Assets under management
Assets Under Management, or AUM, must be considered one of the most critical indicators regarding how financially fit or important a firm is in the market. Whether you are an accomplished individual investor or just exploring investment firms or funds, it is vital to understand AUM.
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Assets under management
When investing in a mutual fund, you must first comprehend a few ideas to make an informed choice. AUM, or assets under management, is one of them. AUM is a critical metric to consider when assessing a mutual fund. AUM is simply one factor considered when assessing a business or investment. It is frequently taken into account together with managerial experience and performance. But higher investment inflows and AUM comparisons are usually seen by investors as indicators of quality and management prowess.
Assets Under Management, or AUM, refers to the aggregate market value of every financial asset managed by an investment firm or a fund on behalf of its customers. These can be stocks, bonds, real estate, cash, or any other form of financial instrument. AUM serves as a benchmark for assessing the scale and performance of a financial firm or fund since it gives an indication of the collective amount managed and the total wealth under control.
For instance, if an investment firm has US$50,000 in client investments under management, this will be its AUM. When more join the firm or when investments become successful, the firm’s AUM will rise, proving that the firm is increasing and succeeding.
What is AUM?
AUM in its simplest form, refers to the entire market value of assets held by a financial institution or investment adviser, whether from a single customer or a number of them. AUM comprises funds that a manager has to use in making new investments and the returns a mutual fund has earned.
AUM measures both the size and performance of a mutual fund. A rising AUM might be a sign of improved fund performance, the entrance of new investors with more money to invest, or both. A declining AUM indicates the opposite: subpar performance or a big redemption that may or may not be related to the fund’s performance.
Understanding AUM
AUM is one indicator that investors look at when assessing a portfolio manager. A higher AUM might be a sign of a manager who has shown their ability, among other factors, including experience, management performance, disciplinary history, and services supplied. Financial organisations use the value of AUM to gauge market trends by comparing them to those of their rivals as well as to their own past performance.
The AUM helps investors to analyse a fund’s performance and assess its growth potential. It also affects an investment manager’s fee structure, as fees are usually charged as a percentage of AUM.
Securities and Exchange Commission (SEC) registration is required for investment advisers with more than US$25 million in AUM under their management. Less experienced advisors are permitted to register with the state securities administration.
Calculating AUM
The calculation method for assets under management is rather simple:
AUM = Σ Market value of all managed assets
The symbol Σ in this case, denotes the total value of all individual assets that the financial institution manages on behalf of its clients. To calculate the total AUM, the market value of each purchase is multiplied by the number of assets held in the portfolio.
Calculating AUM is a crucial task for investment managers. To calculate AUM, the investment manager needs to add the market value of all the assets in the fund.
A fund’s managed assets have variable values at all times. It varies based on how many investors contribute capital and the fund’s profits. The market value of investments that perform poorly, fund layoffs, and a decline in investor flows are all factors that affect AUM. AUM may include money held by investment business executives or restricted to all investor cash invested in the firm’s products.
Accurate calculation of AUM is necessary for reporting to regulatory authorities and providing transparency to investors about the portfolio’s size and composition.
AUM payment and fees
For funds and investment businesses to register with the SEC, they must meet certain AUM standards. To maintain the fairness and orderliness of the financial markets, the SEC is in charge of regulating them. Depending on several variables, including the firm’s size and location, the SEC registration threshold might range from US$25 million to US$110 million in AUM.
AUM could also have a significant role in determining how much to charge. Many investment products have pre-set percentage-of-assets-under-management management fees. Additionally, a lot of personal money managers and financial advisers bill their customers as a percentage of the overall assets they handle. This ratio often declines as AUM rises, allowing these financial experts to draw high-net-worth investors.
Importance of AUM
- Both investors and financial firms are highly interested in Assets Under Management. Indeed, AUM is one of the fastest ways an investor can assess the size of a fund or financial institution in terms of size and stability.
- Firms with higher AUMs are more frequently perceived as secure and may even be able to offer more diversified investment choices and lower fees because scaling economies will help significantly.
- A higher AUM thus brings higher revenue potential for financial firms as most firms charge management fees as a percent of the assets they manage.
