Global Equity Strength Drives MarketGrader Indexes Performance in 2025

MarketGrader’s 2025 report cards cover 73 indexes across US, developed, and emerging equity markets. This excludes a small number of indexes that we calculate and publish daily, such as equally weighted versions of our US indexes.

Across all markets, performance in 2025 was strong. Sixty five of the 73 indexes posted positive returns for the year, while only eight recorded losses. The indexes that finished the year with gains delivered an average total return of 25.7 percent, while those that declined posted an average loss of 6.0 percent. On a relative basis, outperforming indexes exceeded their benchmarks by an average of 402 basis points, while underperformers trailed by an average of 640 basis points. Taken together, all 73 indexes produced an average total return of 22.2 percent in 2025 and average excess returns of 288 basis points relative to their respective benchmarks.

Among all MarketGrader indexes, the standout performer in 2025 on both an absolute and relative basis was the MarketGrader Israel Large Cap 30 Index, which returned 93.4 percent for the year and outpaced its benchmark by 6,059 basis points, or nearly 61 percentage points. Notably, performance rankings in 2025 were dominated by international indexes. The highest ranked US index was the MarketGrader US Materials Index, which delivered a total return of 32.5 percent and ranked fifteenth overall. Figure 1 highlights the top ten performers across all MarketGrader indexes in 2025.

Figure 1. Performance for Top 10 MarketGrader Indexes in 2025 (All Regions)

From a relative performance perspective, two US indexes ranked among the top ten in 2025. The MarketGrader US Materials Index outperformed its benchmark, the S&P 1500 Materials Index, by 2,241 basis points. The MarketGrader US Large Cap Value Select 30 Index also posted strong results, returning 27.9 percent for the year and beating the Russell 1000 Value Index by 1,200 basis points.

Geographic Breakdown

United States

In the US, 25 of 34 MarketGrader indexes outperformed their benchmarks in 2025, generating an average excess return of 395 basis points. The average return of all outperforming indexes was 20.0 percent, while underperformers averaged returns of 9.1 percent. Across all 34 US indexes, the average return for the year was 17.1 percent. Over the last five years, performance has been even more consistent, with 32 of 34 indexes outperforming and delivering an average annualized excess return of 341 basis points.

While the US Materials Index ranked first, the top ten performers were otherwise dominated by MarketGrader Large Cap Core and Large Cap Value indexes, as shown in Figure 2. On a relative basis, 24 of the 34 US indexes outperformed their benchmarks by at least 100 basis points, including 16 that exceeded their benchmarks by more than 600 basis points. Three indexes, US Materials, US Large Cap Value, and US Mid Cap Core, delivered excess returns in excess of 1,000 basis points in 2025.

Figure 2. Performance for Top 10 MarketGrader US Indexes in 2025

Developed Markets

In developed markets, 12 of 20 indexes outperformed their benchmarks in 2025, with average excess returns of 691 basis points. Over the last five years, 19 of 20 indexes have outperformed, producing average annualized excess returns of 444 basis points. In 2025, outperforming indexes posted an average return of 39.0 percent, while underperformers averaged returns of 26.9 percent. Across all MarketGrader Developed Markets indexes, the average return for the year was 34.2 percent.

Notably, none of the developed markets indexes posted a negative return in 2025, underscoring the strength of global equity markets during the year. Figure 3 presents the ten best performing MarketGrader Developed Markets indexes in 2025.

Figure 3.  Performance for Top 10 MarketGrader Developed Markets Indexes in 2025

Emerging Markets

Performance in emerging markets was more mixed in 2025 relative to benchmarks, with four of 20 indexes outperforming. Even so, average total returns across all MarketGrader Emerging Markets indexes reached 18.8 percent. Several of the underperforming indexes included broader emerging market exposures that exclude South Korea and Taiwan, which MarketGrader classifies as developed economies.

The MarketGrader Emerging Markets (including Korea and Taiwan) Index also underperformed its benchmark, but only by 141 basis points, despite delivering a total return of 32.9 percent for the year. Over the last five years, that index has outperformed the MSCI Emerging Markets Index by an average of 489 basis points per year. More broadly, performance across MarketGrader Emerging Markets indexes over the last five years has been compelling, with 16 of 19 indexes outperforming and generating average annualized excess returns of 687 basis points. Figure 4 shows the top ten emerging markets performers in 2025.

Figure 4. Performance for Top 10 MarketGrader Emerging Markets Indexes in 2025

The complete 2025 MarketGrader Indexes report card (relative to global benchmarks) is available here. Investors interested in tracking MarketGrader Index performance on a daily basis may also visit our Index Explorer.

To learn more about how MarketGrader help asset managers and wealth managers design and deploy smart beta strategies that bridge the gap between active and passive management, please visit our Index Solutions page.