Endowus Q1 2026 Portfolio Performance Review

Endowus Flagship Portfolios — Cash/SRS

Key performance highlights: 

The first quarter of 2026 was a period of heightened volatility and a sharp reversal for global equity markets. The year began with a continuation of 2025’s “soft-landing” optimism, even as investors questioned whether massive AI capital expenditures by hyperscalers would continue to generate returns. However, things took an unfortunate turn in March following the escalation of conflict in the Middle East. The resulting disruption to oil and gas supplies triggered a price surge, fueling stagflationary fears and a broad risk-off sentiment. These headwinds erased earlier gains, leaving global equities down 2.6% for the quarter.

The Flagship Cash/SRS 100% Equity Portfolio fell 1.2% in the first quarter of the year, but outperformed the global equities benchmark. The Portfolio benefitted from its overweight to value stocks, which proved resilient as growth-oriented names struggled. Additionally, the Portfolio’s larger emerging market exposure contributed to its outperformance. Despite the energy-price shock having a greater impact on several emerging market countries given their greater reliance on oil imports, the region’s robust performance early in the quarter enabled it to finish ahead of developed market peers.

Within the Portfolio, the Dimensional Emerging Markets Large Cap Core Equity Fund was the best performer, ending the quarter up 4.2%. The Fund’s robust performance was driven by its emerging market emphasis and stock selection. Conversely, the iShares US Index Fund was the weakest performer, ending the quarter down 4.8%. The Fund suffered as US equities faced significant pressure from profit taking within the Technology and AI related sectors, as investors grew increasingly skeptical whether massive AI-related capital expenditures will continue to generate revenue growth.

Global bonds were not immune to the quarter’s heightened volatility. Government bonds faced downward pressure as higher energy prices from the Middle East conflict reignited inflationary concerns, triggering a rise in government bond yields across the board. However, US Treasuries remained resilient this period, ending the quarter flat as the US was more insulated from the energy price shock given its net energy exporter status. On the other hand, credit markets detracted as the risk off environment led to a widening of both investment grade and high yield credit spreads. Overall, global bonds fell 0.8% during the quarter.

The Flagship Cash/SRS 100% Fixed Income Portfolio fell 1.3% during the first quarter, underperforming the global fixed income benchmark. The Portfolio’s overweight to emerging market bonds and credit weighed on relative performance during the quarter, as both came under pressure due to the risk off market sentiment. 

Within the Portfolio, the iShares Global Aggregate 1-5 Year Bond Index Fund was the best performer due to its shorter duration. The Fund fell by 0.5% during the quarter. In contrast, the PIMCO GIS Global Bond Fund was the weakest performer, falling 2.1%. The Fund’s curve steepener positioning within euro bloc rates took a hit and contributed to the underperformance.

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 CPF 100% Equity Portfolio fell 2.0% in Q1 2026, outperforming the broader global equity market which declined 2.6%. Similar to the Flagship Cash/SRS version, the Portfolio’s overweight to value and emerging market equities contributed to its outperformance this period. Within the Portfolio, the Dimensional Emerging Markets Large Cap Core Equity III Fund was the best performer, ending the quarter up 2.4%. The fund’s focus on emerging market equities, as well as its stock selection, bolstered performance. On the other hand, the Amundi Prime USA Fund fell 4.6% and was the weakest performer during the quarter. US equities struggled due to profit taking within the Technology and AI related sectors.

The Flagship CPF 100% Fixed Income Portfolio fell 0.8% in Q1 2026, performing in line with the broader global fixed income market. Within the Portfolio, the United SGD Fund was the best performer as it benefited from its shorter duration. The Fund ended the quarter with flat returns. Conversely, the Dimensional Global Core Fixed Income III Fund was the weakest performer, as its longer duration and higher credit exposure weighed on performance this period.

