China’s President Xi has announced the country will hit their 5% growth target in 2025 despite a turbulent year of political and economic uncertainty.
In 2025 China set a ‘modest’ 5% growth target, in-line with recent years however, still below historic growth targets. Despite being a ‘modest’ growth target, it’s still significantly higher than most developed economies like the US and UK.
They edged over the line in 2024, and it looks like they’ll do the same this year. This is despite the significant uncertainty over US tariffs. At one point the US implemented a 145% tariff on all imports from China before a deal could be made between the countries to lower the tariff rate.
Many were expecting tariffs to significantly hurt exports, a vital part of Chinese growth, as the US is a key trading partner for the country. But exports have held up relatively well as companies have looked to other international markets away from the US.
Initial data released in early January shows that exports to the US had fallen 20% compared to a year ago but other trading partners have helped carry the slump with exports to Southeast Asia and the EU growing by 13.4% and 8.4% respectively. Overall the data suggests exports from China grew by 5.5% in 2025 compared to 2024.
This has helped China once again meet their growth target despite the issue of tariffs.
But it’s not just tariffs that the Chinese economy has been grappling with. The housing market has continued to struggle, and consumer spending has been lacklustre.
Economists believe that the housing crisis will likely continue in 2026. The housing market has fallen for the fifth year in a row, with developers struggling to sell newly built homes as well as tough funding conditions.
The consensus is that China will continue to grow around 4.5% in 2026. They believe exports will remain resilient and continue to drive growth. Exports to emerging economies have outpaced developed economies in recent years and this will be a key growth area for the country.
Fed independence called into question, again
The US Federal Reserve’s (Fed) independence has again been questioned. The Department of Justice (DoJ) has launched an investigation into current chairman Jay Powell, threatening a criminal indictment over testimony he gave last year in relation to Fed building renovations.
Powell believes the investigation is politically motivated, and US President Donald Trump is angry with the pace of interest rate cuts. Trump has made it clear previously that he believes Powell has been too restrictive and that interest rates should be significantly lower. This is despite the Fed lowering interest rates three times last year.
Powell’s term as chairman ends in May this year but he could still stay as a voting member until 2028. Trump will announce his replacement soon with many expecting the new chair to pay greater attention to the President’s views compared to Powell, putting the independence of the Fed into question.
If the Fed lowers interest rates too quickly, we could see a spike in inflation. Something the US has been grappling with for the last few years. Inflation is currently 2.7%, above the 2% target. But with Trump’s tariffs and immigration policy causing uncertainty this could change very quickly.
How have stock markets performed?
Over the 12 months to the end of December the broader global stock market has risen 14.41%.* As always though, past performance isn’t a guide to future returns.
The South Korean market was one of the best performing markets, returning 86.93% in 2025. They have benefited significantly from various factors including the advancements of artificial intelligence (AI).
Several semi-conductor and AI companies are based in the region and demand for chips has increased significantly over the last 12 months. There has also been a number of government reforms which have increased confidence in the Korean stock market.
The Indian stock market was one of the weaker performers, returning -2.89% over the last 12 months. After recent years of strong performance, investors may be looking for new opportunities elsewhere especially as India is exposed to the uncertainty around US tariffs.
The US stock market, which makes up a large part of the global market grew 9.64%. The US market has had a volatile 12 months. After a strong start to the year following the hopes of a pro-market agenda by President Trump, markets fell considerably in April after he announced his liberation day tariffs. Since then, there’s been a gradual recovery as tariffs, for the most part, were eventually rolled back.
At a sector level, the global materials sector performed best, returning 23.23%. Consumer staples stocks lagged the wider market, returning 1.73%.
