Performance Commentary

Backdrop 

The S&P 500 Index gained 2.65% in the fourth quarter of 2025, capping another strong year for equities. The Index delivered its third consecutive year of double-digit returns; a milestone achieved only six times since the Great Depression. In total, the S&P 500 rose 17.86% in 2025 and recorded 39 new all-time highs over 252 trading days. 

Strength was broad-based across risk markets, with all major asset classes ending the year at or near all-time highs. Investors continued to climb a “wall of worry” throughout 2025, yet the U.S. economy proved notably resilient. After a soft start to the year, growth accelerated meaningfully, with real GDP expanding at a 3.8% annualized rate in the second quarter and 4.3% in the third quarter, supported by steady consumer demand, exports, and business investment. 

This resilience held despite several meaningful headwinds. These included tariff-driven uncertainty, recurring geopolitical flare-ups, and heightened concerns that China’s rapid progress in artificial intelligence could reshape competitive dynamics and intensify strategic rivalry. The year also saw one of the longest government shutdowns on record. Despite these challenges, global trade held up better than many feared, with the WTO noting that world merchandise trade volumes rose 4.9% year-over-year in the first half of 2025, underscoring the underlying durability of cross-border demand and supply chains even amid elevated policy risk. 

Volatility was a defining theme in 2025, and investors were rewarded for maintaining discipline, staying invested and avoiding the day-to-day whipsaw of headlines. Style leadership shifted late in the year: value stocks outperformed growth in the fourth quarter, though growth outpaced value for the full year. Communication Services and Information Technology led the market higher in 2025, but gains were not evenly distributed. Investors favored companies directly tied to the AI infrastructure buildout, including semiconductors, cloud, data centers, and networking. 

International equities extended their strong performance in 2025, finishing the year with broad-based gains across both developed and emerging markets. The MSCI EAFE Index rose 4.91% in the fourth quarter and returned 32.03% for the full year, while the MSCI Emerging Markets Index gained 4.76% in the quarter and returned 34.32% in 2025. Global equities rallied as trade tensions eased and policy clarity improved, marking a sharp contrast from the uncertainty that defined the first half of the year. Emerging market equities outperformed both U.S. stocks and international developed markets over the year. This outperformance reinforced an important investment lesson: diversification across regions can help stabilize portfolios. 

In fixed income markets, interest rates were mixed during the quarter. The 2-year Treasury yield declined from 3.61% at the start of the period to 3.47% at quarter-end, while the 10-year yield edged up from 4.15% to 4.18%. The Federal Open Market Committee (FOMC) met twice during the quarter and reduced interest rates at both meetings by 0.25%, bringing the federal funds target range to 3.50%–3.75%. Credit markets also remained constructive. Investment Grade and High Yield corporate bonds posted strong results for the year, returning 7.90% and 8.76%, respectively. Credit spreads continued to tighten over the quarter, reflecting healthy corporate balance sheets and sustained economic momentum. Municipal bonds also delivered solid performance, supported by a strong second half of the year. Overall, fixed income sectors performed well, benefiting from a resilient economy that absorbed multiple bouts of uncertainty while monetary policy shifted toward a more accommodative stance. 

International Diversification and Corporate Credit Drive One-Year Performance for Citizens Bank SpeciFi, SigFig, and Betterment SRI 

Citizens Bank SpeciFi, SigFig, and Betterment SRI finished 2025 at the top of the robo-advisor performance rankings. Each held above-average international equity allocations, an approach that paid off in a year where developed and emerging markets surged far ahead of domestic equities while corporate credit outperformed municipal bonds. 

International stocks delivered a dramatic year of outperformance relative to U.S. equities. The MSCI EAFE Index returned 32.03% and the MSCI Emerging Markets Index gained 34.32%, both nearly doubling the S&P 500’s 17.86% return. Citizens Bank SpeciFi allocated 45% of its equity sleeve to international markets, well above the 34% peer average. SigFig held 41% and Betterment SRI 37%, with all three benefiting from overweight positions in non-U.S. stocks during the strongest year of international outperformance in over a decade. 

Large-cap equities maintained their advantage over smaller companies, though the gap was narrower than in prior periods. The Russell 1000 Index returned 17.35%, ahead of the Russell 2000 Index’s 12.79% gain. Citizens Bank SpeciFi and SigFig each held 74% of their equity in large caps, above the 70% peer average, while Betterment SRI was lower at 64%. Cap-size positioning varied among the leaders, but international diversification was the more decisive factor in driving one-year outcomes. 

Growth stocks edged ahead of value, though by a narrower margin than in prior periods. The Russell 3000 Growth Index returned 18.14%, modestly ahead of the Russell 3000 Value Index’s 15.69%. Citizens Bank SpeciFi allocated 28% to growth stocks, SigFig 27%, and Betterment SRI 26%, all near the 25% peer average. The tighter growth-value spread meant style positioning was less decisive than international allocation in determining full-year results. 

