Q1 Top Sellers: Will The Market Rally Continue?

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The strong finish in 2023 flowed over to 2024 as markets continued the strong momentum in what has been one of the biggest ever rallies. Notably, the US Federal Reserve maintaining the Fed Funds Rate after two consecutive policy meetings while also continuing to indicate three rate cuts by the end of 2024 as they did in December last year.

Key takeaways from the Federal Reserve and Bank of Japan’s March policy meetings

Among the rallies across major regions, the Nikkei 225 index hit a new record high in February –bringing decades of pain to a close. March 2024 also saw the Bank of Japan (BOJ) conclude its policy meeting with a raise in key interest rate from -0.1% to between 0% and 0.1% for the first time in seventeen years, officially ending Japan’s negative interest rate era.

Reasons to buy Japan and the yen after BOJ’s first hike in 17 years

With the exception of Singapore, fixed income yields remain flat for the quarter largely due to major central banks keeping interest rates unchanged for the time being. The latest cut-off yield for 6-month Singapore treasury bills auction closed at 3.80%, up two basis points from the previous auction two weeks prior. The 2, 5 and 10-year Singapore Overnight Rate Average-Overnight Index Swap (SORA-OIS) rose in the month of March as well.

The Credit Cheatsheet – Our favourite bond ideas in March

Most Popular Unit Trusts in 1Q2024

Several new entrants managed to squeeze into the top ten best-selling funds in Q1 while some of the old favourites dropped off. As usual, we excluded short-duration and money market funds in the top ten rankings.

Taking the 1^st and 2^nd spots once again respectively, Allianz Income and Growth Cl AM DIS H2-SGD and PIMCO Income Fund Cl E Inc SGD-H remain strong favourites among investors for their high dividend yields. Both funds have substantial holdings in bonds and are therefore, well positioned to provide investors with monthly stable dividends.

Despite the Nikkei 225 hitting all-time high, we believe there is still room for growth in Japan equities. Investors who shared our view bought into Blackrock Japan Flexible Equity A2 USD-H and Nikko AM Japan Dividend Equity SGD-H, pushing these two funds into 6^th and 8^th place respectively.

Rising one place to take 7^th spot, China equity fund Schroder China Opportunities Acc SGD maintains its popularity among investors who are probably looking to capitalise on China’s cheap valuations. We maintain our underweight position on China as there are no positive catalysts on the horizon that could potentially change our view.

The 7 points you should take away from China’s “Two Sessions”

The two balance funds from the FSMOne Recommended Funds also made it to the top ten once again in Q1. Schroder Multi-Asset Revolution A Dis SGD at 4^th and First Sentier Bridge A DIS SGD 5^th can be invested using cash, SRS, CPF-OA, and even CPF-SA!

Mainstays from the FSMOne Recommended Funds, FSSA Dividend Advantage A QDIS SGD and Schroder Asian Growth A Dis SGD had rather contrasting fortunes as the former slipped five places to 10^th while the latter rose three places to 3^rd.

Taking 9^th place is a fresh entrant for this quarter – Schroder ISF Global Gold A Acc USD, which aims to provide capital growth in excess of the FTSE Gold Mines Index.

Table 1: Top 10 Most Popular Unit Trusts

Rank	Product Name (Unit Trusts)
1	Allianz Income and Growth Cl AM DIS H2-SGD
2	PIMCO Income Fund Cl E Inc SGD-H
3	Schroder Asian Growth A Dis SGD
4	Schroder Multi-Asset Revolution A Dis SGD
5	First Sentier Bridge A DIS SGD
6	Blackrock Japan Flexible Equity A2 USD-H
7	Schroder China Opportunities Acc SGD
8	Nikko AM Japan Dividend Equity SGD-H
9	Schroder ISF Global Gold A Acc USD
10	FSSA Dividend Advantage A QDIS SGD

Most Popular ETFs in 1Q2024

As with the previous quarter, the rapid adoption of artificial intelligence (AI) has boosted market sentiment towards the technology sector. Hence, it comes as no surprise that technology-focused ETFs once again dominated the top selling ETFs list.

Q1 also saw the Securities Exchange Commission’s (SEC) approval for spot Bitcoin ETFs. As such, the iShares Bitcoin Trust made its way to our top ten selling at the 10^th position. However, we urge investors to exercise caution when investing in such ETFs as investments carry high risks. The SEC also clarified that the approval of the ETFs does not equate to an endorsement of Bitcoin.

ETF Insights: Don’t fall into the hype of the new spot Bitcoin ETFs (January 2024)

While we are bullish that the semiconductors sector will thrive, there are also investors who share an opposite sentiment and took a bearish stance. As such, the leveraged ETFs Direxion Daily Semiconductor Bull 3X Shares and Direxion Daily Semiconductor Bear 3X Shares came in 1^st and 2^nd respectively. Generally, leveraged ETFs are more suitable for short term trading. For relatively longer term investors, 5^th-placed VanEck Semiconductor ETF would be preferred.

This quarter also saw fresh entries from other leveraged ETFs with MicroSectors™ FANG+™ Index 3X Leveraged ETN, ProShares UltraPro QQQ and GraniteShares 2x Long NVDA Daily ETF coming in at 7^th, 8^th and 9^th in Q1.

