5 min read I Date: 20 March 2026
Market Data
| Asset Class | Currency | 1-wk | 1-mth | YTD | 2025 | |
| Equities | ||||||
| MSCI World | USD | -1.99% | -6.78% | -4.2% | 19.5% | |
| S&P 500 | USD | -1.9% | -5.8% | -4.9% | 16.4% | |
| Nasdaq | USD | -2.0% | -4.4% | -5.3% | 20.2% | |
| Russell 2000 | USD | -1.7% | -8.4% | -1.8% | 11.3% | |
| Stoxx 600-Europe | EUR | -3.8% | -9.0% | -3.0% | 16.7% | |
| Nikkei 225 | JPY | -0.8% | -6.0% | 6.0% | 26.2% | |
| KOSPI | KRW | 5.4% | -0.3% | 37.0% | 75.3% | |
| MSCI Asia Pac ex-Japan | USD | -0.2% | -5.5% | 4.9% | 26.9% | |
| ASEAN | USD | 1.0% | -6.6% | -0.3% | 12.0% | |
| Shanghai Shenzhen CSI 300 | CNY | -2.2% | -2.1% | -1.5% | 17.7% | |
| Hang Seng | HKD | -0.7% | -4.0% | -1.4% | 28.2% | |
| Shanghai Stock Exchange Composite | CNY | -3.4% | -3.1% | -0.6% | 18.6% | |
| FBM Emas Shariah | MYR | 1.2% | -0.4% | 1.7% | -3.9% | |
| FBMKLCI | MYR | 1.6% | -0.5% | 3.7% | 2.4% | |
| Fixed Income | ||||||
| Bberg Barclays Global Agg | USD | -0.1% | -2.6% | -1.1% | 8.2% | |
| JPM Asia Credit Index-Core | USD | -0.3% | -1.7% | -0.5% | 9.1% | |
| Asia Dollar Index | USD | -0.3% | -1.4% | -0.7% | 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 20 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 remained succumbed to selling pressure amid concerns over a potential energy-driven inflation spike.
In Asia, markets were mixed but generally cautious throughout the week. China onshore market was the largest drag, while South Korea emerged as the biggest gainer. In Malaysia, the FBMKLCI index ended the week in positive return, supported by rising crude prices acted as a partial hedge against global stagflation fears.
- In the bond market, the US 10-year Treasury yield climbed toward the 4.30% range (as of March 20) as investors reacted to 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, sentiment remained fragile as inflation concerns gripped Wall Street. Oil prices, represented by Brent futures, was trading around $110 a barrel following the latest attacks on energy infrastructure across the Middle East as the Iran war dragged on. The central bank left the fed funds rate unchanged, as expected, noting the uncertain economic impact of the Iran war while flagging elevated upside risks to inflation. The Fed indicated it will not cut rates until inflation shows signs of easing, though it still projects one rate reduction this year and another in 2027, consistent with its December outlook. Data on Wednesday showed US producer prices rose more than expected in February. Investors now await the latest weekly jobless claims for fresh insights on the labor market. 2
- In Europe, annual inflation rate was confirmed at 1.9% in February 2026, up from January's 16-month low of 1.7%, driven by a notable acceleration in services inflation, which climbed to 3.4% from 3.2%, and a pickup in non-energy industrial goods inflation. Market focus now shifts to this week's ECB and Federal Reserve policy meetings, where interest rates are expected to remain unchanged. ECB President Christine Lagarde is anticipated to outline strategies to protect the Eurozone from inflationary pressures linked to the ongoing conflict. 3
- In China, new home prices across 70 cities dropped 3.2% year-on-year in February 2026, following a 3.1% decline in the previous month. The latest data marked the 32nd consecutive month of contraction and the steepest drop since last June, underscoring Beijing's ongoing struggle to stabilize the prolonged property downturn, as policymakers have largely relied on measured, incremental support. China's retail sales rose 2.8% year-on-year in the first two months of 2026, accelerating from a 0.9% gain in December and exceeding market expectations, partly boosted by the Lunar New Year holiday in mid-February. On the trade front, Trump asked Xi Jinping to delay their summit by about a month to focus on the Iran conflict. 4
- In Malaysia, the annual inflation rate slowed to 1.4% in February 2026 from an eleven-month high of 1.6% in the previous month and below market forecast of 1.6%. Core inflation, which excludes volatile fresh food and administered prices, eased to 2% from 2.3% in January, marking the softest in six months. Trade surplus widened to MYR 16.7 billion in February 2026, from MYR 12.6 billion in the same month last year, though it fell short of market expectations. 5
Investment Strategy6
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.
Our recommendation for long-term investors is clear: Stay invested. We believe investors can navigate current challenges and capture future opportunities by staying invested, diversifying, and hedging.
While past performance does not guarantee future returns, history can certainly serve as a guide for navigating the future. In this environment, our strategy focuses on quality growth companies with domestic earnings, supplemented by quality bonds for portfolio stability during uncertainty.
Click here to download the PDF format
Sources:
1 Bloomberg, 20 March 2026
2 Bloomberg, Bureau of Labor Statistics (BLS), ISM, S&P Global, US Federal Board, 20 March 2026
3 S&P Global, ECB, Factset, Bank of England (BoE), 20 March 2026
4 Bloomberg, National Bureau of Statistic China, CEWC, 20 March 2026
5 Department of Statistic Malaysia, S&P Global, 20 March 2026
6 Principal view, 20 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.
What to do next?
- If you need any investment assistance, please get in touch with your financial consultant. (We can help you find one). They can assist you with your investment goals and advice you on your risk tolerance.
- Alternatively, you can also manage your portfolio on-the-go, anytime, anywhere via our online investment portal.
- If you need further assistance, please leave your details here, and we will connect with you.
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.