Strong performance of digiPortfolio

Hope Into Reality

In 2Q21, Global Equities (referencing the MSCI AC World Index) rose 7.4%, driven by robust corporate earnings and continued liquidity support from central banks in the US and Europe. Global bonds (referencing the Bloomberg Barclays Global Aggregate Total Return Index) gained 0.98%, helped by a moderation in inflation expectations.

During the quarter, both “Comfy Cruisin’” Global Portfolio Plus USD model portfolio and Global Portfolio USD model portfolio made total returns of 4.7%. Both equities and bonds contributed positively with equities showing a larger outperformance, helped by a rebound in the growth funds.

The equity fund that stood out was the Franklin US Opportunities Fund, which invests in growth themes in the US such as semiconductors, enterprise software and healthcare. The other growth funds included in our portfolios are the BNY Mellon Global Equity Fund and the Capital Growth New Economy Fund, both with a bottom up approach to investing. In bonds, the best performer was the Loomis Sayles Multisector Income Fund, a fund which focuses on generating above average cash flows from different income sources. We also have the BGF Asia Tiger Bond Fund, an Asian focused credit fund, for yield pick-up.

Q2 2021 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 3.2% 4.8% 6.2%
USD 3.1% 4.7% 6.2%
Global Portfolio Plus SGD 3.0% 4.7% 5.6%
USD 2.9% 4.6% 5.6%
YTD 2021 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 1.7% 4.9% 7.5%
USD 1.3% 3.8% 6.1%
Global Portfolio Plus SGD 1.6% 5.0% 6.9%
USD 1.3% 4.6% 6.3%
 

The above table is based on the Indicative Model Portfolio gross of fees returns. Individual performance may vary.

What’s next

Looking ahead, we continue to favour equities over fixed income.  Our equity investments continue to tilt towards growth themes where earnings visibility is the best in this changing world. We also expect the USD bond yield curve to steepen gradually.  Thus, our strategy is to keep duration short to mitigate our portfolio sensitivity to potential interest rates rises.

20 Apr 2021

Back on Track

In 1Q21, Global Equities (referencing the MSCI World Index) rose 4.9%, driven by an acceleration in vaccination programs and fiscal stimulus in the US. Global bonds (referencing the Bloomberg Barclays Global Aggregate Total Return Index) declined 4.5% corrected as yields rose. Our portfolios benefitted from being fully invested during this period with a tilt towards equities and -our moderate risk (“Comfy Cruisin’”) Global Portfolio Plus USD model portfolio and Global Portfolio USD model portfolio declined around 0.15% and 0.89% respectively.

Our equities holdings underperformed the 1Q21 market rally. The BNY Mellon Long Term Global Equities Fund and Franklin US Opportunities Fund, which we like for their focus on quality and growth stocks, lagged the rally driven by value stocks this year. With the strong rally in value counters, we expect investors to be more selective in their stock picking, which favours the bottom-up approach of these two funds.

Our bond funds outperformed declining global bond markets by keeping their duration short and focusing on credit, particularly in Asia. We had the BGF Asian Tiger Bond fund, which focuses on Asia corporates, and the Loomis Sayles Multisector Income Fund, that invests in corporate bonds globally. The funds’ strategies will help mitigate the drag from rising bond yields whilst maintaining above-average income streams.

digiPortfolio performance

Q1 2021 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD -1.6% -0.1% 1.1%
USD -1.9% -1.0% -0.2%
Global Portfolio Plus SGD -1.6% 0.0% 0.9%
USD -1.7% -0.2% 0.5%
FY2020 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 5.6% 8.4% 10.3%
USD 6.9% 10.2% 12.2%
Global Portfolio Plus SGD 6.5% 10.3% 13.4%
USD 8.1% 12.1% 15.3%
Since Inception Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 9.9% 16.6% 22.8%
USD 11.7% 18.2% 23.3%
Global Portfolio Plus SGD 11.6% 20.5% 27.2%
USD 13.6% 22.8% 29.6%

The above table is based on the Indicative Model Portfolio gross of fees returns and excludes dividends received.

Individual performance may vary.

What’s next

Looking ahead, we continue to favour risk assets and will maintain a tilt towards equities. We are watchful of the rising bond yields although we expect this to peter out eventually, as longer-term inflation still faces structural headwinds such as disruptive technologies.

