Year in review: fund performance and market highlights

A key driver of the investment returns shown in your annual account statement is how the fund or funds you’re invested in performed over the year. Below is a snapshot of the main market events over the past 12 months to 30 September 2026 and how they influenced investment performance.

International share markets generally delivered strong returns over the 12 months to 30 September 2026, supported by resilient economic growth and ongoing enthusiasm around artificial intelligence (AI), which continued to drive earnings growth for many technology-related companies.

While many markets reached new highs during the year, investors faced several periods of uncertainty. Concerns around tariffs and trade policy, ongoing geopolitical tensions, and questions about the sustainability of AI-driven market gains all contributed to bouts of volatility. Despite these challenges, international share markets remained resilient.

Bond market performance was mixed over the year. Earlier support from lower interest rates and easing inflation gradually gave way to renewed concerns about inflation pressures.

Towards the end of the period, rising oil prices and higher government borrowing requirements pushed bond yields higher across many major economies. Because bond prices move in the opposite direction to yields, this created headwinds for bond investors.

New Zealand's economic recovery remained gradual, although conditions improved compared with the previous year. Lower interest rates provided some support to households and businesses, while export-focused industries benefited from favourable demand and commodity prices.

Business confidence improved during the year, although economic activity remained uneven across different sectors. Against this backdrop, the New Zealand share market delivered positive returns but generally lagged the stronger gains seen in several international equity markets.

The strong performance of international share markets helped drive positive returns across our diversified funds over the year. Investors in our growth-oriented funds benefited the most, with some seeing double-digit gains.

Most of our single-sector funds also produced positive returns. Bond and property-related funds faced a more challenging environment, however, as higher interest rates weighed on performance.

While market volatility increased at times, diversification across different asset classes, sectors and regions helped portfolios navigate changing market conditions and capture opportunities as they emerged.

Geopolitical developments and inflation remain important themes as we move forward. Higher energy prices, ongoing tensions in the Middle East and the path of global inflation will continue to influence both share and bond markets.

While uncertainty is likely to remain a feature of investment markets, our portfolios continue to be diversified across a range of assets and markets, helping position them to manage periods of volatility while remaining focused on long-term investment outcomes.