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By  Samuel Ruiz

Beware of the Hype

Global Equity Q3 Market Wrap

October 2025, In the Loop

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Reviewing the global equity market for the third quarter of 2025, it was an incredibly strong market for investors.

The MSCI All Country World Index rose around 6.5% in Australian dollar terms, really further extending this bull market and strong rally we've seen since the concerns around April.

Investors though did have some positive data points during the quarter.

We saw more announcements in the AI investment space.

We had OpenAI signing multiple deals, some in excess of USD 100 billion.

This really allayed some concerns that the AI investment cycle was approaching a peak.

However, it did create concerns that the way these deals were being done was similar to what we saw in the 90s, increased use of leverage and related party transactions, creating a bit more of a circular financing model.

However, investors did look past these concerns and partly that's because we also got some other positive data points, particularly out of the US.

We had the One Big Beautiful Bill signed creating more fiscal policy certainty and also showing that there is likely to be more fiscal stimulus in the US versus the prior belief that they will be focusing more on reducing debt.

We had the Fed announce that really we're expected to see more rate cuts in the near term.

And there was data released that showed that both economic and corporate earnings growth were showing strong momentum and stabilising from some of the weaker points we had earlier in 2025.

As we look at the backdrop though, this is really creating a market we believe is exhibiting heightened hype, speculation and risk taking to a level we think investors should be prudent about.

In fact, when we look at the outperformance of high risk stocks versus high quality stocks over the last 12 months, they are in the 90th percentile, which means going back to 1992, only one out of 10 times have you been successful by betting on high risk stocks, outperforming to the extent they have.

So we believe at this point it's important to remain focused on valuation, prudent on the companies we're investing alongside, believing that they do have moats, that they won't have their profit pools competed away and they do in fact have reasonable enough valuations to generate strong forward returns from here.

Sam Ruiz, Equity Portfolio Specialist, discusses the current global equity environment, highlighting both ongoing volatility and resilience in key sectors.

Samuel Ruiz Portfolio Specialist
Video Oct 2025 In the Loop

Global Equity Fund Quarterly Review

By  Samuel Ruiz

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