The London Company International Equity Vs. MSCI EAFE FY 2025 Commentary

2026-01-23 08:29:00 ET

Full Year Market Update

Global equity markets posted strong gains in 2025. In developed markets, the MSCI World index returned 21.1%. International and Emerging markets bested the U.S. markets by a wide margin. The MSCI EAFE and MSCI EM posted impressive 31.2% and 33.6% returns, respectively; meanwhile, the S&P 500 returned 17.9%. Importantly, the weak U.S. Dollar added a little over 10% points to the MSCI EAFE’s return. Economic indicators across the Eurozone, UK and Asia were mixed but provided a stabilizing picture, as the initial shock and uncertainty from U.S. administration trade policies faded throughout the year. The EU kept policy rates unchanged, but the UK eased rates on cooling inflation. In Asia, Japan reported a better economic picture, with GDP growth and stable unemployment. The policy rate was tightened by 25 bps to 0.75%, as the Bank of Japan continues to normalize rates. China was a mixed bag with GDP ticking up and unemployment stable while industrial production slipped. Despite differing policy rate moves, we observed yield curve steepening across most developed markets....

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