Fintuity Market Review August 2025
August proved a positive month across most major asset classes, with investor confidence supported by signs of global economic resilience and contained inflation. Equity markets, fixed income, and commodities all posted modest gains despite political uncertainty and conflicting economic data, particularly from the US.
Equity Markets Performance
Global developed markets saw a healthy 2.6% gain in August. Japan led the way, buoyed by upbeat economic data and a recently agreed trade deal with the US. Meanwhile, the UK’s FTSE All-Share index rose by 0.9%, underperforming relative to peers due to persistently high inflation and cautious monetary policy by the Bank of England. While the BoE cut interest rates by 25 basis points, its hawkish commentary led many to revise their expectations for further cuts.
In the US, the S&P 500 gained 2.0%, supported by strong second-quarter earnings and manufacturing optimism. However, AI-related stocks wavered mid-month following a report indicating that AI pilot programmes were not materially boosting corporate revenues. Elsewhere, Europe saw mixed performance. The MSCI Europe ex-UK index rose 1.2%, though French equities underperformed due to political instability.
In emerging markets, China drove performance with a 1.5% rise in the MSCI EM index, as the extension of the US-China trade truce and semiconductor investment plans lifted sentiment. However, Indian equities were hit by a new US tariff, while South Korea struggled with tax reforms.
For investors looking to optimise their portfolios with the help of an independent adviser, now may be an ideal time to book a meeting with an adviser to review market exposure.
Style and Sector Trends
August saw small-cap equities outperform large-caps, reflecting hopes for interest rate cuts and sustained economic activity. The MSCI World Value index outpaced its growth counterpart by 1.9 percentage points, driven in part by a cooling sentiment around AI investments. Nvidia’s strong earnings couldn’t fully offset the broader tech sector’s cautious outlook.
This is a timely opportunity to speak with a financial adviser about the potential benefits of diversification across styles and sectors, especially when looking to align portfolios with long-term financial goals such as retirement or pension planning. An independent financial adviser can also guide on the best use of market dips to adjust investment strategies.
Fixed Income Highlights
Fixed income markets also performed solidly. The Bloomberg Global Aggregate bond index rose 1.5%, helped by narrowing credit spreads and expectations of rate cuts from the US Federal Reserve. Investment grade corporate bonds led the way, as earnings continued to beat expectations. Emerging market debt and high-yield credit were likewise supported by improving risk appetite.
UK Gilts, however, underperformed. July’s higher-than-expected inflation led to a sharp upward move in long-dated Gilt yields, as concerns about UK fiscal stability grew. The yield on 30-year Gilts rose to 5.6%, the highest since 1998. This is a key area where a certified financial adviser can assist clients with pension planning and protection strategies.
Meanwhile, in Japan, inflation remained sticky, increasing the likelihood of further rate hikes. This pushed Japanese government bond yields higher.
If you’re unsure how fixed income fits into your broader financial plan, especially when balancing risk, protection, and income generation, it’s a great time to book a meeting with an adviser.
Political and Economic Landscape
Global geopolitics added complexity. In the US, labour market data signalled a slowdown, leading to speculation that the Federal Reserve may ease policy soon. However, attempts to interfere with central bank independence caused concern. In Europe, French politics dominated headlines as the government faced a no-confidence vote over its fiscal plans.
Oil and gas prices softened, while gold continued to climb—reflecting investor caution and demand for safe-haven assets. The combination of political uncertainty and global inflationary pressures highlights the value of working with a financial advisor to find the best protection strategies and investment solutions.
Summary and Outlook
August was a broadly positive month, underpinned by resilient global activity and well-contained inflation. Yet markets remain sensitive to political and economic shifts. As equity valuations remain above their long-term averages, particularly in the US, a diversified approach is key.
For those seeking to optimise their portfolio, control fees, and find a top financial adviser with tailored service and guidance, now is the time to act.
Book a meeting with an adviser today to ensure your strategy is aligned with your long-term goals and responsive to evolving market conditions.
Founded in 2017, Fintuity has fast become one of the only digital Independent Financial Advisers (IFA) in the United Kingdom. Fintuity offers a wide range of financial advisory services including pensions, protection, investments and mortgage advice. The key difference is that as an exclusively digital service, we can offer significant savings and a service that is direct to you and on demand.