On the fixed-income front, corporate bonds and high yield outpaced municipal bonds, with the Bloomberg US Corporate High Yield Index delivering 8.62%, comfortably ahead of the Bloomberg US Corporate Index’s 7.77% and the Bloomberg Municipal Bond Index’s 4.25%. Wells Fargo Intuitive Investor topped the bond leaderboard, driven by a 31% high-yield allocation that was well above the 4% peer average. Axos Invest was the runner up, which had a 16% high-yield allocation. 

Domestic Equity Concentration and Growth Positioning Fuel Three-Year Results for SoFi, Betterment Climate Impact SRI, and Vanguard Digital Advisor  

Over the past three years, sustained domestic equity outperformance and a widening growth premium rewarded portfolios with concentrated U.S. large-cap growth positioning. SoFi, Betterment Climate Impact SRI, and Vanguard Digital Advisor delivered the strongest total returns in the robo-advisor universe against their normalized benchmarks, with SoFi’s substantial domestic growth tilt driving the widest outperformance while the other two benefited from more balanced positioning. 

The domestic equity advantage was pronounced over this timeframe. The S&P 500 returned an annualized 22.94%, well ahead of the MSCI EAFE’s 17.94% and the MSCI Emerging Markets Index’s 16.91%. SoFi allocated 75% of its equity sleeve to U.S. stocks, well above the 66% peer average. Vanguard Digital Advisor held 68% and Betterment Climate Impact SRI held 63%. 

Large-cap dominance persisted with substantial separation. The Russell 1000 Index earned an annualized 22.67% versus the Russell 2000’s 13.68% return. SoFi maintained the highest large-cap allocation among the leaders at 81%, well above the 70% peer average, while Betterment Climate Impact SRI held 78% and Vanguard Digital Advisor 74%. Limited small-cap exposure helped avoid the heightened volatility that continued to weigh on smaller companies throughout the period. 

The growth premium expanded to its widest margin across all measured periods. The Russell 3000 Growth Index’s annualized 30.18% return more than doubled the Russell 3000 Value Index’s 13.71%, a gap of over 16 percentage points. SoFi’s 33% growth allocation, well ahead of the 25% peer average, was a primary driver of its first-place ranking. Betterment Climate Impact SRI held 27% and Vanguard Digital Advisor 26%, each also benefiting from the resilience of large-cap growth franchises. 

Within fixed income, corporate bonds outpaced municipals, with the Bloomberg US Corporate Bond Index returning an annualized 6.09% compared to the Bloomberg Municipal Bond Index’s 3.87%. High yield bonds delivered an even wider premium, with the Bloomberg US Corporate High Yield Index returning an annualized 10.04%. Wells Fargo Intuitive Investor led the three-year fixed-income category driven by a 31% high-yield allocation. 

Sustained Domestic Equity Overweight and Selective Credit Propel Eight-Year Results for SoFi, Fidelity Go, and Wealthfront 

Extending the analysis to eight years reveals how sustained strategic positioning compounds performance advantages. SoFi maintained its leadership alongside Fidelity Go and Wealthfront, with all three demonstrating that consistent domestic large-cap equity overweights paired with selective fixed income approaches can drive superior long-term results across multiple market cycles. 

The U.S. equity premium reached its most dramatic levels over this extended period. The S&P 500 returned an annualized 14.30%, nearly doubling the MSCI EAFE’s 7.83% and well above the MSCI Emerging Markets’ 5.35%. SoFi’s 75% U.S. equity allocation captured the bulk of this persistent outperformance, alongside Fidelity Go at 70% and Wealthfront at 72%, all above the 66% peer average. 

Large-cap superiority became even more entrenched over the eight-year horizon. The Russell 1000 Index delivered a 14.01% annual return, far surpassing the Russell 2000’s 7.59%. SoFi allocated 81% of its equity to large-cap stocks, well above the 70% peer average, while Fidelity Go held 77% and Wealthfront 71%. Their limited small-cap stakes shielded performance from the greater volatility and weaker earnings that persisted among smaller companies throughout the period. 

Growth outperformed value by a wide margin. The Russell 3000 Growth Index delivered a 17.46% annualized return, nearly doubling the 9.13% logged by the Russell 3000 Value Index. SoFi’s 33% growth allocation, well above the 25% peer average, was a primary driver of its first-place equity placement. Fidelity Go and Wealthfront maintained growth allocations near the peer average at 25% and 24% respectively, but still benefited from the durability of large-cap growth franchises across multiple cycles. 

In fixed income, corporate bonds slightly outpaced municipals over eight years, with the Bloomberg US Corporate Bond Index returning 2.53% annually versus the Bloomberg Municipal Bond Index’s 2.22%, while high yield bonds delivered a substantial 5.14% annual return. Axos Invest topped the bond rankings which had a 16% high-yield allocation, followed by Empower with its 8% high-yield allocation.