Year in Review 2025

Investors entered 2025 questioning how markets could build on the strong gains of 2024. The answer was definitive: 2025 proved to be the JSE’s best performance in two decades. South African investors benefited in particular from a powerful rally in gold and platinum-group metals.

Market performance reflected broad-based strength across SA equities, bonds, and commodities. The FTSE/JSE All Share Index delivered a robust 42% return over one year, while bonds returned an impressive 24%. We also saw improving earnings expectations and renewed foreign inflows into undervalued South African assets. Many active managers now hold overweight positions in local equities.

Moreover, the ALSI’s performance over the past five years highlights the longer-term opportunity in SA equities. The index has delivered returns of approximately 110% in USD terms, comfortably outperforming the MSCI World Index, which returned around 86% over the same period.

Looking back over the past year since the formation of the Government of National Unity (GNU) in 2024, South Africa has experienced a marked improvement in economic sentiment, capital market stability, and investor confidence. This positive shift has been evident not only in economic indicators but also in national morale, buoyed by global recognition at the G20 Summit. From a technical perspective, the GNU period has been characterised by lower perceived political risk, more stable fiscal guidance and encouraging signs of inflation moderation. These factors have allowed the equity market to re-rate.

In 2025, the rand strengthened meaningfully against the US dollar, moving from a peak of around 19.74 in April to the low-17 range. This was an appreciation of 8–10%, marking its strongest performance in several years. This reflected a combination of a weaker dollar, rising gold and platinum group metal prices, and renewed investor interest in emerging markets.

Although the resources sector, rising 126%, was the primary driver of equity performance, financials and industrials also contributed positively as the SARB cut rates and bond yields declined. Nominal government bonds outperformed inflation-linked bonds, while listed property delivered strong returns, benefiting from lower yields and improving earnings momentum. Cash was the clear laggard as interest rate cuts reduced returns.

Within global markets, equities outperformed fixed income, with emerging market equities leading developed markets. European equities delivered the strongest returns among developed markets, while global cash lagged as rate cuts eroded yields.

While much unfolded during 2025, the key drivers of Global market performance can be distilled as set against the backdrop of the 2024 year-end context of a new Trump administration and continued US exceptionalism:

• Q1: Escalating tariff rhetoric led markets to price in a de facto tax on growth. US equities declined, long-duration bonds rallied sharply, while European equities made steady gains.

• Q2: Market dynamics remained heavily influenced by political developments. A partial retreat from the tariff narrative triggered a reversal in asset performance, with equities rallying and bonds coming under pressure.

• Q3: A return to fundamentals took hold. Markets were driven by the AI-led technology investment boom, robust corporate earnings, but slowing economic growth and a softening US labour market. The Federal Reserve delivered its first rate cut, supporting strong performances across both equities and bonds.

• Q4: Equity markets extended their gains, buoyed by strong Q3 earnings growth, sustained technology investment, a resurgence in corporate deal-making, and expectations of fiscal easing.

Despite heightened uncertainty associated with a second Trump presidency, 2025 proved to be an exceptional year for South African investors. SA assets outperformed global peers in the fourth quarter, with commodity-driven rand strength providing additional support.

The Destiny Portfolios continued to deliver superior returns, supported by a range of measures implemented over the past few years. Key contributors to this success included maintaining a large exposure to SA bonds, remaining invested in local equity asset managers, and increasing offshore exposure through cash flows, which was optimised by periods of rand strength. The portfolios also benefited from the use of passive investments to gain cost-effective exposure to the US “Magnificent Seven” stocks. Outstanding returns were once again achieved through the multi-asset manager approach. Click here to view the Industry Survey.

No discussion of South African optimism would be complete without reference to the green and gold. The Springboks scored 81 tries in 14 Tests in 2025, matching the record set by the 2007 team, albeit in fewer matches. Averaging 5.8 tries per game, their dominance has delivered a meaningful psychological lift. While not a traditional economic indicator, sentiment matters. Confidence influences consumer behaviour, risk appetite, and spending patterns. If the JSE needed a symbol of resilience, the Bokke provided exactly that. South Africa, it seems, still knows how to win on and off the field.