| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Global equities gained 3.7% in Q4 2025, marking a third consecutive quarterly advance driven by robust AI infrastructure spending, strong corporate earnings, and Federal Reserve liquidity support. The Fed cut rates twice and ended quantitative tightening while launching Reserve Management Purchases. Central bank policies diverged with the ECB holding steady and the BOJ raising rates to 0.75%. Trade developments proved positive as US-China agreements reduced statutory tariff rates from 30% to 15.7%, while South Korea secured favorable trade terms. Commodities surged with industrial metals up 15.8% led by copper's 22.6% gain, and precious metals rallying 15.6% with silver advancing 51%. Regional performance varied significantly, with Japan benefiting from new leadership and stimulus measures, while China struggled despite trade improvements. Key risks include technology sector valuations, labor market cooling, and persistent geopolitical tensions. The investment landscape remains shaped by AI spending, commodity dynamics, and evolving central bank policies amid contained but monitored inflation pressures.
Global markets advanced in Q4 2025 driven by AI infrastructure spending, central bank policy support, and improved trade relations, though regional economic divergence and persistent geopolitical risks create a complex investment environment.
Markets face mixed signals with central bank policy divergence continuing, trade tensions easing but geopolitical risks persisting, and economic growth showing regional variations. The investment landscape remains shaped by AI infrastructure spending, commodity price dynamics, and inflation trends.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 23 2026 | 2025 Q4 | - | AI, Central Banks, commodities, equities, fixed income, Global Markets, inflation, Trade Policy | - | AI infrastructure spending drove global equity markets higher in Q4. Robust AI-driven demand for chips and electronics supported Singapore's economic performance. Taiwan's economy was underpinned by continued robust demand for AI, with exports surging to record levels. Central bank policy divergence shaped markets with the Fed cutting rates twice during the quarter while ending quantitative tightening. The ECB left rates unchanged for the fourth consecutive meeting. The BOJ raised rates by 25 bps to 0.75%, signaling further hikes in 2026. Positive trade developments supported markets as the US statutory tariff rate declined to 15.7% from 30% peak after US-China trade agreements. South Korea soared after reaching a trade deal with the US, significantly reducing tariffs in exchange for investment commitments. Industrial metals surged 15.8% led by copper rallying 22.6% on supply disruptions, declining dollar, and trade progress. Precious metals rallied 15.6% with silver up 51% on supply concerns and renewable energy demand. Energy retreated 5% on mild weather and inventory dynamics. US inflation remained contained enabling Fed policy action, with November CPI rising at slowest pace since early 2001. Eurozone inflation was unchanged at 2.1% in November. Various countries saw moderating inflation trends supporting central bank policy decisions. |
| Oct 24 2025 | 2025 Q3 | - | AI, equities, inflation, Macro, Trade | - | Global equities rose 8.1% as strong earnings, AI infrastructure spending, and easing trade tensions drove markets higher. Wellington highlights divergent central bank policies, elevated inflation, and continued AI-led investment cycles. Managers expect volatility as rate paths and liquidity conditions remain uncertain amid ongoing tariff negotiations. |
| Aug 7 2025 | 2025 Q2 | - | asset allocation, diversification, fundamentals, Macro, risk management | - | The letter highlights diversification across asset classes, geographies, and styles as essential in an uncertain macro environment. Management stresses adapting portfolios to shifting growth, inflation, and policy regimes rather than relying on a single factor. Active risk management and long-term fundamentals anchor positioning. |
| Apr 30 2025 | 2025 Q1 | - | - | - | |
| Dec 31 2024 | 2024 Q4 | - | - | - | |
| Oct 30 2024 | 2024 Q3 | - | - | - | |
| Jun 30 2024 | 2024 Q2 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CommoditiesBull market may be in early stages with most commodities 46% below nominal peaks and 73% below inflation-adjusted highs. Commodity-to-equity ratio near historic lows suggests capital starvation. Current cycle appears only one-third complete compared to historical precedent. |
Cycles Capital Valuation Equities | |
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 | |
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 | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
| 2025 Q2 |
DiversificationThe Fund remains purposefully diversified despite market leadership being narrow and focused on AI. This discipline reflects commitment to effective risk management and appropriate diversification, which weighed on relative performance but positions the Fund well for various market scenarios. |
Risk Management Portfolio Construction Concentration |
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