2025 was yet another exceptional year for investors.
For the calendar year1:
- Canadian stocks were up 31.68%
- US stocks were up 11.23% (in CAD terms)
- International developed market stocks were up 25.17%
- Emerging market stocks were up 25.21%
- Global Real Estate Investment Trusts were up 2.62%
- Canadian bonds were up 2.36%
- Global bonds were up 3.05%
Which countries had the strongest stock market returns in 2025?
Among emerging markets, Colombia, Korea, Hungary, Greece, Poland, Peru, South Africa, Czech Republic, and Chile all had returns exceeding 60%. Among developed markets, Spain, Austria, Ireland, Italy, and Finland all had returns exceeding 40%. Quite remarkable that Canada, despite returning an extremely impressive 31.68% for the year, was not even in the ten top-performing countries globally. Evidently, global diversification continues to make sense for investors.
How about returns that are more easily captured via a globally diversified investment fund, for some of the more common risk profiles? The investment management industry has come a long way over the years and Canadian investors have access to various investments that are both low-cost and well-diversified. In 2025, assuming broad diversification2:
- Equity investors would have earned roughly 20-22%
- Growth investors would have earned roughly 16-18%
- Balanced investors would have earned roughly 13-14%
- Conservative investors would have earned roughly 9-10%
While we often encourage clients to minimize the frequency with which they review their investment accounts, periodically checking the various asset-class returns that make up one’s portfolio can be both informative and productive. I personally find that observing these calendar year returns tends to reinforce strong investor behaviour, enhance our own investor psychology, and ultimately help keep us in our seats when markets inevitably become more turbulent.
What are some other takeaways when we consider 2025 performance? A few that that come to mind would be:
- Investors must go through uncertainty and deal with volatility to capture the investment returns that were up for grabs in 2025. Without accepting that uncertainty and short-term volatility, we must accept lower investment returns. As we always say, risk and return are correlated.
- Very few people predicted the equity market returns that were realized in 2025. This includes many of the brightest minds on Wall Street and across global finance circles. More importantly, if you followed the news and global events all year, you may have expected the complete opposite of what occurred in the stock market. This reality on display in 2025 informs much of our investment philosophy at The Andrews Group. There is comfort in recognizing that acting on predictions and opinions is not required for wealth generation. 2025, like many years in recent history, once again supported this belief.
- Advisors and financial planners often refer to long-run expected returns when discussing portfolios, projections and plans. The historical data reveals that “average return” years actually happen relatively rarely; arriving at the average over the long-run is more likely to be the product of many exceptionally strong years combined with the occasional painful year, as we saw most recently in 2022. Remembering this is important.
- Now is as good a time as ever to keep our return expectations in check as long-term investors. FP Canada, Canada’s national professional body for financial planners, updates their projection assumptions annually and has most recently put forward long-term expected returns of 6-8% for global equities and 3-4% for global fixed income, before any associated costs are factored in. We can all be grateful for the significant boost that years like 2023, 2024 and 2025 provide to our investment portfolios, but we would be naïve to expect this to continue as the new normal. Downside market volatility will rear its ugly head again, although the timing of which is entirely unknowable. Investors would be wise to recall that their portfolio values today are the outcome of remaining invested through both good times and uncertain times, as opposed to being on the sidelines and trying to time the market. Patience and discipline were rewarded in 2025 and will continue to be crucial for growing wealth moving forward.
Thanks for reading.
Reid Palmer
CFP®, CIM®
Associate Financial Planner
The Andrews Group
CI Assante Wealth Management Ltd.
Footnotes:
- Market segment (index representation) as follows: Canada Stock Market (S&P/TSX Composite), US Stock Market (Russell 3000 Index [net of tax]), Developed ex Canada and US Stocks (MSCI EAFE IMI Index [net div.]), Emerging Markets (MSCI Emerging Markets IMI Index [net div.]), Global REITs (S&P Global REIT Index [net div.]), Canada Bond Market (Bloomberg Canadian Aggregate Bond Index), and Global Bond Market (Bloomberg Global Aggregate Bond Index [hedged to CAD]). Data courtesy of Dimensional Fund Advisors Canada ULC.
- In this context, equity, growth, balanced and conservative categories refer to a respective equity to fixed income ratio of 100% equity, 80% equity/20% fixed income, 60% equity/40% fixed income, and 40% equity/60% fixed income, respectively. Various asset-allocation funds were referenced, including those of Blackrock, Vanguard and Dimensional Fund Advisors Canada ULC.
Disclaimer:
This material is provided for general information and should not be considered individual investment, tax, accounting, or legal advice, or construed as an offer or solicitation to buy or sell securities.
The statements and opinions expressed are those of the presenter(s) and not necessarily those of CI Assante Wealth Management Ltd. All opinions expressed and information provided herein are subject to change without notice. Every effort has been made to compile this material from reliable sources as at the date indicated however, no warranty can be made as to its accuracy or completeness Market conditions may change which may impact the information contained herein. All charts and illustrations in this document are for illustrative purposes only and they are not intended to predict or project investment results. In considering any particular investment or investment strategy, please remember that past performance is no guarantee of future performance. We caution you not to place undue reliance on any statements that are predictive in nature, depend upon or refer to future events or conditions, as a number of factors could cause actual events or results to differ materially from those expressed in any forward-looking statement, including economic, political and market changes and other developments. The information contained herein may not apply to all types of investors. Before acting on the information presented, please seek professional financial advice based on your personal circumstances.
CI Assante Wealth Management Ltd. is a Member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.