The year 2025 saw robust expansion across global equity markets, with a notable outperformance by international and emerging markets relative to the U.S. This analysis delves into the performance of the International Equity portfolio throughout the year, which yielded a gross return of 17.6% (16.7% net) compared to the MSCI EAFE index's 31.2%. The portfolio's underlying strategy, focusing on enduring fundamental characteristics, positions it for sustained resilience and growth in a dynamic market landscape.
Global stock markets experienced significant upward momentum in 2025. The MSCI World index, a benchmark for developed markets, recorded an impressive 21.1% return. A key trend observed was the superior performance of international and emerging markets over their U.S. counterparts. The MSCI EAFE and MSCI EM indices both showcased their strength during this period.
The International Equity portfolio's returns for the year stood at 17.6% on a gross basis, translating to 16.7% net of fees. This figure is measured against the MSCI EAFE index, which posted a higher return of 31.2% for the same period. This differential in performance warrants a closer look at the factors influencing the portfolio's results.
A core tenet of the International Equity portfolio's construction is its commitment to long-term sustainability. The managers firmly believe in identifying and investing in businesses that possess fundamental strengths capable of weathering various economic cycles. This approach prioritizes companies with robust balance sheets, consistent profitability, and strong management teams, which are considered crucial for enduring market fluctuations and delivering value over extended horizons.
The portfolio's strategic allocation in 2025 reflected a deliberate focus on these quality attributes. Despite market trends that sometimes favor riskier assets, the portfolio maintained its discipline, aiming to provide a stable and growth-oriented investment vehicle. The emphasis remains on companies that demonstrate not just short-term gains but also the intrinsic value that can generate wealth over many years.
In summary, 2025 was a prosperous year for global equities, particularly for international and emerging markets. While the International Equity portfolio's returns were solid, they trailed the MSCI EAFE index. The underlying investment philosophy, however, remains centered on cultivating a portfolio of fundamentally strong companies, built for long-term endurance and resilience in an ever-evolving global economy.