19 Jan 2021

A New Hope

Amid the tumultuous year in 2020, the funds-based digiPortfolios have made positive gains for the full year, following on a successful 2019. We achieved this by maintaining a well-constructed portfolio and focusing on high conviction fund selections.

During 4Q20, the portfolios were fully invested and benefited from the rally in equities and corporate bonds. Some of the notable performers in equities were the Capital New Economy Global Equity Fund, a fund that focuses on growth stocks and is aligned with our DBS CIO Barbell theme. It rose around 16.5% in 4Q compared to the equity market’s 14% return. Meanwhile, the FSSA Dividend Advantage Fund rose around 20%.

Within fixed income, we maintain our favourable view on corporate bonds that we expect will drive bond market returns as the economy recovers. We continue to hold the Natixis Loomis Sayles Multisector Income Fund which rose around 6% over Q4 while the PIMCO Diversified Income Fund appreciated around 4.5%.

digiPortfolio performance

Q4 2020 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 5.2% 7.7% 8.9%
USD 5.7% 9.3% 11.2%
Global Portfolio Plus SGD 4.7% 6.6% 8.0%
USD 5.2% 8.1% 10.2%

FY2020 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 5.6% 8.4% 10.3%
USD 6.9% 10.2% 12.2%
Global Portfolio Plus SGD 6.5% 10.3% 13.4%
USD 8.1% 12.1% 15.3%

Since Inception Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 11.7% 16.7% 21.4%
USD 13.9% 19.4% 23.5%
Global Portfolio Plus SGD 13.4% 20.5% 26.0%
USD 15.6% 23.1% 29.0%

The above table is based on the Indicative Model Portfolio gross of fees returns. Individual performance may vary.

What’s next

Looking ahead, we expect risk assets, namely equities and credit, to appreciate in 2021. The backdrop for risk taking is favourable – ultra easy monetary policies, less confrontational US-China politics and a viable cure for Covid-19. Heading into Q1, we are comfortable with our fund holdings and will make changes when appropriate.



20 Oct 2020

On the Mend

Updates on Global Portfolio

Global equities and bonds continued to trend up in 3Q20, driven by monetary stimulus as countries progressively emerged from Covid-19 lockdowns.

digiPortfolio performance

Q3 2020 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 2.6% 3.7% 4.5%
USD 2.9% 4.4% 5.4%

YTD Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 0.3% 0.7% 1.2%
USD 1.1% 0.9% 0.9%

Since Inception Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 6.0% 7.2% 9.8%
USD 8.1% 9.1% 10.5%

The above table is based on the Indicative Model Portfolio gross of fees returns. Individual performance may vary.

In 3Q20, the Global Portfolio has performed well, and key contributors included AB Low Vol Fund and BNY Mellon Long Term Global Equity Fund. The former benefited from its overweight position in technology (28%). The latter benefited from its overweight position in US equities and technology, investing in growth stocks in line with secular themes we are positive on.

What’s next

Our longer-term view remains unchanged, and we continue to favour Funds investing in growth sectors that are the key beneficiaries in this changing world. We’re adding the Capital New Economy Fund for its participation in secular growth themes globally, aligned with our CIO’s focus on growth sectors. We will adjust the bonds portion to increase our exposure in emerging market bonds when the opportunities arise. We will remain invested to benefit from this policy tailwind and will monitor events closely and adjust our course if needed.

Updates on Global Portfolio Plus

Global equities and bonds continued to trend up in 3Q20, driven by monetary stimulus as countries progressively emerged from Covid-19 lockdowns.

The portfolio benefited from our overweight positioning in Asian and US equities, which were the best performing markets within equities. For fixed income, our preference for corporate credit over government bonds continued to fare well as corporate bonds outperformed government bonds over the quarter.

digiPortfolio Performance

Q3 2020 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio Plus SGD 2.6% 3.7% 4.7%
USD 3.0% 4.6% 6.2%

YTD Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio Plus SGD 1.7% 3.4% 5.0%
USD 2.8% 3.7% 4.6%

Since Inception Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio Plus SGD 8.8% 12.2% 15.2%
USD 10.9% 14.3% 17.4%

The above table is based on the Indicative Model Portfolio gross of fees returns. Individual performance may vary.

