DFO Monthly Review – April 2026

Review – Enthusiasm for Value and Semiconductor Shares Trumps the Iran War!

Focus: Property & Private Markets

Property Shares (REITs) Rally in April

Property shares (REITs) had a very good April and moved upwards in line with global equity markets.

Private Equity and Private Credit: Stabilising After the Sell-Off

Private equity and private credit investments had a stable month, and the shares of private asset managers were able to stabilise somewhat following the sharp sell-off at the start of the year. It remains to be seen how things will develop from here. The firms will likely face high redemptions again towards the end of the second quarter, which may induce another wave of selling in shares of private equity managers. Only once all the ‘weak hands’ have exited the asset class will we know how the managers’ future revenues are likely to develop and how share prices may evolve going forward.

Focus: Currencies

US Dollar Outlook: Sideways With a Weakening Bias

The US dollar is stabilising between 98 and 100 points on the DXY index and is likely to move sideways for the time being. However, we anticipate some dollar weakness should there be positive news from Iran. The US government tends to favour a weaker dollar, and the currency appears overvalued given America’s high debt levels and based on its purchasing power parity.

Diversification Into Stable Currencies

Diversification into more stable currencies such as CHF, SGD, AUD, and NOK may be advisable. If community members are interested in foreign currency loans, we currently favour CHF, SGD, and HKD over the Japanese yen as funding currencies.

Our Investment Styles

We generally advocate three investment strategies or philosophies, which we can confidently assume are highly likely to lead to success in the long term.

1) Traditional Index Investing (Jack Bogle, the Founder of Vanguard)

This strategy works very well, and there is no reason to question it. However, on the equity side, the strategy also means that many indices in the MSCI and FTSE Russell families are currently heavily dominated by US equities. It is therefore important to check to what extent one’s portfolio might also be, and should be, overweight in the US.

When it comes to bond indices, the fact is that traditional indices are inevitably more heavily invested in bonds from higher-debt issuers than in those from less indebted companies. For this reason, investors keen on ETFs should take the trouble to compare bond indices with systematically designed indices (e.g. Dimensional) or good actively managed bond portfolios (e.g. Pimco Income).

2) Factor-Based or Scientific Investing (Eugene Fama / Kenneth French)

Factor Performance Update

Since the start of the year, the value factor has continued to see strong excess returns, which extends the factor’s lead since early 2025. Shares in small companies (size factor) have performed very well so far this year in both Japan and the US. The quality factor has improved somewhat following a poor previous year but still lags behind common benchmark indices. The momentum factor lagged in the first quarter of 2026 but experienced a resurgence in April and recorded double-digit gains.

Systematic Investing in Bonds

As far as scientific investing in bonds is concerned, one should perhaps speak of systematic investing rather than factor investing. Generally, fewer bonds are purchased than is the case with the traditional indices of the FTSE Russell and Bloomberg families. In this way, it is possible to reduce the risk associated with individual issuers and thus achieve a better overall result without deviating significantly from the nature of the benchmark. Systematically constructed bond portfolios can therefore generally perform slightly better than traditional bond indices. So far, this has also been the case in 2026.

3) Investing Focused on a Few Securities (Warren Buffett / Charlie Munger / Hendrik Bessembinder)

After our preferred actively managed bond portfolios lagged their benchmarks until the end of March, they managed to catch up in April and are once again well ahead.

Active Equity Managers Regain Momentum

The same applies to our active equity managers, who, with a few exceptions, were trailing their benchmarks at the end of the quarter but were able to pick up momentum again in many cases during April. Paul Wick, the manager of the CT Global Technology Fund, had a fantastic April and, with a gain of 30% since the start of the year, is now 23 points ahead of the Nasdaq 100 Index. His focus on Bloom Energy and the semiconductor industry has led to this exceptional outperformance. We prefer this portfolio to the very popular Nasdaq 100 ETFs, even if figures like those seen in April cannot always be expected.

Our Model Portfolio Performance

Dimensional World Allocation Portfolios as Benchmark

We use the Dimensional World Allocation Portfolios as our standard model and benchmark portfolios, as they provide a highly representative picture of global financial markets, are very cost-effective to acquire, and cover all our FairHorizons in all relevant currencies (USD, EUR, GBP, and SGD).

All six components had an exceptionally good April, which was primarily due to the strong performance of the Dimensional equity strategy. It is currently benefiting significantly from the strong performance of small caps, as well as overweighting the value factor. The current performance of the Dimensional portfolios is very encouraging and reinforces the fact that it can be worthwhile to stick to the same strategy in the long term. I would even go so far as to suggest that these portfolios outperform more than 90% of all discretionary portfolio management services offered by private banks.

Vanguard LifeStrategy for EUR and GBP Investors

For investors whose reference currency is EUR or GBP, Vanguard also offers a range of investable model portfolios (Vanguard LifeStrategy), which have also performed very well and present themselves as alternatives to private bank discretionary portfolio management services.

Additional Options for Euro-Referenced Investors

Furthermore, for euro-referenced investors, there are additional options for the FairHorizons Yellow (7–10 years) and Orange (10–15 years), which are very suitable for medium- to long-term investments (e.g. ARERO, Global Portfolio One).

Source: Bloomberg, 30 April 2026

Outlook – It’s Still Worth Taking a Look at Valuations

From Undervaluation to Normalised Valuations

In our quarterly outlook at the start of April, I made it clear that the valuations of many stock markets appeared quite attractive following the attack on Iran and that our community should consider investment opportunities despite fears of war. However, following the strong rally in April, the undervaluation has eased somewhat, and it is difficult to describe the broader stock market as cheap. I would rather speak of normalised valuations, which certainly make long-term investment seem sensible but not urgent.