Example: If a company’s AUM is US$50,000, with an annual management fee of 1%, then earnings would be US$500 yearly. This means that with the increase in the AUM, the firm’s earnings increase to sustain further growth and investment.
Different Types of Funds in AUM
AUM will vary across different types of funds. Some of them are:
- Mutual Funds: Mutual fund AUM refers to the aggregate amount of value owned collectively by these funds on behalf of its investors. Growth in AUM reflects new investor inflows and good fund performance.
- Hedge Funds: Hedge funds are institutions that invest huge amounts of money from high-net-worth individuals and Institutional investors. Their AUM is highly responsive to market conditions and investor confidence. A hedge fund employs complex, aggressive strategies, often backed by extensive advanced mathematical modelling.
- Exchange-Traded Funds (ETFs): ETFs declare their AUM, which reflects the size of capital being invested in the fund. A higher AUM in an ETF usually signifies increasing investor interest or even confidence within the asset class or market the ETF tracks.
These funds differ by strategy, risk level, and fee structure, with the AUM indicating their scale, stability, and attractiveness.
Examples of AUM
Let’s use the scenario of a mutual fund with a large cash position and a diverse portfolio of equities and bonds. Assume the mutual fund’s portfolio comprises US$2 billion in cash, US$1 billion in equities, US$2.5 billion in government bonds, and US$1.5 billion in corporate bonds.
The assets under management for the fund will be US47 billion in total.
Investors frequently consider a fund’s AUM since it measures the fund’s size when assessing it. Investment items with high AUMs often have high market trading volumes, which makes them more liquid and enables investors to acquire and sell the fund easily.
Frequently Asked Questions
AMCs, asset management companies, invest in securities using the pooled assets of investors per the declared investment goals. AMCs assist investors in managing their funds and investing them in assets and securities, keeping a diverse portfolio on their customers’ behalf. The money managers correctly do the tasks, including market analysis, asset fund allocation, portfolio development, and performance evaluation.
The AUM of a mutual fund is closely correlated with changes in the stock market since changes in the price of stocks or other securities affect the value of the securities that the fund is holding in its portfolio. When it involves the effectiveness and size of a particular fund, AUM is a critical metric.
One of the key strategies to increase mutual fund AUM is to focus on customer education and awareness. This involves creating marketing campaigns and materials that educate potential investors about the benefits of investing in mutual funds and how they can help them achieve their financial goals. Additionally, mutual fund companies can offer special promotions or discounts to incentivise investors to invest in their funds.
Assets under administration, or AUA, vary from AUM because the service provider has no control over choices about asset distribution. Fund accounting, trade reporting, tax reporting, and custody are all services that asset administration companies provide.
The entire value of a fund’s assets minus all of its obligations is known as NAV, or net asset value, and is frequently displayed on a per-share basis. The NAV reveals the price at which fund shares can be purchased and sold. The value of the assets handled by a person or business, as opposed to a fund, is referred to as AUM. Unlike NAV, which is reported per share, AUM refers to the entire value of managed assets.
