Top performing investment options ranked by return

Another year of strong market returns saw many growth-oriented investment options perform well over the 2025-26 financial year with returns driven by a broad range of investment themes and regions that extended well beyond large US technology companies.

As we reveal our top-performing investment options for the year to 30 June 2026¹ across investment asset classes and risk profiles, several key themes stand out, including:

• the resilience of global investment markets,

• the influence of AI across equity markets,  

• the rise of emerging markets, and

• renewed interest in fixed income products such as private credit.  

CFS’ Head of Equities Ben Lam and Head of Fixed Income and Alternatives Robert Graham-Smith discuss key trends that drove the opportunities of the past year, and what to look for in the year ahead.

Despite wars, trade tensions, inflation concerns and periods of market volatility, many share markets remained resilient during the past financial year, contributing to a fourth consecutive year of strong returns.

Ben Lam says much of that resilience came from AI and technology-related companies, which continued to drive overall market returns, even as many other sectors faced challenges. 

“The headline might look okay, but it's very much driven by a narrow subset of the market. Anything AI and tech related is what's driving markets,” Ben says. 

Strong economic growth, particularly in the US, is also contributing, Rob adds.

“If you look at the US, for example, the economy's roaring.” he says. “I think a lot of that growth is driven by AI investment. People also have benefited from some tax cuts and President Trump’s One Big Beautiful Bill. 

“But a lot of that AI and tech related spending is starting to lean into growing debt, which is what the fixed income markets are, I think, increasingly focused on.”

AI continued to be one of the biggest drivers of global share markets during 2025-26.

While large US technology companies remained important, investors increasingly looked beyond the so-called ‘Magnificent Seven’ (Apple, Microsoft, NVIDIA, Amazon, Alphabet, Meta, Tesla) to the businesses supplying the infrastructure behind AI. This included companies involved in the buildout of AI infrastructure such as semiconductors, memory chips and other technology needed to support growing demand.

According to Ben, AI remains the dominant theme in global equity markets, but the benefits have broadened well beyond the largest technology stocks.

“We have seen a bit of a broadening in terms of some of that exposure,” Ben says.

“It’s a great technology, and there will be lots of benefits.

“The challenge is to assess where do the economic gains and profits end up? Is it with the companies investing in the technology, or is it with the users?" 

Another key shift of the past financial year was the strong performance of emerging markets. 

"So that's been very much a tale of three stocks and basically two countries – South Korea and Taiwan,” Ben says. “Within Korea, two memory stocks, SK Hynix and Samsung Electronics, which produce memory as a critical component of the build-out of infrastructure related to AI

“And then within Taiwan, a company called TSMC, which is heavily involved in building a lot of the chips related to AI build out.”

Ben says while there is a lot of concentration in those three companies, there are also opportunities to be found with other companies, and countries. 

“This highlights the value of maintaining exposure across a range of regions rather than relying on any single country or market theme,” he says. 

Fixed interest also remained a focus for investors as governments around the world continued to manage large debt levels and changing interest-rate expectations.

CFS Head of Fixed Income and Alternatives Robert Graham-Smith says while government bonds remain an important defensive asset, investors have increasingly explored other areas of fixed income, including traded and private credit.

Private credit involves loans made directly to businesses rather than trading on public bond markets. Investors are often attracted to private credit because it may provide higher income than traditional bonds, although it can also involve additional risks, including traded and lower liquidity and greater exposure to individual borrowers.

“During the volatility of the past two years, credit spreads in traded markets globally and in Australia have remained really well behaved,” Rob says. “It can be an attractive space for investors because they can earn a higher all-in yield from investing in credit markets.

“Credit spreads, or the price you are compensated for to take credit risk, remain very tight by historic standards.

“That's obviously paid off for investors relative to more traditional global fixed interest products which are more interest rate sensitive in the last 12 months. However it should be noted that credit investments are generally more vulnerable to deteriorating economic conditions as well.”

Australian shares delivered positive returns over the 2025-26 financial year but lagged overseas markets.

A key reason is that the Australian sharemarket has less exposure to the technology companies that have driven returns globally, instead being heavily weighted towards sectors such as financials, resources and healthcare.

“We don't have the same exposure to that AI infrastructure build out as you see in global markets,” Ben says.

“What's been the really strong part of the domestic market is the performance of the resources sector,” he adds. “It's been very much a resources versus ex resources dynamic in the Australian market.”

While performance rankings provide useful insights into which parts of the market delivered strong returns, they focus on past performance and are not a reliable indicator of future performance.

Consider your risk tolerance and your investment objectives before making any investment decisions, read the PDS and seek advice if needed before investing.

As well as your investment goals, strategy and risk appetite, it’s also important to understand the minimum recommended investment timeframe for the type of investment considered, your diversification strategy, and how soon you might need to access your money, particularly when markets are volatile.

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