| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
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| - | - | - |
Brighton Jones delivered their Q4 2025 investment update highlighting market resilience despite significant volatility. Every market segment posted positive returns in 2025, with international equities leading at nearly 34% return, roughly a third from currency tailwinds as the dollar weakened. The US stock market demonstrated classic volatility patterns, dropping 20% earlier in the year before recovering to close with 16% total return. Trade policy created major market disruption when President Trump announced sweeping tariffs on April 2nd, causing panic selling until a 90-day negotiation pause was announced. The Federal Reserve cut rates by 175 basis points over five quarters while longer-term yields remained elevated due to inflation concerns. The dollar declined 11% from January highs but remains within its three-year trading range. Fixed income delivered strong results with the total bond market returning over 7%. Brighton Jones maintains a moderate conservative stance emphasizing global diversification, viewing their fundamentally-weighted equity portfolio as better positioned than cap-weighted indexes for the next decade.
Brighton Jones maintains a globally diversified approach emphasizing resilience through market volatility, with a moderate conservative risk stance that balances international equity exposure against currency fluctuations while positioning for normalized interest rate environments.
The firm maintains a moderate conservative stance towards risk positioning while emphasizing global diversification benefits. They are more constructive on the return potential of their globally diversified equity portfolio than indexes such as the S&P 500 for the next decade, noting healthy return prospects for fundamentally-weighted indexes that overweight value stocks, high profitability companies, and smaller market capitalizations.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 7 2026 | 2025 Q4 | - | diversification, Dollar, global, inflation, rates, Resilience, Trade Policy | - | 2025 has been marked by resilience with equities pushing higher despite episodes of volatility, international leadership emerging after years of US dominance, and fixed income delivering strong positive returns. The experience of 2025 fits the story perfectly: despite a 20% drop earlier in the year, the US stock market closed the year with a 16% total return. It's a reminder that volatility and setbacks are a normal part of investing, and that keeping a long-term perspective is essential. President Trump unveiled his long-awaited tariff plan on April 2nd, with measures far more sweeping than the expected modest 10% tariffs. The surprise sent shockwaves through global markets, sparking panic selling as investors recalibrated the potential impact on trade, supply chains, and corporate earnings. On April 9th, Trump announced a 90-day pause on the newly implemented tariffs, giving each country an opportunity to negotiate a trade deal before higher rates would take effect. The US dollar declined ~11% since January, but after zooming out for context, the dollar index sits slightly below its pre-election level. The dollar has spent the past three years oscillating within a 100-115 range, and over fifteen years, the prevailing trend has been upward. Currency swings are just one factor among many rather than the primary driver of outcomes. The Federal Reserve has reduced the Fed Funds target rate by 175 basis points over the past five quarters, from 5.00% to 3.75%. Yet yields on Treasury securities with maturities beyond five years have risen modestly, reflecting concerns that inflation may prove stubborn. The yield curve is moving back toward normal, with short-term yields easing and long-term yields staying elevated. Elevated inflation has been an ongoing concern for consumers and a key driver of investment returns since 2022. The Federal Reserve has made significant progress: inflation has fallen from a peak of 9% in June 2022 to 2.7% in the most recent readings. Some economists expect inflation to ease further in early 2026 as elevated monthly readings roll out of the 12-month calculation. |
| Oct 8 2025 | 2025 Q3 | - | - | - | |
| Jan 15 2025 | 2024 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
DollarDollar depreciated -9% against trading partners in 2025, worst year since 2017. De-dollarization trend accelerating as world shifts away from US. Reduced net dollar exposure from 25% to 8% following geopolitical tensions and superpower positioning concerns. |
Depreciation De-dollarization Reserves Geopolitical |
InflationInflation has continued to be a persistent feature in Japan and has prompted changes in both corporate and consumer behavior. Importantly, inflation has fed through to corporate earnings and equity performance. Companies that have successfully passed on higher costs to consumers have benefited from improved operating margins. |
Inflation Corporate Earnings Operating Margins Consumer Behavior Cost Pass-through | |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
Resilience2025 tested the fund's thesis severely with a bankruptcy, major customer losses, and cyber-attacks, yet delivered 17.45% net returns. The manager emphasizes that edge comes from exploiting inefficiency rather than avoiding adversity, demonstrating portfolio resilience through active management. |
Adversity Active Management Drawdowns Volatility | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact |
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