A Year of Ups, Downs & AI: 2025 Market Review for KiwiSaver Investors
Markets through 2025: US tech led gains, NZ’s NZX broke long-term highs, and the ASX saw bouts of volatility. Here’s how major markets performed and what it meant for your KiwiSaver.
US Markets - Tech & Tariffs Shaped Returns
Tech Leads, Broad Markets Up
The U.S. stock market ended 2025 with solid gains across major indexes. The S&P 500, Nasdaq and Dow all finished the year higher, with technology stocks, especially those tied to AI helping lift performance late in the year. On a recent trading session, the S&P 500 rose about 0.9% and the Nasdaq jumped about 1.3%, reflecting renewed momentum in AI-driven names.
Year-to-Date Strength
As of late 2025, major U.S. indexes had posted strong year-to-date returns:
Nasdaq: +20.7%
S&P 500: +16.2%
Dow Jones: +13.1%
Volatility & Policy Impacts
2025 wasn’t without stress. Early in the year, tariff policy changes and trade tensions sparked volatility. Markets dipped sharply in response to the April tariff announcements before rebounding through the rest of the year. Later in the year, concerns about stagflation and inflation risks persisted, with debate over future Federal Reserve interest rate moves shaping sentiment into 2026.
What It Meant for KiwiSaver:
US equities make up a significant portion of many KiwiSaver growth and balanced funds via global share exposure, so the strong gains in large-cap and tech sectors contributed positively to returns in 2025. However, periods of volatility (e.g., tariff-related sell-offs) tested return consistency throughout the year.
New Zealand Market - NZX Climbs & Records
NZX Up Over the Year
New Zealand’s main share index, the NZX 50, finished the year higher and recently posted gains on market sessions in December. Ending 3-4% higher on the year.
Record Highs After Long Wait
The NZX 50 surpassed its previous high from early 2021, a long-anticipated milestone. Driven by improving earning reports and stronger local economic data.
Quarterly Performance Patterns
Earlier in 2025, NZ equities posted a modest quarterly gain in Q2 thanks to strength in sectors like healthcare and communications.
What It Meant for KiwiSaver:
KiwiSaver funds with exposure to NZ listed equities saw benefits from the late-year rally and record index levels. However, local market performance remained more modest relative to global peers, reflecting New Zealand’s smaller and more concentrated market.
Australian Market - Volatility & Sector Rotation
Mixed ASX Performance
The Australian sharemarket had a choppy 2025. At times, the ASX 200 experienced notable declines, including drops tied to tech sell-offs and weaker commodity prices. Despite this, the ASX 200 ended 5% higher on the year.
Market Pressure from Commodities & Tech Fears
Recently, concerns about AI-related tech weakness and falling copper prices contributed to downward pressure on the ASX. Major miners like BHP and Rio Tinto posted declines as commodities weighed on sentiment.
Regulatory Spotlight
Meanwhile, regulators levied penalties against ASX for prior underinvestment in technology and infrastructure. An event that injected additional uncertainty into the market.
What It Meant for KiwiSaver:
Australian shares are another key piece of many KiwiSaver portfolios. ASX volatility and mixed sector performance meant that returns from Australian equities were uneven, with gains in some areas offset by weakness in others.
KiwiSaver Insights - How 2025 Shaped Returns
Diversification Really Helped
KiwiSaver funds that held diversified global equity exposure benefitted from the strong U.S. tech-led market, which offset more modest local returns.
Interest Rate Moves & Growth Impact
Rising interest rates early in the year added volatility, but later Fed rate moves and RBNZ easing supported share prices. This interplay influenced equity valuations and fixed income returns across portfolios.
Calendar Year Patterns
Mid-year saw markets react to macro news, tariffs, monetary policy and growth data, before rallying into year-end. This meant periods of drawdown in Q1/Q2 reversed later, leading to generally stronger annual results.
Disclaimer
This update is for general information only and is not financial advice. Past performance is not indicative of future performance. If you require a personalised recommendation, feel free to get in touch!