ProfitShield Quarter 3 – 2025
Investors embrace optimism, but risks remain latent
The third quarter of 2025 was marked by relief and optimism. While investors were still grappling with geopolitical turmoil and mixed economic signals in the spring, confidence returned strongly this summer. Markets reached new highs for the year, buoyed by interest rate cuts, strong corporate results, and an unstoppable belief in the growth potential of artificial intelligence. Nevertheless, the underlying tone remained fragile, with the fundamentals of this boom less solid than stock prices suggest.
Growth and interest rate cuts provide breathing space
The US economy grew by 3.5% year-on-year in the second quarter, which was stronger than previously thought. Initially, this figure dampened hopes of rapid interest rate cuts, but by the end of September, the Federal Reserve appeared willing to ease its policy after all. The first cut since early 2024 was a fact, and Fed Chairman Powell hinted that more would follow. Worldwide, 165 central banks have now cut interest rates in the past twelve months, a sign of a policy environment that is clearly focused on growth.
In Europe, too, the lights seem to be slowly turning green. Germany is showing signs of industrial recovery, the service sector is growing steadily, and the composite PMI reached its highest level in sixteen months. Inflation remains under control at 2.2% in the eurozone, while in the US there was a slight increase to 2.9%, an acceptable level for an expanding economy.
AI hype and FOMO drive the markets
The stock markets benefited greatly from confidence in the future. The global AI boom remained the dominant force: companies such as Nvidia, Broadcom, and Oracle broke record after record. Investors wanted to be part of this at all costs. The familiar FOMO (fear of missing out) did its job. Expectations of tax cuts in the US and large-scale investments in infrastructure and defense in Europe also provided additional tailwinds. Emerging markets, particularly China, posted the strongest returns, helped by stable growth and rising domestic demand.
Bonds and currencies: moderate movements
The bond markets remained relatively calm. European interest rates rose slightly, particularly in France, where political instability drove up risk premiums. US long-term interest rates fell slightly, resulting in modest positive returns for government bonds. Corporate bonds performed better, thanks to easing recession fears and tighter credit spreads. The US dollar has fallen by more than 11% since the beginning of this year, improving the competitive position of US exporters but depressing returns for European investors in dollars.
ProfitShield: stable returns in euphoric markets
In this predominantly positive climate, ProfitShield delivered a return of +3.36% in the third quarter (July –0.24%, August +2.09%, September +1.49%). This means that the strategy remained well within its target: stable growth with limited fluctuations. The buffers did their job; volatility remained low, even during interim corrections at the end of July and mid-August. For the whole of 2025 up to and including September, ProfitShield's total return was +6.82%.
ProfitShield is designed to bring calm to markets that are often overly driven by emotion. While investors were swept up in AI hype and interest rate expectations, ProfitShield remained focused on preservation and controlled growth. The combination of buffer ETFs with predetermined protection levels and return caps once again ensured a controlled risk profile.
Outlook: cautious optimism
Historically, the fourth quarter is often the strongest period of the year for equities. Markets are entering the final quarter with confidence, supported by more accommodative monetary policy. However, the risk of disappointment is increasing: valuations are high and geopolitical tensions remain latent.
ProfitShield therefore remains defensively positioned, with an emphasis on broad protection and diversification across sectors and regions. This makes the system a reliable anchor strategy, not only for generating returns, but above all for maintaining peace of mind, even if the markets take another downturn.