Global Equity Market Performance - Q1 2026
Overall Trends
- MSCI World Index: Fell during Q1, reflecting broad weakness in developed markets.
- Emerging Markets: Slightly outperformed developed markets, with Korea and Taiwan showing gains early in the quarter.
- Japan (TOPIX Index): Up 3.6%, supported by yen weakness and political stability after February’s elections.
- Europe (MSCI Europe ex-UK): Down 2.3%, pressured by higher gas prices and geopolitical tensions.
United States
- S&P 500: Declined 4.3–4.4%, marking its weakest quarter since 2022.
- Nasdaq-100: Dropped 5.8%, hit by fading enthusiasm for high-valuation tech stocks.
- Sector Winners: Energy stocks surged thanks to oil price spikes; basic materials also benefited.
- Sector Losers: Information technology and consumer sectors lost momentum.
Commodities & Macro Drivers
- Oil Prices: Brent crude jumped 63% in March, the largest monthly increase in four decades, driven by Middle East conflict and supply disruptions.
- Bloomberg Commodity Index: Up 24.4%, making commodities the top-performing asset class.
- Bond Markets: Sold off globally as inflation fears rose, with short-dated bonds hit hardest.
Risks & Outlook
- Geopolitical tensions (Iran–U.S.–Israel conflict) remain the biggest risk, disrupting energy supply and investor sentiment.
- Inflation pressures from commodity spikes complicate central bank rate-cut expectations.
- Rotation into value stocks suggests investors are hedging against growth-sector volatility.
- Emerging markets remain vulnerable to capital outflows as global investors rebalance toward safer assets.
Portfolio Performance As of March 2026
Total Return in USD
<Source: Morningstar Direct>
Total Return in MYR
<Source: Morningstar Direct>
Comments:
P4 to P10 investment have high exposure to iShares Core MSCI Emerging Markets ETF, iShares Core MSCI EAFE ETF and Vanguard 500 Index Fund ETF that have influenced the strong positive performance. Global equities market in general has perform badly in the recorded performance period due to the geopolitical tension in Middle East. The performance of the funds in MYR was affected by the weakening of USD in 1st quarter 2026.
Global Outlook 2026
Baseline Forecast
- Global GDP growth: 3.1% (down from 3.3% earlier).
- Global inflation: 4.4%, reversing the disinflation trend of recent years.
- Advanced economies: Growth around 1.8%.
- Emerging markets: Growth just above 4%, but uneven across regions.
Downside Scenarios
- Moderate conflict scenario: Growth slows to 2.5%, inflation rises to 5.4%.
- Severe scenario: Growth drops to 2%, inflation exceeds 6%, risking global recession.
- Key risks:
- Prolonged closure of the Strait of Hormuz, disrupting oil and gas supply.
- Energy price spikes (oil and gas up 100–200%).
- Financial tightening as inflation expectations rise.
Sources: Morningstar, IMF, Schroders, JP Morgan
Disclaimer:
Past data and performance do not indicate future performance. Actual individual investor performance will vary depending on the initial investment, amount and frequency of contributions, allocation changes, taxes and fees during the time frame considered.
