GoalsGetter Monthly Commentary December 2025

The final quarter of 2025 saw another strong performance from global equities, and a number of countries/regions saw their share markets reach new all-time highs. Global bonds (hedged to NZD) were down slightly for the month of December but up for the quarter, while NZ Bonds were slightly down for both December and over the quarter. US treasuries sold off over December despite the US Fed delivering another 0.25% reduction in interest rates. While some of the rhetoric from the Fed was on the dovish side, they suggested they would continue to “wait and see” with respect to labour market and economic growth data before committing to further cuts.

The MSCI ACWI (NZD Hedged) was up 0.7% for December, and up 3.4% for the quarter. The Kiwi dollar was slightly stronger than the US dollar, but weaker versus the Euro and Yen. Returns for the MSCI ACWI (in NZD terms) were therefore slightly stronger than fully hedged, up 0.9% for the month, and up 4.3% for the quarter.

Economic data continued to paint a mixed picture in many countries. For both USA and Europe, the services sector continues to do slightly better than the manufacturing sector, yet neither are running particularly ‘hot’ or ‘cold’. Annual inflation in the US eased to 2.7%, below expectations but still some distance from the preferred 2% level. The recent US government shutdown is still impacting the release of economic data, and ongoing speculation over who will replace Jerome Powell as Chair of the US Fed adds another layer of uncertainty.

On a regional basis, emerging markets led the way over the fourth quarter. Over the year emerging market equities (local currency) delivered returns of nearly 30%, comfortably ahead of developed markets for the first time since 2019. In developed markets, Europe, UK and Japan were the standouts, and all three delivered stronger returns than the US market for 2025. On a sector basis, Healthcare performed strongly over the quarter after underperforming the broader market for the last couple of years.