Skip to main content
Search

Monthly market summary – Review of February 2025

Date: 13 March 2025

3 minute read

Our market summary

In February, global markets experienced mixed performance with global equities posting a 1.9% loss overall. US equities faced challenges due to policy uncertainties, while European equities saw strong performance, driven by gains in financials and defence stocks. Elsewhere, emerging markets equities benefited from the positive sentiment around Chinese tech stocks and a weakening US dollar. Meanwhile, fixed income markets saw gains as US Treasury yields declined in the face of softer economic data, with global bonds providing diversification against equity losses. Overall, the month highlighted the importance of diversification and the varying impacts of regional and sector-specific factors on market performance.  

Equity markets

US

US

US equities struggled in February, recording a loss of 2.9%. The continued uncertainty about Trump’s agenda affected corporate and consumer sentiment. The technology sector faced significant headwinds as investors moved away from the more richly valued large-cap growth stocks. Mixed economic data and ongoing inflationary pressures also contributed to market volatility. Despite this, the energy and healthcare sectors demonstrated relative strength.

Europe

Europe

Despite ongoing geopolitical tensions and inflationary pressures, European equities performed well in February and ended up 2.4%. Gains were driven by strong performance from the financials and defence sectors, supported by hope of a ceasefire in Ukraine, higher long-term defence spending, and a rotation out of US tech stocks. The European Central Bank's accommodative monetary policy (lowering interest rates) and improving economic data also helped.

UK

UK

In February, UK equities returned 1.4%, This was led by gains in healthcare, financials, and industrials, while the consumer discretionary and consumer staples sectors both underperformed. The large banks, defence, and pharmaceutical companies boosted performance of UK large-cap equities, but the sentiment towards small-caps weakened. So far, the UK has been spared US tariffs and this helped sterling strengthen following a very poor January.

Emerging markets

Emerging markets

Emerging markets equities were up 0.8% in local currency terms over the month, but the strength of the pound turned this into a 0.8% loss for sterling-based investors. China was the best performing region delivering a 10.3% return amid continued optimism about its AI capabilities and signals of government support for the private sector. Elsewhere, Poland, Greece, and Chile all posted positive returns. Korea saw negative returns, as did Brazil and India.

Fixed income

Fixed income markets saw gains in February as global bonds acted as diversifiers against equity losses. Treasury yields fell (meaning their prices rose) with global bonds returning 1.2% over the month. The decline in yields was driven by increased demand for safe-haven assets amid market volatility and concerns about economic growth. At a more granular level, US Treasuries were up 2.2%, gilts saw a 0.8% gain, and sterling corporate bonds returned 0.4%.  

 

Source: Quilter Investors as at 28 February 2025. Total return, percentage growth, rounded to one decimal place. The performance shown for global equities is represented by the MSCI AC World Index, US equities by the MSCI USA Index, European equities by the MSCI Europe ex UK Index, UK equities by the MSCI United Kingdom All Cap Index, emerging markets by the MSCI Emerging Markets Index, Chinese equities by the MSCI China Index, global bonds by the Bloomberg Global Aggregate (GBP Hedged) Index, US Treasuries by the ICE BofA US Treasury (GBP Hedged) Index, gilts by the ICE BofA UK Gilt Index; and sterling corporate bonds.by the ICE BofA Sterling Corporate Index.  

Important Information

Investment involves risk. The value of investments and the income from them may go down as well as up and investors may not get back any of the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter Investors Limited (“Quilter Investors”), Senator House, 85 Queen Victoria Street, London, United Kingdom, EC4V 4AB. Quilter Investors is registered in England and Wales (number: 04227837) and is authorised and regulated by the Financial Conduct Authority (FRN: 208543).

This communication is for information purposes only. Quilter Investors uses all reasonable skill and care in compiling the information in this communication and in ensuring its accuracy, but no assurances or warranties are given. You should not rely on the information in this communication in making investment decisions. Nothing in this communication constitutes advice or personal recommendation.

Any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or companies within the same group as Quilter Investors as a result of using different assumptions and criteria.

Data from third parties (“Third-Party Data”) may be included in this communication and those third parties do not accept any liability for errors and omissions. Therefore, you should make sure you understand certain important information, which can be found at www.quilter.com/third-party-data/. Where this communication contains Third-Party Data, Quilter Investors cannot guarantee the accuracy, reliability or completeness of such Third-Party Data and accepts no responsibility or liability whatsoever in respect of such Third-Party Data.

Marcus Brookes

Chief Investment Officer & Managing Director

Marcus is chief investment officer and managing director of Quilter Investors. Marcus joined Quilter Investors in December 2021 from Schroders Personal Wealth, where he also held the role of chief investment officer. He has considerable investment management experience with a deep understanding of the multi-asset sector having managed multi-manager fund ranges for more than 20 years.

Related articles

Navigating financial uncertainty amid US tariff announcements

4 minute read

Tips to help you navigate financial uncertainty.

Published 6 days ago

Quilter Investors market update quarterly webinar – April 2025 (Q1 2025)

Register to watch the quarterly webinar on the latest market update.

Published 11 April 2025