C1W - Market Commentary Q4 2025

• Global markets closed 2025 with strong absolute returns but a clear shift in leadership. While U.S. equities delivered solid mid-to-high-teens gains, international equities materially outperformed, marking the widest gap versus U.S. markets in over a decade and reinforcing the benefits of including global diversification in 2025 after a prolonged period of U.S. dominance.

• Market leadership broadened beneath the surface, even as headline indices masked dispersion. Factor, sector, and regional outcomes varied widely in Q4, with defensive areas such as Health Care outperforming late in the year, commodities and precious metals posting exceptional full-year gains, and pockets of speculative risk unwinding sharply, highlighting a more selective and less uniform market environment.

• Fixed income reasserted its role as a source of income and stability amid shifting policy expectations. Despite a late-year Federal Reserve rate cut accompanied by a more cautious forward path, core bonds delivered steady returns in 2025, supported by attractive starting yields and resilient credit fundamentals.