Related Terms
- Variable Annuity
- Asset Swaps
- Anchoring Bias
- Compound Yield
- Discretionary Accounts
- Industry Groups
- Growth Rate
- Foreign Direct Investment (FDI)
- Floating Dividend Rate
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- Compound Yield
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- Industry Groups
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- Flash Crash
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Snowflake Inc – Growth from Rising Coding and AI Agent Activities
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Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. 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You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. 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Please consult with qualified financial professionals before making investment decisions. * This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Phillip Securities Research Morning Call: Market Updates and Strategic Outlook – 5 Oct 2026
The latest Phillip Securities Research Morning Call provided comprehensive insights into market developments, featuring updates on Micron's quarterly results, CDL's strategic review, technical analysis of major indices, and Singapore's economic indicators. The session highlighted both opportunities and challenges across various sectors and geographies. Micron Shows Promising Signs with Strategic Customer Agreements Micron Technology delivered fourth-quarter results that met expectations, with revenue and earnings driven primarily by rising average selling prices (ASPs) for both DRAM and NAND memory products amid ongoing shortage conditions. The most significant development was Micron's announcement of 10 new Strategic Customer Agreements (SCAs), bringing the total to 26 agreements expected to exceed 35% of revenue through 2030. These SCAs represent a marked improvement over previous long-term contracts, featuring stricter terms including "take or pay" contracted volumes requiring 20% deposits and price floors to mitigate future downcycles. This structure should provide greater revenue stability and earnings predictability for the memory giant. However, Micron also announced higher capital expenditure guidance for the first half of fiscal 2025, representing more than 60% of previous guidance. Management justified this increase as necessary to meet customer demand through facility expansions in the US, Singapore, and Taiwan. Looking ahead, Micron anticipates substantial share repurchases starting 9 December, as the two-year CHIPS Act restriction period expires. The company plans to return 100% of excess cash through buybacks, potentially totaling US$70 billion based on current projections, which could boost earnings per share by approximately 6%. CDL's Strategic Review Faces Market Scepticism City Developments Limited (CDL) unveiled its "GET Plus" strategy, a three-year plan focusing on four core sectors: residential, commercial, hospitality, and living. The strategy involves US$5 billion in growth investments and US$6 billion in divestments for capital recycling and deleveraging. Key objectives include maintaining dividend payouts above 35% of reported earnings, reducing leverage to 55% by FY2029 from current levels of 75%, and doubling assets under management from US$5 billion to US$10 billion. The company expects to unlock over US$1 billion in divestment gains from the planned asset sales. Despite these ambitious plans, CDL's share price declined 15% following the announcement. Market scepticism stems from the lack of detailed financial outcomes, absence of specific ROE targets, and limited visibility on the financial benefits of the strategy. Unlike comparable strategic reviews by peers like Hong Kong Land, CDL's plan was perceived as less concrete and execution-dependent. The geographic focus remains on Singapore as the core market, with plans to gradually exit Australia except for hospitality assets. Of CDL's 54 owned hotels valued at US$8.6 billion, management categorised 60% as core assets to retain, 20% for enhancement through asset improvement or redevelopment, and 20% (US$1.8 billion) for divestment. Strong Singapore Economic Data Signals Recovery Singapore's economic indicators showed remarkable strength, with the PMI reaching its highest level in almost eight years and accelerating from the previous month. The banking sector demonstrated exceptional loan growth of 13.5%, representing a record acceleration and doubling the 6% growth from a year ago. This robust loan growth, driven primarily by data centers, technology, energy, renewables, and acquisition financing, provides banks with both volume increases and pricing power as SORA rates turn positive year-over-year. Manufacturing remains the fastest-growing loan segment, while housing and consumer loans maintain stable mid-single-digit growth rates. The strong economic momentum in Singapore contrasts with challenges elsewhere, as semiconductor exports from Korea continued robust growth at 26.3% in September, indicating sustained demand in the technology sector. Technical Analysis Points to Cautious Optimism The S&P 500 showed resilience despite a slight 0.2% decline last week, holding key support at 5,655 around the gap-fill level and 20-day moving average. The index maintained its breakout above a wedge consolidation pattern, with Friday's gap higher suggesting continued