Welcome to our monthly investment catch up. In this edition we discuss what went well in the markets last month, what captured the attention of our investment team, and we share insights into some of the actions the investment team took in the portfolios.

What went well in February?

• Markets handled uncertainty well – Global share markets continued rising despite mixed economic news, supporting long term investment returns.
• Inflation continued easing globally – Lower inflation strengthened confidence that official interest rates have likely peaked, which is positive for both shares and bonds.
• Bond returns improved – Stable to lower inflation expectations helped fixed interest investments recover, benefiting conservative and balanced funds.
• Company earnings meet expectations – Results that meet expectations for large international companies supported global share market performance and diversified investment portfolios.
• New Zealand export incomes remained supportive – Solid dairy and agricultural prices continued supporting national income, helping underpin the wider economy despite slower domestic growth.

What captured our attention?

• Interest rate cuts may take longer than hoped – Official interest rates in New Zealand and overseas may remain elevated (or be increased), which can slow economic growth and influence investment returns.
• Longer-term mortgage rates have edged higher – Banks lifted some longer fixed mortgage rates as market interest rate expectations shifted, meaning borrowing costs may be higher for some households.
• Strong recent market gains raised expectations risk – After a period of positive returns, markets may react more sharply if economic data or company earnings disappoint.
• China’s economic recovery remains uneven – Slower growth in China could reduce demand for New Zealand exports such as dairy, meat, and forestry products.
• Markets are reacting quickly to new economic data – Investors are responding rapidly to inflation and employment updates, leading to increased short term market swings.

Market Commentary

February was a steady month for investors. Global share markets continued to rise, even with mixed economic news, showing that confidence in the longer‑term outlook remains firm. Inflation kept easing in major economies, which strengthened the view that interest rates are close to their peak. This helped bond markets settle after a volatile year, improving returns for conservative and balanced funds.

Stronger‑than‑expected earnings from large international companies also supported global share performance, lifting diversified portfolios. In New Zealand, the economy is still adjusting to higher living costs and slower household spending, but solid export prices for dairy and other agricultural products continue to provide support.

At the same time, markets are reacting quickly to every new update on inflation, jobs, and growth. After several months of strong gains, this means short‑term swings are likely, even though the broader trend remains positive.

All of this highlights an important point: in a world that moves quickly, staying invested in a way that reflects your values and long‑term goals matters more than trying to react to every market change. That’s where responsible investing comes in, not just avoiding harm, but backing companies that are building solutions for the future.

Investing that makes a difference — today and for the future

At different stages of life, we all want our money to work a little harder, and a little smarter. Whether you’re building your financial base in your 30s and 40s or thinking about the legacy you’ll leave in retirement, most people want their investments to grow while also contributing to a world they feel good about.

That’s why our approach to responsible investing combines two complementary tools:

• Negative screening to avoid industries that don’t align with our values.
• Positive screening and impact investing to support companies that actively may improve lives and the environment.

This approach is strengthened through our partnership with LGT, and through access to the Crown Impact II Fund. These partnerships allow your investment dollars to support businesses doing real, measurable good.

Airtel Money

Airtel Money is just one of the examples of your investment dollars at work, to make a positive and meaningful difference to the world.

Airtel Money offers mobile money services to customers across Africa, including payments, microloans, savings and international money transfers. In Sub-Saharan Africa, where there is little access to banking services, Airtel provides digital banking to rural communities. This increases financial resilience and provides opportunities that those people may have never had.

Why this matters for your money

Companies like Airtel, solving real problems, tend to be the ones shaping the future. They attract talent, build trust, and operate in sectors with long‑term demand. Through partners like LGT and funds such as the Crown Impact II Fund, we look for businesses that are:

• financially resilient
• mission‑driven
• creating measurable positive impact
• positioned for long‑term growth

Your investment dollars can do more than grow, they can contribute to good things happening in the world, whether you’re planning for the next 5 years or the next generation.

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).