Investment Market Update
September 2025 | 3min read
Key takeaways
Strong returns for members: Returns were strong over the quarter and for the year to 30 September, supported by gains in global share markets. The US technology sector was a key driver.
Trade headlines, limited impact: Trade and tariffs continued to make headlines, but the overall economic impact has been limited.
Supportive central banks: Central banks around the world have lowered interest rates to support growth.
RBA rate cut: The Reserve Bank of Australia cut interest rates in August but held steady at 3.6% in September.
Looking ahead: We expect the investment landscape to remain dominated by trade and policy uncertainty, while the economic backdrop is marked by slowing but resilient growth.
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Investment markets in review
Share markets moved higher over the September quarter, despite continued global economic and trade challenges. US shares performed particularly strongly, led by the technology sector. Companies involved in artificial intelligence (AI) and semiconductors (the chips that power everything from smartphones to data centres) were the standout performers.
Trade tensions continue to be a major theme in markets as the US administration introduced higher tariffs - import taxes - on a range of goods. These tariffs have raised costs for businesses and disrupted supply chains (the steps a product goes through to get from the place it’s made to the person who buys it).
Investors have been closely watching how these higher costs might impact inflation and consumer spending in the US. So far, the broader economic impact has been limited, even though some goods have become more expensive. In fact, the US economy grew faster than expected during the second quarter, thanks to strong spending from households.
One of the biggest ripple effects of trade uncertainty has been in currency markets – where investors buy and sell other countries’ currencies. The US dollar has long been considered a “safe haven” - trusted to keep its value in times of uncertainty - but this year we’ve seen it weaken as investors question this traditional role. Many have looked to diversify their currency exposure by moving away from the US dollar, and a major beneficiary has been gold, which continues to rise in value. Gold is often seen as a store of value when confidence in currencies wavers.
Looking at interest rates, central banks around the world have become more supportive of growth and globally we’ve seen official interest rates cut. Central banks cut rates to make borrowing cheaper and stimulate economic activity. In the US, the Federal Reserve cut rates by 0.25% in September. This was their first cut for the year, and took the US official interest rate, known as the federal funds rate, to a range of 4.0% – 4.25%.
In Australia, the Reserve Bank of Australia (RBA) cut rates for the third time this year in August – but held steady at 3.6% in September. Governor Bullock referred to on-going concerns about inflation, so a further cut in November will very much depend on the economic data, and in particular where inflation lands.
In general terms, the economic picture in Australia has improved. We’ve seen consumer demand picking up due to stronger real wage growth, lower savings and the recent rate cuts, and the labour market remains resilient. On the other hand, job growth has slowed slightly, and the unemployment rate has edged higher this year but remains low.
Our outlook
In the near term we anticipate that the investment landscape and markets will continue to be dominated by trade and policy uncertainty – and we may see further periods of volatility as a result. Global growth has slowed, but remains resilient, supported by robust consumer spending. In this environment, central banks are likely to maintain a bias towards further interest rate cuts, to support economic activity.
Over the longer term, we remain focused on the two key components of our investment approach which have consistently delivered for our members. The first is to invest in an actively managed diversified portfolio of investments – across different asset classes, sectors and geographical locations.
The second is to stick to our long-term strategy. We closely monitor market conditions and events to understand how they might impact future returns, but remain focused on long-term dynamics, like the energy transition, digitalisation and changing demographics, which we expect to drive investment returns into the future.
