Over the final three months of 2025, market volatility remained very low, in line with the trend observed since the summer. Nevertheless, two brief episodes of market tension were recorded during the quarter.
In mid-October, risk aversion rose sharply following China’s announcement of its intention to expand export controls on rare earth elements. These metals, over which China holds a near-monopoly, are now critical to the production of high-technology goods. Donald Trump reacted immediately by announcing plans to impose an additional 100% tariff on Chinese imports, along with new restrictions on the export of U.S. software.
A further episode of volatility occurred in November, when concerns emerged regarding the sustainability of financing for the surge in investments related to artificial intelligence. Once again, investor nervousness proved short-lived.
From a macroeconomic perspective, data released in recent weeks confirm a degree of resilience in U.S. economic growth, driven primarily by investments linked to artificial intelligence. However, large segments of the U.S. economy are showing signs of fragility, particularly the labor market. This backdrop partly explains the two interest rate cuts implemented by the Federal Reserve during the quarter.
In Europe, growth remains moderate, but the scale of the stimulus plans announced - particularly in the defense and infrastructure sectors, most notably in Germany - has fueled expectations of a reacceleration in economic activity.
Against this backdrop, financial markets experienced relatively contained movements over the quarter. Equity markets registered modest gains of around 2% to 5% across the main indices, thereby consolidating a strong annual performance for the asset class, with returns ranging between 15% and 20%.
Industrial and precious metals also delivered strong performances over the year: copper rose by 37%, silver by 148%, and gold by 65%.
As for bond markets, interest rates remained broadly stable over the quarter. On a full-year basis, European sovereign yields increased by 30 to 50 basis points, reflecting the impact of fiscal stimulus measures. In contrast, U.S. yields declined by around 40 basis points, benefiting from the continuation of the Federal Reserve’s rate-cutting cycle.
During the fourth quarter, the management of Dynamic profiles was oriented toward an exposure primarily focused on the euro area, built around a selection of clearly identified themes with attractive medium-term growth potential.
We increased the allocation to Germany in order to capture the expected momentum stemming from the stimulus plan and the recovery in industrial activity. This positioning was implemented through the acquisition of the MDAX ETF, providing immediate diversification into German mid-cap equities. These companies are well positioned to benefit from the gradual normalization of supply chains and a rebound in activity across industrial sectors.
At the same time, we invested in the MW Multi Caps Europe fund, whose exposure favours European companies in the industrial, infrastructure, and defence sectors, aligned with the theme of “European Independence.” These segments benefit from more visible fiscal support and improved earnings visibility.
In addition, we further strengthened our exposure to Defense and Cybersecurity, which we view as key drivers of sustainable growth and European sovereignty. The selection of stocks such as Thales, Theon International, Exail, and Facephi aims to capture the acceleration in both public and private investment dedicated to system security, data protection, and the reinforcement of defence capabilities.
This allocation reflects our intention to combine tactical responsiveness (via the MDAX) with long-term convictions (European Independence, Defence & Cybersecurity), supported by solid structural trends.
For Balanced and Conservative profiles, the approach remains deliberately selective, with a strong emphasis on risk control. Within the equity allocation, we implemented similar adjustments to those made in the dynamic profiles, maintaining a euro-centric and thematic bias, while keeping overall equity exposure limited. In a profit-locking strategy, we realised gains on Roche following a strong performance and reduced exposure to ASML to limit sensitivity to market fluctuations. The fixed-income allocation, meanwhile, fully played its role as a stabilizing component throughout the year, through MW International Bonds and a Corporate Bond ETF.
Finally, across the majority of securities accounts and life insurance contracts, we maintain a meaningful allocation to gold (5% of portfolios), as well as exposure to commodities via Freeport for copper, Glencore for diversified commodity exposure, and a sector tracker. This positioning preserves tactical flexibility and allows us to increase exposure to risk assets when entry points become more attractive.