Many happy returns

In summary:
• 2025 was a fantastic year for South African investors.
• Long-term data proves that the country can deliver solid returns despite its many problems.
• The medium-term outlook is still positive, but investors should temper expectations for 2026, as markets rarely move in straight lines.

The first 19 days of January have produced enough topics for several newsletters, including Venezuela, Iran, Greenland, and the criminal probe into Federal Reserve Chair Jerome Powell. However, there will be plenty of time to unpack these topics in the weeks ahead – US President Donald Trump isn’t going anywhere anytime soon, after all. Instead, this week we’ll reflect on the exceptional returns that South African investors earned in 2025 and place them into historical context.

Last year saw a massive rise in global policy and geopolitical uncertainty as Trump tore the old rulebooks and hiked tariffs to levels last seen before World War II. This was a shock to all trade-dependent nations, but South Africa managed to find itself particularly exposed to Trump’s hostility. Against this backdrop, one might have reasonably expected 2025 to be a bad year for the rand and local markets. It was not.

Boom
The FTSE/JSE All Share Index delivered a 42% return, while the All Bond Index returned a record 24%. Listed property also shone with a 30% return. The rand appreciated by almost 14% against the US dollar. This reduced offshore returns from the point of view of South African investors, but global equities were still positive in rand terms. All told, 2025 was a fantastic year for South African investors with broadly diversified portfolios, but clearly the domestic asset classes were the real stars.

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