2025: a turbulent investment year

2025 was a year of significant market movements. Yet, the year ended on a positive note. Equities performed well, and bonds also delivered returns. There were tense moments, such as a brief market crash in April triggered by the announcement of higher U.S. import tariffs. However, markets quickly recovered when part of those tariffs was rolled back. This article outlines what happened in 2025 and what it means for pensions at BeFrank.

Technology and AI in the Spotlight

2025 was all about artificial intelligence (AI). Companies invested billions in data centers, chips, and software. Major tech firms like NVIDIA, ASML, and Alphabet benefited from this trend on the stock market. This development sparked debate about the high valuations of AI-related companies and the potential investment risks involved. U.S. companies such as Apple and Amazon were more affected by rising costs and trade tariffs.

Dollar Lost Value

The U.S. dollar clearly depreciated against the euro in 2025. As a result, returns on U.S. equities were lower for euro-based investors. Meanwhile, shares in Europe, Japan, and emerging markets became more valuable. This underlines the importance of diversified investing, as practiced by BeFrank.

Strong Performance for Bonds

In the United States, the central bank gradually lowered interest rates. In Europe, the European Central Bank kept rates stable. This brought more calm to the markets, allowing both government and corporate bonds to contribute to investment results. Corporate bonds performed particularly well, as did bonds from emerging markets.

What does this mean for pensions at BeFrank?

For participants with a higher investment risk profile, returns were positive. For those closer to retirement, returns were negative due to rising interest rates. However, higher rates make purchasing pension benefits cheaper, helping to keep expected payouts stable.

Diversification Reduces Risk

BeFrank invests globally across different companies, sectors, and asset classes to limit risk. The April market crash shows how important diversification is. Even during a crash, there are sectors or companies that are less affected—or even benefit. It is important not to panic. History shows that market dips tend to recover over time.

As the retirement date approaches, the investment mix automatically shifts: less in equities and more in bonds and matching funds to maintain stability. Risk preferences can be adjusted at any time via the Profile Selector on the personal pension page.

Clear Insight into Returns

Quarterly returns are published on the website, along with a short update video: the Investment Update. Through the app and the personal pension page, participants can monitor how investments are performing.