Insights
Market Review for April 2025

If there’s a single word that encapsulates April 2025, it is probably ‘aftermath’. The month will go down in history as the time when President Trump rolled out a ‘Liberation Day’ red carpet (2 April) for the world to waltz down. In reality, it was more akin to an ugly rug strewn with hazardous bumps. Economies and financial markets fast lose their footing on it - however, the latter moves faster than the former so there's uncertainty as to the impact of all this on the broader economy.

As mentioned in our March update, Trump’s use of punitive tariffs shouldn’t have been a surprise to anyone. However, their scale and the speed at which they materialised, were undeniably shocking. You don’t need a degree in economics to understand that upending well-established trade dynamics on a whim, and in such a blunt and aggressive fashion, equals volatility.

The credibility of White House policymakers was further strained when it transpired that ChatGPT may have been used to define key elements of US tariff strategy, which could explain why they included an island populated only by penguins. Or perhaps those penguins had secretly been trading with the US. At the time of writing, it remains a mystery.

We notice with interest an emerging trend regarding the respective energy policies of America and China.

While the US has shifted from a mindset of climate leadership to energy leadership irrespective of the source, a recent closed-door UN meeting saw the Chinese double down on efforts to support climate action. President Xi Jinping was at pains to highlight his country’s efforts to lead in the renewables space, and there was a deliberate communication pivot towards pitching China as the most reliable and stable superpower.

As an ethical investment house, we cautiously welcome the apparent prioritisation of environmental issues by China - one of the world’s biggest emitters. A cleaner, more sustainable planet relies on the curtailing of fossil fuel use and on large-scale investment in viable alternatives.

However, it would be remiss of us not to highlight ongoing concerns about human rights that run in parallel to recent climate pledges. When we talk about ESG factors, we refer to three important, overlapping elements - environmental, social, and governance. Progress in one (i.e environmental), without progress in others (i.e. social), can’t be ignored.

Obviously, The West benefitted from an earlier period of industrialisation, a priority position when it comes to decarbonisation. For the time being, we’ll keep a close eye on the pledges being made and any subsequent action, especially in the run-up to COP30 in November.

Meanwhile in New Zealand, the fragility of the post-recession recovery is leading to more scrutiny of the Reserve Bank’s potential monetary policy reaction.

The April rate cut of 0.25% saw the OCR fall to 3.5%, the lowest it’s been since October 2022. However, domestic headwinds such as a weakening jobs market, coupled with global turbulence, suggest more cuts may follow to give the NZ economy a helping hand.

All of which brings us to the action that we’ve been taking in managing our investors' money.

Here are three stocks we decided to buy over the course of April, alongside the corresponding rationales. Please note that the holdings will vary in size according to a customer’s risk profile:

Sprouts Farmers Market: This company has been on our radar for a while, and we chose to dip a toe in the water, ahead of finalising our core assessment. As the name suggests, it’s a natural and organic grocery chain which appears to have a multi-year runway ahead of it, as the category grows and the store rollout continues. Why not buy more you might be wondering? We are wary of the macroeconomic risks in the background, as well as the associated risk of consumers trading down, and the fact the stock is sitting at all-time highs. For now, we’re proceeding with caution and will increase exposure if the investment case strengthens.

UBER: Did you know the chronic underutilisation of owned vehicles sees close to 95% of them being parked at any one time? It makes a strong case for the hail-a-ride industry, as well as for broader fleet ownership. Uber has emerged from market share battles as a leader in many key geographies, and under new leadership has quickly become a highly cash generative business. It currently makes a cool $6billion in Earnings Before Interest and Taxes  per year and rising.. We believe Uber, as illustrated by its recent deal with Google’s Waymo (self-driving cars), will be the leading platform for car and fleet owners to find customers. The company is also allocating hundreds of millions to encourage EV adoption, pointing to a considerable amount of future-proofing and consideration of climate impact.

ACE: Most road accidents are due to distractions or DUIs. ACE is a company which supplies camera technology to local police to spot drivers not wearing their seatbelt, and/or who are driving on their phones, therefore posing a risk to themselves and others. Whilst unlikely to be a small-cap rocketship, we see enough merit and have been building an appropriately sized position. They recently won a large $96m/5-year deal with NZTA, which means proceeds from any future speeding tickets may indirectly find their way back to you via your KiwiSaver. Of course, the better option is to drive safely in the first place.

The global economy, as well as financial markets, still face uncertainty regarding the timing and degree of tariff softening from the White House. Our job is to chart the smoothest route through the turbulence on your behalf. And along the way, as the April trades highlighted above show, there will inevitably be pockets of opportunity worth utilising.

At Pathfinder, we resolutely believe that a chaotic world needs ethical investors prepared to take a stance and to back the companies that can make a tangible, positive difference to the world. And, avoid the ones that are contributing to a less stable, less livable future. 

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Pathfinder recommend all investors receive financial advice before making an investment decision. Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver Plan and Pathfinder Investment Funds. Product Disclosure Statements for the offers are available at pathfinder.kiwi. Learn more about how we invest ethically by reading our Ethical Investment Policy here.