Today marks the first trading day of the year. As done in previous years, we will recap the changes that we have seen throughout the various asset classes.
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Today marks the first trading day of the year. As done in previous years, we will recap the changes that we have seen throughout the various asset classes. Financial markets delivered strong results across the board, driven by easing inflation, multiple Fed rate cuts, and continued strength in technology and AI-related themes. These trends set the stage for an intriguing 2026, as we continue looking for areas of strength.
Domestic/International Equities
U.S. equities posted solid gains for the year, with the SPDR S&P 500 ETF Trust (SPY) up 17.72%, while the Invesco S&P 500 Equal Weight ETF (RSP) lagged at 11.20%, highlighting continued mega-cap dominance. Small-cap and mid-cap stocks stocks underperformed, with the iShares Russell Midcap ETF (IWR) and small-cap (IWM) returning 10.37% and 12.66%, respectively, as market leadership remained concentrated in the largest names. The Invesco Nasdaq-100 trust (QQQ) was the strongest outperformer within domestic equities, surging 20.77%, fueled by strength in technology and AI-driven growth themes. While domestic equities delivered another strong year in 2025, momentum cooled in the fourth quarter, as Q4 saw returns well below its average for the year.
International Equities
International equities were the strongest relative performer out of all the major asset classes, as the group benefitted from many factors including a weakening US Dollar and broad easing of inflation. The iShares MSCI Emerging Markets ETF (EEM) was up almost 34% and was the best performing ETF representative in the best performing asset class. Over the past year, emerging markets benefited significantly from strong performance in large-cap technology stocks, particularly in countries like China and Taiwan.
Commodities
Commodities delivered mixed results in 2025. The subgroup within commodities that saw the most strength was the precious metals group. The SPDR Gold Shares ETF (GLD) was up over 63% as investors sought safety amid much geopolitical tensions. This marks one of the strongest years ever for Gold. Additionally, although not shown in the table, Silver also had a record year as the iShares Silver Trust (SLV) was up over 140%.
Fixed Income
Fixed income delivered a strong rebound in 2025, supported by three Fed rate cuts that drove yields lower and boosted demand for duration. Long-term Treasuries led the way, with the iShares 7-10 Year Treasury Bond ETF (TLT) gaining over 8%, outperforming its peers. Meanwhile, the iShares Core U.S. Aggregate Bond ETF (AGG) was the relative laggard, posting a 7.19% return for the year.
