GoalsGetter Monthly Commentary September 2025

The third quarter of 2025 saw global equities continue their record-breaking run. Aside from a very brief pull-back in early August the quarter was one-way traffic, with a number of regional or national equity markets hitting new all-time highs. Global bonds (hedged to NZD) and NZ bonds both posted a solid gain in September, and over the quarter. NZ bonds in particular delivered very strong quarterly returns, up 3.6% to comfortably outperform global bonds.

Geo-political tensions remained high, and the global tariff picture is still uncertain, but risk sentiment was helped by a solid quarterly earnings season, and a number of central banks remaining dovish.

The MSCI ACWI (NZD Hedged) was up 3.6% for September, and up 7.9% for the quarter. The Kiwi Dollar was weaker versus the US Dollar and most of the major currencies over the month and the quarter. Returns for the MSCI ACWI (in NZD terms) were therefore even stronger than fully hedged, up 5.3% for the month, and up 12.5% for the quarter.

The US Federal Reserve (Fed) made a much-anticipated move with a rate cut in September, resuming the easing cycle that they paused in December 2024. They noted heightened uncertainty regarding tariff-induced inflation, but also acknowledged increased downside risk to growth and the labour market.

Economic data continued to present a mixed picture, payrolls in August were weak, and prior months were revised down. Conversely second quarter GDP was revised higher, and ‘nowcast’ models for the third quarter GDP paint a strong picture. The macro picture in Europe remains different to the US. While inflation has been stable around the preferred 2% level, economic growth is proving to be harder to generate. It is gradually improving but remains sub-par despite the ECB already moving the monetary policy settings to accommodative levels.

On a regional basis Asian equities led the way, with China, Hong Kong and Japan the stand-outs for the third quarter. Share markets in Australia and New Zealand delivered solid mid-single digit returns that lagged most other regions. On a sector basis, more ‘growth’ focused sectors such as Information Technology and Communications Services led the way for a second straight quarter, while Consumer Staples, Real Estate and Healthcare lagged the broader market.