underlying strength. Historical analysis of weak market breadth conditions provides encouragement. When less than 25% of S&P 500 constituents trade above their 50-day moving averages – a condition that occurred on 20 September – markets have historically performed well afterward, averaging 1.8% gains one week later and nearly 16% a year later. September proved challenging across most asset classes, with only Bitcoin ETFs posting gains (+5.4%) while gold ETFs declined 6.7%. October expectations remain muted, with most assets likely to consolidate sideways, though gold, Singapore equities, and the Hang Seng Index may extend their weakness. EQDP Program Shows Structural Impact on Small-Mid Caps The Equity Development Partnership Program (EQDP) continues demonstrating its structural catalyst effect on Singapore's small and mid-cap stocks. Since the program's announcement in February, dedicated Singapore equity funds have grown five-fold from US$1 billion to US$5 billion by August, with OCBC's fund expanding most dramatically from US$200 million to US$2 billion. The program has also increased institutional participation, with more small-mid cap stocks achieving 5% institutional stakes. While recent performance has been mixed, the historical pattern shows strong outperformance typically occurs 6-12 months after fund allocation rather than immediately following announcements. Sector Outlook: Semiconductors and Oil & Gas Favored For attractive EQDP allocation targets, analysts favor the semiconductor sector, noting the upcycle only began in early 2024 when TSMC raised capital expenditure. Singapore semiconductor companies are just beginning to show earnings improvement from this cycle, suggesting continued momentum ahead. The oil and gas sector also presents opportunities due to expected capital expenditure increases driven by high oil prices and energy security concerns. However, the construction sector faces headwinds from elevated diesel prices related to Middle East conflicts, though private sector demand shows signs of strengthening with contract awards up 25% year-to-date through July. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Micron Technology Strengthens Position with Strategic Customer Agreements
Brief Overview Micron Technology reported strong fourth-quarter 2026 results with revenue and adjusted PATMI within expectations, driven by a dramatic surge in memory pricing. The company secured 10 new strategic customer agreements during the quarter and provided an optimistic outlook for memory market conditions. Phillip Securities Research maintains a BUY recommendation with a raised target price. Investment Positives Micron's strategic positioning has strengthened significantly through new customer agreements. The company signed 26 Strategic Customer Agreements (SCAs) to date, up from 16 in the third quarter of 2026, which management guided to represent over 35% of revenue through 2030. These agreements feature much stricter terms than previous long-term contracts, including cash deposits and take-or-pay contracted volumes with price floors. Two SCAs were extended by a year to 2031, demonstrating customer commitment to long-term supply security. The financial impact of these agreements is substantial. Remaining performance obligations rose to approximately US$150 billion from US$100 billion in the third quarter, representing 13% higher than FY26 revenue. Financial commitments increased 45% to US$32 billion from US$22 billion, with the majority consisting of cash deposits. Memory pricing has surged dramatically, driving exceptional profitability. DRAM and NAND average selling prices spiked by an estimated 232% and 383% year-on-year respectively, propelling fourth-quarter 2026 net profit up more than 10-fold to US$38.4 billion. Gross and net margins reached record levels of 87% and 71% respectively, compared to 85% and 70% in the previous quarter. Supply constraints are expected to persist, supporting pricing strength. Cleanroom space across the industry remains constrained, as new fabrication facility expansions typically require 2-4 years to complete. Management expects memory and storage conditions to be "much tighter" in 2027 and 2028 than the current year, with hyperscalers and high-end processor chip companies prioritising memory supply security through 2031 with approximately 20% cash deposits. Challenges The report does not explicitly identify significant investment negatives or challenges facing Micron Technology. Outlook Micron anticipates a worsening memory and storage shortage from 2027-2028, which should support continued strong pricing and profitability. The company plans to return all excess cash to shareholders, primarily through buybacks, starting from 9 December 2026 when CHIPS Act restrictions end. The base case projection suggests returning approximately US$70 billion in FY27, equivalent to roughly US$1,100 per share, potentially boosting earnings per share by about 6%. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation with a raised target price of US$1,950, up from the previous US$1,870. The analysts increased FY27 revenue and adjusted PATMI forecasts by 11% and 22% respectively due to expected rises in DRAM and NAND prices, whilst lowering FY27 price-to-earnings assumptions to 12x from 14x. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
PhillipCapital Strategy & Stock Picks 4Q2026: Key Sectors and Equity Market Outlook
