5 min read I Date: 27 March 2026
Market Data
| Asset Class | Currency | 1-wk | 1-mth | YTD | 2025 | |
| Equities | ||||||
| MSCI World | USD | -1.47% | -8.19% | -5.6% | 19.5% | |
| S&P 500 | USD | -2.1% | -7.4% | -7.0% | 16.4% | |
| Nasdaq | USD | -3.2% | -7.3% | -8.4% | 20.2% | |
| Russell 2000 | USD | 0.4% | -6.9% | -1.3% | 11.3% | |
| Stoxx 600-Europe | EUR | 0.6% | -8.9% | -2.5% | 16.7% | |
| Nikkei 225 | JPY | 0.0% | -9.4% | 5.9% | 26.2% | |
| KOSPI | KRW | -6.0% | -12.9% | 28.8% | 75.3% | |
| MSCI Asia Pac ex-Japan | USD | -2.3% | -10.4% | 2.4% | 26.9% | |
| ASEAN | USD | -1.0% | -7.6% | -1.3% | 12.0% | |
| Shanghai Shenzhen CSI 300 | CNY | -1.4% | -4.5% | -2.9% | 17.7% | |
| Hang Seng | HKD | -1.3% | -6.0% | -2.7% | 28.2% | |
| Shanghai Stock Exchange Composite | CNY | -1.1% | -6.0% | -1.7% | 18.6% | |
| FBM Emas Shariah | MYR | 0.1% | 0.8% | 1.7% | -3.9% | |
| FBMKLCI | MYR | -0.4% | 1.1% | 3.2% | 2.4% | |
| Fixed Income | ||||||
| Bberg Barclays Global Agg | USD | -0.5% | -3.6% | -1.6% | 8.2% | |
| JPM Asia Credit Index-Core | USD | -0.7% | -2.6% | -1.1% | 9.1% | |
| Asia Dollar Index | USD | -0.3% | -2.2% | -1.0% | 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 27 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 continue to face volatility, driven by fluctuating diplomatic signals in the Middle East and a "hawkish" shift in central bank expectations. Major U.S. indices recorded weekly losses largely led by technology stocks. Meanwhile, the European markets experienced a brief "relief rally" as investors reacted to signs that energy supply disruptions from the Middle East might be less severe than initially feared.
In Asia, markets remain cautious throughout the week. South Korea and India were the largest drags due to their high dependence on energy imports amid the ongoing Middle East conflict, while Thailand posted marginal gain. In Malaysia, the FBMKLCI index ended the week in negative return.
- In the bond market, the US 10-year Treasury yield climbed toward the 4.40% range (as of March 27) as investors continued to monitor developments in the Iran war and assess economic data. (It's worth noting that bond prices move inversely to bond yields)
Macro Factors
- In the United States, sentiment remained fragile with President Donald Trump extending the deadline to strike Iranian energy infrastructure by 10 days amid ongoing negotiations with Tehran. Trump also said Iran had allowed 10 oil tankers to pass through the Strait of Hormuz this week as a "present" to the US. Meanwhile, Iran rejected the US' 15-point plan to end the war and submitted its own conditions, including recognition of Tehran's authority over Hormuz. On macro, the flash S&P Global US Composite PMI slipped to 51.4 in March 2026 from 51.9 in February, marking its lowest level since April last year and signaling a second straight month of slowing growth. 2
- In Europe, ECB President Christine Lagarde delivered a "hawkish" pivot in a recent keynote speech, signalling that the bank is prepared to raise interest rates if the Middle East conflict continues to drive inflation above its 2% target. She reaffirmed that while rates were held steady the previous week, a "measured adjustment" may be necessary to combat an energy-driven inflation spike, which is now projected to reach 2.6% this year. On macro, the S&P Global Eurozone Composite PMI declined to 50.5 in March 2026, down from 51.9 in February and below market expectations of 51.0, according to preliminary data. This signals only marginal growth in the bloc's private sector, the weakest in ten months, as service sector activity nearly stalled.3
- In China, industrial profits surged 15.2% year-on-year to CNY 1.02 trillion in the first two months of 2026, a sharp rebound from 0.6% growth in 2025. The figures point to growing momentum in China's recovery, even as geopolitical tensions continue to cloud the global outlook. On the diplomatic front, US President Donald Trump's first visit to China in eight years has been rescheduled for May 14–15 after being delayed due to the Iran war. 4
- In Malaysia, the government is mulling a reduction in the monthly quota for subsidised RON95 fuel as costs have spiked. Additionally, BUDI Diesel assistance was increased to RM300 effective March 17 to cushion the blow for eligible groups. On macro, producer prices fell 3.4% year-on-year in February 2026, deepening from a 2.9% drop in the previous month and marking the 12th straight monthly decline. The latest reading was also the steepest contraction since last July, as manufacturing costs declined further. 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.
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Sources:
1 Bloomberg, 27 March 2026
2 Bloomberg, Bureau of Labor Statistics (BLS), ISM, S&P Global, US Federal Board, 27 March 2026
3 S&P Global, ECB, Factset, Bank of England (BoE), 27 March 2026
4 Bloomberg, National Bureau of Statistic China, CEWC, 27 March 2026
5 Department of Statistic Malaysia, S&P Global, 27 March 2026
6 Principal view, 27 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.