Portfolio Manager Commentary

Q4 Market and Portfolio Review

In the fourth quarter of 2025, equity markets produced modestly positive returns, supported by generally upbeat earnings reports from companies, continued solid economic data, and a more accommodating Fed. This capped a strong year for equity markets in 2025.

Despite economic fears and uncertainty causing a market pullback early in the year, 2025 was the third straight year of double-digit gains for US equities. Shortly after President Trump’s inauguration, the new administration embarked on many new initiatives that quickly created uncertainty for the global economy, causing market volatility and weak equity performance in late February and throughout March. Following the announcement of sweeping tariffs in early April, the markets experienced a significant two-day selloff, with most indices approaching or entering bear market territory. However, sentiment reversed almost instantly after a 90-day tariff reprieve announcement and further supported by country-specific trade deal progress. This kick-started a strong rally that continued for the next six months and was buoyed by macroeconomic stability, cooling inflation, Fed rate cuts, and fiscal stimulus from the OBBB, among others. While Big Tech led for most of the year, there were signs of the market broadening out as the market recovered. In large caps, the S&P Equal-Weighted Index beat the overall benchmark by 238bps from October 29^th, and the Russell 2000 Index outperformed the Russell 1000 Index by 400bps from the April 8^th low (Source: Jefferies).