In this 2025 asset allocation article, I will share my year-end allocation in both Malaysia and foreign markets.
Target asset allocation
Malaysia
My target allocation is 10% P2P lending and 90% stock.
I am only considering equities and peer-to-peer (P2P) lending.
Foreign
My current target allocation is 20% in bonds, 74% in equity and 6% in alternative assets.
My investment assets in foreign markets are made up of exchange traded funds (ETFs) and a stock. A portion of these investments is on the robo-advisor platform, MYTHEO. My investment on MYTHEO consists of three portfolios, namely growth, income and inflation hedge. For simplicity sake, I am going to group income and inflation hedge into bonds.
Malaysia vs foreign
My target allocation between the local and overseas markets is 70% and 30%.
2025 asset allocation
Malaysia
My investments in Malaysia are divided into P2P lending (4.15% vs 2024: 7.55%) and stock market (95.85% vs 2024: 92.45%).
This allocation is not my ideal as the P2P portion has decreased drastically.
Foreign
My investment assets in foreign markets are 22.05% bonds (2024: 20.60%), 74.97% equities with cash (2024: 76.29%), and 2.51% in alternatives (2024: 3.11%). I consider this allocation to be within my target as I have given myself a leeway of ±5%.
The table below shows the countries that I have equity exposure with their percentages in my foreign portfolio (excluding my portfolios on MYTHEO).
| Country | Percentage |
|---|---|
| Cash | 5.27% |
| China | 23.21% |
| India | 12.56% |
| Indonesia | 6.94% |
| US | 33.99% |
Current asset allocation between Malaysia and overseas
As on 31 December 2025, I have 74.42% (2024: 77.86%) of my total investment assets in Malaysia and 25.58% (2024: 22.14%) in the foreign markets. My target allocation is 70% Malaysia/30% foreign markets, with a leeway of ±5%. Thus, I have achieved my ideal allocation.
Conclusion of 2025 asset allocation
I have finally attained my ideal allocation between local and foreign markets, as predicted last year. However, this was mainly achieved due to divestment of my Malaysian stocks. I have withdrawn significant fund from the Malaysia market in 2025 for house renovation. In 2026, my plan is to direct equal portion of my monthly investment amount to both markets. With this plan, I think I should be able to achieve my target allocation in 2026 too.
Asset allocation is an important determinant in the portfolio return. You should have a plan for your asset allocation too and stick to it as much as possible.
Invest and prosper!
