Q2 2025 Market Update
Amid the fluctuations of Q2 2025, investors are reminded of the importance of long-term planning. Geneva’s Target Date Funds help participants maintain steady progress toward retirement, despite short-term variations and uncertainty in the financial landscape.
The second quarter of 2025 was marked once again by heightened volatility due to trade policy uncertainty, geopolitical tension, and increased concern regarding the US fiscal deficit. The Liberation Day on April 2nd saw a steep sell-off in US equities, as the S&P 500 fell by as much as 12% the week after, while US yields rose by roughly 50 basis points. A week later, the US administration paused reciprocal tariffs for 90 days, and later in May, the US and China agreed to a 90-day pause on opposing tariffs. This temporary change, along with a strong earnings season and renewed investor confidence, led to positive returns in all major equity markets for Q2, with the S&P 500 leading the way with 10.9%.
On the international front, the US dollar saw further declines as there was expectation of a rate cut, uncertainty surrounding trade policy, and the previously mentioned concern over US fiscal policy. However, the US dollar depreciation provided a tailwind for USD-denominated international returns. As devastating as international war can be, the impact upon the markets has so far been minimal. 2025 YTD returns for US and non-US indices are below:
| Index | 2025 YTD Returns |
| MSCI ACWI ex US | 17.9% |
| EAFE | 19.5% |
| MSCI EM | 15.3% |
| S&P 500 | 6.4% |
| -Collected from MSCI data | |
Geneva continues to encourage its participants to take a long-term, balanced, and well-diversified approach towards retirement. A long-term outlook will help one to see through volatile markets without making emotional decisions. According to Alight, retirement plan investors rushed to safe-haven assets as participants had their highest level of trading in five years, moving assets from equities and Target Date Funds into fixed income.[1] Unfortunately, these participants may have missed out on the upside of the second quarter. Further, US equities have outperformed in recent years, up until 2025 where we saw a rotation of assets into non-US equities. This, along with a solid 2025 YTD total return for the Bloomberg Agg of 4%, highlights the benefits of diversification. Geneva’s custom-built target date funds provide both benefits so participants can have peace of mind knowing that their retirement assets are diversified and rebalanced regularly to maintain an optimal allocation among world-class assets.
Geneva Benefits Group serves those who serve others, providing practical support for the financial, physical, and mental wellbeing of people who work in full-time ministry.
