Key Points
- US tariffs added to market volatility in the fiscal year (FY) ended June 30, 2025. Nevertheless, most risk assets ended the year higher, supported by strong earnings ahead of tariff uncertainty and the prospect of continued central bank policy easing to support growth.
- Dispersion in returns narrowed across equity regions and factors in FY 2025, as performance broadened beyond the US and large-cap technology stocks.
- Bond performance improved from the prior year as monetary easing drove short-dated yields lower. A weaker US dollar supported the outperformance of emerging markets (EM) local currency (LC) bonds.
- Interest rate–sensitive assets delivered healthy gains. Gold surged to fresh highs on heightened trade and geopolitical tensions and meaningfully outperformed other major asset classes.