US Stock Funds Continue Winning Streak with 14.6% Average in 2025

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TLDR

  • In 2025, US stock funds had an average return of 14.6%.
  • This is the third consecutive year that US stock funds have been above the 10 percent return mark.
  • Throughout the year, technology and AI – related stocks were the main drivers of market gains.
  • The fourth quarter contributed 2.5 percent to the overall yearly return.
  • President Donald Trump’s tariff announcement in April shifted market leadership back to large – cap tech stocks.

US stock funds ended 2025 with a 14.6% average return, marking the third consecutive year above the 10% threshold. Despite fluctuating sentiment and global events, investors continued to allocate to equities, and quarterly gains supported the year – end increase.

US Stock Funds Rise Despite Tariffs

According to LSEG data, funds gained 2.5% in the fourth quarter, raising the full – year average return to 14.6%. The performance, recorded through December 24, followed returns of 21% in 2023 and 17.4% in 2024.

Although the rate of gains slowed each year, the trend remained upward as investor optimism endured through policy changes and market rotations.

A small number of technology stocks related to artificial intelligence drove most of the gains, with broader participation falling short of expectations. “The market significantly narrowed again,” said someone from F.L. Putnam Investment Management.

She attributed the shift to policy changes in April when President Donald Trump announced extensive tariffs on what he called Liberation Day.

That policy move reversed early signs of market broadening, refocusing on the dominant large – cap technology firms. Hazen explained, “Everyone thought the AI trade was over,” but it came back strongly.

She added that although AI – related cautionary signs have emerged, they are not sufficient to reverse the broader optimism going into 2026.

Global and Bond Funds Reshape Allocation

International stock funds outperformed their US counterparts, rising 29.8% in 2025 compared to 4.8% in 2024. Early – year tariff disruptions helped shift global capital flows.

Investors reallocated assets as global markets strengthened while US equities continued to rise at a slower pace. Cash shifted rapidly during mid – year volatility.

Investment Company Institute data showed that US stock funds and [missing part] had $391.6 billion in outflows during the year. Most outflows occurred in July.

Investors moved capital into more stable vehicles, including bonds and international stock funds. Global equity funds received $102.1 billion in net inflows.

Bond funds attracted $669.4 billion in new money, led by interest in investment – grade debt. Those funds returned 7.3% in 2025.

[The entity] cut rates three times during the year. Bonds added 1.1% in the fourth quarter alone.

Large – Cap Managers Lead Actively Managed Funds

Top – performing US stock funds concentrated their holdings in large – cap technology and AI – related companies. The leading fund, Permanent Portfolio Aggressive Growth Portfolio (PAGRX), had a return of 36.9%.

PrimeCap Odyssey Growth Fund (POGRX) followed with a 33% gain. Four Alger funds also ranked in the top ten.

Alger Capital Appreciation Portfolio (ALVOX) had a 32.9% return, keeping investor attention on aggressive growth themes. Large – cap strategies remained dominant.

Across the broader market, 1,185 funds with $50 million or more in assets had an average return of 11.5%. That performance helped extend the current streak of annual gains.

Despite fund outflows, performance across categories remained strong. Investors remained committed to core holdings throughout policy shifts and economic uncertainty.

The outlook for 2026 remains uncertain, with technology earnings and macro policy in focus. Hazen said other sectors could increase returns if growth occurs.