GoalsGetter Monthly Commentary April 2025

April 2025 was a remarkable month for markets and will join a growing list of infamous examples of how volatile global markets can be. Global equities were down over 10% mid-month, but finished April only slightly lower, while bonds posted solid gains. The MSCI ACWI (NZD Hedged) was down -0.4% but is still up over 10% on a rolling 1-year basis. The NZ Dollar moved higher, particularly against the US dollar (up to U$0.594), meaning the MSCI ACWI Index (NZD unhedged) was down -3.5% (+11.3% rolling 1-yr). Global bonds posted a solid gain over the month of April, the Bloomberg Global Agg Index (NZD Hedged) advanced 0.9% for the month, while the NZ Composite Bond Index did even better, up 1.1%.

The much wider scope, and larger size, of the new US Administrations tariffs announced April 2nd (“Liberation Day”) caused a brief, but large, sell-off in equites all around the world. The Volatility Index (“VIX” or “fear index”) spiked to levels not seen since the early period of the Covid-19 lockdowns and the global financial crisis. As tariff negotiations between the US and multiple other countries, and various product/sector/country exemptions were announced, sentiment swiftly recovered. President Trump announcing on X that tariffs would be paused for 90 days led to equity markets roaring higher. Exactly one week on from “Liberation Day” the S&P500 was up more than 9.5%, the largest one-day rally since Oct 2008 – the midst of the global financial crisis. US GDP came out negative for the first quarter of 2025, down -0.3%, but this was mostly driven by a surge in imports in anticipation of tariffs. Other components were solid, for example real final sales to private domestic purchasers – a gauge of underlying economic strength – was +3.0%, slightly up versus the prior quarter.

In the Eurozone consumer confidence declined further, and as expected, the European Central Bank (ECB) lowered its policy rates by 25 basis points after their April meeting. On a sector basis some of the more defensive names outperformed in April, with consumer staples and utilities leading the way.  Energy was far and away the weakest sector, down over 10%, and is one of only two sectors (the other is Materials) that have fallen over the last 12-month period.  Information technology had a solid month amidst the volatility, but it is the weakest sector on a year-to-date basis, down over 10%.