Market review Q1 2025

During the first quarter of 2025, the FTSE All World, a representative global equity index, declined 4.1% in sterling terms and 2.0% in local currency terms. Sterling strengthened against the US dollar over the period. Within equities, Europe and the UK were the strongest regional markets. Emerging markets and Asia Pacific also gained ground in local currency terms. Meanwhile, Japan and the US fell back. Growth stocks were outpaced by value stocks over the quarter. In a period that saw Donald Trump inaugurated as US president for the second time, US equities declined as a result of trade tariff worries and an increase in negative sentiment towards the technology sector. Indeed, just after quarter end the US announced a broad range of trade tariffs which led to initial falls in equities markets globally, weakness in the US dollar and a fall in government bond yields in the US and elsewhere. In bonds, during a volatile quarter, the ICE BofA Global Government Index saw a marginal decline of 0.1% in sterling terms but gained 0.8% in local currency terms.