May 2026 Portfolio Review: China Is Dragging Everything Down
May was one of those months where the headline number doesn’t tell the full story.
Portfolio ended the month at +0.4%.
Not terrible. Not great either.
The S&P 500 did +5.0%, so relative to US markets it definitely felt underwhelming. YTD, I’m now at +10.0% versus the S&P’s +10.7%.
But once I dug through the numbers properly, the main issue became very obvious.
China is dragging almost everything down.
The Numbers First
| Comparison | May | YTD (May 29) |
|---|---|---|
| My Portfolio (Total) | +0.4% | +10.0% |
| My Portfolio (ex-China) | +2.1% | +28.0% |
| My China-related assets | -1.9% | -15.2% |
| S&P 500 | +5.0% | +10.7% |
| HSI (Hang Seng Index) | -2.3% | -1.8% |
S&P 500 and HSI data from Yahoo Finance, captured June 1.
China Is Costing Me A Lot This Year
Looking at the numbers, you’ll notice China is doing a lot of the heavy lifting — in the wrong direction.
My China-related positions make up roughly 42% of my portfolio. YTD, that basket is down around -15.2%. The non-China side is actually up around +28% YTD.
That’s a massive gap.
Without China, this would probably be one of my strongest years in recent memory. China is the single factor that brought the headline number down from the high-20s to +10%.
So naturally the question becomes: why am I still holding these positions?
Because I think the market is currently treating almost all China growth names as uninvestable regardless of what the underlying businesses are actually doing. Right now the market wants near-term profits, predictable cash flow, low geopolitical risk and minimal policy uncertainty. Most China growth names fail at least two or three of those requirements immediately.
The losses are painful. But I don’t think the market is pricing these businesses based on where they may be three to five years from now. Right now it’s mostly pricing fear.
Not all my China positions are dragging though. WUXI is at +16.4% YTD. The AV names are thesis-driven, and the mark-to-market loss is sentiment-driven, not fundamental deterioration. BABA is still my largest single stock exposure across the entire portfolio — and I’m continuing to trim it.
The rest of the portfolio is doing its job. This is a China problem, not a portfolio problem.
Where My USD Positions Are
The easiest way to understand what happened this month is to look at the sector breakdown.
Technology did well because of trading gains. Healthcare stayed mixed. Industrials still looks ugly mainly because of the AV exposure.
| Sector | ETF | My Alloc | ETF May | My May | ETF YTD | My YTD |
|---|---|---|---|---|---|---|
| Comm. Services | XLC | 3.3% | -0.8% | +3.5% | -1.7% | -4.1% |
| Consumer Discr. | XLY | 21.4% | -1.0% | +0.7% | +1.2% | -0.1% |
| Energy | XLE | 3.7% | -1.2% | -19.8% | +25.9% | +16.3% |
| Financial Services | XLF | 2.6% | +0.6% | -10.0% | -5.8% | -8.6% |
| Healthcare | XLV | 26.3% | -0.9% | -3.9% | -3.4% | -6.8% |
| Industrials | XLI | 36.1% | -0.4% | -2.4% | +11.6% | -22.3% |
| Materials | XLB | 2.2% | -0.4% | -10.3% | +12.8% | +5.7% |
| Technology | XLK | 4.4% | +2.2% | +20.4% | +32.7% | +29.7% |
ETF source: Seeking Alpha, captured June 1.
The Positions That Drove the Month
Top gainers:
AAOI & ONDS | Technology | +20.4% in May (blended)
Technology was my best-performing sector. Sounds great. But the reality is less exciting than the headline.
Most of those gains came from two short-term round-trip trades. AAOI (Applied Optoelectronics) returned +13.7% on deployed capital. ONDS (Ondas Inc.) returned +30.1%. Both fully exited within the month.
The gains are real. But it’s trading performance, not long-term compounding. Sometimes portfolio numbers flatter the underlying reality and I think it’s important to be transparent about that.
F (Ford Motor) | Consumer Discretionary | +33.8% in May
My buy thesis was simple — the F-Series truck business prints cash, the stock was pricing in an EV collapse that isn’t happening, and Ford doesn’t need to win the EV race to stay profitable. The bonus optionality: CEO Jim Farley confirmed on the earnings call that Ford is in early talks with the Pentagon on defence manufacturing — similar to how US automakers pivoted to military production during WWII. No contracts yet. Ford’s US factories are running at only 73% utilisation.
Top losers:
NOG | Energy | -19.8% in May
NOG (Northern Oil and Gas) was my biggest drag in May. Oil sold off after Middle East tensions eased and the war premium disappeared from crude prices. Operationally the company still did well — record production, EPS beat, guidance intact. Nothing fundamental changed.
The fuller picture: earlier tranche exits at higher prices mean I’m net ahead on total NOG capital deployed at +6.4% YTD. The -19.8% reflects the price movement in the month of May. At current levels the remaining position is dead capital earning a modest dividend while oil sentiment works against it. My approach now is staggered sells on any recovery — same playbook as BABA and ALB. No single price target, just disciplined reduction on strength.
DOCS (Doximity) | Healthcare | -12.4% in May
DOCS hit a record low of $17.71 on May 14 — a -26% drop the morning after earnings — before recovering to $21-22 by month-end. Revenue guidance missed badly, management declared FY2027 an “AI investment year” signalling margin compression, and new pharma pricing rules are hitting their core ad revenue model. Three bad things at once.