Brief Overview Singapore equities posted their fifth consecutive and strongest quarterly gain, rising 9.8% in 3Q26 and reaching a fresh record on 4 September. A 22% year-to-date advance ranks Singapore as Asia's fourth-best performer. Banks led the outperformance on above-consensus 2Q26 results driven by a jump in wealth management fees, while shipbuilders rallied on an order book recovery as US-to-China container freight rates surged 36%. Cost pressures and demand headwinds weighed on consumer and food-related counters, and a spike in bond yields triggered a de-rating across S-REITs. Investment Positives The Equity Development Programme (EQDP) has served as a structural catalyst for Singapore's small-mid cap stocks. Now in its 3rd phase — with S$5.4 billion of the S$6.5 billion allocation announced cumulatively — EQDP has driven a rally in small-mid caps since its February 2025 announcement. Institutional participation has become more significant, with higher-conviction ownership in small-mid cap names, and Singapore-dedicated equity fund assets under management soared almost five-fold over the past eight months. Rising global bond yields are not expected to derail growth. Higher yields mirror improving economic conditions, and aggressive AI-driven capital expenditure is accelerating corporate demand for capital, marking a transition from a savings glut to a capital-starved world. Banks remain a favoured sector, with rising interest rates providing pricing power alongside loan volume growth. Semiconductors are viewed especially positively — the earnings upcycle has only just begun this year, making the sector an attractive EQDP target. Oil and gas enjoy a revival due to energy security concerns, firmer oil prices stimulating a capex cycle, and Offshore Support Vessel operators benefiting from an ageing fleet and tight yard capacity. A 60% year-to-date rally in coal prices alongside a 50% output expansion provides strong earnings leverage for Geo Energy. In construction, building materials and dormitories are preferred segments, with order momentum expected to peak post Terminal 5 awards. Singtel was added to the Absolute 10 portfolio, offering structural earnings and monetisation drivers through data centres and GPU-as-a-Service, with mobile price repair underway across multiple Asian markets. Challenges Uncertainty over bond yields and inflation risk from the Middle East conflict keeps REITs under pressure. The Fed raised rates by 25 basis points to 3.75–4.00%, with further tightening likely, and rate expectations swung up 112 basis points from December 2025 to September 2026. Rising government bond yields have made Singapore equities less attractive, with the earnings yield spread over two-year bond yields at multi-year and one standard deviation lows, potentially capping overall market multiples. Property stocks have de-rated due to interest rate worries, with high rates in Australia and the UK dampening valuations and asset monetisation efforts. Hospitals and consumer sectors face headwinds — insurance payers are pressuring healthcare providers on pricing, while consumer spending continues to reel from rising inflation. REITs fell 10% this year, with 17 REITs or trusts hitting new 52-week lows in a single week. Outlook Singapore equities trade at a premium 17x PE, above the historical average of 15x, but this is justified by growing earnings momentum across multiple sectors. The key risk is whether elevated bond yields begin to present headwinds. The Absolute 10 model portfolio rose 5.5% in 3Q26, underperforming the broader market's 9.8% gain, with drags from profit-taking in Frencken and poor results from Sembcorp Industries. Recommendation & Target Price In the Absolute 10 model portfolio for 4Q26, Phillip Securities Research removed Stoneweg Europe Stapled Trust and added Singtel. The portfolio maintains overweight positions in banks, semiconductors, and oil and gas, while remaining underweight REITs, hospitals, and consumer sectors. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
AvePoint Inc.: AI Revolution Drives Demand for Independent Data Governance Solutions
Brief Overview AvePoint Inc., a US-headquartered SaaS company, has achieved a historic milestone by completing a secondary listing on the Singapore Exchange in September 2025, becoming the first of its kind to dual list in Singapore. The company is well-positioned to benefit from the surge in global AI spending, which is forecast to grow 49.5% year-on-year to US$2.7 trillion in 2026. With 73% of organisations already operating hybrid-cloud environments, the increasing complexity of AI-related data, security and costs is driving demand for independent governance solutions. Investment Positives The analyst identifies several compelling investment merits for AvePoint. AI adoption is creating dual opportunities in governance and cost optimisation. As AI-driven errors can propagate and cause significantly greater damage than human errors within short timeframes, enterprises are increasingly requiring fast recovery capabilities to minimise operational disruption. Simultaneously, the rapid escalation in AI spending is making cost optimisation a critical priority for companies scaling their AI adoption. AvePoint addresses these challenges by helping enterprises optimise costs across three key areas: identifying underutilised licences to right-size software spending, clearing