Company earnings held up well, economic growth remained steady, and investor confidence gradually strengthened over the course of the year. While headlines were often unsettling, fundamentals continued to matter most, rewarding those who stayed focused on the long term.
Market Highlights — 2025
Most major equity markets finished 2025 comfortably higher. The U.S. led in absolute terms, supported by strong earnings growth and continued investment in technology and artificial intelligence (Ai). Importantly, returns were not confined to one market or sector. Europe surprised on the upside, Japan benefited from ongoing structural reform, and emerging markets enjoyed a long-awaited period of strong performance after several difficult years.
December provided a fitting end to the year. Although there was some volatility early in the month, driven by central bank commentary and year-end positioning, sentiment improved as December progressed. Investors looked beyond short-term noise and positioned for continued growth, allowing markets to finish the year on a positive footing.
Within this environment, the Pie Emerging Companies Fund delivered an outstanding result, returning 44%* over the past year. This was a standout performance, reflecting strong stock selection and exposure to companies with genuine growth opportunities. It was particularly pleasing to see emerging companies deliver such strong returns.
One quieter but important theme throughout the year was the performance of gold. As geopolitical tensions flared and uncertainty rose, gold proved to be a consistent beneficiary. It performed its traditional role as a store of value during periods of stress, reminding investors of the importance of diversification — even when equity markets are performing well overall.
Geopolitical Drivers
Geopolitics remained a constant backdrop to markets in 2025, increasingly shaping what many describe as a new world order. Three leaders, in particular, dominated the landscape.
In the United States, bold and often unpredictable actions — including the recent dramatic seizure of the Venezuelan president — kept political risk firmly on investors’ radars. China continued to apply pressure closer to home, with its overtures toward Taiwan prompting concern across the region and renewed focus on security. Meanwhile, Vladimir Putin remained a destabilising force, influencing defence policy and energy markets well beyond Russia’s borders.
Markets learned to live with these realities. While geopolitical headlines periodically unsettled sentiment, they did not derail the broader upward trend, as economic fundamentals and earnings growth continued to assert themselves.
Outlook — 2026
Looking ahead, we expect many of last year’s themes to continue into 2026. We remain constructive on equity markets, supported by healthy earnings, ongoing innovation and continued investment in AI and productivity-enhancing technologies.
At the same time, geopolitical uncertainty is unlikely to fade. We expect substantial increases in defence spending globally as governments respond to a more complex and less predictable security environment. Investment in defence and AI should continue to support economic growth across both developed and emerging markets.
Portfolios are fully invested, reflecting our confidence in the opportunities ahead. As always, we remain vigilant to potential risks and continue to closely monitor developments, ready to respond if conditions change.
Personal Message
On a personal note, I’m very aware that periods of uncertainty, such as April 2025, can be uncomfortable for investors, even when markets are performing well. History consistently shows that staying disciplined, diversified and focused on long-term goals is usually rewarded.
Our role is to navigate the ups and downs thoughtfully, remain clear-eyed about risk, and continue to look for opportunities where we believe value exists. I want to thank our investors for their ongoing trust and support. We enter 2026 optimistic, vigilant, and committed to delivering strong long-term outcomes.