Akru’s Investment Philosophy

We construct optimally diversified global portfolios using ETFs with low expense ratios that track the underlying benchmarks closely.

Historical Portfolio Composition

Currently, Akru’s portfolios have 5 ETFs comprising 3 equity ETFs and 2 fixed income ETFs, except for P01-P03 which include an additional 2 local fixed income mutual funds. We calculate portfolios’ total returns that have included ETF and mutual fund fees but before any fees payable to Akru.

Since inception, P01-P03 and P05-P07 tracked very closely to their respective benchmarks. In contrast, the tracking differences in P04 and P08-P10 were attributable to the 12bps – 18bps premium of Developed Market ex-US, Emerging Market and Global Fixed Income ETFs relative to their respective Net Asset Values.

On a YTD-2021, P02 and P03 tracked very closely to their respective benchmark.  The tracking differences in P01 were attributable to the 10bps underperformance of the fixed income mutual funds relative to its benchmark.  The tracking differences for P04-P10 were due to 12bps to 18bps premium of Developed Market ex-US, Emerging Market and Global Fixed Income ETFs relative to their respective Net Asset Values.

On a global basis, the emerging market continues to be the driver of performances, followed by developed market (ex-US) and US equities, as indicated below.

Whereas the fixed income mutual funds and ETFs affected by the steepening yield curves in the 1Q21.  The fixed-income market has priced in anticipation that the era of low-interest rates is ending given economic recovery and rising inflation expectation.   The steepening yield curve has resulted in poor performance of P01 to P03.

However, the portfolios’ total returns translated to RM since inception are lower as Ringgit appreciated slightly by 0.37%.  Whereas on a YTD basis, total returns are higher, as the Ringgit depreciated by 3.64%.

Benchmarks

We use market indices that mimic how the underlying ETFs and mutual funds perform to construct the blended benchmark, which comprises the following and according to each portfolio’s respective asset allocation.

Disclosures

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.