4 December 2025

Key takeaways:

  • A flat return in global share markets hides a turbulent month. 
  • Questions over high valuations of AI-related companies saw markets initially sell-off, but sentiment quickly reversed seeing a strong recovery.
  • The RBNZ delivered a 0.25% OCR cut as expected, but signalled future cuts are not a given. 
  • Given this backdrop, the MAS Schemes continue to perform strongly. 
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Below is an in-depth review of financial markets over November. 

November ended with the global share market1 (in US dollar terms) delivering a relatively flat return. However, this headline hides a rather turbulent month. For most of November, markets drifted lower as the record-long US government shutdown and jitters over big-tech weighed on confidence. However, in the final week, sentiment turned positive, and shares rallied strongly on renewed hopes that the US Federal Reserve (Fed) will cut interest rates in December. 

Concerns have been mounting recently around the sustainability of the artificial intelligence (AI) boom. This boom has been one of the main forces behind the seemingly relentless drive higher in global share markets in recent years. Recently, investors have been questioning whether the share prices of some AI-related companies are justified. These jitters saw volatility hit its highest level since April and rapid-fire media headlines questioning whether the AI boom is in fact a bubble. The technology sector around the world led global share markets lower in the initial sell-off period. The technology ladened NASDAQ Index in the US is a great example. At one stage the Index was down 6.9% (all returns are in local currency unless otherwise stated), before rallying 4.9% in the final week of the month as volatility fell back to more normal levels and buyers of the dip emerged. The NASDAQ Index ended the month marginally in negative territory. Please click here for more information on MAS’s view on the AI boom or bubble. 

While some of the large cap US technology companies struggled over the month (Nvidia down 12.6%, Microsoft down 5.0%), US smaller cap names and other sectors thrived. The S&P SmallCap 600 Index gained +2.6%, while the US health care sector rallied +9.3% in November. The broader US share market2 record a positive gain of 0.2% for November. 

European share markets delivered mixed results in November. Health care led the way, jumping +5.6%, while technology lagged, falling -4.0% as investors worried about stretched valuations. Overall, the European share market3 managed a modest +1.0% gain for the month. Emerging markets, on the other hand, slipped -2.4% (in US dollar terms), dragged down by weakness in Chinese technology stocks. 

The Australian share market4 struggled over November, ultimately ending down -2.7% as higher than expected inflation data weighed on investor confidence. Sectoral returns were consistent to global peers, health care leading the way, while the technology sector was the weakest, declining 11.6%. The local share market5 held up better than its Australian counterpart but still ended November in the red, down -0.4%. Sentiment was dampened after the Reserve Bank of New Zealand (RBNZ) signalled that its easing cycle may be completed. 

Fixed interest returns were mixed over the month. In the US, Treasury prices edged higher as expectations grew for a December interest rate cut (bond prices move in the opposite direction to interest rates), with the 10-year Treasury interest rate touching the 4% mark just prior to month end. Closer to home, the RBNZ cut the Official Cash Rate to 2.25%, as expected. But the tone of its statement and updated forecasts signalled a more neutral stance, rather than anticipating more cuts. This shift saw domestic interest rates move sharply higher toward the end of the month. 

The differing fortunes of various market indices are illustrated in the chart below. 

Investment Market Commentary – 30 November 2025

 

Note: Returns are in local currency terms.

 

The Outlook

2025 has been a rewarding yet eventful year for investors. Resilient global growth, healthy corporate fundamentals and enthusiasm for AI have driven equity markets higher. This resilience has allowed investors to navigate, at times, periods of extreme policy uncertainty. Together with relatively stable bond markets, this has supported solid returns for balanced portfolios overall.  

What could 2026 have in store? It would be overly simplistic to say, ‘more of the same’, but the base case for our lead investment manager, JBWere, is that many of the supportive factors that benefited financial markets over 2025 should persist. An expectation for steady global economic growth, contained inflation, and favourable financial conditions is a positive combination for shares. Especially with the promise of transformative technologies remaining an important part of the picture too. In short, JBWere sees 2026 being another year where broadly favourable economic conditions provide financial markets with some added resilience to deal with likely shocks and surprises. 

Indeed, looking at the global growth outlook specifically, there are some positive tailwinds. Financial conditions are accommodative, business capex spending (especially in technology) continues to ramp up, targeted fiscal stimulus will occur in places like the US, Germany and Japan and the negative impulse from the sharp jump in US tariffs should fade. More fundamentally, private sector balance sheets are generally still in strong shape, providing some sturdiness to the growth picture. And some central banks (but specifically the US Fed) have room to ease policy restrictiveness further. 

At the same time, however, the global economy faces a number of significant crosscurrents, placing it at a pivotal moment. Despite supportive fiscal policies in major economies, large structural deficits could trigger renewed concerns about fiscal sustainability. The rapid growth in AI infrastructure is driving economic activity but rising capital needs and increased debt make the sector more vulnerable to changes in liquidity and funding. And, although inflation is largely contained, persistent pockets could limit central bank flexibility.  

Overall, while JBWere expects the economy to weather these crosscurrents, the margin for positive outcomes is narrowing. Within the MAS Schemes, our active management style allows us to regularly test and adjust conviction levels when deemed necessary. The economic and market landscape is constantly evolving. But through strong diversification and exposures to high-quality investments, we believe the MAS Schemes are well positioned to weather what could be in store next. 

We have useful online tools to help you:

If you decide to change your Fund after reviewing your risk profile or meeting with a MAS Adviser, you can make a switch via the MAS Investor Portal, or alternatively you can complete an investment strategy change request form. There is no fee for switching. Links to the relevant forms are below.     

You can see weekly updates on fund unit prices and returns on our website.

1 As represented by the MSCI All World Country Index.
2 As represented by the S&P 500 Index.
3 As represented by Euro Stoxx 600 Index.
4 As represented by S&P/ASX 200 Index. 
5 As represented by S&P/NZX 50 Index.

This article is of a general nature and is not a substitute for professional and individually tailored advice. No party guarantees the return of capital or the performance of investment funds. Returns indicated may bear no relation to future performance. The value of investments will fluctuate as the values of underlying assets rise or fall.

MAS is a financial advice provider. Our financial advice disclosure statement is available by visiting mas.co.nz or by calling 0800 800 627.   

The Product Disclosure Statement for the MAS KiwiSaver Scheme is available at: MAS KiwiSaver Scheme. The Product Disclosure Statement for the MAS Retirement Savings Scheme is available at: MAS Retirement Savings Scheme. The Product Disclosure Statement for the MAS Investment Funds is available at: MAS Investment Funds. Medical Funds Management Limited is the issuer and manager of the Schemes.