April 2025 delivered a welcome reprieve for global equity markets following the steep declines in March. While geopolitical theatrics continued to capture headlines—most notably Donald Trump’s “Liberation Day” exploits—investors took some comfort in stabilising interest rate expectations and a moderate rebound in corporate earnings. In South Africa, domestic risk assets posted strong gains, particularly within the listed property sector, although these gains unfolded against a still-precarious fiscal and political backdrop.
Global Market Overview
April marked a partial recovery for global equities, as major indices clawed back some of March’s losses. The MSCI World Index gained 0.89%, while the MSCI ACWI rose 0.93% in USD terms. However, year-to-date returns remain negative across many developed markets, highlighting persistent investor unease around geopolitics, monetary policy, and corporate earnings.
One of the most market-moving political events came mid-month, when US President Donald Trump staged a high-profile rally declaring “Liberation Day”—a symbolic assertion of deregulation, sovereignty, and economic nationalism. The announcement, laden with anti-globalist rhetoric, raised fears of renewed trade tensions and policy instability ahead of the US elections. Further compounding global uncertainty in April were renewed tariff threats from President Donald Trump, who proposed a sweeping 10% import tariff on all goods entering the United States, alongside targeted levies on Chinese imports. These proposals raised alarms globally, with concerns of reigniting a trade war. Chinese equities and currencies came under pressure amid fears of retaliatory measures and a slowdown in exports. Broader global markets also responded with caution, fearing disruptions to supply chains, renewed inflationary pressures, and fragmentation of global trade norms.
US equity indices staged a mild recovery. The S&P 500 posted a 0.45% gain for the month, trimming its year-to-date decline to -5.04%, while the tech-heavy NASDAQ 100 added 1.54% but remains down -6.71% YTD. Broader policy uncertainty and elevated valuations continue to weigh on forward sentiment. In contrast, European and Japanese markets outperformed, buoyed by currency tailwinds and more predictable fiscal environments. The FTSE 100 rose 2.80% in USD terms, while the JPX-Nikkei 400 delivered an impressive 5.38%, supported by robust earnings and shareholder reforms.
Emerging markets extended their relative outperformance, with the MSCI EM Index up 1.31% in April and 4.28% year-to-date. India and select Latin American markets led the gains, underpinned by stable inflation, commodity demand, and stronger fiscal management. China’s outlook remained murky, and Hong Kong’s Hang Seng Index fell -3.73% in April as investor enthusiasm waned amid unclear stimulus execution and new US-China political tensions.
Global REITs were relatively flat, with the S&P Global REIT Index declining -0.16%, despite improving earnings in some regions. Meanwhile, fixed income markets remained choppy, as sticky US inflation data and hawkish commentary from some central banks pushed yields higher, hurting long-duration assets.
With politics, trade, and monetary policy all in flux, the April rebound masked deeper structural concerns. The interplay between inflation, interest rates, and populist political narratives continues to cloud the global outlook, reinforcing the need for flexibility and quality in portfolio positioning.
South African Market Overview
April was an exceptionally strong month for South African risk assets, as local markets delivered a welcome counterbalance to the uncertainty clouding the global investment landscape. The FTSE/JSE All Share Index surged 4.34% in ZAR terms, bringing the year-to-date return to a robust 10.54%. Gains were broad-based across sectors, driven by renewed interest in resources, a rebound in financials, and technical tailwinds that supported a re-rating of domestic equities.
A key contributor to this equity strength was improved global sentiment towards emerging markets and commodities. Stabilising metal prices, coupled with marginally weaker US yields, supported demand for South African mining counters. The financial sector also benefitted from expectations that domestic interest rates may have peaked, providing a more supportive environment for banks and insurers. Institutional inflows from yield-seeking investors added to the demand profile, despite the prevailing macro risks.
