Highilghts
Financial markets experienced mixed performance in February amid central bank policy and global trade uncertainty. Equities pared back some of their recent gains while bonds delivered solid returns as yields fell.
Global equities posted a decline -0.9% in local currencies (+0.7% in NZD terms) in February with a decline in the NZD against the USD lifting performance for unhedged investors.
The U.S. (S&P 500) and Japanese (Nikkei 225) share markets fell -1.4% and -6.6% respectively amid tariff uncertainties, in contrast to other major global markets which saw some gains. European stocks (Euro Stoxx 50) gained +3.3%, while the UK share market (FTSE 100) delivered a positive return of +1.6%. NZ shares (NZX 50 Portfolio) meanwhile, fell -1.7%, following US markets lower, amid a challenging local reporting season.
Despite some volatility, bond markets posted a positive return for the month. Long dated US treasury yields hit 4.6% mid-month before retreating to 4.2%, a fresh low for 2025, given weaker-than-expected U.S. economic activity data and tariff uncertainty. Global bonds (Bloomberg Global Aggregate NZD Hedged) gained +1.2% in February, while NZ bonds (Bloomberg NZBond Composite) delivered a return of +0.6%.
The domestic listed property sector fell -2.8% in February, following the broader share market lower. The Reserve Bank of New Zealand (RBNZ) delivered a 50bps cut to the Official Cash Rate (OCR) in February, bringing the rate down to 3.75%, as expected by the market. Falling debt costs are expected to support capital valuations for commercial property assets going forward.
Chart 1: Market index performance – Month and Annual period
Please find links to February Unit Pricing and Performance below:
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