Global markets ended 2025 on a constructive note, despite ongoing uncertainty around monetary policy and geopolitical developments. After a volatile start to the year, investor sentiment strengthened meaningfully in the second half, supported by resilient economic data and expectations of continued policy easing.
For EUR‑based investors, the most influential macro factor of the year was the Euro’s strong appreciation. While global markets delivered robust gains in local terms, much of this upside was eroded when translated back into Euros. As a result, currency hedging proved to be one of the most effective tools for preserving returns and fully capturing global market strength.
Equity markets delivered a notably positive year, marked by a shift in regional leadership. After several years of U.S. dominance, performance broadened: Emerging Markets, Europe, and Japan outperformed the U.S. The Bank of Japan maintained its policy stance despite expectations for a rate hike, citing soft Q3 GDP but continued wage momentum. Meanwhile, the Federal Reserve cut rates by 25 bps and signalled a more data‑dependent approach going forward. Strong U.S. labour market indicators—including higher‑than‑expected job openings—suggest markets may be overestimating the pace of future rate cuts.
Across alternatives, Global Infrastructure stood out as a strong and stable performer, significantly outperforming general Real Estate. In credit markets, the search for yield supported strong returns in Emerging Market Sovereign Debt and Global High Yield, with investors prioritizing “carry” over defensive positioning. Credit markets broadly outpaced sovereign bonds, with U.S. Investment Grade credit offering particularly attractive opportunities through compelling all‑in yields. In contrast, European Government bonds ended the year broadly flat.
Against this backdrop, the Pensions Caixa 2, F.P. Fund delivered a positive return of 6.3% in2025. Over five years, the fund achieved an annualized return of 5.7%, performing above the long‑term target of 5.3% (Euribor + 3.5%) and the 4.2% CPI benchmark. Importantly, the fund continues to rank among the top 5% of pension funds in Spain over both 5‑ and 10‑year periods within the Employment and Associated Systems. This consistent outperformance highlights the resilience and effectiveness of its long‑term investment strategy.
In summary, the Pensions Caixa 2 Fund continued to make solid progress throughout 2025, delivering results aligned with its objectives despite a complex market environment. With markets expected to remain dynamic and sensitive to monetary policy developments, the medium‑ and long‑term outlook remains favourable for well‑diversified investors. The fund’s consistent track record reinforces the strength of its approach to generating long‑term value.