ASX 200 TSR Performance: 2025 Year in Review

2025: A Year of Divergent Returns

The ASX 200 delivered a total return of approximately 11.2% in calendar year 2025, driven primarily by strong performance from the financial and resources sectors.

Sector Highlights

Sector	TSR (2025)
Financials	+18.4%
Materials	+14.7%
Healthcare	+9.1%
Technology	+6.3%
Real Estate	+3.2%

Key Themes

Banking Sector Outperformance

The big four banks collectively delivered TSR above 15%, benefiting from resilient net interest margins and improved asset quality. CBA led the pack with a TSR of 22.1%, driven by multiple expansion and consistent dividend growth.

Resources Recovery

After a subdued 2024, resources companies rallied on the back of iron ore price stability and growing demand for battery metals. BHP and Rio Tinto both delivered double-digit TSR.

Tech Sector Headwinds

Despite global AI tailwinds, Australian technology companies delivered below-average TSR, partly due to valuation compression from their 2023-2024 highs.

Implications for TSR Hurdles

Companies setting relative TSR hurdles for 2026-2029 LTI grants should note the wide dispersion of returns across sectors. A one-size-fits-all approach to peer group selection risks misalignment between pay and performance.

Looking Ahead to 2026

Consensus expectations point to more moderate returns in 2026, with the RBA's rate trajectory and global trade dynamics as key swing factors for TSR outcomes across the ASX 200.