Current market environment performance of dynamic, risk-managed investment solutions.
Momentum builds as summer turns to fall
The third quarter of 2025 saw stocks rise to new heights on reinvigorated enthusiasm for AI developments and new rounds of fiscal and monetary stimulus.
As the volatility of the year’s first half faded, markets moved steadily higher on low volatility—a calm backdrop as summer gave way to fall. Gains were spread across the asset classes: U.S. and international stocks, bonds, and gold all delivered gains for the quarter.
Technology stocks led the way as investors shifted their focus from tariffs to the long-term productivity potential of AI. Fiscal stimulus from the July spending bill likely boosted investor sentiment and contributed to the quarter’s rally. Market strength extended across most sectors, with Consumer Staples the only one to decline.
Bonds rose as investors grew hopeful that the Federal Reserve would resume its rate-cutting cycle after pausing last December—expectations that were met when the Fed cut rates in September. Gold also surged, outperforming both stocks and bonds. It hit record highs during the quarter and was up an impressive 47% year to date by the quarter’s end. Many of our strategies utilize gold and were able to take advantage of the asset’s outperformance this year.
Recognizing the positive market returns this quarter, most of our actively managed strategies were positioned with large non-defensive holdings at quarter-end. Among our QFC, ETF, and Axos platform strategies:
• 73% of our equity strategies had over 90% in non-defensive asset exposures
• 69% of our bond strategies had over 50% in non-defensive asset exposures
• 91% of our core strategies had over 50% in non-defensive asset exposures
• 100% of our alternative strategies had over 50% in non-defensive asset exposures
The third quarter looked very different from the second. Seasons changed—and so did market direction. That’s why our strategies are built to adapt. Whether conditions feel like summer, fall, or something in between, our dynamic, risk-managed approach helps keep your portfolio prepared for whatever the market forecast brings.