Welcome to our quarterly investment wrap-up. In this edition we discuss what went well in the markets over the last quarter, what captured the attention of our investment team, and we share insights into some of the actions the investment team took in the portfolios.

A steadier finish to the year

The three months to 31 December 2025 saw domestic markets continue to stabilise, with inflation gradually easing and interest rates moving lower. That helped improve sentiment for both investors and borrowers, with most diversified portfolios delivering positive returns over the quarter.

What went well in the December quarter?

• Interest rates moved lower in NZ – Lower rates eased pressure on new mortgages and floating rates, giving some households a bit more breathing room.
• Share markets delivered positive returns – International and local share markets generally finished the quarter higher, supporting retirement balances.
• Bond markets stabilised – Bonds benefited from expectations of further rate cuts, helping income and balanced funds.
• NZ property prices were broadly steady – A stable housing market reduced the risk of a sharp jump in rents.
• Export conditions improved in pockets – Some commodity prices and export sectors provided support to regional economies.

What captured our attention?

• Economic growth remained mixed – Weak in New Zealand and resilient globally (particularly in the U.S.). However, the risk of slower earnings growth and higher unemployment remained.
• Pressure on households and businesses lingered – Despite lower interest rates, many households and small businesses continued to feel the effects of high living costs and weak demand.
• Global growth risks increased – Slower growth in key overseas economies raised concerns about future demand for New Zealand exports.
• Geopolitical and trade uncertainty persisted – Ongoing global tensions and trade disruptions added uncertainty for markets and supply chains.
• Market volatility remained a risk – While markets finished the year more stable, sudden shifts in investor sentiment remained a key risk for the period ahead.

Market Commentary

The December quarter was characterised by cautious optimism. Central banks, including the Reserve Bank of New Zealand, continued to ease policy, which helped take pressure off mortgage rates and supported share and bond markets.

Share markets were generally positive, supported by expectations that the worst of the inflation cycle is behind us. Global technology and large international companies remained key drivers of returns, while bonds also provided modest gains as rate cut expectations firmed.

In New Zealand, the economy is still soft, but there are signs that conditions are slowly improving. Inflation is trending lower, though cost of living pressure remains front of mind for many households.

How We Think About Investing in Changing Times

Managing retirement savings means thinking well beyond the next market swing. Our approach starts with a long‑term view: over time, share prices tend to reflect company earnings, interest rates, and the strength of underlying businesses. But the long term is really experienced as a series of short‑term moments, which means what happens today still matters.

We pay attention to the news, not to react to every headline, but to understand how short‑term events might influence long‑term fundamentals. A key part of our job is judging whether market movements reflect real changes or are simply noise that will fade. Experience helps us recognise if prices already reflect the latest developments and help us decide what to do next.

We’ve seen markets move sharply around elections, geopolitical tensions, pandemics, and unexpected global events. These periods can feel unsettling, but history shows that markets eventually return to pricing companies on what they earn and what they’re likely to earn in the future. Working out what an “appropriate” price is in these volatile times, remains the challenging part, and it’s where research and judgement matter most.

Recent volatility has been influenced by a range of global announcements, including those from President Trump. Whether these effects last is something we continue to assess carefully.

Through all of this, our focus stays steady: balancing today’s signals with our expectations, to support your long‑term financial wellbeing.

Tip for members:
For our members, the key message remains diversification and patience. Markets rarely move in straight lines, but staying invested across a mix of assets helps portfolios benefit when conditions improve, as we saw through the second half of 2025.

The article above is for educational purposes only and is not financial advice. Please seek advice from a qualified financial adviser when making important decisions about your financial situation. 

The New Zealand Anglican Church Pension Board trading as Anglican Financial Care is the manager and issuer of Christian KiwiSaver Scheme, The Retire Fund and The New Zealand Anglican Church Pension Fund. Product Disclosure Statements and Fund Updates are available on the Documents page of the AFC website (Pension Fund and The Retire Fund) and https://christiankiwisaver.nz/documents/ (Christian KiwiSaver Scheme).