Global markets in review: Opportunities in the year ahead

Our annual CIO Insights Report is now available, providing investors with a thorough review of last year’s global market performance and an outlook on the trends expected to influence investment decisions going forward. Compiled by our Chief Investments Officer Jordan Portelli, the report examines the forces that shaped 2025 and outlines key considerations as markets transition into 2026. 

Here are some of the main themes addressed in this year’s report.  

Volatile markets, resilient returns 

The global investment landscape in 2025 delivered strong returns, but not without challenges. Equity markets reached record levels despite a notable correction in April, reinforcing the idea that volatility and opportunity often coexist. 

Geopolitical factors were front and centre, particularly U.S. trade policy under President Trump. Uncertainty surrounding tariffs created headwinds early in the year, dampening sentiment. As policy clarity improved, markets regained focus on economic fundamentals. 

Investor confidence recovered as uncertainty faded, with artificial intelligence emerging as the primary driver of equity market gains. 

Changing markets dynamics 

A defining characteristic of 2025 was the transformation in market behaviour. Elevated intraday volatility has become increasingly common. 

Rising retail investor participation, now estimated at 20–25% of overall market activity, contributed to sharper short-term movements. While this environment can be challenging, it also rewards investors who remain disciplined and view excessive volatility as an opportunity rather than a threat. 

Key reflections from 2025 

U.S. growth exceeds expectations 

Despite widespread caution among economists, the U.S. economy once again outperformed. Growth remained stronger than in the euro area, supported by resilient consumer demand even as inflation stayed elevated. 

Artificial intelligence continued to underpin U.S. equity performance and is expected to remain a significant growth driver into 2026, supported by efficiency gains and broader adoption across industries. 

Central banks and policy uncertainty 

The Federal Reserve attracted significant attention amid heightened market swings. President Trump renewed criticism of the Fed’s pace of rate cuts, calling for a more accommodative approach. 

Looking ahead, the anticipated appointment of a new Federal Reserve Chair in 2026 has raised questions around future policy direction and inflation management. 

Europe: Expectations drive performance 

European equity markets also enjoyed a positive year, though gains were largely expectation-led rather than driven by strong economic indicators. In Germany, political developments were influential, particularly the announcement of a €500 billion fiscal initiative spanning 12 years. 

Asia’s mixed performance 

China continued to face economic challenges despite substantial stimulus measures. However, increased openness to foreign investment and progress in AI technologies helped spark a recovery in Chinese equities. 

India emerged as a standout performer, recording economic growth slightly above 8%, even amid the impact of U.S. tariffs. 

Evolving geopolitical landscape 

Progress was observed on several geopolitical fronts. President Trump played a role in securing a ceasefire and initiating peace discussions in Gaza. Additionally, the Russia–Ukraine conflict showed early signs of improvement after three years, supported by U.S.-led mediation efforts. 

Bonds regain momentum 

Bond markets generated positive returns in 2025, with performance led by: 

• Emerging market bonds, benefiting from a weaker U.S. dollar 

• U.S. high-yield bonds, which delivered strong gains 

Investor flows were closely tied to expectations around interest rate cuts, with increased demand in the final months of the year as the Federal Reserve moved to ease policy despite elevated inflation. 

What happened locally? 

Locally, equity markets delivered low to mid-single digit returns, largely driven by large-cap stocks. Liquidity remained limited, and international markets continued to offer comparatively stronger opportunities. 

In contrast, the local bond market remained active, with strong issuance from both new and existing issuers, a trend expected to continue into 2026. 

Currency movements and investor impact 

A major macroeconomic development in 2025 was the depreciation of the U.S. dollar, which weakened by around 12% against the euro. This had a negative impact on euro-based investors with exposure to U.S. assets. 

Concerns over U.S. trade policy, political discourse, and the independence of the Federal Reserve contributed to a reassessment of the dollar’s role as a safe haven. While further weakness remains possible, recent trends suggest currency volatility may be less extreme in 2026. 

Entering 2026 with greater clarity 

Many of the uncertainties that dominated 2025, particularly trade-related concerns, have eased. While markets are entering 2026 with improved visibility, volatility is expected to remain a constant feature. 

Investors are reminded that emotional reactions, such as panic-driven selling, can undermine long-term returns. Ultimately, maintaining exposure over time is more important than attempting to time market movements. 

For a deeper analysis of 2025’s market developments, expectations for 2026, and the investment strategy of Calamatta Cuschieri Moneybase, read the full CIO Insights Report. 

This report was written by our Chief Investments Officer, Jordan Portelli. Jordan holds over 15 years of experience in investment research. He oversees the group’s investment strategy and manages over €250 million in client assets, focusing on fixed income and multi-asset strategies. Jordan has been working with our group since 2016.  

Get guidance on your investments 

Looking to start investing in 2026? No need to do it alone. Our financial advisors are here to help you set up an investment portfolio backed by in-depth research and years of experience.  

You can also invest on your own online through Moneybase, an all-rounded, easy-to-use platform to access over 40 international exchanges, with over 20,000 investment options including stocks, ETFs, bonds, and funds, with a free trade on U.S. exchanges every month.   

This document has been issued by Calamatta Cuschieri Investment Services Ltd (“CC”). CC is licensed to conduct Investment Services in Malta by the Malta Financial Services Authority. This document is prepared for information purposes only and should not be interpreted as investment advice. This document has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. It does not constitute an offer or invitation by CC to any person to buy or sell any investment. No person should act upon any recommendation in this document without first obtaining professional investment advice. Security values may go up as well as down and past performance is not necessarily indicative of future performance, nor a reliable guide to future performance. Currency fluctuations may affect the value of investments and any income derived. This document may not be reproduced either in whole, or in part, without the written permission of CC. CC does not accept liability for any actions, proceedings, costs, demands, expenses, loss or damage arising from the use of all or part of this document. Approved and issued by Calamatta Cuschieri Investment Services Ltd, Ewropa Business Centre, Triq Dun Karm, Birkirkara BKR 9034, Malta. Company registration number C13729.