January had it all.
From foreign leaders being seized, to protests and deaths at the hands of government officials from Tehran to Minnesota, and a stand-off over Greenland between the United States and its European NATO allies - geopolitics dominated the headlines from the very start of the year.
Despite this, financial markets opened 2026 with considerable momentum. Risk assets continued to climb, and investor appetite remained strong, reinforcing the view that markets are learning to live with an increasingly complex and unpredictable global backdrop.
Market highlights
January marked the ninth consecutive month of positive returns for global equity markets - a remarkable run by any standard. Leadership broadened again, with small-cap stocks returning to favour, while enthusiasm around AI and capital expenditure surged back into focus. Several AI-exposed companies recorded gains of more than 100% during the month alone.
Gold also pushed higher through much of January as geopolitical tensions intensified, continuing its recent role as both a defensive asset and, at times, a momentum trade. Currency markets were equally active, with the New Zealand dollar rallying sharply late in the month, briefly touching 60 US cents.
The most dramatic moves came on the final trading day of January. With Kevin Warsh increasingly tipped as the next Chair of the US Federal Reserve, the US dollar strengthened sharply. This triggered a rapid unwind of the crowded “debasement” trade, with gold falling approximately 10% and silver nearly 30% in a single session - their steepest one-day declines since 1980.
Elsewhere, Bitcoin lagged broader risk assets, longer-dated US bond yields continued to move higher, and in Australia the Reserve Bank now appears increasingly likely to begin raising interest rates earlier than previously expected.
Fund performance
January was a mixed month for our funds.
Higher-than-expected inflation data in Australia led to a meaningful correction across Australasian equity markets, which weighed on our Australasian funds. Globally, however, returns were more constructive. The Global Growth Fund rose 3.5%, while the Property & Infrastructure Fund gained 2.8% over the month.
We’re particularly pleased with how these global strategies have been tracking recently, especially relative to peers. They continue to provide valuable diversification benefits for investors whose portfolios are heavily concentrated in Australasia. For investors without exposure to these strategies, we encourage a conversation with the team to discuss how they may complement an existing portfolio.
Geopolitical backdrop
Geopolitics remains an unavoidable feature of the investment landscape. Tensions involving the US, China and Russia continue to influence markets, defence policy and global trade dynamics. While headlines can drive short-term volatility, markets have increasingly demonstrated an ability to refocus on fundamentals once the initial noise subsides.
Outlook
Our funds remain fully invested, reflecting our constructive view on the medium-term outlook for markets. That said, after an extended rally, there are signs that markets may benefit from a period of consolidation in the near term.
Encouragingly, the breadth of the current rally remains strong, with small-cap and value stocks outperforming - a pattern that is typically supportive of longer-term market strength. While short-term volatility would not be unexpected, our broader outlook remains bullish, supported by earnings growth, ongoing investment in AI, and increased global spending on defence and infrastructure.
As always, we continue to monitor risks closely while remaining focused on long-term opportunities.