June 2025 marked a robust month for Pie Funds, with several of our strategies delivering strong returns amid a backdrop of global economic shifts and policy developments. If there’s one thing this job provides, its surprises. There's never a dull moment. And even if there is, that usually means something!
Calm amid chaos: markets rally despite global tensions
It was a nervous month for the world, with geo-political events taking centre stage once again. Whilst we may not have been on the brink of WW3, it was certainly scary, particularly for those based in the Middle East.
As diplomats brokered a ceasefire, markets cheered that the worst had been averted. Surprisingly, market volatility declined during the month. There is a saying in the industry that bull markets "climb a wall of worry" and that was certainly the case this month.
Despite all the uncertainty and risk, global equity markets experienced a rally in June, buoyed by expectations of interest rate cuts and optimism surrounding technological advancements.
In the US, the S&P 500 continued its upward trajectory, influenced by investor confidence in AI-driven productivity gains. In New Zealand, the NZX 50 Index saw modest gains, reflecting cautious investor sentiment.
Fund highlights: global equities shine, strategy tweaks paying off
Our global funds led the performance chart with an impressive 4% return for Global Growth 2, driven by a rally in US equities. Strategic positions in high-performing sectors and exposure to a wide range of markets - including South Korea which surged due to market-friendly reforms – added to performance. Not to be forgotten, our UK & Europe Fund was up 4.7% in June and is up 14.4% over a 3 month period.
We’re pleased with how our global funds are positioned after improving our investment process for stock selection a few months back. These early results are ahead of our benchmark and some key peers that we track, with lower volatility (deliberately) partly due to our higher cash levels.
KiwiSaver: active management drives outperformance
Our KiwiSaver Growth Fund delivered a 2.9% return, while the Aggressive Fund achieved a 3.1% return for the month and is up 8.7% since launching at the start of May this year. These results highlight the effectiveness of our active management approach in navigating complex market dynamics and capturing growth opportunities.
Looking ahead: eyes on the Fed, earnings, and trade winds
Looking ahead, while macroeconomic indicators suggest potential for continued growth, geopolitical developments and policy shifts warrant close monitoring.
Our investment strategy will continue to focus on identifying quality companies with strong fundamentals and growth prospects. The US earnings season starts in mid-July, along with further announcements expected around trade tariffs.
Finally, the market is eagerly awaiting the nomination for a new Chair of the Federal Reserve, to give some direction for interest rate moves.
We appreciate your continued trust in Pie Funds and remain committed to delivering strong returns through our active management approach.
Information is current as at 30 June 2025. Pie Funds Management Limited ("Pie Funds") is the manager and issuer of the funds in the Pie Funds Management Scheme and Pie KiwiSaver Scheme (the Schemes). Any advice is given by Pie Funds and is general only. Our advice relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees, like brokerage, if you act on any advice. As manager of the Schemes' investment funds, we receive fees determined by your balance and we benefit financially if you invest in our products. We manage this conflict of interest via an internal compliance framework designed to help us meet our duties to you. For information about how we can help you, our duties and complaint process and how disputes can be resolved, or to see our product disclosure statements for the Schemes, please visit www.piefunds.co.nz. Please let us know if you would like a hard copy of this disclosure information. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary. The information is given in good faith and has been derived from sources believed to be reliable and accurate. However, neither Pie Funds nor any of its employees or directors gives any warranty of reliability or accuracy and shall not be liable for errors or omissions herein, or any loss or damage sustained by any person relying on such information, whatever the cause of loss or damage. No person, including the directors of Pie Funds, guarantees the repayment of units in the Schemes or any returns of units in the Schemes.