redundant data to reduce cloud storage and training costs, and implementing agent cost tracking to rationalise underutilised agents and reduce overall AI expenditure. The company's multi-platform approach creates a structurally competitive advantage. As enterprises increasingly adopt fragmented combinations of Microsoft, Google, Salesforce, AWS and other platforms to access best-of-breed capabilities whilst comparing costs and avoiding excessive vendor dependence, the need for independent oversight grows. Individual vendors can only provide analytics within their own ecosystems and lack visibility across broader IT environments. This positions AvePoint favourably as an independent player capable of consolidating data, usage, governance, and cost insights across multiple platforms into a single control layer. AvePoint has demonstrated sustained strong financial performance with structurally improved profitability. Annual Recurring Revenue increased from US$215 million in FY22 to US$417 million in FY25, representing a 25% compound annual growth rate. Growth remained robust at 27% year-on-year in 2Q26. Non-GAAP operating margin expanded significantly from -1.2% in FY22 to 18.9% in FY25. Challenges The analyst notes that increased investments to capture AI-related opportunities are expected to temporarily moderate margins in FY26. However, non-GAAP operating income is still guided to grow 10% year-on-year despite these investment pressures. Outlook The analyst expects continued strong performance with revenue growth of 23% in FY26e and 20% in FY27e, reflecting the company's strong positioning in the evolving AI landscape. Recommendation & Target Price Phillip Securities Research initiates coverage of AvePoint Inc. with an ACCUMULATE rating and a target price of S$20.00. The valuation is based on a discounted cash flow analysis utilising a 7.9% weighted average cost of capital and a 5.0% growth rate. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
ETF Monthly Review: Mixed September Performance with Muted October Outlook Expected
Brief Overview September proved challenging for most ETFs, with the gold-tracking ETF (GLDM) suffering the steepest decline of 6.7%, whilst the Bitcoin ETF (BITO) stood as the sole gainer with a 5.4% rise. Current market conditions show most major asset classes in range consolidation, though US Treasury Bonds, Gold, and the Hang Seng Index remain in downtrends. October is anticipated to bring sideways consolidation for some assets whilst others may extend their weakness. Investment Positives Limited bright spots emerged from September's performance, with Bitcoin demonstrating notable resilience. The ProShares Bitcoin Strategy ETF gained 5.4% in September, marking its third consecutive month of positive performance. This sustained momentum reflects continued strength in the cryptocurrency space despite broader market challenges. The S&P 500 showed relative stability, with the Vanguard S&P 500 ETF experiencing only a modest 0.3% decline during September. This minimal pullback suggests underlying market resilience in US equities, with the index maintaining its position within a range consolidation pattern. Several ETFs are positioned for sideways consolidation in October, indicating potential stability ahead. The S&P 500 ETF is expected to find support in the US$697.50 to US$704.30 area, whilst the oil-focused XOP ETF may trade within a defined range between US$172 and US$185. Challenges Gold faced significant headwinds in September, with the SPDR Gold MiniShares Trust tumbling 6.7% to become the month's worst performer. The precious metal has entered a clear downtrend, raising concerns about further weakness ahead. US Treasury Bonds encountered notable pressure, with the iShares 7-10 Year Treasury Bond ETF declining 3.3% in September. This asset class has shifted into a downtrend pattern, reflecting challenging conditions in the fixed income market. Asian markets demonstrated vulnerability, with the Hang Seng China Enterprises Index ETF pulling back 3% for the second consecutive month, maintaining its downtrend status. Singapore Equities also showed weakness, with the relevant ETF snapping a five-month winning streak by declining 0.7%. Oil markets faced headwinds with the SPDR S&P Oil & Gas Exploration & Production ETF pulling back 4.7% during September, though it remains within a range consolidation pattern. Outlook October is expected to deliver muted performance across most asset classes. Four major ETFs - those tracking the S&P 500, US Treasury Bonds, Oil, and Bitcoin - are anticipated to consolidate sideways during the month. However, three asset classes face potential further weakness. Gold may extend its decline and potentially retest the US$78.33 swing low from late June, representing a 4.5% downside risk. Singapore Equities could fall to the US$5.59 support level if they break below US$5.72, indicating a possible 2.2% decline. The Hang Seng Index may retest support at HK$80.70, suggesting a potential 1.6% downside. Recommendation & Target Price The report provides specific technical levels and percentage projections for various ETFs but does not include an overall investment recommendation or target prices. The analysis focuses on directional expectations, with some assets expected to consolidate whilst others may extend their current weakness into October. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
