5 min read I Date: 20 February 2026
Market Data
| Asset Class | Currency | 1-wk | 1-mth | YTD | 2024 | |
| Equities | ||||||
| MSCI World | USD | 0.5% | 1.5% | 2.1% | 19.5% | |
| S&P 500 | USD | 0.3% | 0.6% | 1.3% | 16.4% | |
| Nasdaq | USD | -0.3% | 0.3% | 1.2% | 20.2% | |
| Russell 2000 | USD | -2.1% | 4.5% | 5.2% | 11.3% | |
| Stoxx 600-Europe | EUR | 0.4% | 3.1% | 3.2% | 16.7% | |
| Nikkei 225 | JPY | -1.1% | 5.8% | 5.8% | 26.2% | |
| KOSPI | KRW | 4.5% | 23.7% | 23.7% | 75.1% | |
| MSCI Asia Pac ex-Japan | USD | 2.1% | 7.8% | 7.8% | 26.9% | |
| ASEAN | USD | -0.2% | 3.1% | 3.3% | 12.0% | |
| Shanghai Shenzhen CSI 300 | CNY | 0.1% | 1.1% | 1.6% | 17.7% | |
| Hang Seng | HKD | 2.4% | 5.6% | 6.6% | 28.2% | |
| Shanghai Stock Exchange Composite | CNY | -0.5% | 3.7% | 3.6% | 18.6% | |
| FBM Emas Shariah | MYR | -0.3% | 1.1% | 1.3% | -3.9% | |
| FBMKLCI | MYR | 1.2% | 3.2% | 3.5% | 2.4% | |
| Fixed Income | ||||||
| Bberg Bardays Global Agg | USD | 0.8% | 0.8% | 0.9% | 8.2% | |
| JPM Asia Credit Index-Core | USD | 0.1% | 0.4% | 0.3% | 9.1% | |
| Asia Dollar Index | USD | 0.4% | 0.2% | 0.2% | 3.3% | |
| Top Performing Principal Funds | ||||||
| Equities | 1-mth as of (30 October 2025) | YTD as of (30 October 2025) | ||||
| Principal China Direct Opportunities USD | 5.91 | 35.60 | ||||
| Principal Malaysia Opportunities | 4.97 | 1.14 | ||||
| Principal Malaysia Titans | 4.35 | 2.03 | ||||
| Balanced | ||||||
| Principal Lifetime Balanced | 3.07 | -0.39 | ||||
| Principal Lifetime Balanced Income | 2.60 | -0.16 | ||||
| Principal Dynamic Enhanced Malaysia Income | 2.54 | -0.43 | ||||
| Fixed Income | ||||||
| Principal Conservative Bond | 0.32 | 4.94 | ||||
| Principal Lifetime Bond | 0.29 | 5.22 | ||||
| Principal Deposit | 0.28 | 3.51 |
Source: Bloomberg, market data is as of 20 February 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 markets experienced a "risk-off" environment initially driven by "higher-for-longer" interest rate concerns and Middle East tensions, followed by a relief rally after the US Supreme Court struck down President Trump's emergency tariffs. Both the US and European markets finished with positive gains.
In Asia, markets were mixed this week due to the Lunar New Year holidays. While China was closed, South Korea hit record highs thanks to strong chip sales. Malaysia also did well, reaching its best level in years led by strong GDP data. However, Japan and Hong Kong SAR fell slightly at the end of the week due to worries over tensions in the Middle East.
- In the bond market, the US 10-year Treasury yield (UST) generally rose, closing near 4.09%–4.10% (as of 20th February). Yields increased as markets reacted to sticky 3% core PCE inflation, a 1.4% Q4 GDP print, and the Supreme Court striking down tariffs, which was offset by new executive actions. (It's worth noting that bond prices move inversely to bond yields)
Macro Factors
- In the United States, key developments include US Supreme Court struck down President Donald Trump's global tariffs. The court ruled that Trump exceeded his authority under a federal emergency-powers law by imposing broad "reciprocal" duties worldwide, marking a significant legal setback for the White House. Investors also digested a fresh batch of US economic data and its implications for Fed policy. US GDP grew at an annualized 1.4% in Q4, below the 3% forecast, highlighting slower momentum amid tariffs and the government shutdown. December PCE data showed headline and core inflation accelerating more than expected, while the S&P Global US Composite PMI signalled the slowest private-sector expansion in ten months. 2
- In Europe, the HCOB Eurozone Composite PMI rose to 51.9 in February 2026 from 51.3, beating expectations of 51.5, according to a preliminary estimate. The data signalled the strongest expansion in private sector activity since November, driven by the sharpest rise in manufacturing output since August 2025 and faster growth in services. Markets also reacted to comments from European Central Bank President Christine Lagarde, who told The Wall Street Journal she intends to complete her term, countering earlier reports that she could step down early. 3
- In China, markets entered the week-long Lunar New Year holiday, shifting price discovery to offshore trading. The International Monetary Fund kept its 2026 growth forecast for China unchanged at 4.5%, while warning that weak domestic demand and a slowing global economy pose downside risks. On the geopolitical front, reports that the US has paused several tech-security measures targeting China ahead of a planned April meeting between Presidents Donald Trump and Xi Jinping have eased near-term tensions, though broader strategic frictions remain.4
- In Malaysia, the economy expanded 5.2% in 2025, surpassing both the government's 4.0%–4.8% projection and the preliminary 4.9% estimate. Bank Negara Malaysia said growth was underpinned by strong domestic demand and favourable exports. Household spending rose on the back of positive labor market conditions, income-related policy support, and robust consumption. Investment also expanded, supported by machinery and equipment spending, ongoing multi-year projects, and the development of data centres. Exports continued to rise amid steady global demand for E&E goods, while imports remained strong, reflecting investment and intermediate goods. The annual inflation held at 1.6% in January 2026, unchanged from the previous month and in line with market expectations. 5
Investment Strategy6
We maintain the views that the US central bank has further to go in its easing cycle, and this remains a key pillar to global equities overall. Periods of price consolidation often follow rapid rallies as investors digest new data on corporate spending and interest rate paths. We believe it is essential to hold a long-term view rather than reacting to short-term volatility. 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, 20 February 2026
2 Bloomberg, Bureau of Labor Statistics (BLS), ISM, S&P Global, US Federal Board, 20 February 2026
3 S&P Global, ECB, Factset, Bank of England (BoE), 20 February 2026
4 Bloomberg, National Bureau of Statistic China, CEWC, 20 February 2026
5 Department of Statistic Malaysia, S&P Global, 20 February 2026
6 Principal view, 20 February 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.