5 min read I Date: 13 March 2026
Market Data
| Asset Class | Currency | 1-wk | 1-mth | YTD | 2025 | |
| Equities | ||||||
| MSCI World | USD | -1.73% | -3.91% | -2.2% | 19.5% | |
| S&P 500 | USD | -1.6% | -2.9% | -3.1% | 16.4% | |
| Nasdaq | USD | -1.1% | -1.4% | -3.4% | 20.2% | |
| Russell 2000 | USD | -1.8% | -6.2% | -0.1% | 11.3% | |
| Stoxx 600-Europe | EUR | -0.3% | -3.3% | 0.8% | 16.7% | |
| Nikkei 225 | JPY | -3.2% | -5.4% | 6.8% | 26.2% | |
| KOSPI | KRW | -1.7% | -0.2% | 30.0% | 75.3% | |
| MSCI Asia Pac ex-Japan | USD | -2.0% | -4.3% | 5.1% | 26.9% | |
| ASEAN | USD | -1.9% | -6.0% | -1.2% | 12.0% | |
| Shanghai Shenzhen CSI 300 | CNY | 0.2% | 0.0% | 0.7% | 17.7% | |
| Hang Seng | HKD | -0.8% | -3.9% | -0.7% | 28.2% | |
| Shanghai Stock Exchange Composite | CNY | -0.7% | 0.2% | 2.9% | 18.6% | |
| FBM Emas Shariah | MYR | -0.3% | -0.4% | 0.5% | -3.9% | |
| FBMKLCI | MYR | -0.1% | -1.3% | 2.1% | 2.4% | |
| Fixed Income | ||||||
| Bberg Barclays Global Agg | USD | -1.2% | -2.6% | -1.0% | 8.2% | |
| JPM Asia Credit Index-Core | USD | -0.8% | -1.2% | -0.2% | 9.1% | |
| Asia Dollar Index | USD | -0.5% | -1.2% | -0.4% | 3.3% | |
| Top Performing Principal Funds | ||||||
| Equities | 1-mth as of (28 Feb 2026) | YTD as of (28 Feb 2026) | ||||
| Principal Islamic Asia Pacific Dynamic Equity MYR | 9.10 | 20.69 | ||||
| Principal Asia Pacific Dynamic Growth - USD | 8.03 | 19.18 | ||||
| Principal Dynamic Growth - USD | 8.02 | 18.13 | ||||
| Balanced | ||||||
| Principal Asia Pacific Dynamic Mixed Asset MYR | 4.04 | 9.55 | ||||
| Principal Islamic Lifetime Balanced | 3.14 | 6.43 | ||||
| Principal Heritage Balanced MYR Hedged | 2.15 | 6.16 | ||||
| Fixed Income | ||||||
| Principal Lifetime Enhanced Bond | 0.72 | 0.62 | ||||
| Principal Sustainable Dynamic Bond MYR | 0.34 | 0.61 | ||||
| Principal Sustainable Conservative Bond MYR | 0.29 | 0.58 |
Source: Bloomberg, market data is as of 13 March 2026.
*As we emphasise a long-term focus, the top performing funds were selected based on monthly performance.
*The numbers may show as negative if there is no positive return for the period under review.
*The fund performance was referenced from the daily performance report, data was extracted from Lipper.
*The performance figures are based on the fund's respective currency class.
*Past performance is not an indication of future performance.
Market Review1
- This week, global equity markets delivered broadly negative performance as the risk-off sentiment persisted. Major U.S. indices recorded weekly losses as investors pivoted away from rate-sensitive growth stocks. European markets also succumbed to selling pressure amid concerns over a potential energy-driven inflation spike.
In Asia, markets were mixed but generally cautious throughout the week. Markets were caught between domestic policy updates in China and the regional impact from higher import costs for energy. MSCI Asia Pacific Index faced headwinds as energy-importing nations (Japan, South Korea, and India) braced for higher input costs. In Malaysia, the FBMKLCI index ended the week lower, reflecting the global risk-off trend.
