NYLI Epoch International Choice Fund Q1 2025 Commentary

2025-07-02 23:55:00 ET

Market Review

• For the 3-month period ending March 31, 2025, the MSCI EAFE Index rose 6.9% (in USD). Performance was broad, with nine of eleven sectors posting gains. The best performing sectors were financials (up 15.2%), energy (up 15.2%), and utilities (up 12.5%). The worst performing sectors were information technology (down 2.8%), consumer discretionary (down 0.7%), and real estate (up 1.3%). The five largest countries within the benchmark all rose during the quarter, with Japan up 0.3%, United Kingdom up 9.7%, France up 10.3%, Switzerland up 11.4%, and Germany up 15.5%.
• Regionally, Europe delivered the strongest returns. Stocks were buoyed by investor enthusiasm around the continent's pledge to increase defense spending and Germany's fiscal pivot from austerity to stimulus. These positives outweighed the negative overhang of looming tariffs, at least temporarily. The information technology sector performed the worst, pressured by worries around the secular artificial intelligence theme. Purportedly cheaper and more efficient large language models have been developed by Chinese companies such as DeepSeek and investors continue to question the ultimate return on investment of massive capital expenditures by the hyperscalers.

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