The longest ever US government shutdown ended earlier this year after 43 days. Eclipsing the previous record of 34 days. Government shutdowns are nothing new, the first came in 1976 under Gerald Ford, and Ronald Regan faced eight over his two terms. But they’ve become a feature of the Trump administration. Before this latest standoff, the previous record happened seven years ago during Trump’s first term, alongside two shorter shutdowns that lasted just one and three days.
Shutdowns usually happen when a spending plan cannot be agreed and signed into law by the president. The spending plan must be agreed by both chambers of congress, made up of the House of Representatives and the Senate.
The Republicans currently have a majority in both, but fell short of the 60 Senate votes required, meaning they needed to convince seven Democrat senators to join them and get the bill passed.
What happens when the government shuts down?
In the latest shutdown, thousands of non-essential government workers were furloughed. Other essential workers such as air traffic controllers and law enforcement were expected to work without pay. Their pay is then backdated when the government reopens.
0.1%
Government shutdowns carry potential political and economic costs, with estimates suggesting that each week of a shutdown could shave 0.1% off US GDP growth. Impact that could be amplified as Trump used this as an opportunity to potentially cut jobs which were deemed less important.
Why did the shutdown last so long?
The Democrats were reluctant to pass the spending bill put forward by the Republicans as it would have increased healthcare insurance premiums for millions of Americans.
The shutdown finally ended when the Republicans agreed to hold a separate vote in December relating to the subsidies the Democrats are fighting for.
The Fed cut interest rates again
The Federal Reserve (Fed) cut interest rates to the lowest level in three years as consumer spending and the labour market start to show signs of a slowdown.
The US interest rate is now 3.75% following the 0.25% cut. However, it wasn’t an easy decision as they try and balance the slowing job market and a hesitant consumer, with rising inflation.
Inflation data has been delayed due to the recent government shutdown but in September it was at 3%, well above the Fed’s 2% target, which continued its upward trend since April.
The job market has also showed signs of cracking over the last 12 months. Job openings grew by 12,000 in October, but hiring and resignations were subdued. This underscores uncertainty in the market, something economists call ‘no-hire, no-fire.
The US consumer showed signs of slowdown. Increases in consumer spending slowed to just 0.3% in September after a period of stronger growth.
How have US stock markets performed?
Over the 12 months to November 2025, the US stock market grew 10.50%, though smaller companies lagged far behind their larger peers, returning -0.14%.
It’s been a volatile year. The market initially rallied after Trump’s return to the White House, due to expectations that his pro-market agenda would keep the stock market trending upwards.
But in April he surprised investors by announcing significant tariffs on some of the US' closest trading partners sending markets tumbling. Confidence returned, however, when he paused the additional levies to allow new trade deals, helping the market rebound.
More recently, the market has been volatile as investors continue to scrutinise AI companies which are some of the largest companies in the world. Money has poured into the so-called winners of AI which has seen some of their share prices reach all-time highs. But some investors are fearing it has gone too far and are concerned that the improvements from AI won’t have a material effect on the company’s profits.
From a sector point of view, despite the growing concerns in recent months, the information technology sector was the best performing, returning 19.76% over the last 12 months. Materials was the worst performing sector returning -7.42%.
One-year stock market performance
30/11/2020 To 30/11/2021 | 30/11/2021 To 30/11/2022 | 30/11/2022 To 30/11/2023 | 30/11/2023 To 30/11/2024 | 30/11/2024 To 30/11/2025 | |
|---|---|---|---|---|---|
MSCI North America | 28.26% | -0.79% | 7.00% | 33.57% | 10.50% |
MSCI USA/Information Technology | 36.26% | -13.05% | 28.50% | 39.97% | 19.76% |
MSCI USA/Materials | 21.82% | 10.50% | -4.76% | 17.11% | -7.42% |
Russell 2000 | 23.14% | -3.36% | -8.34% | 35.89% | -0.14% |
How have our Wealth Shortlist funds performed?
US 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 these 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 diversified portfolio.
This article isn’t advice. Investments and any income they produce will rise and fall in value, meaning you could get back less than you invest. If you’re not sure if an investment is right for you, ask for financial advice. Remember, past performance is not a guide to the future.
For more details on each fund and its risks, you can use the links to their factsheets and key investor information below.
The strongest performing US fund on the wealth shortlist over the last year was the L&G US index fund.
This fund tracks the performance of the US stock market, as measured by the FTSE USA Index. It aims to invest in every company in the index and in the same proportion. This is known as full replication and helps the fund closely match the performance of its benchmark.
The fund is currently made up of 505 companies. It invests 42.50% in the technology sector which includes household names like Apple and Microsoft. The next largest sectors are consumer discretionary, industrials and financials at 14.40%, 11.00% and 10.20% respectively. This is determined by the underlying index the fund is tracking.
The weakest performer over the past 12 months was FTF Royce US Smaller Companies, returning -6.70%, behind the IA North American Smaller Companies sector average which returned -4.09%. The manager’s stock selection held the fund back especially in the industrial and healthcare sector. Longer-term performance has been stronger though and we still view the fund as a good way to invest in lesser-known US smaller businesses.
The fund invests in smaller companies which can be higher risk.
While we believe Wealth Shortlist funds have long-term performance potential, they won’t perform the same way at the same time. We think it’s important for investors to build a portfolio filled with managers who have different approaches and investing styles to help generate long-term returns.
30/11/2020 To 30/11/2021 | 30/11/2021 To 30/11/2022 | 30/11/2022 To 30/11/2023 | 30/11/2023 To 30/11/2024 | 30/11/2024 To 30/11/2025 | |
|---|---|---|---|---|---|
FTF Royce US Smaller Companies Fund | 27.27% | 1.32% | 0.83% | 25.31% | -6.70% |
IA North American Smaller Companies TR | 21.07% | -7.94% | -5.07% | 32.66% | -4.09% |
Legal & General US Index C | 28.19% | -5.42% | 11.62% | 33.40% | 9.88% |
FTSE USA TR USD | 27.95% | -0.95% | 7.59% | 33.72% | 10.36% |