PSN Top Guns Commentary

Q2, 2025

PSN Top Guns Q2 2025: Global Markets Post Strong Returns Despite Volatility

The second quarter of 2025 delivered solid returns across global markets (MSCI World index +11.63%) despite significant volatility triggered by geopolitical tensions and trade policy uncertainty. After a tumultuous start following "Liberation Day" tariff announcements on April 2nd, markets staged a strong recovery when the Trump administration implemented a 90-day pause for negotiations. By the quarter-end, most major indices had rebounded substantially to post strong gains.

Fixed income markets started the quarter focusing on monetary policy and the uptick in recession fears following “Liberation Day” but shifted their attention to fiscal policy and debt sustainability as the Bloomberg U.S. Aggregate index posted a +1.21% return.

Despite beginning with significant turbulence, the second quarter ultimately delivered strong returns across U.S. equity

markets, with the S&P 500 (+10.94%) surpassing its February high in the final days of June following the delayed tariff implementation. The quarter saw extreme dispersion in sector and style returns. Growth stocks (Russell 1000 Growth index +17.84%) outperformed value (Russell 1000 Value Index +3.79%) by 14%, while the midcap growth style (Russell Midcap Growth index +18.20%) was the top performing style. Furthermore, the technology sector posted a strong +23.71% return after being the first quarter’s biggest laggard, while defensive sectors like healthcare (-7.18%) and Energy (-8.56%) experienced deep selloffs during the quarter. Below are some of the strategies that make up the PSN Top Guns Mid Growth Universe.

Lord, Abbett & Co., LLC: Mid Cap Growth (+27.7% for the quarter)
Silvant Capital Management: Silvant Mid-Cap Growth (+25.8% for the quarter)
Victory Capital Management: Pioneer US Mid Cap Growth Equity (+25.4% for the quarter)

Both developed international (MSCI EAFE index +12.07%) and emerging markets (MSCI Emerging Markets index +12.20%) posted very strong returns on their way to outperforming U.S. equities during the quarter. Currency movements played a significant role, as the weakening U.S. dollar substantially boosted returns for dollar-based investors. Despite geopolitical tensions and trade uncertainties, international markets demonstrated remarkable resilience, supported by attractive valuations and accommodative policy environments in several regions. Like U.S. equities, technology stocks led the way. The following strategies made the PSN Top Guns list for the Emerging Markets Universe.

Delaware/Macquarie Investment Management: Macquarie Emerging Markets Equity (+25.7% for the quarter)
AQR Capital Management, LLC: Emerging Small Cap Equity (+21.8% for the quarter)
Informed Momentum Company: IMC Emerging Markets Small Cap (+21.1% for the quarter)

Fixed income endured a similar rollercoaster ride during the quarter. The quarter was characterized by significant volatility, particularly following the April "Liberation Day" tariff announcements, which initially triggered a flight to quality before markets stabilized as the Bloomberg U.S. Treasury: 7 – 10 Year index posted a +1.40% return. The yield curve steepened notably as short-term rates declined on expectations of eventual Federal Reserve rate cuts, while longer-term yields rose due to growing concerns about fiscal sustainability following the approval of the “One Big Beautiful Bill”. Meanwhile, international fixed income (FTSE World Govt ex US index +7.37%) outperformed U.S. fixed income (Bloomberg U.S. Aggregate

index +1.21%). Below are some of the strategies that make up the PSN Top Guns International Fixed Income Universe.

Franklin Templeton Investments: Franklin European High Yield (+11.3% for the quarter)
Columbia Threadneedle Investments: European High Yield Bond (+11.2% for the quarter)
UBS Asset Management: Euro High Yield (+11.1% for the quarter)
To learn more about PSN Top Guns and see the entire list of winners.

View the entire Top Guns list for Q2, 2025 here.

PSN Top Guns quarterly commentary is presented by Zephyr's Market Strategist Ryan Nauman whose analysis and research has been shared on financial industry media including WealthManagement.com, Reuters, CNBC, Bloomberg, MarketWatch.com, Yahoo! Finance, and the Wall Street Journal, while being a regular guest on TD Ameritrade Network, Yahoo! Finance, Bloomberg TV, Bloomberg Radio and Chuck Jaffe’s Money Life podcast.