March Performance Update
March was a month of contrasts for the stock lists:
🇸🇬 SG dividends rebounded strongly, rising 7% in March as local income names regained momentum.
🇺🇸 US growth also delivered a solid 5% gain, supported by resilient earnings and still-healthy economic activity.
📉 The Tactical ETF sleeve fell 4.5%, with tech weakness weighing on performance as investors rotated out of the sector in favour of other areas of the market.
Macro backdrop: higher-for-longer, oil shock and rotation
Globally, markets are still digesting a “higher-for-longer” interest rate narrative after the US Federal Reserve’s March projections raised 2026 PCE inflation to about 2.7%, up from earlier forecasts, while leaving the policy-rate path broadly unchanged. This combination of sticky inflation and a cautious Fed has kept volatility elevated and made investors more sensitive to sector and style rotations.
At the same time, geopolitical tensions in the Middle East have pushed energy prices higher, fuelling concerns about stagflation and complicating central banks’ efforts to normalise policy. Oil’s spike has fed directly into headline inflation, and policymakers have warned that any further escalation could delay the timing and pace of rate cuts.
Singapore sits in a relatively enviable position in this environment. Private-sector economists have upgraded the Republic’s 2026 GDP growth forecast to about 3.6%, near the upper end of the Government’s 2–4% range, with inflation still expected to average a manageable 1–2%. A resilient domestic backdrop and steady labour market give local blue chips room to sustain earnings and dividends, even if global growth wobbles.
In equity markets, the big story so far this year has been a nascent rotation away from last year’s AI‑fuelled mega-cap tech leaders towards smaller caps and non‑tech sectors. Data for 2026 shows energy, materials, industrials and dividend payers leading, while technology has slipped into negative territory, underscoring how quickly sector leadership can change. This rotation is exactly the kind of environment where income and value strategies can quietly outperform while growth and tech consolidate.
SG Dividends: A 7% rebound
Against this macro backdrop, the Singapore dividend sleeve delivered the standout performance in March, climbing 7% for the month. This rebound comes after a choppy period in early 2026.
Two macro shifts helped dividends regain their footing. First, while the Fed has turned more cautious about cutting quickly, markets are no longer pricing in aggressive further hikes, removing the worst‑case scenario for high‑yield names with leverage. Second, the improved Singapore growth outlook, driven by manufacturing and trade, supports earnings for the STI heavyweights that anchor most dividend portfolios here.
In practical terms, March’s move reminds me why the Singapore income sleeve is the portfolio’s ballast. In an environment where cash yields remain attractive but inflation and policy uncertainty linger, a basket of local banks, defensives and selected REITs continues to offer a mix of 4–6% cash yield plus mid‑single‑digit upside when sentiment turns. Our strategy to hold the best 10 and rebalance monthly work so far. April’s Singapore dividends update will be coming on 11 April – don’t miss this month’s update.
US Growth: 5% gain in a tricky tape
The US growth bucket added 5% in March, a respectable result given the headwinds facing the broader growth and tech complex. While headline indices have been choppy, the underlying US economy has held up better than expected, with solid earnings and continued job growth supporting sentiment.
At the same time, the Fed’s latest projections show higher near‑term inflation but still‑positive real growth, reinforcing a “slow normalisation” rather than an imminent recession. That backdrop tends to favour quality growth — companies with real earnings, strong balance sheets and pricing power — over speculative names that rely on cheap capital.
The 5% gain suggests the portfolio’s US growth exposure is tilted more towards that “quality growth” cohort than the frothier corners of the market. This is important in a year when tech as a sector has slipped into the red, even as selected innovators continue to compound revenue and earnings. Rather than chasing the latest small‑cap AI story, the focus remains on businesses that can grow through different rate regimes. The April update for the US growth will be out on 18 April – don’t miss this month’s update.
ETF sleeve: -4.5% as tech drags
The main laggard in March was the ETF sleeve, which fell 4.5%, largely due to its tech‑heavy composition. This lines up with wider market data showing that tech has been one of the weakest sectors so far in 2026, after a blockbuster run in prior years. With investors rotating into cyclicals, value, small caps and dividend stocks, broad growth‑ or tech‑leaning ETFs have given back some of last year’s outsized gains.
Part of this is simply mean reversion: after the AI boom pulled forward a lot of future returns, even good companies need time for fundamentals to catch up with valuations. The other part is macro — higher real yields and uncertainty over the path of rate cuts disproportionately hurt “long‑duration” assets whose value is tied to cash flows far out in the future.
For this portfolio, the ETF sleeve’s underperformance is not a reason to abandon the strategy, but it does call for a closer look under the hood. If the ETF is overly concentrated in the largest US mega‑cap names, it may make sense to complement it with broader or equal‑weight exposure that benefits more from the current rotation into smaller caps and non‑tech sectors.
Portfolio read-through
Looked at in aggregate, March’s performance is exactly how a barbell portfolio is supposed to behave in a transition year. The Singapore dividend sleeve provided stability and upside as investors rewarded yield and resilience. The US growth sleeve participated in upside where fundamentals remain strong. The tech‑centric ETF absorbed most of the downside from sector rotation and valuation compression.
In a world of higher‑for‑longer rates, energy‑driven inflation risks and shifting leadership across sectors, I’m comfortable leaning into this barbell – anchoring the base with dependable local dividends while keeping targeted exposure to high‑quality US growth and global innovation through ETFs. The key over the next quarter will be to stay disciplined: trimming euphoria in any sharp tech rebound, recycling capital into underloved income names when spreads are attractive, and resisting the temptation to chase every macro headline.
Disclaimer: This article constitutes the author’s personal views and is for entertainment and educational purposes only. It is not to be construed as financial advice in any form. Please do your own research and seek advice from a qualified financial advisor. From time to time, I have positions in all or some of the mentioned stocks when publishing this article. This is a disclosure - not a recommendation to buy or sell stocks.