portfolio’s strategic overweight position in emerging market equities.

The Endowus Future Income Portfolio returned 1.9% in May, slightly underperforming the 40-60 equity-fixed income composite benchmark.

• The fixed income sleeve (60%) underperformed the global credit markets, mirroring the performance of Stable Income. 
• The equity sleeve (40%) was the main contributor to overall performance. The FSSA Dividend Advantage Fund continued to be the standout performer as Asia-Pacific equities delivered another month of strong return. However, the AB Low Volatility Equity Portfolio Fund, the sleeve's largest holding, participated in the recovery but captured less of the upside. This was the primary reason for the sleeve’s underperformance against the broader equities market. 

Latest current target payout update:

In September 2025, we revised downwards the current target payout of Higher Income Portfolio to 5-6%. The recent increase in hedging cost between SGD and USD pair has caused certain fund managers to lower the payout, impacting the overall payout levels across all three income portfolios. This in particular has caused Higher Income Portfolio’s payout yield to dip below the prior target payout range. In light of the prevailing interest rate cycle, it is only prudent to lower the current target payout range of the Higher Income Portfolio. 

Investment grade flexible income funds continue to be able to generate income that’s akin to high yield funds in the current environment where high yield spreads are particularly tight. In light of this, we are comfortable with the Higher Income Portfolio generating an income level that is similar to that of Stable Income. It is important to note that the Higher Income Portfolio has delivered better growth in terms of total return than Stable Income, with the prudent addition of credit and equity risk. This means that after receiving the income, investors in the Higher Income Portfolio would have seen stronger capital preservation year-to-date amidst volatility.

We are monitoring and will take actions to improve the portfolios if we believe there are better building blocks/ is room to optimise the portfolios further. 

Endowus Cash Smart Portfolios

Cash Smart Secure continued to generate stable returns in May. 

• The Cash Smart Secure Portfolio maintained its stable return profile, posting a 0.1% gain in May. 
• Both the underlying funds, the Fullerton SGD Cash Fund and the LionGlobal SGD Enhanced Liquidity Fund, returned 0.1%. 

Cash Smart Enhanced continued to provide positive returns in May.

• Cash Smart Enhanced generated a return of 0.2% during the month, slightly higher than Cash Smart Secure’s return as it has slightly higher risk.
• The Portfolio’s returns were boosted by its allocation to short duration bonds via the United SGD Fund, which delivered 0.2% during the month.

Cash Smart Ultra posted a positive return in May, though it performed in line with Cash Smart Enhanced.

• Cash Smart Ultra rose by 0.2% in May.
• While all of the Portfolio’s underlying short duration bond funds saw positive performance during the month, there was some divergence in their individual performances, resulting in Cash Smart Ultra ending the month with similar performance as Cash Smart Enhanced.

Please note: There has been a change in the benchmark due to the discontinuation of the 3-month SIBOR. The new benchmarks feature higher returns than SIBOR, but our Cash Smart Portfolios have tended to outperform them across various periods.

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