Best returns on investment by asset type in 2025-26

Investors were rewarded with strong performance across a range of asset classes in 2025-26, as emerging markets delivered the strongest returns, and global shares, global listed infrastructure and global listed property also returned well above their 10-year annualised return.

Strong performance came despite a year of ongoing geopolitical tensions, inflation concerns and uncertainty, marked by the resilience of businesses and investment markets.

CFS Chief Investment Officer Jonathan Armitage said investors had benefited from “growth opportunities across a range of regions, sectors and asset types” over the past financial year.

“Geopolitical and economic uncertainty remains a feature of investment markets, but diversification helps position portfolios to capture opportunities wherever they arise,” he said.

Emerging markets were the best-performing of the major asset types, returning 35.8% over the year to 30 June 2026, according to market performance data¹. 

That result more than doubled the already strong 17.5% return the investment asset class delivered over the 2024-25 financial year and was more than three times its 10-year return of 10.9%.

As AI-linked investment extended beyond the US technology sector, several Asian markets and businesses had benefited strongly over the past financial year, Jonathan said. 

“Companies such as Taiwan Semiconductor Manufacturing Company (TSMC), Samsung Electronics and SK Hynix benefited from growing demand for the semiconductors and memory chips underpinning AI technologies,” Jonathan said. “In the year to 30 June 2026, TSMC was up about 50%, Samsung was up about 200% and SK Hynix was up 300%."

Source: Colonial First State Research and Performance. Annualised performance for periods over 12 months. Benchmark performance is shown for: Bloomberg AusBond Bank Bill Index; Bloomberg AusBond Composite 0+ Yr Index; Bloomberg Global Aggregate AUD Hedged; S&P/ASX 300 Accumulation Index; MSCI ACWI Ex-Aus Index Special Tax Net AUD Unhedged; MSCI ACWI Ex-Aus Index Special Tax Net AUD Hedged, MSCI Emerging Markets (AUD), FTSE EPRA/NAREIT Dev ex Aus Rental Index AUD Hdg Net and FTSE Dev Core Infrastructure Index AUD Hdg Net.

Global shares also delivered impressive returns well above their long-term average, particularly those that were hedged to reduce the impact of currency fluctuations unfavourable to Australian investors.

Hedged global shares returned 25.7%, making them the second-best performing asset class overall and delivering twice their 10-year return of 12.7%.

Unhedged global shares returned 17.4%, also comfortably above their long-term average of 13.9%.

Global equity markets recovered strongly following periods of volatility earlier in 2026, due partly to consistent cash flows and profits. 

“Businesses have learned to adapt to changing macroeconomic situations, moving from just-in-time inventory management to something that’s much closer to just-in-case,” Jonathan said.

“That said, the Magnificent Seven tech companies were up meaningfully over the full year, but they were flat in the January to June half as investors wait for them to show a return on the amount of capital they’ve been investing.”

The most impressive turnarounds of the past financial year were seen in global listed infrastructure and global listed property.

Global listed infrastructure returned 17.8% – more than double its 10-year average return of 7.5%, and one of the strongest results across all major asset classes, less affected than global shares by the volatility that was seen throughout the January to June half.

The sector benefited from ongoing investment in energy, utilities, transport assets and digital infrastructure, including the networks and facilities required to support growing demand for data and AI.

Global listed property also produced a standout result, returning 14.7% compared with a 10-year average return of just 2.8%.

One of the most notable features of 2025-26 was how many investment types delivered returns above their long-term results.

Cash returned 3.9%, well ahead of its 10-year return of 2.2%, and global bonds generated 2.9%, more than double their 10-year average of 1.4%.

Australian shares and Australian bonds were the only major asset classes that finished the financial year below their respective 10-year performance benchmark.

Australian shares returned 6.2%, compared with 9.4% annualised over 10 years, while Australian bonds returned 1.5% against a long-term average of 1.8%.

“The materials sector did really well and should continue to benefit as the world focuses on rebuilding local infrastructure.

“Looking forward, risks associated with higher inflation, geopolitical tensions and high government spending in some countries are not going away. Diversified portfolios that can help protect investments against a range of potential future events will be even more important.”