The standout performer in April was the South African listed property sector. The FTSE/JSE SA Listed Property Index delivered an exceptional 7.58% return for the month, lifting its year-to-date gain to 3.81%. After a prolonged period of underperformance, the sector saw a re-rating as inflation expectations moderated and market consensus grew that the South African Reserve Bank (SARB) could adopt a more dovish stance in coming quarters. Lower bond yields improved the relative attractiveness of income-generating property counters, especially those with stronger balance sheets and exposure to high-quality commercial assets. Valuations, previously depressed, became too compelling for investors to ignore, sparking a broad-based recovery in sector sentiment.
South African bonds posted more muted returns. The FTSE/JSE All Bond Index rose by 0.76% in April, bringing the year-to-date total to 1.47%. While nominal yields remain attractive on a global basis, foreign appetite for South African debt remains constrained by fiscal deterioration and political instability. Rising debt service costs, the risk of further credit downgrades, and doubts over the government’s ability to manage state-owned enterprises continue to suppress confidence in long-duration sovereign assets. Domestic investors have maintained a cautious approach, with preference given to shorter-duration instruments and higher-quality credit.
Short-term interest-bearing investments held their ground, with the STeFI Composite Index delivering a 0.61% return for April and 2.52% year-to-date. Cash continues to offer a reliable buffer amid asset class volatility and serves as a tactical option for re-entry as market conditions evolve.
From a macroeconomic perspective, the domestic landscape remains fraught with structural headwinds. Investor focus in April sharpened on the deteriorating fiscal metrics laid bare in the most recent Treasury projections. Widening budget deficits, weak tax collection, and bloated expenditure on state-owned entities have amplified concerns about the sustainability of public finances. The political arena offered little reassurance. The GNU continued to show signs of fragmentation, with coalition infighting obstructing progress on key reforms, particularly those related to Eskom, Transnet, and labour market deregulation. This ongoing gridlock has weighed on business confidence, investment appetite, and the broader growth outlook.
Despite these challenges, the Rand proved relatively resilient during the month, aided by a weaker US Dollar and renewed appetite for higher-yielding EM currencies. The stability of the exchange rate provided an important anchor for local investors and helped mitigate imported inflation pressures—factors that further supported domestic equities and real assets.
Key Insights from Weekly Investment Team Meetings
Our April investment discussions focused on how to navigate the short-term recovery while remaining alert to medium-term risks. Key themes included:
- Global Risk Reassessment: Trump’s “Liberation Day” rhetoric and tariff threats reintroduced policy risk into equity markets. The team revisited developed market exposure and assessed potential vulnerabilities in US-centric strategies and global supply chain themes.
- Emerging Market Reallocation: With EM assets outperforming on both valuation and momentum grounds, we explored tactical increases in commodity-linked and India-focused allocations, while maintaining caution on China amid renewed trade tension fears.
- SA Asset Rebound and Fiscal Caution: While local equities and property rallied, we continued to stress-test our scenarios for government debt, SOE liabilities, and potential credit risk events. Equity positioning remains selective and valuation-driven.
- Balancing Defense and Upside: We reaffirmed the importance of maintaining sufficient cash buffers, gold exposure, and high-quality global bonds. Flexible asset allocation and unconstrained strategies remain core to our downside protection posture.
Portfolio Performance and Strategy
April’s asset class rotation favoured our existing positioning, particularly our overweight to gold. Listed property exposure, although modest, also contributed positively. Our continued underweight to developed market growth stocks—especially US tech—helped mitigate volatility.
Looking ahead, we remain defensively tilted but tactically nimble. We see selective opportunities in emerging markets and local assets with strong fundamentals. However, political risk, fiscal uncertainty, and global policy divergence remain key threats to sustained recovery.
As always, we will continue to adjust portfolios in response to market dynamics, maintaining our emphasis on quality, liquidity, and adaptability.
Source of all data: Morningstar, unless otherwise stated.
Jacques de Kock
Quantitative Analyst & Portfolio Manager
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