How is the ASX 200 performing compared to global markets?

Australia’s benchmark equity index has posted solid returns over the last few years even though it often receives less attention when global markets are compared. Most discussions focus on the S&P 500 or emerging markets but the actual results of the ASX 200 present a more balanced and encouraging picture than headlines usually suggest.

The Scorecard: Three Years of Returns

Total return measures price gains and also includes dividends that are reinvested. The ASX 200 on this basis produced steady results over the last three years. The index returned about 12.2% in 2023. It then returned 11.2% in 2024 and about 10.3% in 2025.

The S&P 500 clearly performed better during the same period. The index returned 26.3% in 2023. It then returned 25% in 2024 and 17.88% in 2025. This excellent performance came largely from the artificial intelligence boom and the dominance of large technology companies which investors often call the Magnificent Seven. These returns also reflect a higher trailing P/E ratio compared with many other markets. A weaker US dollar also supported returns.

European markets had a different trajectory as the STOXX Europe 600 rose 15.5% in 2023. The gain slowed to 8.3% in 2024 but the index jumped sharply in 2025 and returned 20.7%.

China’s CSI 300 index which tracks the 300 largest companies listed in Shanghai and Shenzhen had the highest volatility. The index dropped 11.4% in 2023 because the post COVID reopening disappointed and the property sector slowdown became deeper. The market recovered in 2024 after Beijing introduced stimulus which pushed returns to 14.7%. The rally extended into 2025 when the index rose slightly above 20%.

Why the Comparison Needs Adjustment

The ASX 200 has one of the highest dividend yields among developed markets which usually ranges from 3.5% to 4.5% each year. These dividends make the index attractive for investors who want regular passive income and capital growth. This feature is especially valuable for retirees.

Australia also has a franking credit system which improves after tax returns for domestic investors. Australian residents therefore receive higher effective yields from dividend paying ASX companies.

The Outlook: Why the Next 2–3 Years Could Be the ASX 200’s Moment

1.The commodity cycle now appears to favour Australia. Gold prices sit near multi decade highs while iron ore prices have stayed resilient even though concerns about Chinese demand remain. Copper which is an important metal for the global energy transition also faces structural supply shortages. Australia holds some of the largest reserves of these resources in the world.

2.Australia’s economic fundamentals are solid. GDP growth could benefit from higher real incomes and also from lower personal tax rates. Population growth in Australia which immigration supports is among the highest in developed economies. This creates strong long-term demand for housing, retail and services.

3.The Australian dollar could also become a long-term advantage. Many analysts expect the US dollar to weaken over time because the US fiscal deficit is growing. A weaker US dollar often strengthens the Australian dollar which increases the purchasing power and appeal of Australian assets for global investors. It also tends to support commodity prices which are usually priced in US dollars.