Rounding up the list are the usual mainstays with SPDR® Straits Times Index ETF slipping to 3^rd from first last quarter, Lion-OCBC Securities Hang Seng TECH ETF dropped to 4^th from second and Vanguard S&P 500 ETF rose to 6^th from ninth.

Table 2: Top 10 Most Popular ETFs

Rank	Product Name (ETFs)
1	Direxion Daily Semiconductor Bull 3X Shares
2	Direxion Daily Semiconductor Bear 3X Shares
3	SPDR® Straits Times Index ETF
4	Lion-OCBC Securities Hang Seng TECH ETF
5	VanEck Semiconductor ETF
6	Vanguard S&P 500 ETF
7	MicroSectors™ FANG+™ Index 3X Leveraged ETN
8	ProShares UltraPro QQQ
9	GraniteShares 2x Long NVDA Daily ETF
10	iShares Bitcoin Trust

Most Popular Stocks in 1Q2024

With our FLAT S$8.80* processing fee for SGX stocks and free Level 2 Market Data, it comes as little surprise that SGX stocks dominate our list of best selling stocks almost every quarter!

Dividends remain an attractive draw for Singapore investors as the three local banks declared dividends in February. As such, DBS Group Holdings Ltd maintained its 1^st position, United Overseas Bank Ltd rose to 2^nd while Oversea-Chinese Banking Corp Ltd dropped to 5^th.

While we are selective on S-REITs, quality ones with links to Temasek Holdings remain popular among investors. Q1 saw CapitaLand Integrated Commercial Trust and Mapletree Logistics Trust make fresh entries into the list at 6^th and 7^th respectively. Mapletree Pan Asia Commercial Trust remains on the list despite dropping one place down to 10^th.

One of the best performing stocks year-to-date (YTD), investors quickly jumped on the NVIDIA Corp bandwagon after they reported record-breaking revenue in the quarter. The widespread growth of AI has significantly boosted the positive sentiment and pushed the technology giant 3^rd place on our quarterly list. Though electric vehicle maker Tesla Inc did not enjoy the same stellar performance, it still secured the 4^th spot on the list. The final US-listed stock to make it to the list is US-based airline United Airlines Holdings Inc at 9^th place.

Rounding up the list at 8^th place is Singapore-based investment firm iFAST Corp Ltd.

Table 3: Top 10 Most Popular Stocks

Rank	Product Name (Stocks)
1	DBS Group Holdings Ltd
2	United Overseas Bank Ltd
3	NVIDIA Corp
4	Tesla Inc
5	Oversea-Chinese Banking Corp Ltd
6	CapitaLand Integrated Commercial Trust
7	Mapletree Logistics Trust
8	iFAST Corp Ltd
9	United Airlines Holdings Inc
10	Mapletree Pan Asia Commercial Trust

Most Popular Bonds in 1Q2024

6-month Singapore Treasury Bills (T-bills) continue their dominance on our list as treasury yields remain decent despite market pricing in several rate cuts later this year. Unsurprisingly, BS24105X; SITB ZERO 17Sep2024 Govt (SGD), BS24103H; SITB ZERO 20Aug2024 Govt (SGD) and BS24100F; SITB ZERO 09Jul2024 Govt (SGD) took 1^st, 2^nd and 10^th places respectively.

With the exception of HPDLF 7.000% 18May2024 Corp (USD) issued by Chinese property developer Hopson Development Holdings that came in 9th, the rest of the bonds on the list are new issues that were announced in Q1.

Bank bonds remain hot favourites among bond investors with two Additional Tier 1 and three Tier 2 bonds make it to our list. Tier 2 bonds BNP 4.750% 15Feb2034 Corp (SGD), HSBC 4.750% 12Sep2034 Corp (SGD), and BPCEGP 5.000% 08Mar2034 Corp (SGD) took 3^rd, 4^th and 5^th spots while perpetual bonds UBS 5.750% Perpetual Corp (SGD) and OCBCSP 4.050% Perpetual Corp (SGD) came in 6^th and 7^th.

National carrier Singapore Airlines, which had a retail bond mature in March, also issued a new USD bond SIASP 5.250% 21Mar2034 Corp (USD) and it took the spot on the list at 8^th.

Table 4: Top 10 Most Popular Bonds

Rank	Product Name (Bonds)
1	BS24105X; SITB ZERO 17Sep2024 Govt (SGD)
2	BS24103H; SITB ZERO 20Aug2024 Govt (SGD)
3	BNP 4.750% 15Feb2034 Corp (SGD)
4	HSBC 4.750% 12Sep2034 Corp (SGD)
5	BPCEGP 5.000% 08Mar2034 Corp (SGD)
6	UBS 5.750% Perpetual Corp (SGD)
7	OCBCSP 4.050% Perpetual Corp (SGD)
8	SIASP 5.250% 21Mar2034 Corp (USD)
9	HPDLF 7.000% 18May2024 Corp (USD)
10	BS24100F; SITB ZERO 09Jul2024 Govt (SGD)

While the market anticipates several rate cuts in the later part of the year, we maintain our view that the US Federal Reserve will not cut rates this year. Even though inflation have come down, the US economy’s resilience suggests that threat of inflation still remains. Investors expecting a market rally reminisces of the on in 2020 may be left disappointed.

Given our expectation that inflation and interest rates will stay higher for longer, we recommend investors consider the following: (1) short duration bonds for fixed income; (2) quality companies and commodity-related stocks for equities.