Rotation and regional divergence

United States

• S&P 500: –0.8%
  Underperformance driven by outflows from high‑valuation technology and reassessment of AI‑linked earnings expectations.
• U.S. small caps: +3.9%
  Benefited from improving domestic activity and reduced reliance on the mega‑cap complex.

Europe & United Kingdom

• MSCI Europe ex‑UK: +5.6%
• FTSE 100: +7.0%
  Supported by strong flows, attractive valuations and renewed interest in value‑heavy sectors.

Emerging Markets

• MSCI Emerging Markets: +5.5%
  Asia ex‑Japan and Latin America outperformed, while China remained a drag due to structural headwinds.

Japan

• MSCI Japan: +10.4%
  Continued to lead global equity markets, supported by renewed governance reforms, domestic demand and expected fiscal support.

South Africa

• FTSE/JSE ALSI: +7.0%
  Strong sector performance and high stock dispersion:
  • Resources: +13.3%
  • Financials: +7.3%
  • Industrials: +0.1%

Notable stock moves included Pan African (+31.9%), AngloGold (+30.3%) and Sasol (+27.2%).
Retailers such as Spar (–21.3%) and Pick n Pay (–19.2%) lagged on weak updates.

Portfolio implications

• Reduce concentration risk in U.S. mega‑cap technology given high valuations and narrow earnings leadership.
• Tilt toward quality, value and selective small caps.
• Enhance global diversification via Europe, UK, Asia ex‑Japan and South Africa.
• Maintain an underweight to China due to structural concerns.
• Maintain exposure to gold and real assets as effective hedges against geopolitical and late‑cycle risks.