Monthly Review and Outlook September 2025
Global markets continued to make progress in September, with global shares posting gains. Emerging markets performed particularly strongly, outpacing developed markets. Bonds also had a generally positive month, with corporate bonds outperforming government bonds.
Below is a review of key developments across global markets and our outlook for the months ahead, highlighting opportunities and potential risks.
Company shares
September saw global markets build on recent gains, supported by positive sentiment across both equities and bonds. Investors responded favourably to central bank actions, particularly the US Federal Reserve’s interest rate cut, and to encouraging developments in emerging markets. While economic and political uncertainties remain, the overall tone was constructive, with most major asset classes delivering positive returns.
- United States: US equities advanced, led by information technology and communication services. Materials and consumer staples underperformed. The Federal Reserve delivered a widely anticipated 25 basis point interest rate cut, responding to recent weak jobs data.
- Europe: Eurozone shares posted gains, with information technology and industrials performing well. Consumer staples, materials, and telecoms services lagged. Political developments in France were in focus, as Prime Minister Bayrou lost a confidence vote and was replaced by Sebastien Lecornu. Rating agency Fitch downgraded France’s sovereign rating from AA- to A+.
- United Kingdom: In the UK, shares gained ground, supported by strength in mining companies amid merger and acquisition activity and higher gold prices. Banks and aerospace & defence sectors also performed well.
- Japan: Japanese equities delivered positive returns, advancing ahead of the October leadership election for the ruling party, following the resignation of the prime minister.
- Emerging Markets: Emerging market equities outperformed developed markets, supported by the US interest rate cut, a weaker US dollar, and strong returns from Asian markets such as China, Korea, and Taiwan. The broader Asian region saw technology shares drive gains, while some Southeast Asian markets underperformed.
Bonds
September was a positive month for bond markets overall, with yields across developed government bond markets falling, led by longer-dated bonds. As yields fall, bond prices rise, contributing to overall market gains. Corporate bonds outperformed as markets focused on a broadly positive economic outlook, supported by lower interest rates.
Commodities
Commodities saw gains over the month. Gold prices rallied, supported by increased investor demand. The oil market was influenced by the Opec+ group’s decision to further increase output, while other commodity prices were mixed depending on supply and demand dynamics across sectors.
Outlook
Strong equity performance, lower interest rates, and positive sentiment in emerging markets have helped reduce uncertainty and boost investor confidence. We continue to see opportunities in global shares, particularly in technology and Asian markets, but remain mindful of ongoing political and economic risks. We maintain a cautious stance on government bonds, with a preference for corporate bonds and gold as diversifying assets.
Asset overview
Our general view of assets in the coming months is summarised as follows. These are our in-house views as at the end of September 2025.
| Asset | Rag Status | Details |
|---|---|---|
Equities | Green | We are positive on equities to positive due to the low risk of recession, lower real yields and robust corporate earnings alongside looser fiscal policy. Overall equity exposure within the Tactical Funds has remained neutral broadly in line with last month, with a preference for Chinese equities over US and European equities. |
Government bonds | Red | We retain a negative view on government bonds over concerns around inflation risks and expensive valuations. |
Corporate bonds | Amber | We maintain a neutral stance on corporate bonds. |
Commodities | Green | We retain a positive stance on gold which continues to serve as a diversifying hedge against in an environment of policy volatility, fiscal fragility, and growing investor uncertainty around the long-term role of Treasuries and the US dollar. |
Source: Schroder Investment Management and Schroders Personal Wealth, 2 October 2025.
RAG Status legend
Green - Positive outlook
Red - Negative outlook
Amber - Neutral outlook
Important information
Forecasts of future performance are not a reliable guide to actual results, neither is past performance a
reliable indicator of future results. The value of investments and the income from them can fall as well as rise and are not guaranteed, and the investor might not get back their initial investment.
Any views expressed are our in-house views as at end-September 2025. Investment markets and conditions can change rapidly, and the views expressed should not be taken as statements of fact nor relied upon when making investment decisions. This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without our prior written consent.
Schroders Investment Management (SIM) provides investment management and advice services for SPW funds and portfolios respectively.
Schroders Personal Wealth (ACD) is a trading name of Scottish Widows Schroder Personal Wealth (ACD) Limited. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 11722973. Authorised and regulated by the Financial Conduct Authority number 834833.
Claims may be protected by the Financial Services Compensation Scheme. We are covered by the Financial Ombudsman Service.
Claims may be protected by the Financial Services Compensation Scheme. We are covered by the Financial Ombudsman Service.
