Click Here to Download the Full Cross-Asset Performance Report
2025 proved to be an exceptional year for global equities, highlighted by the MSCI World Index’s remarkable 37.5% gain from its April lows.i The sudden reversal of the “Liberation Day” tariffs sparked a massive relief rally in cyclical stocks, which was further sustained by resilient global growth, AI optimism, and supportive fiscal and monetary shifts. While bonds faced volatility from lingering inflation and rising fiscal deficits, they ultimately delivered broad-based gains as inflationary fears subsided, key policy makers lowered rates, and investors chased riskier assets. Precious metals were standout performers, delivering their strongest gains since 1979 on the back of stagflation concerns, elevated geopolitical risks, and record central bank accumulation. The energy sector and the US dollar were the year’s primary laggards; the greenback was pressured by narrowing growth and interest rate differentials, while escalating oversupply fears, which overshadowed heightened global geopolitical tensions, drove oil prices down.
The fourth quarter, specifically, was marked by the continued ascent of risk assets. The MSCI World Index advanced 3.1%, supported by healthy corporate earnings and central bank policy easing. While enthusiasm for artificial intelligence remained a core driver, Q4 returns were more broad-based, with health care and non-US markets outperforming. Investor appetite for risk stayed strong in credit markets, fueling outperformance in emerging markets and high-yield bonds. Conversely, long-duration sovereign bonds struggled as confidence in governments’ ability to stabilize debt dynamics deteriorated. The US dollar rose 0.6% on a trade-weighted basis, primarily due to meaningful weakness in the Japanese yen. Precious metals continued their historic rally, supported by elevated demand and geopolitical and stagflation hedging. Energy prices fell sharply as supply growth outpaced demand expectations.
