Watch Mike’s video here, or read on for the full story.
September surprises
September is often billed as a tough month for markets. Seasonal trends tend to work against investors, headlines about geopolitics dominate, the US economy was expected to show signs of fatigue, and the Federal Reserve remained cautious on inflation. On top of all that, markets had already enjoyed a strong run earlier in the year – so, as I said last month, there were plenty of reasons to expect a pause.
But here we are!
Instead of faltering, markets pressed higher, with new highs set during the month. For Pie’s funds, September capped off another fantastic run. In fact, the last six months have been among the strongest in our 18-year history - right up there with the post-GFC rebound and the Covid-era rally.
What’s driving the rally?
Several key forces are pushing markets forward:
- Artificial intelligence – ongoing investment and innovation in AI is fuelling optimism across many sectors and industries
- Consumer resilience – spending has stayed stronger than expected, underpinning growth
- Central banks – expectations of more rates cuts are helping to propel small caps, which are finally catching up after years of lagging
Together, these themes have kept the market buoyant at a time when many thought it would struggle.
Looking ahead to October
The natural question now is: where does this leave us? Are we set for a correction, some healthy consolidation, or yet another month charging ahead with the bulls?
It reminds me of a trip many years ago to Pamplona in Spain. I’d heard all about the running of the bulls and made my way there, only to find the event had already finished - the bulls had already been and gone.
That’s a fair metaphor for October. While I think there’s a strong chance the bulls may step aside this month, I can’t point to an obvious immediate trigger. As is often the case, we’ll likely identify the catalyst in hindsight.
In truth, a pause in markets would be healthy. After such an exceptional six months, a period of consolidation would allow investors to take stock, reset expectations and prepare for the next phase.
I’m staying positive
Despite the likelihood of near-term cooling, my outlook remains constructive. The tailwinds of AI investment and the gradual easing of interest rates continue to provide support. Even if October sees markets cool, the underlying fundamentals suggest reasons for optimism as we move further into the year.
Information is current as at 30 September 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.