Navigating Market Volatility in February

Global equities have faced turbulence recently, with a notable pullback in US tech stocks. The Nasdaq Composite fell by -10.2%, with key names such as Nvidia experiencing sharp declines of almost 12%. Broader indices, including the S&P 500, also lost ground amid shifting economic conditions and investor sentiment. Adding to market uncertainty were renewed trade tensions, as President Trump’s proposed tariffs on goods from Mexico and Canada sparked concerns among investors. This dampened sentiment and contributed to the weakness in US equities.

Meanwhile, Chinese equities stood out as a bright spot. Offshore Chinese stocks surged +17% year-to-date in SGD as of 14 March 2025, driven by optimism surrounding AI advancements and supportive government policies. The performance contrast between US and Chinese equities underscored the importance of a well-diversified portfolio in managing market fluctuations.

What This Means for Investors

Market pullbacks like these are a normal part of investing. While concentrated bets on high-growth tech stocks delivered in recent years, February served as a reminder that portfolios with broader geographic and factor-based diversification are able to weather volatility better over the long run.

This is where Syfe Core portfolios provide an edge. Our systematic approach tilts toward factors such as value, quality, and size, which have historically outperformed over time. Additionally, our diversified geographic exposure helped cushion losses compared to portfolios solely reliant on US stocks (such as through a S&P 500 ETF) or the tech sector.

The Syfe Core Philosophy: Investing for the Long Haul

Our investment philosophy remains unchanged: we focus on systematic, factor-based investing that enhances long-term performance while managing downside risks. This approach means that while certain months may see short-term dips, our portfolios are built for sustained growth over years and decades.

Diversification has played a crucial role so far this year, particularly in our exposure to China and other global markets. This balanced approach ensured that our portfolios remained resilient relative to riskier, more concentrated strategies.

The Power of Factor Investing

While market cycles fluctuate, factor-based investing has demonstrated long-term outperformance. Our focus on value, quality, and size ensures that we are positioned to benefit from market inefficiencies over time. A historical view of these factors underscores why this disciplined approach continues to drive strong investment outcomes.

Staying Confident in a Disciplined Approach

Short-term market swings can be unsettling, but they don’t change the fundamental principles of investing. The key to long-term success is staying invested, not trying to time the market. History has shown that missing just a few of the best-performing days in the market can significantly erode long-term returns.

Looking Ahead: Staying the Course

Market fluctuations are inevitable, but the best strategy remains consistent investing. Whether through a lump sum investment or dollar-cost averaging (DCA), staying invested through different market cycles leads to better long-term outcomes.

For investors who stayed the course in February, the lesson is clear: diversification works, discipline matters, and markets reward patience.

Your Next Steps

Now is the time to ensure your portfolio is positioned for long-term success. If you have additional funds to invest, consider adding to Syfe Core portfolios or setting up a DCA plan to take advantage of market fluctuations. Staying invested is key to capturing future growth.

Start investing today or increase your allocation to stay ahead of market trends.If you’d like to hear more about other topics or have any questions, feel free to reach out to us at [email protected]. We’re always happy to provide additional insights and updates to help you make informed decisions.