Major Asset Classes | January 2025 | Performance Review
January was kind to the major asset classes, marking a strong rebound from a rough month in December. Across-the-board gains last month suggest the year is on a positive trajectory for markets. But the good news became irrelevant in a heartbeat after President Trump announced sweeping tariffs on Canada, Mexico and China – news that threatens to lift inflation, slow growth, upend the global trading system and roil markets.
One can only guess what the numbers for February will look like. For now, the start of what appears to be a global trade war ensures that uncertainty has spiked. In what may be a new world order for the global trading system, investors will need to adjust. “The market needs to structurally and significantly reprice the trade-war risk premium,” says George Saravelos, head of foreign-exchange research at Deutsche Bank.
Meanwhile, let’s review what may a final snapshot of the old-world order through the prism of the major asset classes, based on a set of ETFs. Last month’s top performer: foreign stock markets in developed nations ex-US (VEA), which rose 4.4%.
All the main slices of global markets rose last month – the first month of across-the-board winners in nearly three years.
