A Tough Quarter, Explained Plainly
Q1 2026 Portfolios Update
Dear Client,
Due to the volatility caused by the Iran war event, the first three months of 2026 were a difficult time for investors around the world, and our portfolios felt it too. Before anything else, we want to walk you through what happened to your investment, why it happened, and what we are doing about it.
What Went Wrong in the World
In late February, war broke out in the Middle East involving Iran. This led to the closure of the Strait of Hormuz — a narrow sea lane between Iran and Oman that handles roughly one out of every five barrels of oil used in the world each day.
When that much oil suddenly stops moving, prices go up. Crude oil has held above $90 a barrel for weeks. Higher oil means higher fuel, higher transport costs, and higher prices at the supermarket. This is inflation, and it came back quickly.
In March, US inflation jumped almost 1% in a single month. That is a big number. Before the war, markets expected the US central bank to cut interest rates this year. Now, nobody is expecting that to happen anymore. High oil, high inflation, and no rate cuts together make an uncomfortable environment for most investments.
Portfolio Performance Overview (Q1 2026)
Conventional Portfolios
Shariah Portfolios
What Went Wrong in Our Portfolios
Two things hurt us in Q1 2026.
First, the world got harder. Almost every global portfolio went down when the war broke out. Markets become more volatile quickly after the geopolitical event, some positions taken earlier in the quarter did not perform as expected.
Second, the portfolio restructuring during the quarter. Airo converted the legacy Balanced, Contrarian, Opportunistic and Aggressive (BOCA) portfolios into the new Growth, Balanced and Conservative portfolios which is a new framework designed to improve consistency and risk management. By implementing a global-macro regime driven asset allocation strategy from both a top-down and a bottom-up perspective, we believe that this new strategy will better serve our investors in the long run. During this transition period, the portfolio did not fully reflect either from the old or the new approach, which affected short-term performance.
On the other hand, the Shariah portfolios held up much better than the Conventional ones as it was not impacted by the restructuring initiative. And, crude oil exposure was the main reason that the Shariah portfolios held up relatively well with the exposure such as Exxon Mobil which benefited from the oil price spike.
We are not presenting this as an excuse, but as part of the necessary steps taken to strengthen the investment approach going forward.
What We Are Doing Now
With the strategy upgrade completed, we have made three changes to your Conventional portfolio:
- We have raised more cash. Cash does not earn much, but it is steady and it gives us room to invest at a much better entry prices.
- We have trimmed some aggressive US technology stocks. These have been the stars of recent years, but they have become expensive, and the earnings growth drivers behind them are starting to weaken.
- We have moved money into healthcare and consumer staples (i.e. defensive sectors)— companies that sell things people need whether times are good or bad, such as medicines, food, and household goods are cushioning your portfolios for the time being.
We understand that periods like this can be uncomfortable and we take this outcome seriously.
The changes we have made are focused on building a more disciplined and resilient investment approach so that we are better prepared for different market conditions going forward.
Thank you for your continued trust and patience with us.
William Yii
Chief Investment Officer
20 April 2026
CP GLOBAL FINTECH SOLUTIONS SDN. BHD. — MALAYSIA
Megan Avenue 1, No. 189, Jalan Tun Razak, Suite B-6-3, Block B, Kuala Lumpur, Malaysia
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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