31/12/2020 To 31/12/2021 | 31/12/2021 To 31/12/2022 | 31/12/2022 To 31/12/2023 | 31/12/2023 To 31/12/2024 | 31/12/2024 To 31/12/2025 | |
|---|---|---|---|---|---|
MSCI AC World | 20.14% | -7.62% | 15.88% | 20.13% | 14.41% |
MSCI ACWI/Consumer Staples | 12.74% | 5.84% | -2.66% | 6.61% | 1.73% |
MSCI ACWI/Materials | 16.33% | 0.06% | 6.31% | -6.08% | 23.23% |
MSCI India | 27.83% | 4.17% | 14.45% | 14.42% | -2.89% |
MSCI Korea | -7.07% | -19.99% | 16.62% | -21.71% | 86.93% |
MSCI USA | 28.14% | -9.31% | 19.93% | 27.32% | 9.64% |
How have our Wealth Shortlist funds performed?
Global funds on the Wealth Shortlist delivered mixed performance over the past year, with some faring better than others.
A year is a short time to assess the skills of a fund manager though. Managers with different strengths, styles and areas of focus will perform differently over time.
Investing in funds isn't right for everyone. Investors should only invest if the fund's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a long-term diversified portfolio.
For more detail on each fund, it's charges and specific risks, please see the links to their factsheets and key investor information below.
Artemis Global Income was the best-performing fund in the global sector of the Wealth Shortlist over the past 12 months.
Managed by experienced investor Jacob de Tusch-Lec, the fund returned 45.08%* versus 14.41% for the MSCI AC World Index and 12.67% for the average fund in the IA Global Equity Income sector. While we typically expect the fund to perform strongly in a rising market, the recent level of outperformance is beyond our expectations and it’s unlikely to consistently perform that way in the future. Past performance isn’t a guide to future returns.
We like de Tusch-Lec’s contrarian approach to investing, but it can lead to the fund investing very differently to its peers.
Our analysis suggests de Tusch-Lec’s stock selection has been the main driver of returns over the past 12 months. In particular, selections in Europe and Japan, as well as investments in financial service and industrial companies, have all been strong performers for the fund.
The fund can invest in smaller companies as well as emerging markets which can increase risk. The manager can also use derivatives which if used increases risk. Charges are taken from capital, which can increase the income paid but reduce the potential for capital growth.
Investors should also note that this fund has one of the highest ESG risk profiles of the 100 funds currently under research coverage at HL. The companies within the fund could therefore face increased regulatory scrutiny, reputational damage, and operational challenges, potentially impacting the fund's future performance.
Meet the Manager: Jacob de Tusch-Lec Artemis Global Income
The Lazard Global Equity Franchise was the weakest performing fund in the global sector of the Wealth Shortlist returning -3.43% over the past 12 months.
The fund has a value style of investing which means it can look very different to the benchmark and other funds. This value style has been a headwind for much of the last 12 months as funds focused more on US and technology companies have performed better.
This fund typically doesn’t invest as much in these areas because valuations are higher and haven’t offered as much future performance potential, in the managers’ view. However, the fund did perform very well at the beginning of 2025 when the market fell because of US President Donald Trump’s tariffs and value stocks outperformed which is what we would expect for this fund.
The fund can invest in smaller companies as well as emerging markets which can increase risk. They also can have a relatively small portfolio. This means each investment can contribute significantly to returns, although this approach increases risk.
Annual performance growth
31/12/2020 To 31/12/2021 | 31/12/2021 To 31/12/2022 | 31/12/2022 To 31/12/2023 | 31/12/2023 To 31/12/2024 | 31/12/2024 To 31/12/2025 | |
|---|---|---|---|---|---|
Artemis Global Income | 26.48% | -2.54% | 9.71% | 26.81% | 45.08% |
IA Global Equity Income | 19.01% | -1.32% | 9.41% | 10.98% | 12.67% |
Lazard Global Equity Franchise Fund | 22.55% | 6.79% | 12.31% | -1.76% | -3.43% |
IA Global | 17.95% | -11.05% | 12.45% | 12.49% | 11.17% |
MSCI AC World | 20.14% | -7.62% | 15.88% | 20.13% | 14.41% |