Endowus ESG Portfolios 

Key performance highlights:  

In Q1 2026, the ESG Equity model portfolio underperformed the broader equity market, declining 5.8%, compared to the index, which fell 2.6%. The top contributor was the KBI Global Sustainable Infrastructure Fund, benefiting from strong infrastructure tailwinds driven by data center buildout and grid modernization demand amid the renewable energy boom. The Goldman Sachs Enhanced Index funds provided relative stability through their systematic approach and benchmark-aware positioning, both outperforming the portfolio average. On the other hand, the growth-oriented allocations were relative detractors. The Schroder ISF Global Sustainable Growth Fund declined as its quality-growth orientation faced headwinds during the quarter's market volatility. The Stewart Investors funds were also weighed down as emerging market equities faced currency pressures. The Natixis ESG Mirova Global Sustainable Equity Fund and Nordea Global Stars Equity Fund also lagged, impacted by the challenging environment for active equity strategies.

The ESG Fixed Income model portfolio underperformed the global fixed income benchmark, declining 1.7%, compared to the index, which fell 0.8%. The PIMCO GIS Climate Bond Fund detracted as green bonds and climate-aligned issuers faced valuation pressure in the challenging first quarter environment. On the other hand, the JPM Global Bond Opportunities Sustainable Fund was the main detractor, as its flexible global positioning encountered headwinds from duration management and currency movements during the quarter's market volatility. The Eastspring Asia ESG Bond Fund also lagged, as Asian credit markets faced modest headwinds from regional economic uncertainties.

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 Factors 100% Equity Portfolio fell 0.3% in the first quarter, but outpaced the global equity benchmark which fell 2.6%. The Portfolio benefitted from its overweight to value and emerging market equities, which outperformed their growth and developed market counterparts respectively. Within the Portfolio, the Dimensional Pacific Basin Small Companies Fund was the best performer this quarter, rising 4.2%. The Fund’s performance was bolstered by its overweight to Japanese equities, which experienced tailwinds from expectations of pro-growth policies following the LDP’s victory in the House of Representative election in February. In contrast, the Dimensional US Core Equity Fund was the weakest performer, falling 1.9% during the quarter. US equities detracted due to profit taking within the Technology and AI related sectors.

The Factors 100% Fixed Income Portfolio declined 0.9% in the first quarter, slightly trailing the global fixed income benchmark which fell 0.8%. The Portfolio’s underperformance was driven by its longer duration bond exposure via the Dimensional Global Core Fixed Income Fund, which faced greater downward pressure on the back of rising treasury yields. The Fund was also the weakest performer during the quarter, falling 1.0%. On the other hand, shorter duration bond funds within the Portfolio declined less and prevented further underperformance. In particular, the Dimensional Global Short Fixed Income Fund fell just 0.5% during the quarter, and was the best performer within the Portfolio.

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 model portfolio posted a slight loss of 0.1% in Q1 2026. 

In the first quarter of 2026, the Chinese equity market continued to be a "selective market," characterized by stark divergence between onshore and offshore performance alongside targeted policy interventions. The outbreak of war involving Iran and the subsequent closure of the Strait of Hormuz in early March triggered an acute global energy shock, which sparked a severe "risk-off" flight to safety, driving capital away from broader emerging markets amid renewed global inflationary fears. Domestically, however, the National People's Congress (NPC) convened in early March and announced a flexible 4.5%–5.0% GDP growth target. This marked the first downward adjustment in four years and signaled a pragmatic shift from broad-based, debt-fueled expansion toward high-quality, sustainable growth, focusing on converting property inventory rather than relying on incremental housing easing.

The market witnessed a notable rotation in Q1. Early domestic data revealed encouraging signs of a transition toward internal demand, with Lunar New Year figures highlighting resilient travel and consumer activity. Combined with narrowing Producer Price Index (PPI) declines and the government's heightened regulatory focus on the "anti-involution" theme—a structural effort to curb destructive corporate price wars and improve profitability—a measured reflationary cycle began to take root onshore. Consequently, mid- and small-cap onshore stocks significantly outperformed the broader offshore indices, which bore the brunt of the March risk-off selloff.

The Endowus China Equity Model Portfolio delivered a flat return of negative 0.1% in Q1 2026 , outperforming the Morningstar China All Cap Index which fell 7.6%. T. Rowe Price China Evolution Equity Fund was the best-performing constituent fund in the portfolio, gaining 7.3%. 

