• Performances were mixed over the December quarter.

Following September’s blow-out quarter, performances were mixed for December.  Equities in general performed well but some interest rate sensitive asset classes suffered, and currency had a large impact on returns.

Differing macroeconomic conditions were the key driver of the performance differences.  In the US, markets backed off the view that the Federal Reserve will slash interest rates over 2025 given ongoing strength in the US economy, and upside inflationary risks following Trump’s election.  In contrast, large cuts are still seen as necessary in New Zealand, Europe, China and most other countries given weak economic conditions. 

• Unhedged global equities performed very strongly, while EM and NZ equities also performed well.

• Bond markets and real asset returns were soft, but gold and alternatives performed well.

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