IN FOCUS6-8 min read
Schroders Equity Lens October 2025: your go-to guide to global equity markets
The outperformance of pre-revenue and unprofitable tech, and investing at all-time highs
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The October 2025 edition of the Schroders Equity Lens is now available: Schroders Equity Lens
Summary:
- The US market highlights diverging risk appetite (slide 5):
- on average (which covers an incredibly wide range of outcomes) tech companies with no revenues or profits are flying, as are the engines of US profit growth, the Mag-7
- the rest are being left in the shade.
- There are far more tech companies with no profits or revenues today than in in the past: buyer beware (slide 6).
- Many markets have soared to new all-time highs. Rising valuations and a weaker dollar have boosted non-US markets in USD terms, even as earnings have favoured the US (slides 7 and 10-14).
- The US earnings advantage is driven by the mega caps: the median US company has the same 12-month EPS growth forecast as in Europe and Japan (slide 19).
- Although it seems counterintuitive, stock market returns have been better if you invested at an all-time high compared to other times. Staying invested at such times has been more profitable than selling (slides 8-10 and read more).
- No market is cheap vs its own history. EM valuations have risen sharply (slide 23).
- The UK has become the share buyback capital of the world. Japan is also closing in on US levels, a dramatic shift (slide 37).
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