KiwiSaver providers are optimistic that the announcement of a ceasefire in the Iran conflict could bolster investment markets.
Sharemarkets experienced an uptick following the news that US President Donald Trump was open to a ceasefire with Iran, conditional on the reopening of the Strait of Hormuz.
Data from Morningstar reveals that since the onset of the Middle East conflict, typical growth funds have seen a 4.3% decline, recovering approximately half of that loss.
In contrast, when Trump announced tariffs the previous year, the market experienced a 5% decline from peak to trough, which rebounded within five weeks.
Greg Bunkall, a spokesperson for Morningstar, noted that market attention is now focused on developments. He anticipates that the ceasefire will have a positive impact on KiwiSaver returns.
Dean Anderson, founder of Kernel, observed that markets have remained resilient, looking past the immediate noise.
“However, as we’ve all seen over the last several months—and years—the day-to-day messages carry little weight.
“The ongoing news, tweets, and media briefings continue to deliver different messages. Currently, the world is in a state of uncertainty, and the rising oil prices’ pressures will not dissipate overnight.
“For investors, as tedious as it may sound, the focus should remain on the long-term picture. There are no ‘safe haven’ bets right now—every asset class has been affected, so it’s crucial to stay diversified, keep contributing to KiwiSaver, and avoid trying to time the market or pick a hot stock or sector in this environment.”
Greg Smith, an investment specialist at Generate, described the market’s reaction to the ceasefire news as a relief rally rather than a comprehensive resolution.
“Markets are cautiously optimistic about the ceasefire, but it’s conditional. The critical issue is whether the Strait of Hormuz fully reopens and if supply disruptions are resolved. Until that happens, there will likely be some caution.
“This situation follows a familiar pattern of escalation, deadlines, and last-minute de-escalation, leading to understandable scepticism in the markets. This appears more like a temporary pause than a permanent peace, with volatility likely to stay high in this headline-driven scenario. The same risks could quickly resurface if negotiations stall or tensions escalate again.”
He acknowledged that the impact on KiwiSaver has been relatively contained so far.
“Despite recent volatility, global markets are still only 5% to 10% below their all-time highs, illustrating how controlled the decline has been. Diversification and the defensive nature of the NZ market have also helped soften the blow from our perspective.
“From an investment standpoint, we have maintained our discipline and avoided reacting to short-term noise. These periods are often headline-driven, but our focus remains on long-term fundamentals. We’ve used the volatility to strategically invest in high-conviction areas where we see strong structural growth—rather than pulling back. Specifically, we’ve continued to build positions in areas like AI, where earnings momentum is strong, and adoption is still in early stages.
“Overall, while markets could continue to respond positively in the short term, the situation remains fluid and led by headlines.”