Looking ahead, fund managers see the market firmly anchored in a "domestic demand at the core" policy loop. While the external geopolitical picture—particularly the ongoing Middle East conflict and its impact on global supply chains—remains complex and requires close monitoring, the domestic focus is clear. Managers across the portfolio anticipate that reflation will be gradual. Consequently, stock-picking will rely heavily on identifying companies with genuine pricing power as the economy continues to work through the "anti-involution" phase. 

Megatrends Portfolio 

Key performance highlights: 

The Megatrends portfolio underperformed the Morningstar Global Markets Index in the first quarter of 2026. In January, the portfolio outperformed the Index and kept pace with the Index in March. The bulk of the underperformance came in February, as several underlying funds had negative returns.

Q1 2026 was where the portfolio’s diversification benefits stood out, as the sector-focused funds DWS Global Agribusiness and GMO Climate Change bucked the general trend and gained around 10% for the quarter. Demand for fertilizers and agricultural products was very strong and persisted across the quarter, with several key holdings in the DWS Global Agribusiness experiencing sizable rallies. Similarly, there was also tightness in the energy markets, leading to a surge in stock prices for energy-related companies.           

On the other hand, funds focused on technology and software suffered declines over the quarter. Funds with a higher equity beta witnessed larger declines in March, due to the onset of the Iran war that led to a risk-off environment. As these funds constituted the bulk of the Megatrends portfolio, the declines more than offset the positive returns generated by DWS Global Agribusiness and GMO Climate Change, leading to negative returns for the portfolio.

Technology Portfolio

The Technology Portfolio fell 6.0% in Q1 of 2026. This compares to the Morningstar Global Markets Index which fell 5.5% and the Morningstar Global Technology Index which pulled back 4.9% during the same period.

The main detractors to relative performance this quarter were the JPM US Technology Fund and BGF World Technology Fund, which fell by 14.2% and 9.8% respectively (on a USD basis). The JPM US Tech Fund underperformed due to its exposure to US Tech as well exposure to stocks such as ServiceNow, Oracle, Snowflake, and Shopify within software. Despite its overall underweight to software sector they were hit disproportionately hard by these names. The BGF World Technology Fund also underperformed with a slight overweight to US tech and underweight to the software sector overall.

The best performer this quarter was the BGF Next Generation Technology Fund which fell 3.3%. The overweight to semiconductor and clear underweight to software helped performance.

Note our portfolio has a more balanced weight of mega cap tech (53%) and large cap tech (23%) companies compared to the index, where mega cap tech accounts for 64% and large cap tech accounts for 24% respectively.

Global Real Asset Portfolio

Key performance highlights: 

The Endowus Real Assets portfolio performed well in the first quarter with a positive performance of 6.0%, while broader equity markets largely declined. The three different segments of the portfolio all had varying performances, due to the wide divergence in sector returns over the quarter.

Property and Real Estate had the weakest performance but were still largely flat—positive returns in January and February were largely offset by the drawdown in March. Coming in the middle was infrastructure, due to sustained momentum in the data centre and energy utility sectors. While the two infrastructure funds also suffered declines in March, the declines were more muted due to the inherent defensiveness of the infrastructure sector. 

The best performers over the quarter were funds focused on the commodity space, namely the Ninety One Global Natural Resources and PIMCO GIS Commodity Real Return funds. Natural resources rallied strongly, with traditional oil producers such as Chevron and Exxon Mobil generating sizable returns. At the same time, gold continued to breach new highs, although it gave back a large part of its returns amidst concerns over an unsustainable rally and the strengthening of the US Dollar.             

Endowus Income Portfolios 

Key performance highlights: 

The Stable Income Portfolio fell 1.3% in Q1 2026 and 2.2% in March specifically, slightly trailing the broader credit market. March accounted for the bulk of the quarter’s losses as global fixed income came under broad pressure following the escalation of the US-Iran conflict and the intensified shock on the energy market. Bond yields increased and credit spreads widened. All of the underlying funds gave back their previous months’ gains; funds with longer duration like PIMCO GIS Income Fund and AB American Income Portfolio led the losses, while JPM Income Fund, with its shorter duration positioning, was the most resilient. Asian bonds fared slightly better than global bonds. 

