$1.713 mil Daedalus Income Portfolio Update – January 2026 – Investment Moats

Here is the update for my Daedalus portfolio for January 2026. If work is not too busy, I will try to provide an update where possible.

I explained how I constructed this portfolio in Deconstructing Daedalus Income Portfolio and Why I Currently Invest in These Funds for Daedalus. You might not understand what I wrote below if you haven’t read this post.

All my personal planning notes such as income planning, insurance planning, investment & portfolio construction will be under my personal notes section of this blog.

You can also find the past updates similar to this in the personal planning notes section.

Portfolio Change Since Last Update

The portfolio was valued at $1.646 million at the end of December and is at $1.686 million at the end of January.

We reported a portfolio change of $40,000 for January 2026.

The portfolio is valued in SGD because that is the currency that I would most likely be spending on.

As of 5th February 2026, the portfolio is valued at $1.713 million.

Portfolio Attribution – Why did the portfolio do better/worse compare to last month [or a year ago if this is a December update]?

We all want to know what cause the portfolio to do better or worse. If you have just one fund that covers the MSCI World, or you have a bunch of funds, would you know if it did better or worse?

In this section, I try my best to explain the portfolio performance in my way.

Here are the primary security holding returns for the month-to-date and year-to-date for the funds that I own [the top fund table] and reference benchmark ETFs [the bottom Major Index ETF table]:

The table that shows the fund holdings denotes the month-to-date and year-to-date performance of the funds that I own, against Major Index ETFs. The Major Index ETFs is present to compare the performance. Just to be clear, I do not own the major index ETFs and you should see the top table (Fund) as what I own. The bottom table (Major Index ETFs) are benchmark ETFs to provide performance reflections.

The returns of all funds are in USD. This includes the performance of the Dimensional funds, which I use the returns of the USD share class so that the returns are comparable. I have also listed the major index ETF performance for comparison.

a. General Equity Performance

The MSCI World appreciated 1.6% for the month in USD terms but the emerging markets did better at 8% just in a single month.

This will explain why the MSCI All Country World IMI and MSCI All Country World ETFs are doing better than the world because of their emerging market exposure.

If you see the S&P 500 doing 0.64%, it means international equity is doing better than the United States.

I am slightly glad that international stocks do well more hoping that we have two consecutive years of good developed international performance.

b. Developed Equity Performance

There were a few multifactor funds targeting the developed equities region in Daedalus:

JPGL
GGRA
AVGC
IFSW

I hope you look at them as a diversified group of equities that gives exposure to developed large cap and mid cap global equities. They also systematically gives exposure to cheaper and more profitable companies with a little bit of short term momentum.

The overall valuation of this portfolio segment is lower than the market cap weighted index. The aggregate forward earnings growth of the portfolio should be reasonably high, despite the cheaper valuation.

The main comparison will be against the MSCI World.

JPGL and AVGC did better than the MSCI World while GGRA and IFSW did worse.

IFSW was the standout performer in 2025, and when what worked in 2025 don’t work so well in January, its performance suffered.

We finally see JPGL shine because JPGL is more sector neutral which means it has a larger allocation to the materials, industrial, financial, energy sector which did well.

c. Developed + Emerging Markets Equity Performance

The Dimensional World Equity sits as part of my SRS account. It is a single fund that gives exposure to the developed and emerging markets large cap and mid cap stocks.

You should compare this against the MSCI All Country World.

I finally am able to see the World Equity do well relative to the MSCI All Country World. A few other sectors were working in 2025 and yet Dimensional World Equity performance was mediocre.

So most likely the performance is due to… energy.

d. Emerging Markets Equity Performance

AVEM and EMSD is my emerging market exposure. One is a large, mid and small cap fund that should tilt towards value and profitability. The other is a pure emerging market small cap with no factor tilts.

Both of them underperformance the benchmark index but their performance was not too shabby.

EMSD is likely still levered more towards a weaken USD and given its 1,911 securities holdings which the largest being 0.65% of the portfolio, a good performance means its harder to attribute why it did 6.6% in January.

e. Small Cap Equity Performance.