In 3Q20, the Global Portfolio Plus has performed well and key contributors to performance included Franklin US Opportunities Fund and First State Dividend Advantage Fund. The former was driven by its large tilt in growth and technology stocks with holdings in key industry leaders while the latter benefited from its overweight position in China.

What’s next

Our longer-term view remains unchanged, and we continue to favour US and Asia for their stronger growth potential and attractive sectors. Apart from adding the Capital New Economy Fund for its participation in secular growth themes globally, we will switch into the UBS All China Fund to leverage the funds flexibility to invest in both the China A and H share market. We will remain invested to benefit from this policy tailwind and will monitor events closely and adjust our course if needed.


13 Jul 2020

Capitalizing on the market rebound

Unprecedented monetary support measures from central banks worldwide have led to a sharp recovery in global markets in the 2Q of 2020. Equity markets across the US, Europe and Asia Pacific have recorded double digit returns in the recovery.

Similarly, our portfolios have rebounded strongly as we have remained invested during this period of volatility. Our equity positions, particularly our overweight in the US and Asia equities, were the main drivers of returns.

digiPortfolio performance

Q2 2020 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 9.1% 11.5% 14.2%
USD 9.6% 12.7% 15.7%
Global Portfolio Plus SGD 10.5% 15.0% 17.9%
USD 11.2% 16.7% 20.4%

YTD Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD -2.4% -3.1% -3.5%
USD -1.8% -3.6% -4.6%
Global Portfolio Plus SGD -1.0% -0.4% 0.0%
USD -0.3% -1.0% -1.7%

Since Inception Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 6.6% 7.0% 9.0%
USD 8.6% 8.7% 9.4%
Global Portfolio Plus SGD 9.3% 11.7% 14.2%
USD 11.1% 13.3% 15.7%

The above table is based on the Indicative Model Portfolio gross of fees returns.
Individual performance may vary.

What’s next

Looking ahead, we continue to prefer the US and Asia ex-Japan equities for their stronger economic prospects when compared to Europe and Japan. In fixed income, we are mainly invested in developed market corporate bonds for stability and yield pick up over government bonds. While we remain cautious over valuations, the weaker inflation environment combined with low policy rates should justify higher asset prices.

With equities indices catching up, bond spreads tightening faster, it appears that fear of missing out (FOMO) has re-emerged over the simple fear of losing money. Given the strong rebound seen over the second quarter though, a near-term market consolidation in the months ahead would not be surprising. In such a case, we will again make use of the opportunity to make switches where appropriate.


19 May 2020

Keep calm and practise dollar cost averaging

The market has seen a volatile few months with the concerns over the covid-19 crisis persisting. Global equities (based on the MSCI AC World Index) declined 25% while global corporate bonds (based on the Bloomberg Barclays Global Aggregate Credit Index) declined 4.7%. The economic indicators are already pointing to a global recession as social distancing measures limit activity. To counter the negative impact, policy makers worldwide have implemented massive stimulus programs. Our longer term view is more attractive since bond yields have risen and equities valuations have reverted to the longer term averages.

digiPortfolio performance

Q1 2020 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD -9.6% -11.7% -13.8%
USD -9.4% -12.8% -15.5%
Global Portfolio Plus SGD -9.5% -11.7% -13.2%
USD -9.4% -13.3% -15.9%

FY 2019 Slow n Steady Comfy Cruisin Fast n Furious
Global Portfolio SGD 10.0% 14.8% 20.0%
USD 10.8% 10.8% 20.4%
Global Portfolio Plus SGD 10.4% 16.4% 20.8%
USD 11.0% 17.5% 22.4%

The above tables are based on the Indicative Model Portfolio gross of fees returns
Individual performance may vary.

Our portfolios have remained relatively resilient, they are globally diversified and we remain comfortable in our mutual funds holdings. In equities, we favour the US and Asia equities. The latter for its higher growth and cheaper valuations relative to its DM peers. In fixed income, we favour the more stable developed market investment grade credit during this period of volatility and also Asia for its attractive yield and stronger fundamentals in the emerging market world. We will switch our holdings in Goldman Sachs EM Corporate Bond Fund into the Blackrock Asian Tiger Bond Fund, our preferred fund in Asia bonds.

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