Highlights:

#1
November was a negative month for Airo-BOCA, primarily due to the early reinstatement of our hedging strategy ahead of market movements. However, this is set to change, as the Nasdaq-100 has peaked since October and is currently undergoing a correction, with more downside bias expected.

#2
The Airo-BOCA Composite lost -4.42% in November, mainly due to hedging positions in the U.S. technology sector. However, this was an unrealized loss, as we are carrying the short positions forward into December. The Airo-Shariah Composite lost -0.60%, as there is no hedging mechanism for the Shariah portfolios. By comparison, the MSCI ACWI and Nasdaq-100 indices were down -0.11% and -1.64%, respectively, in November.

#3
The U.S. equity market is running on a dissipating A.I. growth narrative, where competition is heating up fiercely within the sector and is potentially turning this positive growth driver into a more neutral to negative commoditization narrative.

#4
Given the micro backdrop of current equity valuations, a shifting narrative can and will incite a serious reckoning in the forward expected return trajectory. In other words, when the going get tough, markets will likely demand a higher risk premium by dampening equity prices.

#5
Macro-wise, global bond markets are facing rising yields at the long end of the yield curve. In layman’s terms, this means bond markets are fearing that inflation may move higher rather than lower in the coming months. Coupled with the potential for further interest rate cuts, the implications do not appear conducive for risky assets in general.

#6
Strategy-wise, we remain cautious for the rest of December and opine that more corrections may be forthcoming as we head into 2026. Stay nimble, stay safe!

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Dear Valued Investors,

November was a negative month for Airo-BOCA, primarily due to the early reinstatement of our hedging strategy ahead of market movements. However, this is set to change, as the Nasdaq-100 has peaked since October and is currently undergoing a correction, with more downside bias expected. Despite the U.S. Fed’s recent -0.25% interest rate cut, we have not seen and do not foresee any meaningful rally in the global equity markets. Instead, cross-asset price actions are setting the stage for another round of correction.

The Airo-BOCA Composite lost -4.42% in November, mainly due to new hedging positions in the U.S. technology sector. However, this was an unrealized loss, as we are carrying the short positions forward into December. The Airo-Shariah Composite lost -0.60%, as there is no hedging mechanism for the Shariah portfolios. By comparison, the MSCI ACWI and Nasdaq-100 indices were down -0.11% and -1.64%, respectively, in November.

Table 1: Airo-BOCA Composite Performance (Nov 2025)

Nvidia, as the poster child of the A.I. sector, saw its share price peaked in October following the announcement of its 3Q FY2025 results. What happened next? Since Google publicly announced its in-house TPU chips to external clients to compete directly with Nvidia’s GPUs, Nvidia’s share price has continued to slide–from its peak of USD 210 to USD 177, representing a -16% correction in a short span of 1 ½ months. The long-held claim that Nvidia has no real competitors is no longer entirely true. In China, Huawei and Baidu are also rolling out their own chip solutions to meet domestic demand. Although the Trump administration recently relaxed export curbs on Nvidia’s H100 chips, China does not appear particularly enthusiastic, suggesting that it may no longer be reliant on Nvidia’s offerings. In short, recent developments indicate that the market may be shifting the A.I. growth narrative toward an A.I. commoditization narrative sooner rather than later. With rising competition and potential price wars, margin compression could set in quickly, further weighing on already slowing year-on-year earnings growth.

Chart 1: Nvidia share price peaked right before Google TPU’s public released

Given the micro backdrop of current equity valuations, a shifting narrative from growth to a more neutral stance can and will incite a serious reckoning in the forward expected return trajectory. At present, the S&P 500 is trading at 2026E forward P/E of 23x, which is at +2 sigma of its 10-year trailing P/E band. In other words, when the going gets tough, markets will likely demand a higher risk premium by dampening equity prices that are already very expensive by historical standards.

Chart 2: S&P500 trading at the top-band of its 10-year trailing PE ranges

Moreover, from a historical perspective, whenever the S&P 500 was trading at above 20x forward P/E, the subsequent 10-year forward-looking annualized returns have always been negative. For context, the market is currently trading at a 2026E forward P/E of 23x.

Chart 3: From a historical perspective, the 10-year annualized forward return has always been negative when S&P500 was trading at > 20x PE.

Macro-wise, global bond markets are facing rising yields at the long end of the yield curve. In layman’s terms, this means bond markets are increasingly concerned that inflation may move higher rather than lower in the coming months. Coupled with a new round of fiscal expansion in the U.S and the potential for further interest rate cuts amid sticky inflation, the implications do not appear conducive for risky assets in general, from a central bank policy error perspective. Indeed, a continued rise in long-end yields driven by inflation concerns would trigger a higher risk premium, as investors demand a higher required rate of return.

Chart 4: U.S Treasury 30-year yield is about to breakout to its upside!?

Strategy-wise, given both the micro backdrop and macro risk factors described above, we remain cautious for the rest of December and opine that further corrections may be forthcoming as we head into 2026. Stay nimble, stay safe!

Dec 24th, 2025
​William Yii
CIO, CP Global Fintech Solutions

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Disclaimer: Airo is a brand of CP Global Fintech Solutions Sdn Bhd (“CPFS”), licensed by the Securities Commission of Malaysia as a Digital Investment Management company. CPFS is authorised to carry out the business of fund management incorporating innovative technologies into automated discretionary portfolio management services offered to clients under a license issued pursuant to Schedule 2 of the Capital Markets Services Act 2007.

All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Historical returns, expected returns, and probability projections are provided for informational and illustrative purposes, and may not reflect actual future performance. CPFS assumes no responsibility for liability for your trading and investment results. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Past results of any trading system published by CPFS, are not indicative of future returns by that system, and are not indicative of future returns which will be realised by you.