Macquarie Climate Solutions Fund Q2 2025 Commentary

2025-08-13 10:39:00 ET

Market review

Global markets rallied strongly during 2Q25, led by growth stocks, as the Trump administration eased its most severe tariff threats, reducing fears of escalating trade tensions. This policy shift boosted risk assets and improved business sentiment by alleviating concerns over extreme tariffs and disrupted supply chains. Consumer confidence also rebounded by quarter-end, supported by easing inflation expectations. However, geopolitical tensions in the Middle East spiked, culminating in a brief but intense 12-day conflict involving Israel, Iran, and the US, which sent shockwaves through global markets and raised concerns about broader geopolitical risks. The US Federal Reserve (Fed) maintained its cautious “wait and see” approach, leaving interest rates unchanged amid uncertainty over tariffs' potential impact on inflation. Meanwhile, market enthusiasm for innovative technologies surged, driven by renewed interest in artificial intelligence ((AI)) and rising power demands from data centers. This momentum provided a boost to the technology sector and power generation companies, highlighting the growing significance of AI and data infrastructure in shaping the global economy. The Fund's benchmark, the MSCI ACWI (All Country World Index) Investable Market Index (IMI), gained 11.62% (net) during the quarter....

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