Q4 2025 Market Commentary
The following market commentary provides context for the investment performance of your charitable assets.
From Cambridge Associates, investment advisor
Global equities (+3.3% for the MSCI All Country World Index) advanced during the quarter as investors looked past episodic volatility and sector-specific concerns, focusing instead on resilient economic activity, robust corporate earnings, and ongoing artificial intelligence (AI) developments. These factors, alongside moderating inflation and a shift toward more accommodative central bank policy, supported risk sentiment and contributed to outperformance within emerging markets (+4.7% for the MSCI Emerging Markets Index) and select developed countries.
Developed markets ex US equities (+5.2% for the MSCI World ex US Index) outperformed US stocks (+2.3% for the MSCI US Index) as the global economy remained resilient amid policy uncertainty and shifting trade dynamics. Economists broadly maintained or modestly raised near-term global GDP growth expectations, even as the full impact of tighter monetary policy and recent trade actions remained a source of debate. Notably, the United States and China finalized a limited trade agreement, easing tensions and reducing tariffs, while additional positive trade developments emerged in Europe and the UK (+6.2% for the MSCI Europe Index). The resolution of the US government shutdown further underpinned market confidence.
Central banks played a pivotal role in shaping market performance during the quarter. The US Federal Reserve delivered two 25 basis point rate cuts, prioritizing employment risks as labor market data softened and inflation moderated. The Bank of England also reduced rates in response to slowing inflation and rising unemployment, while the European Central Bank maintained its policy stance amid near-target inflation and economic resilience. In contrast, the Bank of Japan began policy normalization, raising rates to address rising wages and prices.
US fixed income assets rose (+1.1% for the Barclays Aggregate Bond Index) during the quarter, primarily driven by the pivot in Federal Reserve policy and stabilized market conditions. Credit markets remained robust, with corporate credit spreads tightening further amid strong investor demand for yield. Non-US sovereign yields were mixed, reflecting divergent fiscal and economic conditions.
The US dollar exhibited volatility, strengthening early in the quarter on safe-haven flows and positive economic data, but later giving up gains as expectations for further Fed easing grew. Precious metals surged, with silver and gold posting exceptional returns, while commodity markets reflected improved global growth sentiment.
Overall, Q4 2025 was characterized by resilient risk appetite, ongoing adaptation to evolving monetary policy, and a continued focus on technological innovation as a driver of market performance. Despite sector-specific headwinds, most notably in technology, broad-based gains across asset classes underscored the market’s confidence in the durability of the global economy.
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