Global Equity Markets – Q4 2025
Global markets closed 2025 with one of the strongest years since the pandemic, posting broad gains across equities and fixed income. Non‑US equities outperformed US markets for the first time in years, while AI‑linked tech, healthcare, and commodities drove sector leadership. Overall, the MSCI ACWI gained +22.3% for the year, with Q4 alone adding +3.4%.
- MSCI ACWI (Global Equities): +3.4% in Q4, +22.3% YTD
- US Equities: Modest gains, supported by strong corporate earnings. AI‑linked firms (Alphabet, NVIDIA, Microsoft) delivered stellar results, offsetting valuation concerns.
- Non‑US Equities: Europe, Asia, and emerging markets outperformed, aided by a weaker US dollar and attractive valuations.
Major Equity Indexes – Q4 & Full Year 2025
Global markets ended 2025 with strong gains: the S&P 500 rose +17.9% for the year (+2.7% in Q4), non‑US equities outperformed for the first time in years, the US dollar weakened, and commodities—especially precious metals—posted standout returns with gold and silver surging over 60%.
- S&P 500: +2.7% in Q4, +17.9% YTD. Gains concentrated in large tech (“Magnificent 7”), though value stocks staged a comeback.
- Russell 2000 (Small Caps): +2.2% in Q4, lagging large caps.
- Global Equities (MSCI ACWI): +3.4% in Q4, +22.3% YTD. Non‑US equities outperformed US markets, driven by weaker USD and attractive valuations.
- Europe & Asia: Strong gains, benefiting from rotation away from US tech and currency tailwinds.
Fixed income markets delivered strong gains in 2025, with Q4 marked by yield curve steepening, tighter credit spreads, and the Federal Reserve’s pivot toward easing. US Treasuries ended steady, while Japanese yields surged, and global bonds benefited from “shadow QE” liquidity support.
<Source: Morningstar Direct>
Portfolio Performance As of December 2025
Total Return in USD
<Source: Morningstar Direct>
Total Return in MYR
<Source: Morningstar Direct>
Comments:
P4 to P10 investment have high exposure to iShares Core MSCI Emerging Markets ETF, iShares Core MSCI EAFE ETF and Vanguard 500 Index Fund ETF that have influenced the strong positive performance. Global equities market in general has perform very well in the recorded performance period. The performance of the funds in MYR was affected by the weakening of USD in 4th quarter 2025.
Global Economic Growth Outlook (2026)
Growth Forecasts
- IMF: World GDP growth at 3.3%, steady from 2025, supported by tech investments but vulnerable to trade disruptions and reassessment of AI productivity gains.
- Drivers: AI-driven infrastructure investment, tech-led expansion, global diversification.
- Risks: Trade tensions, energy constraints, and potential overestimation of AI productivity gains.
Sources: JP Morgan, Goldman Sachs, Deloitte, IMF, Morningstar, MIDF Research, DQYDJ, MSCI, Bloomberg, Principal Malaysia, Hong Leong Bank, Bank Islam Malaysia, New Straits Times
Disclaimer:
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.
