2025: The year in review
Last year proved to be a year of strong gains across virtually all asset classes, in South Africa as well as in most regions abroad. This came despite persistent geopolitical uncertainty, Trump’s policy volatility, and stagnant growth in South Africa. Portfolio manager MIKE TOWNSHEND looks at the year that was.
We had warned that Trump’s unpredictability could increase investment risk. This played out quickly after his January inauguration, with the introduction of punitive tariffs, tightened border controls, cuts to key government departments and a sweeping reset of US foreign policy.
Markets were spooked. By the end of the first quarter, global equities had dropped more than 15% on fears that growth would stall. But as the administration backtracked on some of its harsher policies, sentiment stabilised. A sharp rally followed in the second half of the year, supported by the US Federal Reserve cutting interest rates three times from September onwards.
The S&P 500 gained 17% in 2025 — its third consecutive year of double-digit returns — driven by continued investor excitement around artificial intelligence. But international equities did even better, helped by US dollar weakness. Developed markets in Europe and Asia posted better returns, with standouts like South Korea (+80%) and China’s Hang Seng Index (+36%).
Commodities also enjoyed a stellar year. Gold surged to record highs as investors sought safety from economic uncertainty and geopolitical risk. Precious metals like platinum and silver followed suit. Copper, too, climbed to fresh peaks. Oil was the outlier, falling over 20% due to ample supply and subdued demand. Some parts of the commodity complex are starting to look frothy.
This environment suited South Africa well. The country exports precious metals and imports oil, so the commodity mix was favourable. Local assets rallied hard. The JSE was one of the best-performing global markets in 2025, gaining 62% in US dollars. Resources stocks more than doubled, while financials and industrials rose more modestly — around 20% in rand terms.
The South African bond market also had a good year. Lower inflation, falling interest rates, and a drop in perceived country risk pushed yields down. The All Bond Index rose by a quarter over the year. The broad rally across SA assets — despite weak GDP growth — was supported by strong commodity prices, better electricity supply, improving rail and port performance, and a more credible fiscal stance. The rand, long a proxy for investor sentiment, rallied sharply. It ended the year at R16.59 to the dollar, but we expect some pullback in 2026.
The flagship Foord International Fund had a standout year. It gained 31% in US dollars, rewarding the patience of long-term investors. The fund benefited from broad geographic diversification and a long-standing underweight to the expensive US market, in favour of better-valued Chinese consumer and tech shares. This positioning hurt in 2024 but paid off handsomely in 2025. The Foord Global Equity and Foord Asia ex-Japan funds delivered market-matching returns, despite being constructed very differently.
The Foord SA funds achieved strong absolute returns, though our cautious stance in more speculative, cyclical areas meant we lagged peers. That’s a trade-off we’re comfortable with. Preserving capital and managing downside risk remain our top priorities. All multi-asset class funds returned more than 15%, while the Foord Equity Fund gained 21.5%. The Equity Fund has compounded at over 18.9% p.a. over three years. We continue to find attractive value in select local counters.
As I write this article, 2026 has begun with a jolt. The brazen US abduction of Venezuela’s President Nicolás Maduro and his wife shocked the world. Washington’s desire for Greenland is threatening transatlantic unity. Trump’s assault on the Fed continues with US Department of Justice criminal probe of Chairman Powell. Mass protests in Iran are testing the regime’s grip there. And Russia’s war on Ukraine grinds on with little practical response from Europe, which is in political malaise. It’s a volatile start to what could be a fraught year. Our portfolios remain broadly diversified and ready to weather what comes next.