September 2025 Returns and Asset Performance
October 2, 2025
Major Asset Classes
October 2025
Performance Comparison
Introduction
October returns ended on a strong note as year-on-year earnings growth of the S&P 500 index is coming at 10.7% for third quarter. The S&P 500 index (+2.3%) was up for the month supported by the Fed’s recent rate cut, supportive changes in Fed balance sheet management, and improved trade prospects with China. Blockbuster gains were in Semiconductors (+13.1%), Renewable Energy (+11.8%), and Robotics/AI (+11.6%). Rates fell during the month and long duration Treasury bonds (+1.4%) outperformed corporate IG bonds (+0.2%) of the same tenor. Gold (+3.7%) was positive for the month, but had retraced significant gains by month end, helped by a stronger US Dollar (+2.2%).
The following analysis reviews returns for the prior month using a visual summary by asset group. The aim is to help investors to benchmark portfolio returns and to see emerging trends across markets.
Core US Indices
The NASDAQ 100 index (+4.8%) again topped the headline indices in October and was followed by mega large-cap shares in the S&P 500 Top 50 (+4.1%). Market breadth was weak as the S&P 500 Equal Weight Index (-0.9%) was down, while Private equity funds (-3.2%) were down notably. Year-to-date, the Equal Weight Index (+8.7%) trails the S&P 500 Index (+16.3%) and the S&P 500 mega-caps (+20.6%).
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US Sector Indices
October returns saw sector rotations into large cap Technology (+6.7%), Health care (+3.7%), and Utilities (+2.2%). Top laggards were Consumer Staples (-6.0%), Communication (-3.0%), and Real Estate (-2.9%). Year-to-date, the top returns are with large cap Technology (+29.9%), Utilities (+20.2%), and Communication Services (+19.6%). Companies responsible for Consumer Staples (-17.1%) are struggling.
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US Factor Indices
Factor portfolios are constructed to focus on the core drivers behind returns, including company size, value, profitability, growth, and momentum. Multi-factor portfolios combine two or more factors. In October, the top performing factor portfolios were Value (+4.3%) and Growth (3.4%). The Momentum portfolio (-0.9%) was weak, as were Minimum Volatility (-2.1%) and High Dividend (-2.6%) shares. Year-to-date, the factor portfolios with the strongest returns are Value (+25.6%), Momentum (+23.7%), and Growth (+23.3%). All three have outperformed the broader S&P 500 (+16.3%) Index.
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US Thematic Portfolios
US thematic portfolios are company clusters or networks that represent primary growth trends of the U.S. economy. October returns were led by a Semiconductors (+13.1%), Renewable Energy (+11.78%), and Robotics/AI (+11.6%). Since January, all the thematic portfolios tracked are outperforming the S&P 500 index. The top spot goes to Blockchain shares (+80.3%), Renewable Energy (+53.6%), and Semiconductors (+43.1%).
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Developed Market Equities
The S&P Developed Markets index (+0.7%) lagged US benchmarks in October, but notable performance was seen in Finland (+6.6%), Japan (+4.0%), and Isreal (+2.1%). The MSCI Europe Index (+0.4%) was neutral-to-up, dragged down by Italy (-0.3%) and Germany (-2.1%). The best markets year-to-date include Spain (+63.4%), Austria (+54.5%), and Italy (+47.0%).
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Emerging Market Equities
The S&P Emerging Markets Index (+3.6%) has now beat the S&P 500 index two months in a row. Returns were led by Korea (+21.1%), Chile (+7.2%), and Taiwan (+4.8%). Key laggards in October include export powerhouses included Vietnam (-2.3%), Mexico (-2.5%) and China (-3.5%). Year-to-date performance is led by Korea (+90.6%), Poland (+64.3%) and Peru (+61.5%).
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Government Bonds
During October, the yield on the 10-year Treasury Note was unchanged and ranged between 4.16% and 3.93%, before settling near the high. The US Aggregate Bond Index (+0.62%) saw only modest gains. Emerging Market Government Bonds (+1.98%) and long duration US Treasury Bonds (+1.38%) were strong performers, as were US Municipal bonds (+1.2%) on a pre-tax basis. Year-to-date, the US Aggregate Bond Index (+6.84%) is lagging behind Emerging Market Government Bods (+12.94%), 7- to 10-year Treasuries (+7.80%), and US Mortgage Bonds (+7.60%).
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Corporate & Infrastructure Bonds
The benchmark iBoxx Corporate Bond Index (-0.01%) was unchanged, while infrastructure projects were neutral-to-down as seen with Global Projects (-0.2%) and US Projects (-0.32%). Weakness across the REIT sectors was more pronounced. US Multisector (-1.84%) and Residential (-3.41%) REITS had notable losses. The top performing returns since January include Convertible Bonds (+23.3%), Global Infrastructure Projects (+18.66%), and Developed market IG bonds (+16.53%).
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Commodities
Commodity returns, as measured by the S&P GS Commodity Index (+1.0%), were modest in October. Natural Gas (+24.9%), Soybean Meal (21.0%), and Palladium (+14.3) topped the list. Silver (+3.8%) and Gold (+3.7%) held onto positive gains despite large drawdowns from monthly highs. Lumber (-12.1%), which is a key indicator for many consumers’ more significant purchases, was notably weak. For 2025, the commodity index (+6.6%) lags behind US stock and bond returns. However, top performers in the precious metals group include Platinum (+75.6%), Silver (+65.8%), and Palladium (+60.0%).
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Currencies
The U.S. Dollar index (+2.2%) rebounded in October and is down 8% since the start of the year.
Cryptocurrencies
Benchmark Bitcoin (-3.9%) was down in October with Avalanche (-39.4%) and Cardona (-24.5%) losing large. Over the last ten months, Bitcoin (+17.3%) is solidly outperforming US stocks but is still trailing Gold (+51.5%).
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Saffron Capital LLC is a registered investment advisor that provides guided growth and risk-managed portfolios. The company is employee-owned and Minnesota-based.
