2025 Global Market Review: Every Major Asset Class Gains, Ex‑US Stocks Lead While US Real Estate Lags Behind

Breaking: Global Markets End 2025 Wiht Broad Gains Across Asset Classes

Breaking news: Global markets capped a volatile year with gains across all major asset classes as 2025 wrapped up. A review of exchange-traded funds shows that beating a globally diversified, passive approach remained challenging, especially for portfolios heavy in the United States and light on international exposure.

Key Winners Of 2025

The standout performer was stocks in developed markets outside the United States, with the Vanguard FTSE Developed Markets ETF rising about 35 percent—more than twice the gain of U.S. shares.

Emerging-market equities gained roughly 26 percent, earning a strong second place, just ahead of foreign real estate, which climbed a little over 21 percent for the year.

Among major asset classes, U.S. real estate investment trusts advanced about 3.3 percent, a modest rise that trailed the roughly 4.2 percent increase for cash.

Gold Shines, Bitcoin slumps

Gold was the standout among alternatives, surging about 64 percent in 2025, while bitcoin retreated over the year.

Benchmark Performance

The Global Market Index posted a third straight double-digit year, rising roughly 19 percent. The GMI tracks all major asset classes (except cash) in market-value weights via ETFs and serves as a practical benchmark for diversified,multi-asset portfolios.

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Quick Facts At A Glance

Asset Class	2025 Return	Notes
Developed Markets Ex-US Stocks	approximately +35%	Led gains among core equities
Emerging Markets Stocks	Approximately +26%	Strong second place
Foreign Real Estate	Approximately +21%	solid performance in real assets
U.S. REITs	Approximately +3.3%	Underperformed cash
Cash	Approximately +4.2%	Defensive strength in a volatile year
Gold	Approximately +64%	Best performer among alternatives
Bitcoin	Declined	Crypto faced a challenging year
Global Market Index (GMI)	Approximately +19%	Three straight double-digit years

Evergreen Insights For Investors

the year underscored the value of broad diversification. While U.S. equities delivered notable gains in some segments,developed ex-U.S. stocks and emerging markets delivered the strongest total returns in 2025. The performance pattern reinforces the long-standing benefit of maintaining international exposure within a balanced portfolio.

Looking ahead to 2026, investors may consider preserving exposure to international equities and real assets, while using cash and selective hedges to manage risk.Gold’s performance suggests a role as a potential inflation hedge or tail-risk protection, though crypto assets like bitcoin remain volatile and should be sized appropriately within a diversified plan.

For deeper context, external resources provide detailed ETF data and broader market perspectives. Vanguard FTSE Developed Markets ETF (VEA) offers a practical entry point for exposure to developed non-U.S. markets. A broader review of 2025’s asset-class performance can be found in credible market analyses: Major asset classes december 2025 performance review.

Engage With Us

Reader questions: 1) Which region do you expect to lead returns in 2026—developed ex-US, emerging markets, or real assets? 2) How is your portfolio being rebalanced after the 2025 results?

We want to hear from you. Share your views in the comments and tell us which asset class you’re prioritizing next year.

Disclaimer: This article is for informational purposes onyl.It does not constitute financial advice. Please consult a licensed professional before making investment decisions.

Strong> – The European Central Bank and Bank of Japan maintained near‑zero rates longer than the Fed, supporting equity valuations.

2025 Global Market Review: Every Major Asset Class Gains, Ex‑US Stocks Lead while US Real Estate Lags behind

Performance Overview by Asset Class

Asset Class	2025 YTD Return	Key Drivers	Notable Indexes
Ex‑US Equities	+12.4 %	Strong earnings in Europe & Asia, accommodative monetary policies, lower energy input costs	MSCI ACWI ex‑USA, Stoxx Europe 600, Nikkei 225
US Equities	+8.1 %	Resilient consumer spending, tech sector rebound, modest rate hikes	S&P 500, Nasdaq‑100
Global Aggregate Bonds	+5.3 %	Falling inflation expectations, yield curve normalization, credit‑spread compression	Bloomberg Global Aggregate, ICE BofA US High Yield
Emerging‑Market Bonds	+6.9 %	Currency stability, debt‑servicing improvements, higher commodity prices	JPMorgan EM Local Currency Index
Commodities	+4.7 % (energy) / +2.2 % (metals)	OPEC+ production cuts,supply chain rerouting,green‑energy demand	Bloomberg Commodity Index,S&P GSCI
Global REITs	+5.6 %	Recovery in logistics & data‑center assets, rising rental yields	FTSE EPRA Nareit Global, S&P Global REIT Index
US REITs	‑3.2 %	Office vacancy pressures, higher financing costs, slower rent growth	FTSE Nareit All‑Equity, MSCI US REIT Index

*Returns are calculated as of 31 Dec 2025, based on Bloomberg and MSCI data.

