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- Markets were put to the test multiple times in 2025 with the entrance of DeepSeek in January, Trump’s Liberation Day tariffs in April, and a brief tech sell-off in November.
- Top equity fund performers were predominantly in the commodities and biotech sectors.
- In the fixed income space, emerging market bonds dominated the year's winners. Varied winners across Singapore and capital securities highlight the need for diversification.
2025 was a story of shocks, rebounds, caution, and exuberance, all strung together by one theme – artificial intelligence.
The first major test to markets came just before Lunar New Year 2025, with the debut of China’s DeepSeek-R1—a cheaper, more efficient AI model positioned against US rivals like OpenAI’s ChatGPT. Only months later, on 2 April, President Trump’s sweeping “Liberation Day” tariffs—the steepest in a century—reignited trade tensions and shook global investor confidence.
What initially looked like a lost year for technology quickly turned into a story of a spectacular rebound. From April onwards, the tech sector clawed back losses, surging more than 40% off its lows. AI adoption accelerated, turning the DeepSeek event from a perceived threat into a catalyst. In particular, Asia ex‑Japan, led by Korea, became the star performer, while fixed income delivered steady gains.
As the year progressed, unease grew. Equities pushed to new highs, but concerns about stretched valuations became louder. The 10 October selloff, sparked by renewed US‑China tariff tensions, reminded investors that volatility was never far away. By year‑end, markets finished higher, though the experience underscored the importance of diversification.
The other story beyond AI that dominated the market was the strength of Gold and Silver, as well as the performance of precious metals miners. Gold rose 65% in 2025 while Silver rose 145%. The Gold mining sector rose a whopping 159%. This happened during a year where high quality stocks underperformed low quality stocks and cyclicals outperformed defensives which is unique as Gold is often perceived sought after during times of stress.
Leaders and laggards in 2025
Across 2025, performance was uneven but revealed clear leaders.
On the equity side, gold, precious metals, commodities, and miners took center stage as investors sought protection from concerns over USD debasement, and diversification from over valued areas of equities. However, on the other hand, we believe a form of “FOMO” also happened in this segment as investors followed its strong momentum in lieu of continued central bank buying of gold.
By region, China, Asia ex‑Japan, and broader emerging markets equities also outperformed, buoyed by resilient growth drivers and policy support, while by sector biotech gained traction as innovation and healthcare demand created new opportunities.
In fixed income, frontier and emerging market bonds stood out, offering attractive yields and diversification benefits despite global volatility.
On the flipside, US defensives and small caps were the worst performers with the staples sector down 1.2% for the year and utilities & healthcare up only 12.8% & 12.5% respectively despite the recovery towards the end of the year. The Russell 2000 Index was also only up 11.2% underperforming large caps for its 5th consecutive year.
Together, these sectors and regions defined the year’s leadership, setting the stage for a closer look at the best‑performing funds on Endowus Fund Smart that captured these trends.
Top performing funds of 2025
By absolute returns
Top performing equity funds
The five top performing equity funds on Endowus Fund Smart in 2025 dramatically outpaced the broader equity market, which itself delivered strong returns.
The year's winners tell an interesting story. Precious metals and mining funds rode a historic commodity wave. Mining companies, which amplify commodity price movements, delivered even stronger returns. Biotechnology staged a remarkable recovery after years of underperformance, benefiting from innovation breakthroughs and China's biotech boom. Geographically, international markets—particularly China—outperformed US equities, a trend captured by the Allianz All China Equity Fund.
This represents a striking shift from 2024, when US stocks and technology dominated (see 2024 Fund Smart review). The rotation serves as a powerful reminder: predicting which markets or sectors will lead is exceptionally difficult. This is why maintaining diversified exposure across geographies and sectors remains crucial, rather than chasing last year's winners.
Beyond capturing these market trends, four out of the five top performers exceeded their respective benchmarks through skilled active management—validating Endowus's rigorous fund selection process in identifying best-in-class managers for the Fund Smart platform.
Top performing fixed income funds
In the fixed income space, emerging market bonds dominated the year's winners, driven by a weaker US dollar, improving economic fundamentals, and attractive yields. Away from emerging markets, Away from emerging markets, the multi-sector flexible bond fund by PIMCO shone through with its active approach, adding meaningful return above market benchmark through its tactical duration management and sector and FX calls.
The varied winners across 2025 reinforce an important lesson: even in fixed income, no single region or sector leads every year. Maintaining diversified bond exposure across geographies and credit qualities helps investors capture opportunities wherever they emerge, rather than betting on one area to outperform.
Top performing funds – Others (Multi-asset, commodities, and more)
The multi-asset space reflected the broader risk-on sentiment, with certain segments of commodities showing meaningful outperformance. Funds with a higher allocation to equities performed well, as did those with dedicated exposure to precious metals.
Spotlight on new solutions introduced in 2025
Expanding investment options across multiple currencies
In 2025, we expanded our investment options beyond USD and HKD to include more foreign currencies: AUD, CAD, CNY, EUR, and GBP. Investors can access our curated fund list for each of these currencies.
Upgrading China Equities and Global Technology model portfolios
As part of our ongoing monitoring process, we upgrade model portfolios when we identify superior building blocks that enhance the overall quality of the portfolio. In 2025, we upgraded two model portfolios: China Equities and Global Technology.
For Professional Investors in Hong Kong, we have also further expanded our private markets and hedge fund strategies offering. In 2025, we have launched 3 bespoke fund-of-fund portfolios, covering key alternative asset classes including private credit, private equity and multi-strategy hedge funds.
If you would like to learn more or verify as a Professional Investor, contact our SFC-licensed client advisors for a consultation or email us at privatewealth.hk@endowus.com.
Customise your portfolio in minutes with Endowus Fund Smart
Fund Smart offers flexibility to customise and diversify your investment portfolio at the lowest fees possible. It features over 400 funds curated by our Investment Office after screening thousands of funds. The shortlisted funds go through rigorous assessments of the investment firms, fund managers, framework, process and performance, and continue to be regularly monitored.
Your money, your way. Select funds in six currencies, including HKD, USD, AUD, CAD, CNY, EUR, and GBP. Customise your investment portfolio with up to 12 funds in your desired allocations.
Say goodbye to indecision and hello to fund comparison. The Compare Funds feature gives you a single-page view to compare our curated funds based on fees, risk metrics, top exposures, performance (returns and daily Net Asset Values), and more. Find the right strategies with clarity, and construct a portfolio that aligns with your investment philosophy and goals.
Explore funds and build your own portfolio on Fund Smart—get started 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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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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