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- The first half of 2025 had been a roller coaster for global investors. Following the euphoria of an anticipated pro-business administration under President Donald Trump, global markets rallied in Q1. However, at the start of Q2, global equities fell more than 10% amid the fear and uncertainty following the “Liberation Day”.
- Yet, with subsequent announcements of trade truce and breakthrough in US-China trade talks, global markets rallied more than 23% from the bottom to end the second quarter up 11.5%.
- The first half of 2025 proved that it’s difficult to predict where the markets will go next. Instead of attempting to guess the best performing funds year on year, what’s important is to stay invested, disciplined and diversified.
- Click here to get started on your wealth journey with Endowus Hong Kong today.
Into 2025, we conducted a survey with our fund manager partners in the hope of finding out where the consensus observations are for the year to come. Fund managers expected 2.3% GDP growth in the US, a soft landing, and moderate rate cuts of 25-75 bps for the full year. Inflation was seen as the top concern, especially under Trump’s second-term policies.
1H 2025 in review: What moved markets?
The first six months have passed, and it turned out that the US economy showed resilience, while the Federal Reserve held on and has kept interest rates where it was since December 2024. Q2 was disrupted by the “Liberation Day” tariff shock, briefly denting sentiment.
Despite this, the recovery was swift, with global equities rallying 23% from their lows to end Q2 up 11.5% year-to-date. Volatility, as measured by the VIX, has since returned to pre-Liberation Day levels, reflecting a renewed appetite for risk.
Between Jan and Jun 2025, two of the five top-performing equity funds on Endowus Fund Smart gained traction through its focus on commodities—serving investors seeking inflation hedges and geopolitical protection. The top list was completed by a European equity income fund and a global equity dividend-focused fund. Emerging market debt topped fixed income performance in H1 2025, buoyed by high real yields, a softer dollar, and moderating inflation.
Best performing funds of 1H 2025
Equities
Fixed Income
Most popular funds on Endowus Fund Smart
For those interested to learn about the most popular fund choices on Endowus Fund Smart. Here’s a look at the top 3 funds that were the most in-demand# among investors in the various categories across equities, fixed income, cash management, and more.
Equities
Fixed Income
Cash management
Others — multi-asset, thematic, and more
Where are markets headed for the rest of 2025?
It’s difficult to predict where the market will go next. Such difficulty is demonstrated by looking back at historical returns of different asset classes.
Emerging markets have had a strong comeback 2025 YTD, and yet it has underperformed large caps in the past few years. History shows that the asset class winner of each year could change dramatically year-on-year. Between 2010 to 2023, REITs ranked as the top-3 best performing asset class 8 out of 14 times, yet, in 2020 and 2022, it ranked at the bottom of the pack.
What’s important is to stay invested, disciplined and diversified. The market has historically rewarded long-term investors who maintain a disciplined and diversified portfolio, which takes advantage of outperformance in one sector and cushions underperformance in another.
As we enter the second half of 2025, some might guess Hong Kong/China, or emerging markets might continue their winning streaks. Instead of getting into this guessing routine, try adopting a scientific and evidence-based investing approach that is based on concepts of diversification, compounding and asset allocation.
Customise your portfolios in minutes with Endowus Fund Smart
On Endowus Fund Smart, you can create your own diversified, resilient investment portfolios with 350+ Best-In-Class funds selected by our Investment Office. Browse our complete fund list here.
These funds are selected by applying a strict, institutional-grade screening process that is rigorous, thorough, and continuous — we call this proprietary framework SMART+.
Choose from our curated portfolios including the Flagship Portfolios, core solutions for cash management and income needs, or satellite themes such as Global Technology, Future Trends, Sustainability Equities and China Equities.
Read more: Endowus HK Q2 2025 Portfolios Performance Review
Endowus also offers a broad selection of institutional-grade PI-only mutual funds, hedge funds and private markets across private equity, private credit, and absolute return multi-strategy hedge funds.
For Professional Investors, we offer exclusive access to institutional-grade mutual funds, hedge funds, and private market opportunities in private equity, private credit, and absolute return strategies. Existing clients can opt in here or contact support.hk@endowus.com for assistance.
As your conflict-free advisor, Endowus is committed to helping you achieve better investment outcomes. Get started on your wealth journey with Endowus Hong Kong today. Sign up here.
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Risk Warnings
Investment involves risk. Past performance is not an indicator nor a guarantee of future performance or returns. Projected performance or returns is not guaranteed to materialise. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested.
Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
General risk warnings relating to collective investment schemes
Before making an investment decision, you are reminded to refer to the relevant prospectus/ offering document for specific risk considerations and related fees and charges.
Funds are not a bank deposit and not capital guaranteed, and is subject to investment risks, including the possible loss of the principal amount invested.
Some of the funds also involve derivatives. Do not invest in them unless you fully understand and are willing to assume the risks associated with them.
Opinions
Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endowus HK Limited (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus HK Limited, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.
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Nothing contained [in this article] should be construed as a solicitation, an offer to buy or sale, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction in any jurisdiction in which such solicitation, offer to buy or sale would be unlawful under the securities laws in such jurisdiction. No information included [on this website/ in this article] is to be construed as investment advice or as a recommendation or a representation about the suitability or appropriateness of any advisory product or service; or an offer to buy or sell, or the solicitation of an offer to buy or sell, any security, financial product, or instrument; or to participate in any particular trading strategy. Investors should seek independent financial and tax advice before making any investment decision.
Product Risk Rating: Please note that any product risk rating (the “PRR”) provided by us is an internal rating assigned based on our product risk assessment model, and is for your reference only. The PRR is subject to change from time to time. The PRR does not take into account your individual circumstances, objectives or needs and should not be regarded as advice or recommendation to purchase, hold or sell any fund or make any other investment decisions. Accordingly, you should not solely rely on the PRR in making your investment decision in the relevant Fund.
Complex Products
Some of the funds contained in this article are complex products and investors should exercise caution when investing in these products. Though these products have been authorised by the SFC, authorization does not imply official recommendation. SFC authorization is not a recommendation or endorsement of a product nor does it guarantee the commercial merits of a product or its performance.
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