10 June 2024
Written by MYTHEO
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Key Takeaways
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• Equity markets continued to perform well, with major indices notched new all-time highs during the month.
• The Income portfolio gave a modest performance due to a US Federal Reserve rate hold and the slight strengthening of the MYR.
• Precious metals rose in value due to economic uncertainty has fueled demand for safe-haven assets.

In this monthly report, we will assess the performance of MYTHEO’s portfolios in light of the financial market developments in May 2024.

1. Growth Portfolio

‍MYTHEO’s Growth Portfolio was up by 3.35% (up 2.02% in MYR) in May 2024.

‍In May 2024, MYTHEO AI-Assist executed a strategic shift, scaling back its investments in United Kingdom ETFs on the back of negative sentiments, while bolstering its holdings in Asia-Pacific and US markets ETFs.

‍The portfolio’s allocation to the Nasdaq 100 ETF (about 17%) was the key contributor to the overall portfolio performance during the period.
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Top 3 ETFs performance (Growth portfolio)

Bottom 3 ETFs performance (Growth portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of May 2024.

2. Income Portfolio

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‍MYTHEO’s Income Portfolio recorded a gained of 1.52% (up by 0.21% in MYR) in May 2024.

For the month of May, the income portfolio continues to hold significant levels of short-term duration corporate bonds and treasury bonds that balanced out longer-term US Treasury holdings. Presently, the yield-to-maturity of the bond ETFs in the portfolio (excluding preferred stock) stands at approximately 5.34%.

The portfolio’s exposure to long-term treasury bond (about 13%) was the key contributor to the overall portfolio performance during the period.
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Top 3 ETFs performance (Income portfolio)

Bottom 3 ETFs performance (Income portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of May 2024.

3. Inflation Hedge Portfolio

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MYTHEO’s Inflation Hedge Portfolio recorded a positive USD return in May 2024, up by 3.92% (+2.58% in MYR).

The core holdings of this portfolio are meticulously structured to prioritize resilience amid market volatility, particularly within equities and bonds. Emphasizing US real estate and inflation-linked bonds, the allocation to these assets is strategically designed to navigate fluctuations adeptly. US real estate, infrastructure, and base metals allocations are chosen for their ability to mitigate long-term inflation risks. Simultaneously, investments in inflation-linked bonds and gold offer added stability and diversification benefits, acting as buffers against the inherent turbulence of equity and bond markets.

‍The portfolio’s allocation to US real estate (about 30%) was the key contributor to the overall portfolio performance during the period.
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Top 3 ETFs performance (Inflation hedge portfolio)

Bottom 3 ETFs performance (Inflation hedge portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of May 2024.

4. Global ESG Portfolio

MYTHEO’s Global ESG portfolio is up by 3.96% (2.62% in MYR) in May 2024.

In line with the growth portfolio strategy, MYTHEO Global ESG portfolio exhibits a preference and exposure of around 60% to the US market. This substantial weighting is justified by the United States' prominent role in Environmental, Social, and Governance (ESG) investments, coupled with its well-established track record. By carrying a higher allocation to US markets, MYTHEO recognizes not only the maturity of these markets but also underscores its commitment to mitigate risk management strategies.
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Top 3 ETFs performance (Global ESG portfolio)

Bottom 3 ETFs performance (Global ESG portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of May 2024.

5.  Essential Products Portfolio

MYTHEO’s Essential Products portfolio was up by 4.07% (2.73% in MYR) in May 2024.

The portfolio emphasis on ETFs reflecting pivotal themes of food, water, and energy, encompassing both new energy and traditional energy resources. With an allocation of around 60% to the US market, this strategic positioning is weighed to seize promising investment prospects arising from technological innovations and evolving business models within these sectors on a global scale.
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Top 3 ETFs performance (Essential products portfolio)

Bottom 3 ETFs performance (Essential products portfolio)

Source: GAX MD Sdn Bhd, data in USD term for the month of May 2024.

Chart 1: May 2024 - Portfolio Year-to-Date Rate of Return in % (MYR)

Source: GAX MD Sdn Bhd, Jun 2024
Note: Past performance is not an indication of future performance
Balanced allocation consists of 30% Growth, 45% Income and 25% Inflation Hedge

How to calculate MYTHEO Omakase actual monthly portfolio return

For MYTHEO Omakase, the actual portfolio returns derive from the combined weighted returns of each allocated functional portfolio.
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For instance, assuming allocations of 30% to the Growth portfolio, 45% to the Income portfolio and 25% to the Inflation Hedge Portfolio, the actual portfolio return in MYR for May would be +1.35%, calculated as follows: [(30% x 2.02%) + (45% x 0.21%) + (25% x 2.58%)].

Our Thoughts
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In May, the U.S. market saw a resurgence, buoyed by the artificial intelligence (AI) trend. The S&P repeatedly reached new highs throughout the month, driven by impressive first-quarter earnings. Concurrently, Chinese shares experienced an upturn, with listed firms unveiling a record cash dividend of 2.2 trillion yuan for the year 2023, alongside share buybacks, signalling a commitment to reform capital market efforts similar to Japan and South Korea.

‍Fixed income instruments generated modest returns as the US Federal Reserve kept the target rate at 5.25-5.50% throughout May. Additionally, the Malaysian Ringgit appreciated by 1.29% against the USD during the month.

‍In the commodities market, economic uncertainty has fuelled demand for safe-haven assets and propelled prices of gold, silver, and copper to the higher end. Conversely, crude oil saw a dip to a four-month low in May, closing at $76.99 per barrel, driven by concerns over weak U.S. gasoline demand.
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Wind and clean energy-related stocks made a notable comeback this month, underscoring the rising significance of wind energy in global geopolitics. With nations increasingly investing in this renewable resource, signalling a shift from traditional geopolitical energy dynamics centred around fossil fuels.

As market dynamics continue to evolve, MYTHEO remains committed in providing investors with options aligned with their financial goals. As a digital investment platform, MYTHEO is prepared to support you in achieving your long-term financial objectives through diversified investments, seamlessly and cost-effectively. Discover how MYTHEO can enhance your portfolio diversification today, and embark on your financial journey with confidence. Take the first step towards your financial goals now.

This material is subject to MYTHEO’s Notice and Disclaimer.

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