About 32% of the portfolio or 36.5% of the equity allocation is invested in Global and US Small Cap Value or Value-weighted funds. You should look at Dimensional Global Targeted Value, AVGS and USSC.

Russell 2000 did 4.59%. The more profitable S&P 600 did 3.89%.

The MSCI World Small Cap did 5.1%, indicating that international small caps is doing better and that less profitable small caps in the US is doing better.

Global Targeted Value did slightly lesser than the MSCI World Small Cap, while AVGS did better.

USSC did better than the S&P 600 but did worse than the Russell 2000.

f. Global Aggregate Bond Performance

12.7% of the portfolio is in iShares Core Global Aggregate Bond UCITS ETF (AGGU).

The chart below is the US government yield curve at end Dec (Blue) and end Jan (Red):

The curve shifted upwards so this a bit of headwind for a fixed income portfolio with 6 years of duration on average.

g. Currency Effect

The USD weakened by 1.13% for the month against the SGD.

Since the portfolio is based in SGD, this currency weakness negatively affects the portfolio.

Role of Portfolio

The goal of the portfolio is to generate steady, inflation-adjusted income to cover my essential living expenses. It’s built using a conservative initial withdrawal rate of 2.0–2.5%, which is designed to hold up even under extremely tough market conditions — including scenarios like the Great Depression, prolonged periods of high inflation (averaging 5.5–6% over 30 years), or major global conflicts. In other words, it’s stress-tested to withstand some of the worst financial environments in history.

The income needs to last: from today (age 45) for the rest of your life — potentially forever.

I am currently not drawing down the portfolio.

For further reading on:

My notes regarding my essential spending.
My notes regarding my basic spending.
My elaboration of the Safe Withdrawal Rate: Article | YouTube Video

Based on current portfolio value, the amount of monthly passive income that can be conservatively generated from the portfolio is

The lower the SWR, the more capital is needed, but the more resilient the income stream is.

Nature of the Income I Planned for

Generally, different income strategies produce different types of income streams. They can vary by:

Consistency: Some provide steady income, others fluctuate over time
Inflation Protection: Some adjust with inflation, others remain fixed
Duration: Some last for a set number of years, others are designed to last indefinitely (perpetual)

An income stream based on the Safe Withdrawal Rate framework is consistent and inflation-adjusted, and if we use a low initial Safe Withdrawal Rate of 2.0-2.5%, the income stream leans towards a long duration to perpetual.

Here is a visual illustration of how the income stream will be based on the current portfolio value:

The income for the initial year is based on a 2% Safe Withdrawal Rate. The income for subsequent years is based on the inflation rate in the prior year (refer to the bottom pane of inflation in the previous year). If the inflation is high, the income scales up and if there is deflation, the income is reduced.

Amount of Cash Flow/Income Withdrawn/Extracted from Daedalus Income Portfolio

I wish to be fully transparent about the schedule of withdrawals from the portfolio because if the goal of the portfolio is eventually or currently provide income for spending, you would be interested to know how much is taken out from the portfolio.

There have not been any withdrawals or cash flow extraction for spending since the publication of the portfolio. I will update as and when it happens.

Investment Strategy & Philosophy

After trying my best to learn how to invest for a while, the portfolio expresses my thoughts about investing at this point.

The portfolio is run in a

Strategic: allocation doesn’t change by short-term events.
Systematic: rules/decision-tree-based implemented either myself or an external manager.
Low-cost: investment implementation cost is kept reasonably low both on the fund level and also on the custodian level.
Passive: I spend relatively little effort mentally considering investments and also action-wise.

Portfolio Change Since Last Update (Usually Last Month)

There are no changes to the portfolio in the last month.

Current Holdings – By Dollar Value and Percentages

The following table shows more details about the securities that I currently held.

The securities are grouped based on general strategy, whether they are:

Fixed Income / Cash to reduce volatility.
Systematic Passive, which tries to capture the market risk in a systematic manner.
Systematic Active, which tries to capture various proven risk premiums such as value, momentum, quality, high profitability, and size in a systematic manner.
Long-term sectorial positions.

