Global equities posted strong gains in 2025, driven by the US technology mega-caps. But the artificial intelligence (AI) trade wasn’t the only game in town. Surveying last year’s diverse return drivers can guide investors to a wider set of opportunities while preparing for evolving risks.

Volatile market episodes didn’t derail global equities last year, as the MSCI ACWI Index advanced by 22.3% in US-dollar terms. The S&P 500 rose by 17.9%, trailing Europe, emerging markets and Japan. Although non-US returns benefited from a weaker US dollar, Japan, Europe and emerging markets outpaced the US in local-currency terms as well.

Communications and materials led global sector returns, while consumer sectors underperformed. Global style returns diverged, with growth stocks continuing to lead in the US. Outside of the US, however, the MSCI EAFE Value Index surged by 42.2%—far eclipsing the performance of non-US growth stocks.

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