Winter Update - June 2025
The first half of the year was marked by continued market volatility. The unveiling of controversial US tariff policy in April caused an initial bout of investor concern, but markets broadly recovered and posted strong results over the most recent quarter. Despite persistent geopolitical tensions, including conflict in the Middle East, most equity and bond markets pushed forward, again rewarding long-term investors willing to accept some short-term uncertainty.
Over the past 12 months, markets have had to navigate shifting interest rate expectations, inflation pressures, and political uncertainty. Yet, resilient corporate earnings, improving supply chains, and a gradual stabilisation in global inflation have provided a positive backdrop for disciplined investors. Against this complex environment, diversification, quality asset selection, and a long-term outlook have remained key.
In this report, we explore the cyclical nature of economies and how markets react to short-term developments versus long-term fundamentals. We outline the typical stages of an economic cycle and discuss the importance of staying invested through different phases. In particular, we examine how your portfolio is positioned to capture both cyclical opportunities and long-term global trends.
Closer to home, the New Zealand economy has faced several headwinds over the past couple of years. However, we are now seeing some early signs of improvement. We highlight the key factors behind this shift, while acknowledging that the recovery remains uneven and subject to global developments.
We also have a feature article available to read, ‘The Magic of the Managed Fund’, which takes a deeper dive into why well-diversified, managed funds continue to be one of the most effective ways to build wealth over the long term.
For investors in the Lifetime Series, we can confirm the change of our custodian went through successfully with no complications in the first few weeks of the quarter and we appreciate your patience with that change.
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As always, if you have any questions or would like to discuss your portfolio in more detail, please don’t hesitate to get in touch.
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The magic of the managed fund
Let’s talk about shares for a minute. No matter how you invest, there are really just two ways to make money from owning shares:
1. You receive a slice of the profits (called dividends), or
2. You sell your shares to someone else for more than you paid (that’s capital gain).
That’s it. Anything else is simply a different way of packaging those two outcomes.