- In the bond market, the US 10-year Treasury yield climbed toward the 4.20% range (as of March 14) as investors weighed the release of dramatically slower, downwardly revised fourth-quarter gross domestic product growth numbers. (It's worth noting that bond prices move inversely to bond yields)
Macro Factors
- In the United States, investors navigated the intensifying conflict in the Persian Gulf that drove crude oil prices toward 100 dollars per barrel following defiant rhetoric from the new Iranian supreme leader. Investors weighed the lack of an immediate resolution to the war alongside further increases in energy costs. Market participants largely shrugged off the record coordinated release of 400 million barrels from emergency reserves by the IEA. The Trump administration is weighing a temporary waiver of the Jones Act, the century-old law requiring U.S.-flagged ships to carry goods between domestic ports, as part of efforts to ease surging oil and gasoline prices. 2
- In Europe, market sentiments were primarily rattled by a sharp spike in global energy prices following a major escalation in Middle East tensions, which briefly pushed Brent crude toward $115 per barrel. Sentiment was further dampened by weak German industrial data, confirming a continued slowdown in the bloc's largest economy, while hawkish commentary from ECB officials, who signalled that further rate cuts might be delayed to combat rising import costs, kept upward pressure on government bond yields. 3
- In China, investors grappled with heightened Middle East tensions and surging oil prices as the US-Israeli war on Iran showed no signs of easing. Despite this, China remains relatively well positioned to weather the supply shock after years of prioritizing energy security by building strategic reserves and diversifying energy sources. Annual inflation jumped to 1.3% in February 2026 from 0.2% in January, marking the highest print since January 2023 and topping market expectations of 0.8%. The increase largely reflected the impact of the Lunar New Year, which fell in mid-February this year. Core inflation, excluding food and energy, rose 1.8% yoy, the strongest since March 2019.4
- In Malaysia, retail sales rose by 6.1% year-on-year in January 2026, slowing from a 6.9% increase in the previous month. This was the weakest growth since August 2025 due to softer sales across most groups. On a monthly basis, retail sales fell by 0.3% in January, reversing a 2.0% increase in December. Industrial production grew by 5.9% year-on-year in January 2026, beating market estimates of a 5.4% rise and the previous month's 4.8% increase. The latest figure also marked the fastest growth since October last year, driven by strong performances in all the industrial sectors.5
Investment Strategy6
Volatility has dominated global financial markets since the start of this year, with geopolitical developments, concerns over AI competition, and inflation worries weighing on investor sentiment. History suggests that while near term volatility may cause a market selloff, temporary drawdowns rarely have a lasting impact on long-term equity returns once the initial uncertainty fades.
While past performance does not guarantee future returns, history can certainly serve as a guide for navigating the future.
We continue to believe that investors' best defence against uncertain times is diversification. In this environment, our strategy focuses on quality growth companies with domestic earnings, supplemented by quality bonds for portfolio stability during uncertainty.
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Sources:
1 Bloomberg, 13 March 2026
2 Bloomberg, Bureau of Labor Statistics (BLS), ISM, S&P Global, US Federal Board, 13 March 2026
3 S&P Global, ECB, Factset, Bank of England (BoE), 13 March 2026
4 Bloomberg, National Bureau of Statistic China, CEWC, 13 March 2026
5 Department of Statistic Malaysia, S&P Global, 13 March 2026
6 Principal view, 13 March 2026
*SEZ refers to Special Economic Zone
*PMI refers to Purchasing Manufacturing Index
*HCOB refers to Hamburg Commercial Bank
*NBS PMI refers to official data released by National Bureau of Statis in China
*Caixin PMI refers to data published by Caixin Media and ISH Markit. It provides alternative gauge focusing on smaller and medium-sized enterprises.
*ECB refers to European Central Bank
*PBOC refers to People's Bank of China
*PCE refers to Personal Consumption Expenditure
*FOMC: Federal Open Market Committee
*y-o-y refers to year on year
*m-o-m refers to month on month
*UST refers to United States Treasury
*BNM refers to Bank Negara Malaysia
*Caixin decided to end its title sponsorship of the S&P Global China Purchasing Managers' Index (PMI) as of July 2025. This decision was part of a "strategic adjustment" for Caixin, aligning with its long-term development needs. Caixin had been the title sponsor since 2015, using it as a way to expand into the data sector and analyze China's economic transformation. Following Caixin's departure, RatingDog (Shenzhen) Information Technology Co., Ltd., a Chinese credit research and bond rating company, successfully acquired the exclusive naming rights for the "S&P Global China PMI". Starting with the August 2025 data release, the index was officially renamed the "RatingDog China PMI". S&P Global continues to be responsible for compiling and releasing the monthly report.
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Disclaimer: We have based this document on information obtained from sources we believe to be reliable, but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness, or correctness. Expressions of opinion contained herein are those of Principal Asset Management Berhad only and are subject to change without notice. This document should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell Principal Asset Management Berhad's investment products. The data presented is for information purposes only and is not a recommendation to buy or sell any securities or adopt any investment strategy. This material is not intended to be relied upon as a forecast, research, or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. We recommend that investors read and understand the contents of the funds' prospectus and product highlights sheet available on the Principal website, which have been duly registered with the Securities Commission Malaysia (SC). Registration of these documents does not amount to nor indicate that the SC has recommended or endorsed the product or service. There are risks, fees and charges involved in investing in the funds. You should understand the risks involved, compare, and consider the fees, charges and costs involved, make your own risk assessment, and seek professional advice, where necessary. This article has not been reviewed by the SC.