Broad-Based Gains Accelerate in Q3

The third quarter of 2025 marked a sharp acceleration in global equity market gains, lifting year-to-date (YTD) returns across all major indices. As of 30 September 2025, global equities rose +18.63%, with developed markets surging +26.43% and emerging markets advancing +24.97%. Strong earnings growth, easing inflation, and renewed investor optimism helped drive the momentum.

<Source: Morningstar Direct Data as of 30 September 2025 (Regional, market, and fixed income indices are based on the respective Morningstar total return index. Gold, platinum, and silver prices are based on the LBMA Price PM>

Equity Markets: Asia and Emerging Markets Lead Global Rally

Developed markets extended their lead, with Europe (+28.34%) topping regional returns. The region benefited from improved macroeconomic indicators, resilient corporate profits, and a more accommodative stance from the European Central Bank. In the US, equities gained +14.57%, supported by stable inflation and sustained consumer demand.

Asia’s performance was particularly strong:

• Korea soared +56.15%, powered by its tech sector, especially AI and semiconductors.
• China rebounded with +41.29%, thanks to targeted government stimulus and foreign capital inflows.
• Japan (+22.36%) and Singapore (+25.26%) also posted solid gains amid export strength and stable policy environments.
• Taiwan (+25.48%) mirrored Korea’s tech-driven momentum.

Among other emerging/frontier markets:

• Brazil (+39.62%) continued to benefit from favourable commodity cycles.
• India (-1.37%), Pakistan (-12.69%), and the Philippines (-3.53%) underperformed, weighed down by political and fiscal pressures.
• Indonesia (+4.16%), Malaysia (+4.89%), and Thailand (-0.66%) delivered mixed results, reflecting diverging domestic economic outlooks.

Commodities: Precious Metals Surge, Oil Softens

Explosive gains in precious metals dominated commodities:

• Platinum: +72.07%
• Silver: +59.75%
• Gold: +46.61%

These rallies reflected increased investor demand for inflation hedges and safe-haven assets amid geopolitical tensions.

In contrast, Brent Crude dropped -9.24%, amid weak demand growth and a steady supply outlook.

Note: Brent crude is a light, sweet, North Sea oil blend used as a global benchmark for crude oil pricing, particularly for oil from Europe, Africa, and the Middle East.

Fixed Income: Moderate Gains Amid Policy Clarity

Bond markets posted positive YTD returns as central banks signalled a pause in monetary tightening:

• Global Core Bond Index: +7.64%
• US Core Bond Index: +6.09%

Declining inflation expectations and greater policy transparency supported moderate bond performance, with better relative returns seen in global (ex-US) bonds.

Note: Global (ex-US) bonds refers to bonds issued by countries other than the United States.

Market Outlook for Q4 2025

Cautious Optimism Amid Shifting Winds

Entering Q4, investor sentiment remains cautiously optimistic. While macro conditions have improved, several variables may introduce volatility.

Key insights from leading market reports:

• Resilient Growth, Cooling Inflation: Global GDP is stabilising, especially in the US and Europe. Easing inflation is giving central banks room to hold or reduce rates.
• Valuation Gaps and Selective Opportunities: While US large caps look richly valued, opportunities are emerging in small caps and international equities.
• Secular Tailwinds in AI and Clean Energy: Demand for AI-driven infrastructure and metals supporting the energy transition remains a strong market driver.
• Policy Divergence and Election Watch: Diverging central bank paths and the approaching US presidential election could introduce uncertainty. Investors are advised to adopt a more diversified and cautious approach.

Portfolio Performance As of September 2025

Total Returns in USD

<Source: Morningstar Direct>

The annualised returns for P04-P10 continued to track their underlying benchmark closely. As for P01-P03, the performance was affected by returns in Malaysia's fixed-income mutual funds relative to Malaysia's fixed-income index (Markit iBoxx ALBI Malaysia Total Return Index).

Total Returns in MYR

<Source: Morningstar Direct>

The total returns were lower as the Ringgit appreciated by 3.36%, and 6.21% over 3-year, and YTD-2025 against the USD. 1-year and since its inception, the Ringgit against the USD has been relatively flat.

Views and Recommendations: Navigating Opportunity and Risk

As we approach year-end, we recommend investors focus on the following:

• Maintain global diversification, with particular attention to Asia, select emerging markets, and global small caps.
• Consider high-quality fixed income for stability and income in a low-rate, low-inflation environment.
• Stay agile and informed ahead of US political developments and global policy shifts.

Disclosures 

Past data and performance do not indicate future performance. Actual individual investor performance will vary depending on the initial investment, amount and frequency of contributions, allocation changes, taxes and fees during the time frame considered.