Portfolio Grouped by Account Source Location

Generally, you won’t have just one view about the securities in your portfolio.

In the following sections, I show my portfolio when viewed from different angles.

The first is the portfolio based on location.

Cash means held in accounts that we can make independent choices of which platform that we choose to invest in, when we decide to buy, when we decide to sell without any liquidity, tax, or locking considerations.
SRS Account is a Singapore-related retirement account. There are tax advantages on your ordinary working income if a person contributes to it. You can defer the income tax until after your retirement, where only 50% of your withdrawal then will be tax, at the prevailing tax bracket then.

This view does nothing much but some might be curious whether it makes up my money in CPF, here or there and so basically these are basically my cash monies and SRS.

Portfolio Grouped by Geographical Region Exposure of Securities

The second view groups the securities based on its geographical exposure.

Returns comes potentially from taking systematic risks and risks comes partly from the macro, interest and inflation exposure in different geographical regions.

The general regions:

Global Developed – Strategies that systematically considers the large-cap and mid-cap equities in developed countries. You can view the countries, and sector composition at this MSCI World Index page.
Global Developed + Emerging IMI – Strategies that systematically considers the large-cap, mid-cap, small-cap equities in developed and emerging market countries. You can view the countries, and sector composition at this MSCI Emerging Markets IMI Index page.
US – Strategies that mainly tap small-cap US equities.

Portfolio Grouped by Fund, Cash or Individual Security

The third view groups the securities based on whether they are fund, cash or individual securities.

Almost 100% of the portfolio is implemented with funds. Funds can be:

Singapore Unit Trusts domiciled in Ireland.
London Stock Exchange listed exchange traded funds (ETFs) domiciled in Ireland.

Portfolio Grouped by Strategy.

The last view groups the securities based on commonly known high level strategy names.

What Systematic Active Means: Funds that help me execute passively very specific, repeatable underlying securities selection on an ongoing basis. Here are some examples of the systematic active strategies in my portfolio:

Global Multifactor: From a basket of 1,600 developed market large and mid-cap stocks, rank the stocks by their value, by their 12-month momentum, by their degree of ROE and debt to asset, and then own the top 300. Do this every half-yearly or quarterly. You end up with a strategy that consistently owns 300 companies that are cheaper, quality and have greater momentum relative to a market cap weighted index.
Small Cap Value: From a basket of 3,000 developed market small cap stocks, rank the stocks based on price-to-book value (include intangibles in the book value). Also rank the stocks by operating earnings minus interest divide by book value. Eliminate the companies with low profitability. What we end up is two group of small cap stocks: The more profitable small caps but not too expensive, and the small caps stocks that are at least profitable but are very cheap. Own the top 30-35% of this cohort consistently. Have a manager that consistently helps me execute this.

In contrast, Systematic Passive are funds that help me track certain benchmark indexes. These indexes can be market-cap weighted, or equal-weighted, and reconstituted periodically so that they mirror the performance of benchmark indexes.

Sector are the funds that provide exposure to risks of certain sector such as semi-conductor or energy as an example.

Fixed Income/Cash main helps damp the volatility of the portfolio. They are maintain based on the historical research that it is better to be less than 100% in equities if your portfolio is meant for income.

The fixed income/cash should not be viewed as a war chest to rebalanced to equity or take profit from equity. This is a strategic long term allocation whose main purpose is to optimized negative sequence of return risks.

The Main Custodians for the Securities in this Portfolio

The current custodians are:

Cash: Interactive Brokers LLC (not SG)
SRS: Philips FAME

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.

Readers also follow Kyith to learn how to plan well for Financial Security and Financial Independence.

Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory Firm Providend. All opinions on Investment Moats are his own and does not represent the views of Providend.

You can view Kyith’s current portfolio here, which uses his Free Google Stock Portfolio Tracker.

His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.

You can read more about Kyith here.

Portfolio Change Since Last Update