2025 has been a “standard” year to date in modern markets, and by “standard”, we mean; volatility, growth, political tension & sprinkling of uncertainty albeit with a glimmer of light at the end of the tunnel. Update after update, the same themes will always occur, such is the nature of markets.
Fuelled by “liberation” day threats, and fear of the impact of same on global inflation levels had world equities closing out Q1 in the red by 5.9% in euro terms, pricing in what was to come just a couple of days later. Fast forward those days, and true impact of tariff talk rang through to world equities, with the all-world index closing the day at -16.4% on the 9th of April. In the following weeks and months, we saw that the true extent of tariffs was not as bad as initially appeared, with deals being struck across major markets, to the relief of the investor.
Following the low of April, we saw consecutive resilient months in markets up to 13th of June 2025, when an escalation in the Iran Israel conflict wobbled the markets momentarily, stagnating a bullish recovery in markets. Much like many geopolitical events, markets priced in their impacts, and moved on following the successful de-escalation of tensions, with many considering the war to be contained.
The proceeding months seen normal business resumed, with major world indices all registering all-time highs, in an impressive flex of resilience from global markets. Fuelled by interest rate cuts in the US, coupled with strong communications and tech industries, and controlled level of inflation in the EU, global markets closed out Q3 with an impressive 19.4% swing, with the world index at 3.2% in euro terms on the 30th of September.
When we apply all the above to practice, and look at this from a fund’s perspective, despite volatility the 60/40 portfolio is up 3.20% year to date, a specialized tech fund is up 4.40%, while a diversified 100% equities fund is up 4.07%.
Many of us reading this blog may be oblivious to the extent volatility took on our funds, however this is not a negative thing. Ensuring you have a plan, and not being reactionary is a core principle to investing. Should someone have divested at the lows of 16.4%, they would not have reaped the rewards of the 19.4% recovery. This year’s events to date and the markets response underscores the importance of having a plan and sticking to your investment principles.
As always, if there is anything in this blog that you would like to discuss further, please reach out to us here in CMCC Financial Solutions to talk more.
We will follow this up in the coming weeks looking ahead to the final quarter, and further breaking down the impact of Budget 2026, particularly the changes announced on exit tax!
