As we reflect on the global market performance through August 2025, the data from key exchange-traded funds (ETFs) tracking regions like South Korea, South Africa, the US, and Germany offers valuable insights for investors. With emerging markets leading the charge and developed markets providing stability, now is an opportune time to construct a diversified portfolio that balances growth and risk. In this blog, we analyze the 2025 performance of 15 ETFs and propose a balanced portfolio designed to capture global economic trends while managing volatility.
2025 Market Performance: A Snapshot
The cumulative returns from January to August 2025 and the August 2025 returns for 15 ETFs reveal clear trends in the global economy:
Cumulative Returns (Jan 1 - Aug 31, 2025)
- South Korea (EWY): 33.85% 🚀
- South Africa (EZA): 31.83%
- Hong Kong (EWH): 28.24%
- Singapore (EWS): 24.45%
- Germany (EWG): 20.94%
- Canada (EWC): 18.34%
- Brazil (EWZ): 16.46%
- UK (EWU): 16.43%
- China (FXI): 15.00%
- Taiwan (EWT): 14.32%
- US (SPY): 12.42%
- Japan (EWJ): 11.64%
- Australia (EWA): 10.04%
- EAFE (EFA): 8.88%
- Pacific Ex Japan (EPP): 7.33%
August 2025 Returns
- South Africa (EZA): 14.83% 🔥
- Brazil (EWZ): 4.31%
- Singapore (EWS): 3.69%
- UK (EWU): 3.57%
- Pacific Ex Japan (EPP): 3.04%
- China (FXI): 2.86%
- Australia (EWA): 2.42%
- Hong Kong (EWH): 2.32%
- Germany (EWG): 1.85%
- EAFE (EFA): 1.61%
- South Korea (EWY): 1.40%
- Taiwan (EWT): 0.98%
- Canada (EWC): 0.74%
- Japan (EWJ): 0.58%
- US (SPY): 0.20%
Key Insights
- Emerging Markets Surge: South Korea, South Africa, Hong Kong, and Singapore lead with double-digit returns, driven by technology (South Korea), commodities (South Africa, Brazil), and financial hub stability (Hong Kong, Singapore).
- Developed Markets Anchor Stability: Germany (20.94%) and Canada (18.34%) outperform the US (12.42%) and Japan (11.64%), suggesting strength in industrial and commodity-driven economies.
- August Momentum: South Africa’s 14.83% and Brazil’s 4.31% returns in August highlight continued strength in commodities, while the US and Japan’s minimal gains (0.20%, 0.58%) suggest a slowdown or correction.
Constructing a Balanced Growth Portfolio
Based on these trends, we’ve designed a Balanced Growth Portfolio for 2025, targeting moderate risk with a focus on capturing emerging market growth while maintaining stability through developed markets. The portfolio assumes a $100,000 investment and a one-year horizon, with allocations informed by 2025 performance and August momentum.
Portfolio Allocation
| ETF | Region | Allocation | Amount ($) | Rationale |
|---|---|---|---|---|
| EWY | South Korea | 20% | 20,000 | Top performer (33.85%), driven by tech giants like Samsung. |
| EZA | South Africa | 15% | 15,000 | Strong yearly (31.83%) and August (14.83%) returns, commodity-driven. |
| EWH | Hong Kong | 15% | 15,000 | Robust 28.24% return, stable financial hub in Asia. |
| EWG | Germany | 10% | 10,000 | Strong developed market (20.94%), industrial export strength. |
| EWC | Canada | 10% | 10,000 | Solid 18.34% return, commodity exposure (oil, metals). |
| SPY | US | 10% | 10,000 | Stable anchor (12.42%), broad US market exposure. |
| EWZ | Brazil | 10% | 10,000 | Strong August (4.31%) and yearly (16.46%) returns, commodity-driven. |
| EFA | EAFE | 10% | 10,000 | Broad developed market exposure (8.88%) for diversification. |
Total: 100% ($100,000)
Portfolio Highlights
- Expected Return: Approximately 22.5% based on 2025 returns, blending high-growth emerging markets (60%) with stable developed markets (40%).
- Diversification: Covers Asia (35%), Africa (15%), Americas (20%), and Europe/Developed Markets (30%), balancing tech, commodities, and financials.
- Risk Profile: Moderate, with emerging markets (EWY, EZA, EWH, EWZ) offering growth and developed markets (SPY, EWG, EWC, EFA) reducing volatility.
- August Momentum: Overweights South Africa and Brazil due to strong short-term performance, signaling potential for continued gains.
Why This Portfolio Works for 2025
- Capturing Emerging Market Growth: South Korea, South Africa, and Hong Kong’s stellar returns reflect a global economic recovery, with tech and commodities leading the charge. Allocating 60% to these markets positions the portfolio for high upside.
- Stability from Developed Markets: The US, Germany, Canada, and EAFE provide a stable foundation, mitigating volatility from emerging markets.
- Commodity and Tech Exposure: The portfolio benefits from commodity-driven economies (South Africa, Brazil, Canada) and tech strength (South Korea), key drivers of 2025’s global economy.
- Geographic Diversification: Spanning four continents reduces region-specific risks, such as currency fluctuations or geopolitical tensions.
Alternative Portfolios for Different Risk Profiles
- Aggressive Growth:
- EWY (25%), EZA (20%), EWH (20%), EWZ (15%), EWS (10%), EWG (5%), SPY (5%)
- Focuses heavily on emerging markets (90%) for higher returns (~27-30%), but with increased volatility.
- Conservative:
- SPY (25%), EFA (20%), EWG (15%), EWC (15%), EWJ (10%), EWY (10%), EZA (5%)
- Prioritizes developed markets (85%) for stability (~15-18% return), with minimal emerging market exposure.
Implementation Tips
- Execute the Portfolio:
- Purchase ETFs through a brokerage (e.g., Fidelity, Schwab) using the allocated amounts.
- Rebalance quarterly to maintain target weights, as emerging markets can be volatile.
- Monitor Key Trends:
- Commodities: Watch gold, oil, and agricultural prices impacting EZA, EWZ, and EWC.
- Tech Sector: Track semiconductor and tech demand for EWY.
- Macro Factors: Monitor interest rates, USD strength, and trade policies affecting global markets.
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Risks to Watch
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- Emerging Market Volatility: South Korea, South Africa, and Brazil are high-reward but susceptible to commodity price swings or geopolitical risks.
- Developed Market Corrections: The US and Japan’s weak August returns (0.20%, 0.58%) suggest potential slowdowns.
- Currency Risk: Non-US ETFs may be impacted by USD fluctuations.
- 2026 Uncertainty: Assumes 2025 trends (e.g., commodity rally, tech growth) continue, but economic shifts could alter performance.
Conclusion
The 2025 global market data highlights a dynamic economy, with emerging markets like South Korea and South Africa leading the way, fueled by technology and commodities. The proposed Balanced Growth Portfolio captures this momentum while anchoring stability with developed markets like the US and Germany. Whether you’re a growth-oriented investor or prefer a cautious approach, this portfolio offers a flexible framework to navigate 2025’s opportunities. As we look to 2026, staying agile and monitoring global trends will be key to success.
Data Source: Calculated from monthly ETF closing prices (Jan-Aug 2025) via Yahoo Finance. For real-time data, use yfinance or consult your financial advisor.
What’s your take on building a global portfolio for 2025? Share your thoughts or reach out for a deeper dive into the numbers!
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