Insights
Market Review for April 2026
Please note: All performance numbers referenced in this article are in NZ Dollar terms, unless stated otherwise.
Global equities: Few April fools
For all the chaos and disruption overspilling from the war in Iran, April was broadly speaking an upbeat month for those investors with globally diversified holdings.
Resilient equity markets, and the decision by four key central banks to resist raising interest rates - at least for now - painted a more positive investor outlook than some people may have envisaged at the start of the month.
On a global level, the MSCI World Index - a major global equities index - returned +9.64% in April, and is up +5.83% so far in 2026 (as at 30 April) [1].
Meanwhile, the S&P 500 index –a key US equity index featuring many household names – notched up its biggest monthly gain (+7.04%) since 2020 [2]. This was mainly driven by the return to favour of some tech stocks, and renewed optimism around the potential of some of AI’s biggest players to validate the investor faith shown in them [2].
NZ stocks: Room for improvement
Unfortunately, NZ stocks had another tough month. Their recent poor form continues to reflect a domestic economy that’s stuck in the low gears.
In April, the NZX50 (S&P/NZX50) posted a return of 0.60%. So far this year, the index is down -3.58%, and is barely in positive territory over 5 years, coming in at +2.61% (both numbers as at 30 April) [3].
Kiwi businesses and consumers continue to put in some hard yards, despite two consecutive interest rate cuts at the end of 2025 that were designed to stimulate economic growth.
The challenge for the Reserve Bank of New Zealand is that it doesn’t have much headroom to cut rates further, given that soaring oil prices risk restoking inflation (for which the counter measure is typically higher, not lower, interest rates).
Oil prices: A sad sign of the times
All of which brings us to the record high price for oil that was notched up in April.
As we mentioned in last month’s article, the closure of the Strait of Hormuz has seen global oil supply drop, which in turn has seen inflation concerns pick up. (Remember, higher fuel prices, especially when sustained, typically flow through to higher inflation in a wider range of goods and services).
At one stage in the month, the price of a barrel of crude oil breached the $120 USD mark [4]. Anything over $100 can start to get investors nervous about the prospects of recession. Don’t panic though, we’re not there yet.
From an ethical investor perspective, it’s disappointing to see the scale of influence that fossil fuels continue to have over the global economy. On the flip side, recent events may accelerate and incentivise the transition towards renewable energy sources.
Interest rates: On hold for now
Against that backdrop, four major central banks held their latest monetary policy meetings last month – the Bank of Japan, the European Central Bank, the Bank of England the US Federal Reserve.
In the end, all four banks resisted the urge to raise interest rates. They preferred to wait and see how real the inflationary risk which linked to the Iran war has become. They know that if they can avoid raising rates for as long as possible, it will give growth prospects in their respective economies a helping hand.
Activity in our Funds
April was a busy month in terms of portfolio activity - that is, the buying and selling of shares and bonds that we undertake as part of actively managing your investments. This was especially true in our Global Responsibility Fund, Global Water Fund, and the global equity holdings within our Pathfinder KiwiSaver Funds and the Ethical Growth Fund.
You can read more about this and what stimulated it (our new investment partner Nordea) here.
An end in sight?
The war in Iran has dominated the news cycle and felt, at times, tilted towards catastrophe. But events in the Middle East have a track-record of de-escalating very quickly, with the region prone to short-term bouts of conflicts. As such, it’s logical to expect that the war in Iran will not be a protracted affair. If an enduring ceasefire can be reached soon, then we would expect volatility – especially around oil price – to cool pretty quickly hopefully giving some relief to the people affected.
As unpredictable as Trump might be, there appears to be limited appetite for a conflict that risks nudging gas prices even higher, given the imminent important domestic elections in the States. When US voters feel the pinch, they let the President know about it.
All of which reminds us of the need to remember that investing is a long-term activity. When you can see beyond short-term turbulence, you’re more likely to have a more rewarding investment journey. And at Pathfinder, that sense of wellbeing gets an added boost from our goal of seeking investments that can help support a better world.
