Fund Return 2025 - 2026

Fund return to 30 November 2025

Investment Commentary

Provided by Mercer - CERS Investment Adviser

Market Developments

Global equity performance was flat to slightly positive in November across the US, and non-US developed while emerging markets were down. Non-US developed stocks outperformed US and EM. Small cap outperformed large cap stocks, while value outperformed growth as measured by the Russell 3000.

Fears of frothy tech valuations permeated the market, even as Nvidia beat earnings expectations, leading to losses for tech stocks which are a large part of US indices. News of circular investments between chipmakers, hyperscalers, AI infrastructure and AI firms highlighted the fact that billions of dollars in investment have been flowing between related parties. Investments in AI far exceed actual revenue and markets have lately been in the process of re-evaluating the risk of the AI narrative disappointing.

The US government reopened November 12, marking the longest shutdown in history even though economic and market impact were limited this time. There were some catch-up releases as a result. Nonfarm payrolls for September showed that the labor market remains stable overall. While payrolls were higher than expected, unemployment rose slightly to 4.4%, which is still very low in absolute terms. CPI numbers for October were not released yet as the BLS could not compile the necessary data due to shutdown-related staffing shortages.

Future rate cuts in December are uncertain due to limited data availability, and inflation remains above target in the US at a time when the labor market remains robust and the economy is expanding at a healthy rate. The US Composite purchasing manager index, which is seen as a forward-looking indicator, went further into expansionary territory. The Fed was still on schedule to end the Quantitative Tightening program beginning in December, lessening pressure on rates to rise.

The US dollar ended little-changed for the month against major developed currencies. Oil fell by about 4.0% and gold continued to rally. Listed real assets rose in absolute terms and outperformed broad equities by wide margins. Commodities (Bloomberg index) and natural resources performed strongly. Bitcoin fell from an October 6 high of $126,080 to around $90,400 on November 30, about a 28% cumulative loss.

Outlook

Key global risks in 2026 we expect to be centred on technology, policy, debt, and geopolitics. The rapid build-out of artificial intelligence infrastructure has supported markets and spending, but the risk of overinvestment looms large. Elevated valuations and optimism around AI could expose investors if returns disappoint, while trade restrictions or new semiconductor tariffs could disrupt supply chains and pressure tech-reliant economies.

Policy uncertainty may ease modestly but remains a concern, with US midterm elections and the appointment of a new Fed chair raising questions about monetary independence and legislative gridlock.

Rising public debt presents a growing medium-term risk, with major developed economies on unsustainable fiscal paths that require consolidation to maintain stability. Geopolitical flashpoints remain widespread, from the ongoing Russia-Ukraine conflict to persistent tensions in the Taiwan Strait, South China Sea, and Middle East. Although trade frictions have moderated, global political fragmentation continues to threaten market confidence and growth.

Investment Update - November 2025

Notes

• Scheme Year to date performance is the period from 1 June 2025 to the most recent month shown.
• Performance shown is net of annual management charge.
• The investment choices offered by the Trustee will be regularly reviewed and may be varied from time to time.
• Before you choose a fund we recommend that you speak to a financial adviser. 
• If you require further information please contact the CIRT Team at [email protected]