Phillip ETF Model Portfolio – December 2017 January 4, 2018

DECEMBER 2017 PORTFOLIO PERFORMANCE (%)

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Year-end Roundup

  • All six portfolios generated positive returns in 2017. Equities was the top performing asset class, with China and Asian equities outshining developed markets. (Graphs on the right shows full year total return of individual ETFs).
  • Bonds were also up for the year as U.S. Treasury yields closed the year modestly lower and credit spreads continue to tighten.
  • Gold was up by more than 10% for the year with only Commodities (which we included to our portfolio in Nov) lagging the other asset class.

Looking into 2018

  • Bond prices should begin to underperform as the synchronised global recovery is leading Central Banks to normalise their monetary policies.
  • We find the valuation of U.S. equities rich and better value in other equity markets. Intra-equity, we still favour China and Asia ex-japan region as we expect economic growth to remain strong from the One-Belt-One-Road initiative.
  • Our conviction call will be in commodities as global trade improves and the supply glut is being absorbed. Resurgence of inflation will benefit commodity-linked companies.

STRATEGIC ASSET ALLOCATION

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INSTRUMENTS FOR PHILLIP ETF MODEL PORTFOLIOS

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About the author

Profile photo of Pei Sai Teng

Pei Sai Teng
Investment Analyst
Phillip Securities Research Pte Ltd

Sai Teng covers the global macro research. He has more than 6 years investment experience primarily in portfolio construction and asset allocation.He graduated with Bachelor of Science in Banking and Finance from University of London.

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