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UFS funds deliver strong returns for 2025   By Michael Chou Investment Manager

The Uniting Financial Services range of managed funds delivered strong performance over the 12 months to December 2025, despite the high levels of market volatility amid geopolitical and economic uncertainties UFS fund performance as at 31 December 2025 Fund Net Returns Inception Date 1 Year % 3 Years p.a. % 5 Years p.a. % 10 Years p.a. % Since Inception p.a. % Ethical Conservative Balanced Fund 1-Feb-17 8.16 8.59 6.01   5.62 CPI + 2.5% Benchmark   6.51 5.99 6.85   5.65 Relative Return   +1.65 +2.60 -0.84   -0.03               Ethical Australian Equity Fund 1-Dec-06 10.70 12.91 8.98 9.77 7.23 S&P/ASX 200 Accumulation Index   10.32 11.38 9.89 9.30 6.81 UFS Customised Benchmark   10.66 12.99 9.84 N/A N/A Relative Return   +0.04 -0.08 -0.86 N/A N/A               Ethical High Growth Fund 3-Feb-22 8.16 12.37     8.07 CPI + 4% Benchmark   8.01 7.49     8.66 Relative Return   +0.15 4.88     -0.54   Our Ethical Australian Equities Fund (EAEF) delivered a strong 10.7% return, outperforming both its customised ethical benchmark and the broader S&P/ASX 200 market index. Our diversified funds outperformed their CPI + investment objectives over the year, with the Ethical Conservative Balanced Fund (ECBF) returning 8.2%, while the Ethical High Growth Fund (EHGF) returned 8.2%. The global economy and investment markets were resilient in 2025, despite the ongoing waves of events that exacerbated market volatility. Amid a rapidly evolving macroeconomic environment, ongoing trade tensions, and rising geopolitical uncertainty, equity and bond markets looked past these hurdles to end the year on a positive note. Despite initial fears of a global recession following the Trump administration's announcement of ‘reciprocal tariffs’ in April, the upending of decades of lower trade barriers and globalisation did not derail global growth as much as expected. Subsequent trade deal announcements, along with softer inflation and better-than-expected employment figures, tempered recession expectations. Even the longest US government shutdown in history in Q4 was not enough to push the US economy into recession, as rampant AI spending helped boost growth sectors of the economy along. US central bank easing also supported the economy, with total interest rate reductions of 0.75% over the second half of the year, pushing rates down from the 4.25%-4.5% range to 3.5%-3.75%. Globally, easing monetary policy and fiscal support around the world contributed to the resilience of global growth, which is expected to end the year at 3%. In most major economies, the corporate and household sectors have maintained healthy balance sheets with limited leverage and excess cash.   Outlook Looking ahead, global growth should remain resilient, with looser monetary policy and fiscal stimulus in most developed-market countries generating strong tailwinds. This should support risk assets in general. There is also hope that AI productivity growth will accelerate in 2026, generating efficiency gains and supporting lower inflation. The US economy is expected to continue performing well, as aggregate corporate balance sheets remain strong and profitability margins are elevated. However, the divergence in performance across the economy will continue to widen, with some sectors, such as retail, healthcare, and real estate, lagging further behind technology and AI-related investment. Shifting US inflation dynamics are also a risk to watch over the year, as costs from tariffs are slowly being passed from businesses to consumers, while strong consumer spending may further drive demand-side inflationary pressure. The appointment of the new US Fed Chairperson this year will also be a key focus for markets. Political interference by the US administration has called into question the central bank's credibility and independence, potentially leading to a volatile repricing of risk on US assets. In the Eurozone, inflation is now firmly under control, with the ongoing trade war supporting disinflationary trends, along with lower energy prices and weak wage growth. Fiscal spending is expected to drive Eurozone growth as Germany embarks on its €500 billion infrastructure program and NATO members raise defence spending towards the 3% of GDP target. Higher military and infrastructure spending should encourage additional private sector investment. The impact of the European Central Bank’s lower interest rates should continue to stimulate the economy, though the central bank is already close to its cycle low. Political risks could destabilise European growth, with extremist parties in Germany and France gaining more power, leading to higher risk premiums demanded by investors. China is expected to remain a weak spot in the global economy as the headwinds from US trade tariffs and a falling property market continue to weigh on growth. Though China’s exports have held up relatively well over the past year despite the slump in shipments to the US due to the re-routing of goods, its domestic consumption remains weak, with retail sales continuing to stagnate below their pre-pandemic trend. It is expected that infrastructure spending will be used as a key lever to stabilise growth, as it has been over the past few years. Further government support can be expected as China embarks on its 15th Five-Year Plan in 2026, with greater emphasis on growing its domestic consumer base to build economic self-reliance and strengthen its leadership in high-tech manufacturing and AI. Overall, given the accommodative monetary and fiscal policy environment, there is a strongly positive narrative for global growth over the year ahead. However, uncertainty remains about US trade policy and tariffs. Its flow-on effects add risk to US inflation and growth outcomes. Escalating geopolitical tensions are also an unknown risk to markets. For example, US threats to annex Greenland at the start of the year are already widening rifts between the US and its European allies. More situations such as these will certainly add volatility to markets throughout the rest of the year.  Diversification is important throughout the economic cycle, but even more so during volatile market periods such as the one we are experiencing now. At UFS, our multi-asset funds remain well diversified, focusing on defensive and income-oriented strategies that enhance the consistency of returns during these volatile times. The strong outcomes we have achieved throughout the past year demonstrate this discipline.   Asset class returns (as of 31 December 2025) Asset class 1 year % 3 years pa % 5 years pa % Income       Australian Fixed Income 3.17 5.82 2.75 Global Fixed Income 4.42 5.84 2.94 Growth       Australian Equities 10.32 12.87 9.00 Global Equities 12.53 17.17 12.84 Interest rates       Australia cash rate* 3.60* 4.35% 0.10% USA Fed Funds rate# 3.64# 5.33% 0.07% * The Reserve Bank of Australia, December 2025, December 2023 and December 2021 # The Federal Reserve, USA. December 2025, December 2023 and December 2021     The Uniting Financial Services (UFS) unregistered managed investment schemes are available for investment only to wholesale investors. Prospective wholesale investors who wish to invest via our unregistered managed investment schemes can access the Information Memoranda for any of these funds on the UFS website. Certain statements in the report may constitute “forward-looking statements.” These statements involve subjective judgment and analysis and reflect UFS’ expectations. Such statements are subject to significant uncertainties, risks and contingencies outside the control of UFS, which may cause actual results to vary materially from those expressed or implied. You are cautioned not to rely on such forward-looking statements. While the information in this report has been prepared with all reasonable care, UFS accepts no responsibility or liability for any errors, omissions or misstatements however caused. No action has been taken to register or qualify these products or otherwise permit a public offering of these products in any jurisdiction outside Australia. Past performance is not indicative of future performance. 

