Investment Updates

As we move out of another Sydney winter and welcome the warmer days of Spring, it's a good time to reflect on what proved to be an equally bright quarter for financial markets. The third quarter of 2025 delivered strong returns for investors across most asset classes. Here are some of the key themes:

Technology and AI Lead the Charge

The artificial intelligence boom continued to drive markets to record highs globally. The US S&P 500 and Nasdaq, along with Japanese indices, reached all-time peaks. Taiwan and South Korea were standout performers thanks to strong semiconductor and AI-related demand. For Australian investors with international exposure, this reinforced the importance of diversification beyond our domestic market, which has limited exposure to cutting-edge technology sectors.

Central Banks Begin Easing

The Federal Reserve cut rates by 0.25% in September, marking a significant policy shift. The Bank of England followed with its first cut since 2020. However, both signalled a cautious, gradual approach to further easing. While the RBA maintained its own independent course, these global rate movements influence our bond markets, equity valuations, and the Australian dollar, all of which flow through to your own investment and Superannuation portfolios

Australian Highlights

Australian investors benefited significantly from several trends this quarter:

  • A weaker US dollar amplified returns from overseas investments when converted back to Australian dollars

  • Record gold and silver prices provided a major boost to our resources sector, particularly precious metals producers

  • Progress on US-China trade negotiations was generally positive for Australian commodity exporters and businesses with Asian exposure

  • Strong emerging market performance, especially China, supports demand for Australian resources and agricultural exports

The falling oil prices did present challenges for some energy-focused resource companies, creating a mixed picture across the materials sector.

Looking Ahead

While Q3 delivered strong results, it's important to maintain perspective. Stock valuations remain elevated, inflation hasn't completely disappeared, and geopolitical tensions continue. For Australian investors, our position between the US and China means ongoing trade dynamics remain crucial to monitor.

Markets have priced in significant optimism, which means potential for disappointment if economic data weakens or corporate earnings miss expectations.

Whether you're wondering about portfolio rebalancing, curious about how these global trends impact your portfolios or want to discuss what these developments mean for your goals, please reach out, we're always here to provide guidance and support.

Gavin Glozier, Your Wealth Hub Advice