StashAway’s Q1 2026 Returns

A volatile start to 2026 rewarded diversification

The first quarter of 2026 was marked by sharp swings across markets, driven by a mix of policy uncertainty and geopolitics. Early in the quarter, investors were rattled by renewed tariff threats and broader questions around US policy direction. By late February and March, attention shifted to the war in the Middle East, which drove a sharp jump in oil and gas prices, lifted inflation expectations, and put pressure on both equities and bonds. (For more, read: CIO Insights: Navigating Dire Straits)

These dynamics created a challenging backdrop across asset classes, as illustrated below in Chart 1. Equities started the year on a strong footing but weakened as policy uncertainty and rising geopolitical risks weighed on sentiment, with the S&P 500 ending the quarter down roughly 3%. At the same time, the surge in oil prices pushed inflation expectations higher, driving bond yields up and leading to losses across fixed income. In contrast, commodities were a bright spot. Gold gained around 7% over the quarter, though with sharp swings along the way, as safe-haven demand was at times offset by a stronger US dollar, rising yields, and periodic profit-taking.

General Investing portfolios powered by StashAway

StashAway’s General Investing (GISA) portfolios, guided by ERAA®, delivered moderate returns in Q1. The portfolios returned 2.1% on average in GBP terms, the base currency of the underlying ETFs in this portfolio (-0.1% in MYR terms). Over the past 12 months, the portfolios also posted strong absolute returns across all risk levels, with gains of 18.3% on average in GBP terms (10.6% in MYR terms).

Our asset allocation mix cushioned a volatile quarter

Q1 2026 was a challenging quarter. Geopolitical tensions pushed oil prices higher and lifted inflation expectations, which in turn drove bond yields up. At the same time, policy uncertainty and a risk-off sentiment weighed on equities. 

In this environment, our asset allocation helped cushion returns. Within the portfolios, exposure to gold, emerging markets and Treasury inflation-protected securities contributed positively. These were partly offset by weakness in US equities and bonds which came under pressure as yields rose.

While not a blockbuster quarter, it was the kind of outcome a well-diversified portfolio is designed to deliver through turbulence (read more in our CIO Insights: Not every Trump card wins).

Gold helped portfolios stay resilient through a volatile quarter

Gold was a key source of our portfolios’ outperformance in the first quarter of 2026, with the asset class gaining 7% over the period. Its performance was driven by opposing forces over the quarter: geopolitical uncertainty and inflation concerns supported prices at times, while a stronger US dollar and higher real yields weighed on them, including during a selloff in early March. Speculative, momentum-driven trading was also an important force in both the recent  run-up and wind-down. 

Looking over a longer period, gold’s strong performance amid policy and political uncertainty has made it one of the largest contributors to portfolio returns over the past 12 months. Bigger government spending has kept longer-term inflation risks elevated, while strong central bank buying provided a steady source of demand. At the same time, geopolitical tensions and expectations of eventual rate cuts helped support prices by limiting the rise in real yields.

Global and sector exposures supported equity returns 

Equity performance in Q1 2026 was uneven across regions and sectors. Developed markets outside the US proved more resilient, with Japan being a notable bright spot over the quarter. Meanwhile, emerging markets exposure to countries such as Taiwan, China and Korea contributed positively to returns.

US equities were the main detractor, with broad indices such as the S&P 500 declining over the quarter. Within it, the technology sector also came under pressure, as higher yields weighed on growth-oriented stocks, while concerns that rapid AI advances could disrupt traditional software business models added to the weakness. 

Bonds came under pressure as rate cut expectations were pushed back

Fixed income faced a challenging start to 2026 as rising yields weighed on bond prices. Inflation-linked bonds contributed positively over the period, reflecting persistently elevated inflation expectations, limiting the overall drawdown from fixed income. Emerging market and corporate bonds detracted modestly across portfolios. 

Disclaimers:

Model portfolio returns are expressed in gross terms before fees, withholding taxes, and reclaims on dividends. They are provided only as a gauge of pure performance before other items.

Actual account returns may deviate from the model portfolios due to differences in the timing of trade execution (e.g. during the day vs close), timing differences and intraday volatility of reoptimisation and rebalancing, fees, dividend taxes and reclaims, etc.

Past performance is not a guarantee for future returns. Before investing, investors should carefully consider investment objectives, risks, charges and expenses, and if need be, seek independent professional advice.

This communication is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to purchase any financial product or subscribe or enter any transaction.

This communication does not take into account your personal circumstances, e.g. investment objectives, financial situation or particular needs, and shall not constitute financial advice. You should consult your own independent financial, accounting, tax, legal or other competent professional advisors.