During the second quarter of 2025, the best performing asset classes were international small and value and emerging markets stocks. The following chart shows the 3-month, 1-year, and 5-year performance of many DFA funds (representing different asset classes) compared to the S&P 500 Index:
Market Returns for the period ending June 30, 2025
| DFA Fund / Index | 3 Month Return | 1 Year Return | 5 Year Return* |
| S&P 500 Index | 10.94 | 15.16 | 16.64 |
| DFA World Core Equity | 10.99 | 15.18 | 14.60 |
| DFA U.S. Large Value | 2.25 | 9.29 | 14.61 |
| DFA U.S. Small | 7.09 | 7.79 | 14.36 |
| DFA U.S. Small Value | 5.16 | 4.04 | 18.41 |
| DFA Real Estate (REITs) | -0.60 | 9.16 | 6.75 |
| DFA Int’l Large | 11.89 | 19.44 | 12.14 |
| DFA Int’l Large Value | 10.66 | 23.61 | 17.21 |
| DFA International Small | 16.83 | 23.81 | 12.36 |
| DFA Int’l Small Value | 15.98 | 29.83 | 16.67 |
| DFA Emerging Markets Core | 12.15 | 14.45 | 9.18 |
| DFA 5-Year Global Bonds | 1.07 | 4.84 | 0.96 |
| DFA Inflation Protected Bonds | 0.57 | 6.02 | 1.61 |
*Note: Returns for periods greater than 1 year are annualized. Top 3 returns are in bold.
The second quarter of 2025 can only be described as a roller coaster—marked by sudden drops and sharp turns. As the great investor Peter Lynch once said, “the stock market is a roller coaster, and you don’t get off the roller coaster in the middle of the ride.” That advice rang especially true in April, when the S&P 500 fell nearly 10% in just one week following President Trump’s announcement of tariffs that were broader and steeper than anticipated, targeting nearly every major U.S. trading partner. Just a week later, he announced a 90-day pause on those tariffs, prompting a swift rebound that saw the S&P 500 fully recover by early May.
For the quarter, the S&P 500* returned 10.94%, the international stock market*** earned 11.74% and the US bond market** grew by 0.97%. Shockingly, international small and large stocks were the best performing assets classes over the past year! A key driver behind this performance has been the U.S. dollar’s roughly 11% decline relative to other major currencies, which acts as a tailwind for companies generating earnings in euros, yen, and other non-dollar denominations.
Looking ahead, the markets will continue to grapple with several major themes: trade negotiations, potential tax legislation, anticipated interest rate cuts, and the ongoing evolution of artificial intelligence. While it’s impossible to predict how each of these factors will unfold—or how markets will react—we remain firm in our belief that diversification is your best defense against the unexpected. This year has already provided ample proof of that principle.
Thank you for your continued trust and confidence. As always, please don’t hesitate to email or schedule a remote meeting if you need something—that’s what we are here for.
Happy 4th of July!
*As measured by Vanguard Total Stock Market (VOO)
**As measured by Vanguard Total Bond Market (VBTLX)
***As measured by Vanguard Total International Stock Market (VTIAX)
About Christopher Jones
Christopher Jones is the Founder and President of Sparrow Wealth Management, a fee-only financial planning and investment management firm. Before entering the investment field, Chris was a management consultant for Deloitte Monitor. He graduated summa cum laude from Brigham Young University with a B.S. in Economics and a minor in Business Management.