Resilient Gains Amid Global Divergence

The first Half of 2025 was marked by strong performance across global financial markets, with global equities delivering a robust 10.19% return. Developed markets were the primary growth driver, advancing 19.54%, while emerging markets rose a respectable 13.98%. However, market dynamics varied significantly across regions, asset classes, and sectors—underscoring the importance of diversification in a rapidly evolving macroeconomic and geopolitical environment.

<Source: Morningstar Direct Data as of 30 June 2025 (Regional, market and fixed income indices are based on the respective Morningstar total return index. Gold, platinum and silver prices are based on the LBMA Price PM>

Equity Markets: Developed Economies Lead, Asia Delivers Highs and Lows

Developed markets significantly outperformed, with Europe leading the pack at +23.98%, buoyed by solid corporate earnings, a stabilising economic outlook, and increasingly accommodative signals from the European Central Bank. Japan returned 12.69%, benefiting from corporate reforms and a weaker yen. In contrast, the US lagged with a modest 5.99% gain amid valuation concerns and investor shifts toward international opportunities.

Emerging markets presented a more mixed but overall positive picture. South Korea emerged as the global standout, soaring 41.02%, propelled by strong demand in the technology and semiconductor sectors. Brazil followed with a 30.24% gain, supported by favourable commodity trends and political stability. China and Singapore posted solid returns of 17.65% and 15.14%, respectively, boosted by stimulus measures and foreign capital inflows. However, some Southeast Asian markets, including Thailand (-17.01%), Pakistan (-15.59%), and Indonesia (-4.32%), underperformed due to political and economic headwinds.

Commodities: Precious Metals Outshine, Oil Retreats

Commodities were dominated by a sharp rally in precious metals, reflecting investor demand for safe-haven assets amid lingering inflation concerns and geopolitical uncertainty. Platinum surged 47.86%, followed by gold at 26.00% and silver at 24.46%. In contrast, Brent crude oil declined 8.44%, weighed down by subdued global demand, rising supply, and strategic reserve releases.

Fixed Income: Stability Returns to Bond Markets

Bond markets provided stability and positive returns as central banks signalled a pause in rate hikes. The Global Core Bond Index rose 7.05%, outperforming the US Core Bond Index at 3.98%. Declining inflation and consistent policy messaging contributed to stronger performance, especially in non-US bond markets where yields remained relatively attractive.

Portfolio Performance As of June 2025

Total Returns in USD

<Source: Morningstar Direct>

The annualised returns for P04-P10 continued to track their underlying benchmark closely. As for P01-P03, the performance was affected by returns in Malaysia's fixed-income mutual funds relative to Malaysia's fixed-income index (Markit iBoxx ALBI Malaysia Total Return Index).

Note:The Markit iBoxx ALBI Malaysia Total Return Index is a benchmark that tracks the performance of Malaysian government bonds in the local currency. It’s part of the broader Asian Local Bond Index (ALBI) family, which covers sovereign debt across Asia.

<Source: Morningstar Direct>

The total returns were lower as the Ringgit appreciated by 11.79%, 1.49%, and 5.99% over 1-year, 3-year, and YTD-2025 against the USD. Since its inception, the Ringgit against the USD has been relatively flat.

Views and Recommendations: Navigating Opportunity and Risk

As we transition into the second Half of 2025, markets continue to reflect a blend of opportunity and uncertainty. The strong performance in Europe and select emerging markets like South Korea highlights the value of global diversification. Key areas of focus for investors will include central bank policy direction, macroeconomic indicators, and geopolitical developments. Maintaining a disciplined, diversified approach will be crucial in navigating the evolving investment landscape.

Disclosures

Past data and performance do not indicate future performance. Actual individual investor performance will vary depending on the initial investment, amount and frequency of contributions, allocation changes, taxes and fees during the time frame considered.