Highlights:

#1
December was a flat month for the S&P 500 at 0.05%, as the A.I. sector appeared to have peaked since the end of October 2025. More broadly, the MSCI ACWI closed higher by 0.94%, driven in particular by strong outperformance in emerging markets and Europe.

#2
The Airo-BOCA Composite declined by 1.51% in December, primarily due to hedging positions in the U.S. technology sector. These losses remain unrealized, as the hedging positions are still maintained. The Airo-Shariah Composite was broadly flat at 0.04%, as no hedging mechanisms are employed within the Shariah portfolios.

#3
Global markets began the year amid mounting uncertainties, consistent with what I highlighted in the previous CIO letter–that global macro conditions have entered a period of shifting sands. First, fiscal dominance has emerged as a central theme among the world’s largest economies, namely the U.S., China, and Japan. How these pent-up government expenditures will influence the forward inflation trajectory remains to be seen.

#4
Secondly, Trump’s foreign policy has given rise to a new wave of geopolitical uncertainty, as the U.S. has reportedly invaded Venezuela and seized its crude oil assets. This development alone has created significant repercussions for crude oil trade flows involving China and Russia. In addition, there are growing rumors that the U.S. may be on the brink of military action against Iran amid ongoing civil unrest in the country.

#5
Lastly, A.I.-driven technology companies continue to ramp up A.I.-related capital expenditures. While this presents a positive growth narrative on the surface, relentless spending without due regard for returns on investment is a growing red flag, particularly given current valuations within the A.I. space.

#6
From a strategy perspective, we remain cautious as we head into February and continue to hold the view that volatility remains elevated. Stay nimble, stay safe!

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Dear Valued Investors,

December was a flat month for the U.S. equities, with the S&P 500 flat at 0.05%, driven primarily by a pause in the A.I. sector, which has peaked since the end of October 2025. More broadly, the MSCI ACWI closed up 0.94%, supported by strong outperformance in emerging markets and Europe.

Chart 1: Magnificent 7 peaked in October 2025 and failed to hit new high as a group

The Airo-BOCA Composite declined by 1.51% in December, primarily due to hedging positions in the U.S. technology sector. These losses remain unrealized, as the hedging positions are still maintained due to relative underperformance in the technology sector. The Airo-Shariah Composite was broadly flat at 0.04%, as there no hedging mechanisms are employed within the Shariah portfolios.

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

Table 2: Airo-Shariah Composite Performance (Dec 2025)

Global markets began the year amid mounting uncertainties, consistent with what I highlighted in the previous CIO letter–that global macro conditions have entered a period of shifting sands. First, fiscal dominance has emerged as a central theme among the world’s largest economies, namely the U.S., China, and Japan. As these major countries are increasing government expenditures without a similar increase in tax revenue, how these pent-up government expenditures will influence the forward inflation trajectory remains to be seen. In addition to these fiscal stimulus measures that require funding, the U.S. has approximately USD 9 trillion in Treasury bills and bonds maturing in 2026. This combination of unchecked spending and looming debt maturities is putting upward pressure on global long-end yields at the current juncture.

Secondly, Trump’s foreign policy has given rise to a new wave of geopolitical uncertainty, as the U.S. has reportedly invaded Venezuela and seized its crude oil assets. This development alone has created significant repercussions for crude oil trade flows involving China and Russia. Given Venezuela’s vast crude oil reserves and China’s significant investments in the country, the U.S. has clearly angered China as a result. In addition, ongoing civil unrest in Iran is presenting the U.S. with a potential opportunity for further intervention.

Lastly, A.I.-driven technology companies continue to ramp up A.I.-related capital expenditures. While this presents a positive growth narrative on the surface, relentless spending without due regard for returns on investment is a red flag, particularly given current valuations in the A.I. space. From a historically precedence, equity valuation tended to peak well ahead of the capex. cycle. As such, from a market timing & sector picking perspective, we would need to be extra diligent on the exposure into the A.I. driven technology sector.

Chart 2: Incremental A.I capacity to be added will grow 3.5x from 2025 to 2030

From a strategy perspective, we remain cautious as we head into February and continue to hold the view that volatility remains elevated. Stay nimble, stay safe!

Jan 29th, 2026
​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.

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