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  Important for you to know Financial services are provided by The Uniting Church (NSW) Trust Association Limited ACN 000 022 480, ABN 89 725 654 978, AFSL 292186 (“UCTAL”) and by The Uniting Church in Australia Property Trust (NSW) ABN 77 005 284 605 (“UCAPT”) (together and separately “Uniting Financial Services”), for The Uniting Church in Australia, Synod of NSW and the ACT (“Synod”), under a s.911A Corporations Act 2001 (Cth.) authorisation and pursuant to APRA Banking Exemption No. 1 of 2021 and ASIC Regulatory Guide 87 and ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813 exemptions. Uniting Financial Services® is a registered trademark of UCTAL used with permission of UCAPT. None of The Uniting Church in Australia, UCAPT and UCTAL is prudentially supervised by APRA. Therefore, investments with or contributions to these Uniting Church organisations will not receive the benefit of the Financial Claims Scheme or the depositor protection provisions in the Banking Act 1959 (Cth.). All financial services and products are designed for investors who wish to promote the religious and charitable purposes of Uniting Financial Services and The Uniting Church in Australia and for whom profit considerations are not of primary importance in their decision to invest. The information on this page has been prepared without considering your objectives, financial situation or needs. You should, before acting on it, consider its appropriateness to your circumstances or refer to the relevant disclosure document. Loan applications are subject to credit approval. Interest rates are subject to change. Fees and charges may apply. 

Kindly note that the information on this webpage is only intended for wholesale, professional or sophisticated investors (as defined in the Corporations Act). Please do not refer to this webpage if you are not one of these investors. Uniting Financial Services is not providing any personal advice or recommendation regarding any financial products described or referred to on this webpage. Prospective investors should make their own enquiries and should seek all necessary financial, legal, tax and investment advice. Past performance is not indicative of future performance, all information contained on this wepbage is current at the date of publication, however may be subjected to change without notice.