Q4 Market Commentary 2025

It was a strong quarter on the whole for equity markets.  Sentiment continued to improve from tariff conversations, whilst central banks and governments provided support. For most countries now, a baseline tariff rate has been applied with some variations for sectors.  We remain watchful on how the costings of tariffs are passed on and continue to engage with our active managers on how businesses are adjusting.

The domestic market

The UK market as measured by the MCSI UK IMI index was up by 5.55%.  Many of the large international companies operating in the UK have benefited from currency devaluation. The Bank of England (BoE) cut interest rates by 0.25% over the quarter as labour markets slowed and relatively weak growth provided the rational.  The Budget was finally delivered ending months of speculation and uncertainty.  Corporate earnings overall remain resilient, whilst merger and acquisitions have picked up this year from a variety of sources proving value within the UK market and flows from overseas have started to return.

What about the USA?

Whilst stock market returns have been reasonably strong throughout the quarter there remains a fine balancing act for the Federal Reserve. Inflation remains elevated and the long-term impacts of the tariffs may prove inflationary. The current weakness in the labour market is for now the catalyst for change and this promoted the FED to cut rates 0.25% over the quarter.

What’s happening in Japan?

In Japan the new Prime Minister Sanae Takaichi announced a $135 billion stimulus plan from April 2026 to further boost the economy. Corporate governance reforms continue, and companies are buying back shares at a greater pace, alongside increasing dividends and earnings which continue to be robust, look supportive but careful management on inflation and rate increases will be key to the growth moving forward.

For extended commentary please see here.

ASAM’s Outlook

Looking at the investment outlook for the long term, we continue to focus on fundamentals and what drives investment returns over investment time frames. Over the last twelve months we have seen indiscriminate moves across markets, sectors, and individual companies which are short term and lacking fundamental support. In the West, rates are now being cut as inflationary pressures ease providing greater stability. We cannot rule out further volatility in the short term due to several reasons. Many short-term markets movements are sentimental and reactionary without long term consideration of how individual companies are performing and adapting to the economic environment. The dislocation in markets presents opportunities for active management

This information is obtained from sources considered reliable, but its accuracy and completeness is not guaranteed by Anderson Strathern Asset Management Limited. Neither the information nor any opinions expressed constitute financial advice. Investments can fluctuate in price, value and/or income and may return less than the original amount invested. Past performance is not necessarily a guide to future performance. Anderson Strathern Asset Management Limited is authorised and regulated by the Financial Conduct Authority.

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