The platform itself is still valuable — 80% of US doctors on one network is a real moat. As I covered in my 2026 Doximity stock analysis, this is now a management execution story. The $17→$21 recovery tells me buyers have conviction at these levels. Had it stayed at $17, I wouldn’t be holding to August. The bounce changes the calculus. August earnings will tell me what I need to know.
China Positions: Benchmarked Against HSCI
Shifting to the China book — here’s how each sector tracked against the relevant HSCI sector index for May.
| Sector | Index | Index May | My May | Index YTD (May 29) | My YTD |
|---|---|---|---|---|---|
| Consumer Discr. | HSCID | -3.1% | -3.1% | +2.3% | -8.7% |
| Industrials | HSCII | -2.5% | -0.3% | +1.4% | -21.4% |
| Healthcare | HSCIH | -2.5% | -3.9% | +4.0% | +16.4% |
HSCI May 29 closing prices from live trading data feed.
Beijing’s May 22 crackdown on cross-border securities trading — targeting offshore brokers like Futu and Longbridge — contributed to the late-May HSI selldown as markets feared mainland buying flows into Hong Kong would slow materially.
Against that backdrop:
- BABA fell -4.1% on continued concerns around US chip access and domestic cloud competition
- XPEV stabilised slightly
- PONY gained +1.6%
- WRD gave back -2.2%
The YTD gap of -21.4% against HSCII’s +1.4% reflects the structural mismatch in the benchmark — PONY and WRD are early-commercial-stage autonomous driving companies sitting in an index of old-economy Chinese industrials. Not a fair peer group, but that’s where the classification lands.
WuXi remains the standout performer inside the China allocation at +16.4% YTD. The domestic pharma recovery is intact.
Within the China book, I continued trimming BABA — the valuation gap versus global peers isn’t closing fast enough to justify the allocation risk. On the other side, I added to XPEV — the robotaxi launch and humanoid pivot make it the most multi-layered thesis in the China AV basket, and the pullback gave a better entry point.
What Is My Greater Theme?
This is probably the part of the portfolio most people would disagree with me on.
Across my HK-listed and US-listed stocks, spanning multiple sectors, there’s a thread that quietly connects a surprisingly large part of the portfolio:
- autonomy
- robotaxis
- industrial automation
- real-world AI deployment
That includes PONY, WRD, XPEV, UBER and GRAB.
The market right now clearly prefers businesses with immediate monetisation, profitability and near-term visibility. Last year, almost anything remotely tied to AI rerated higher. That phase now feels over.
Now markets are becoming much more selective.
And honestly, that’s fair.
The problem is that autonomy deployment and physical-world AI are infrastructure-style adoption stories. Those things naturally take longer to scale compared to software. That’s why operational progress and stock price performance have completely disconnected recently.
Robotaxi fleets globally more than doubled in 2025. Europe is opening up testing frameworks across multiple cities — PONY is already in Zagreb with Uber, WRD just announced a test in Madrid. The rollout is becoming more real.
Yet the stocks behave like the entire sector is collapsing.
The obvious question — what about Tesla? I’ve looked at it. The FSD stack is real. But my hesitation isn’t the thesis, it’s the price. The names I already own aren’t fully pricing in their commercial traction. Tesla already is. If it pulls back to a more reasonable entry point, I’d revisit. Not a closed question.
Nonetheless, this is a deliberate contrarian call. The commercial progress is real and accelerating. In time, I believe the market will reprice these companies to reflect that reality. But in the near term, I just have to hold on and bear with the pain.
What I’m Doing in June
June doesn’t feel like a clean correction to me.
It feels more like markets rotating violently between narratives every few days. One day it’s rates. Next day it’s geopolitics. Then AI valuation fear. Then oil moves everything.
Several things hit at the same time. The China capital outflow crackdown spooked markets — though the CSRC has since clarified it targets unauthorised brokers, not investors. The Nasdaq dropped 4% on AI bubble fears. A blowout jobs report removed any reason for the Fed to cut. PPI came in at 6.5% annually, CPI at 4.2%. And US-Iran tensions escalated before a surprise ceasefire claim on June 11 triggered a sharp single-day recovery.
The US market can recover fast on news flow. HSI will take longer to find its footing.
Prior to this period I had already been trimming selectively. Now I’m shifting approach — on names where the thesis is intact and the price has moved against me, I’ll be selectively averaging down. The FOMC rate decision on June 17 will be the key read — a hike extends the pain, a hold with dovish guidance is the signal to be more aggressive.
Final Thoughts
May wasn’t disastrous. But it definitely felt frustrating.
The portfolio right now is basically split into two completely different realities.
The non-China side is performing well. The China side is dragging the overall number down. That’s really the entire story.
Still, I think the portfolio today feels much more intentional than it did a year ago. Less random, less commodity-heavy, more concentrated around a specific long-term direction — autonomy, industrial automation, real-world AI deployment.
That’s not the same as owning the AI hype trade. It’s not unprofitable LLM wrappers, datacenter capex plays, or leveraged AI SaaS. The real risk isn’t that these businesses fail — it’s that markets stop rewarding long-term growth stories and rotate toward cash flow and dividends now. That’s the scenario I’m navigating, and the June 17 FOMC will tell me how much runway I have.
Disclaimer: This is a review of my personal portfolio and performance for learning purposes. It is not investment advice. Always consult with a qualified financial advisor before making investment decisions.