The above performance chart illustrates how various asset classes performed to May 16th, 2025. It shows the performance of some of our benchmark funds in each of the main asset classes.

Equities
It was a challenging period for equities – the MSCI World was down c. 3% in euro terms.
Having started the year on a relatively solid footing, equities lost their momentum from mid-February until the early part of April. The main reason for the change in momentum was attributed to the fear that tariffs would have a ‘double whammy’ effect of slowing economic growth while also stoking inflation. The uncertainty that tariffs caused saw US equities experiencing a correction of almost 20% at one point. However, these falls were reversed on the announcement of a pause in tariffs, with the expectation that the ultimate level of tariffs will be much more manageable than was first feared. This belief was strengthened with the US & China agreeing to allow time to hopefully negotiate a more favourable tariff regime for both countries.
At the same time as US equities were struggling, European equities finally experienced a period of relative outperformance. Encouraging news from Germany around relaxing their fiscal rules helped European equities outperform, also the relative value of European equities versus the US also provided a tailwind.
With the dollar weakening over the period this was a headwind to euro-based investors. This was compounded by c. 70% of the MSCI World being in US equities. The actively managed Aviva High Yield Equity fund which has a lower allocation to the USA outperformed the World Index fund.
Smaller Company and Emerging Market (EM) equities experienced similar volatility to their global counterparts; however, EM equities experienced some relative outperformance as they were helped by positive news from Chinese Artificial Intelligence (AI) advancements.

Bonds
It was a mixed quarter for European bonds, however despite challenges bond markets were broadly unchanged over the period. They also helped to reduce volatility in portfolios and were a useful diversification tool.
ECB interest rate cuts, with the expectation of more to follow, provided a tailwind for bond markets. However, news that Germany was planning to spend €1 trillion (over the next decade) on defence and infrastructure stoked some inflationary concerns.
Despite the economic uncertainty emanating from tariff worries, corporate bonds continued to outperform their government counterparts.

Property
There was further stabilisation in commercial property returns over the period. Challenges remained particularly in the office sector. But the worst appears to be behind this asset class as our preferred property funds’ performance continued to stabilise. Irish Property was one of the best performing asset classes over the period.

Cash
Cash fund returns matched bonds’ returns over the period. However, the yields on Cash funds continued to fall as the ECB cut interest rates three times by 0.25% each time. They have also signalled that there will likely be further interest rate cuts to come this year.

Multi-Asset Funds
Multi asset funds were negatively impacted by volatile equity markets and the weakening dollar. Their diversification assets of Cash, Bonds, Alternatives and Property helped to reduce the overall falls in these funds, for example, our benchmark balanced multi-asset fund is down 2% YTD.