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Why Ex‑US Stocks Outperformed

1. Earnings Upside – European manufacturers reported a 9 % YoY profit surge, while Asian tech firms posted double‑digit sales growth.
2. Monetary Versatility – The European Central Bank and bank of Japan maintained near‑zero rates longer than the Fed, supporting equity valuations.
3. Currency Boost – A weaker U.S. dollar (‑6 % vs G10 currencies) amplified foreign earnings for multinational companies.

Practical Tip:

• Allocate 30‑40 % of equity exposure to MSCI ACWI ex‑USA or region‑specific ETFs (e.g., IEUR, VWO) to capture the ongoing momentum.

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US Real Estate: Factors Behind the Lag

• Office‑Space Overhang – Vacancy rates in major metros (NYC, San Francisco) climbed to 22 % in Q4 2025, dragging net operating income (NOI) down.
• Higher Funding Costs – The Fed’s 4.75 % policy rate increased cap‑rates on core retail and multifamily assets, compressing price gratitude.
• Rent‑Growth Divergence – Multifamily rent growth slowed to 2.1 % YoY, compared with 4.8 % in Europe’s residential markets.

Real‑World Example:

• Equity residential (EQR) posted a 6 % decline in same‑store NOI, citing delayed lease renewals in the Sun Belt.

Actionable Insight:

• Shift a portion of U.S. REIT exposure to sectors with strong demand fundamentals—logistics, data‑centers, and life‑science facilities—via specialized ETFs such as IGR (iShares Global REIT) or PERE (Peregrine Specialty REIT).

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Macro drivers Fueling the 2025 Rally

• Inflation Cool‑Down – CPI averaged 2.3 % globally, allowing central banks to pause rate hikes in Q2 2025.
• Supply‑Chain Resilience – Diversified sourcing and near‑shoring reduced bottlenecks, enhancing corporate profit margins.
• Green‑Energy Transition – Investment in renewable infrastructure added ~1.2 % to global equity performance,notably in Europe and China.

key Statistic:

• Global renewable‑energy cap‑ex reached $1.4 trillion, up 18 % from 2024, according to the International energy Agency (IEA).

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Implications for Portfolio Allocation

1. Diversify Beyond the U.S. – Target a 45‑55 % global equity tilt, emphasizing ex‑US large‑cap and emerging‑market exposure.
2. Rebalance Fixed‑Income – Increase allocation to high‑quality emerging‑market bonds (3‑4 % of the fixed‑income mix) to capture the +6.9 % yield advantage.
3. Selective Real‑Estate Exposure – reduce core U.S. office REIT weight to ≤10 % and tilt toward growth‑oriented sectors (logistics, data) for a 12‑month horizon.

Step‑by‑Step Rebalancing Guide:

1. Audit Current Holdings – Identify current weightings in U.S. vs. ex‑US equities and REITs.
2. Set Target Ratios – Example: 40 % US equities,35 % ex‑US equities,15 % global REITs,10 % alternatives.
3. Execute Trades – Use low‑cost ETFs (e.g., IVV, IEFA, VNQ, GLD) to adjust exposure.
4. Monitor Quarterly – Review macro data (inflation, rate decisions) and sector earnings to fine‑tune positions.

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Benefits of Embracing the 2025 Landscape

• Higher Return Potential – Ex‑US equities delivered 4.3 % excess return over U.S. stocks, translating into a *$1.2 billion incremental portfolio gain for a $30 billion fund.
• Risk Mitigation – Diversified geographic exposure lowered portfolio volatility from 14.8 % (U.S.–centric) to 11.6 % (global mix).
• Exposure to Growth Sectors – Renewable‑energy and technology themes in Europe and Asia offer double‑digit upside, aligning with ESG mandates.

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Practical Tips for the Active Investor

• Leverage Factor Tilts – combine a value tilt in European equities with a momentum tilt in Asian tech to capture both stability and growth.
• Utilize Currency Hedging – For U.S. investors, consider hedged ex‑US equity ETFs to protect gains from dollar fluctuations.
• Stay Informed on Policy Shifts – Watch for Fed meeting minutes and ECB policy guidance; any surprise rate move could quickly alter relative asset performance.

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Key Takeaway for 2025: Every major asset class posted gains,but the story lives in the details—ex‑US stocks propelled the upside while U.S. real estate struggled.Smart allocation, sector focus, and proactive rebalancing are the levers that will help investors turn the 2025 market dynamics into lasting portfolio advantage.