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Hedge Clippings | 16 January 2026Looking forward, Looking back, Welcome back! In 2025, there were a number of major themes that dominated markets and the news, and which in turn influenced returns of the various peer groups and the managed funds operating within them. Equity-based funds continued to benefit from the tailwinds of strong global equity markets, which saw the S&P 500 (T/R) deliver just shy of 18%, while the ASX 200 lagged that at 10.32%. The 542 equity-based funds in AFM's database averaged a return of 13.2%, with 55% of them outperforming the ASX 200. However, averages can be misleading! Fund selection remained (as ever) critical to success, with individual fund results ranging from -20% through to an impressive return of 294%. The question for investors and fund managers alike is whether the dominant themes of 2025 will continue into 2026? There's no reason to think they won't, and there's no reason that just rolling over from December 2025 into January 2026 will mysteriously change last year's trends. Global Technology and AI: The tech juggernaut, and particularly the focus on AI, rolled on - or did it? The bottom line is that the "Magnificent 7" became a "Dominant Duo" consisting of Alphabet and Nvidia. The so called Magnificent 7 averaged a return for the year of 27.5% outperforming the S&P 500 by a clear 10%, but that hid that fact that Alphabet (Google) and Nvidia were up 65%, and 40% respectively, while Microsoft (15%), Meta (13%), Apple (8%), and Amazon (6%) all underperformed the S&P 500. Elon Musk's Tesla, the last of the Mag 7, rose about 15% to be broadly in line with the market, having scored a few own goals, and distractions during the year. Artificial Intelligence dominated markets. It seems unlikely the focus and adoption of AI will wane - if anything, it is likely to continue to expand and dominate, but with question marks around stretched valuations, energy, and at a stock level, which horse to back there are likely to be both winners and losers. Gold, Precious metals, and Resources: In 2025 gold rose 65%, silver was up almost 150%, platinum 127%, while copper rose over 40%. Critical minerals and rare earths became both valuable and a geopolitical point of leverage. Not surprisingly, funds investing in resources, in part or exclusively, dominated the top-performing tables in 2025, with the Top five returning between 102% and 294% in 2025. As can be seen, resources are cyclical. Will the drivers of the precious metals boom continue? As always, there are those saying "this time it is different," although the queues of retail punters lining up in Martin Place each morning outside the bullion dealer suggest a toppy market. Geopolitics and the Trump Factor: The Trump Factor is one theme we're confident will remain in 2026. In the first two weeks of the year, Trump is dominating the headlines as only he can, including threatening the regime in Iran, kidnapping the President of Venezuela, eyeing off Greenland, and, closer to home, continuing to bully Jerome Powell (or trying to) into lowering interest rates. The problem for investors is that it is difficult to predict his unpredictability! If he persists with his intention to absorb Greenland, it is likely to end the NATO agreement - but maybe that's his ulterior motive? News | Insights Investment Perspectives: Thinking about A-REITS | Quay Global Investors Affordability is a hot button issue for 2026 | Magellan Asset Management December 2025 Performance News Bennelong Australian Equities Fund 4D Global Infrastructure Fund (Unhedged) Bennelong Concentrated Australian Equities Fund Glenmore Australian Equities Fund |
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