The Higher Income Portfolio declined 1.5% over the quarter and 3.4% in March, lagging the 20-80 benchmark. The fixed income sleeve declined for similar reasons as Stable Income, except that its tilt towards global high yield added slightly to the losses. For the equities sleeve, it experienced a sharper sell-off than the broader equity market in March due to its tilt to emerging market equities and real assets. However, these segments performed well during the first two months of the year, rendering the equity sleeve to still end the quarter outperforming the global equity market.

The Future Income Portfolio decreased by 2.5% over the quarter and 3.9% in March, underperforming the 40-60 benchmark. The fixed income component declined due to the same factors affecting the Stable Income Portfolio. The equity component slightly lagged the broader equities market in Q1, primarily driven by the underperformance of the AB Low Volatility Equity Portfolio and the portfolio’s tilt towards Asian equities. 

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 a stronger increase in their capital in 2025. 

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

Key performance highlights: 

The Cash Smart portfolios delivered flat to positive returns in Q1 2026. 

The first quarter of 2026 saw a re-emergence of a higher-for-longer narrative. Rates and longer-term yields rose sharply particularly during the month of March as markets quickly priced in the rising inflation risk from tensions in the Middle East. The 2-year US Treasury yield rose 42bps to 3.79% while the 10-year rose 38bps to 4.31% over the quarter. In policy, the Fed kept the federal funds rate on hold at 3.5 - 3.75% in January, citing a wait-and-see approach, keeping front-end rates relatively anchored while the expectations for rate cuts in 2026 fell close to zero by end-March. In Singapore, the MAS kept its S$NEER policy band of a path of “modest and gradual appreciation” in January, while raising its 2026 core inflation forecast to 1-2%. We saw a similar phenomena of rising SG rates and sovereign bond yields over the quarter. In credit spreads, there was a moderate widening in the U.S. investment-grade and Asia & EM sectors, reflecting the rising uncertainty in markets. Cash Smart portfolios, with a very low duration profile, remained resilient during this period.

Cash Smart Secure closed the first quarter of 2026 up 0.4%. This performance was supported by consistent monthly returns throughout the January to March period. The two underlying funds in the portfolio, Fullerton SGD Cash Fund and LionGlobal SGD Enhanced Liquidity Fund, delivered steady returns during the quarter despite the rising SG rate environment, with its emphasis on deposits and money market securities. Secure remains a relatively safer option across the Cash Smart suite for investors seeking shelter for their investments while generating short-term yield.  

Cash Smart Enhanced generated a return of positive 0.2% in the first quarter of 2026. LionGlobal SGD Enhanced Liquidity Fund delivered the strongest performance in the portfolio. On the other hand, the UOB United SGD Fund was flat, with its positive performance in January and February offset by a negative impact in March where rates rose and spreads widened moderately. With a slightly added risk, the Enhanced portfolio takes on slightly more credit risk than Secure with its higher exposure to short duration bonds.

Cash Smart Ultra generated a flat performance during the first quarter of 2026. Across the portfolio, money market and cash vehicles held up better than the short duration funds, which experienced slight negative returns in March due to higher rates and moderately wider spreads. Similar to Cash Smart Enhanced, the best performance came from LionGlobal SGD Enhanced Liquidity Fund, which rose 0.4% over the quarter. On the other hand, the worst performer was PIMCO Low Duration Income Fund, which fell 0.7% over the quarter given its higher exposure to rising U.S. rates. With a higher added risk than Enhanced or Secure, Ultra has a potential to produce higher returns. Investors seeking to largely avoid exposure to market volatility may consider switching to lower-risk portfolios such as Secure or Enhanced.

Cash Smart Portfolios, primarily exposed to USD and SGD market rates, are starting to see some signs of divergence in yields during recent months as markets ride through a rate-cut cycle that restarted in late 2025. 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.