Markets, currency, and expectations — a few observations.

📈 Calendar year-to-date (1 Jan–20 Dec 2025):
• S&P 500: +16.2% (USD, ex-dividends)
• S&P 500: +9.3% (AUD)
• ASX 200: +5.7% (AUD)

📆 Australian financial year to date (since 1 July 2025):
• S&P 500: +8.8% (AUD)
• ASX 200 (price): +0.9%

Across either timeframe, clients should be pleased with the outperformance delivered at the portfolio level, particularly given the broader market backdrop.

November is a good example.
While major indices were broadly flat, most client portfolios rose ~2%. At the same time, several widely followed “super-star” hedge funds reportedly fell ~2%.

Relative outcomes matter — especially when markets aren’t doing much.

A few broader points worth noting:

1) Currency matters — a lot.
The currency you invest in, measure in, or convert back to can materially change outcomes. I expect far more action in currency markets over the coming years, and currency selection will remain a deliberate part of my global strategy.

2) The herd delivers herd results.
Moving with the crowd usually produces the same outcome as the crowd.
Diversification helps you lose less than someone else — it is not designed to produce above-average returns.

3) A different kind of bubble is forming.
Not in prices — but in expectations.

When a potential 20% return is met with, “Is that all?”, it’s worth remembering that the ASX 200 has risen only ~5% over the past 12 months.

Perspective still matters.

December 20, 2025

rob@karriasset.com.au