All of this tends not to be beneficial for financial markets, which is why I wouldn’t let myself be tempted to take on major additional risks.

Why We Are Not Chasing Semiconductor Shares

I would also not chase after semiconductor shares, which are currently performing extraordinarily well. Anyone with a broadly diversified portfolio owns them anyway and need not consider additional exposure.

Seasonality: Approaching the Weaker Summer Period

Added to this is the fact that we are slowly approaching the generally weaker summer period, during which global equity markets tend to record slightly lower returns than during the period between November and April. This seasonality could play a role following the strong market performance in April.

Market Sentiment: From Fear to Greed

Finally, it is perhaps worth noting that the so-called CNN Fear & Greed Index, which, together with the S&P volatility index (VIX), provides a good reflection of market sentiment, has now swung back to ‘greed’. At the end of March, it represented absolute fear. How things can change in an instant!

Iran War, Oil Prices, and Central Bank Implications

Furthermore, the war in Iran is far from over, and global oil and gas prices remain at significantly elevated levels. This should certainly be reflected in higher prices, which will likely mean that global central banks will not cut interest rates anytime soon. There may even be small interest rate hikes.

Whilst one should not overestimate such indicators, the combination of well-recovered markets, normalised valuations, a certain degree of technically overbought conditions in many markets, and very positive sentiment leads me to suspect that global markets may need to pause for a while before they can continue their upward trend.

Yields on Safety Components Above Inflation

If we look at the current valuations of high-return and safety components in our high-rise charts (pages 6–9), we can see that the current yields of the safety components, regardless of the investment horizon (FairHorizons purple to green), are all above the expected medium-term inflation rate of around 2% p.a. Even the yields on money market investments are clearly above current inflation rates and offer protection of purchasing power, even if we must endure the sharp rise in oil and gas prices.

High-Return Components: 6–8% Long-Term Targets Still Viable

Regarding the high-return components we select for longer-term investment horizons (FairHorizons yellow to red), we always communicate a minimum target return of 6% p.a. or a projected long-term return of between 6% and 8% p.a. This corresponds to price-to-earnings ratios (P/E ratios) of between 14 and 17. Most high-return components currently have valuations that make these long-term returns appear viable.

Only the Nasdaq 100, the S&P 500, as well as the MSCI World and MSCI World Quality indices, are significantly below this level, which is why these indices could lag the performance of other markets in the coming years.

Source: Bloomberg, 30 April 2026

Europe, Asia, and Emerging Markets: Comfortably on the Buy Side

Shares in Europe, Asia, and Emerging Markets carry risk premiums (i.e. target returns) of between 7% and 8% p.a., which is why we are comfortably on the buy side here, even if valuations are no longer as favourable as they were at the start of April.

Stick to Your Investment Style

As for our three preferred investment styles, we can only emphasise that all three strategies perform very well in the long term, even if they may disappoint in the short term. Investors should therefore definitely stick to their chosen investment styles and not change them out of disappointment. For example, anyone who had switched from the Dimensional World Equity Portfolio to the MSCI World would now be missing out on around 3 percentage points.

Revisiting the ‘Losers of 2025’

The valuations of our ‘losers of 2025’ – namely Indian equities, property shares (REITs), quality factor index ETFs and quality managers, the healthcare sector, and listed private equity firms – remain attractive to very attractive. This therefore invites us to consider these investments, which are promising in the long term but disappointing in the short term.

Value Strategies for Fresh Capital

Anyone wishing to simply follow current trends with fresh capital should investigate value strategies. Here, the positive trend of recent years appears to be continuing, and valuations remain favourable.

Our Approach: Indexing, Active Management, and Stock Picking

Generally, we recommend indexing for money market investments, active management for most bond strategies, and a mix of indexing and stock picking for equity investments. That’s how we do it ourselves, and we’re delighted when we see the results.

Listed Private Equity: Holding Back for Now

Regarding the shares of private equity firms, we are monitoring the news very closely but are holding back on further purchases for the time being, even though valuations appear very attractive at first glance and price stabilisation is evident.

FairHorizon Maturity Recommendations

Precious Metals, Copper, and Commodities

Shares in precious metal and copper producers have become attractive again following the recent correction and can serve as a portfolio addition. Commodity indices also do not look overpriced despite the strong performance in April and can be added to portfolios. Generally, however, we would not wish to exceed a portfolio allocation of 10–15% in commodities.

Standard Investment Portfolio Ideas

Please also look at our standard investment portfolio ideas on pages 33–35, which follow the principles of investment legends like Jack Bogle, Eugene Fama / Kenneth French, and Warren Buffett / Charlie Munger. Whilst all of them represent different investment philosophies, they are all very effective and successful in the long term.

Why We Prefer Metals Over Futures-Based Commodities

In the long term, investments in metals and precious metals have outperformed commodities that must be acquired via futures, which entails significant (roll) costs and reduces returns. These include, above all, energy and agricultural commodities, which account for around 60–70% of commodity indices. This explains our preference for metals and precious metals, or shares in metal and precious metal producers.

Get in Touch With Das Family Office

If you are worried about whether your portfolio is well equipped for the significant changes in today’s world, just get in touch with us. We will be more than happy to check it for you. Otherwise, I would be delighted if you could tell your friends and family about Das Family Office so that they can also become part of our community.

With best wishes for a wonderful May!

Yours,
Mario Becker