Your KiwiSaver is doing something strange right now. Here’s what’s going on

Sunday, 10 May 2026

Analysis: Wages are stagnant. The economy is struggling to grow. The unemployment rate in Wellington and Auckland is above 6%. Inflation is on the rise. And our mortgage rates look set to climb.

Yet, our KiwiSaver balances, seemingly untethered from the chaos we’re seeing elsewhere, are doing just fine.

Alan Clarke, a portfolio manager at Amova Asset Management, tells me April has gone down as one of the strongest months for global shares in the past 30 years.

“The only comparable months were during Covid and coming out of the global financial crisis,” he says.

Indeed, the recovery over April was so significant that it rendered the reports on the performance of markets in the first three months of the year veritable data relics. With international stocks making up such a big portion of KiwiSaver portfolios, movements in international markets can have a huge impact on our retirement savings.

This has led to a conflict between how we’re all feeling and what the markets – and our balances – are doing. It also challenges some of the standard market rules we’re often encouraged to believe.

For instance, we’re often told that stock markets don’t like volatility, but this is all we’re seeing at the moment. A case in point would be Brent crude oil, which has oscillated wildly with a range of US$40 over the last month. As the ‘on-again off-again’ Iran ceasefire hangs in the balance, the price of oil continues to hang above $100 per barrel – but it would take a brave person to wager a bet on where it could be next week.

This is volatility writ large.

But right now, this doesn’t matter as much as what's going on inside the businesses that move markets.

“Strong earnings from major stocks in the indexes have been a key driver for the all-time highs we have been seeing,” says Eric Walkington, a sales trader at CMC Markets.

And despite talk of an impending demise, AI-dominated stocks continue to defy gravity with ongoing increases in value.

As long as these major companies continue to post strong earnings, the war will play a secondary role. Revenue, growth and company performance ultimately hold the trump card over everything else for investors.

Walkington adds that because there’s still so much back and forth going on between Iran and the United States, investors aren’t quite as reactive as they once were. They’re taking an approach of waiting to see where something actually lands before responding immediately.

The long and the short of a TACO

The market right now offers a real-time case study in how stock prices are influenced in both the short and long term.

Clarke uses the example of Benjamin Graham, who once explained that the market “votes” on fear daily, but “weighs” profits over the longer term.

“All that daily drama – the geopolitical tensions, the central bank announcements, the Trump commentary – that's the voting,” says Clarke.

“But over time, what really drives returns is the underlying earnings power of the businesses you own, and right now that weighing machine is tipping quite positively.”

This is perhaps best captured in the general market response to US President Donald Trump’s announcements.

Back in April 2025, markets fell over 10% in just a few days after the 'Liberation Day' tariff announcement, then bounced just as sharply when those tariffs were walked back.

“That pattern – dramatic announcement, market panic, partial reversal – has played out enough times now that many investors have stopped treating every headline as the final word,” says Clarke.

This trend has also led to the moniker TACO (Trump always chickens out) as a reminder not to respond immediately to announcements that the US President makes.

“For everyday KiwiSaver investors, that's actually a useful lesson to carry forward,” says Clarke.

“Markets will keep reacting to political headlines in the short term. That's not going to change. But for people saving toward retirement, staying invested and keeping sight of your long-term goals will almost always serve you better than trying to second-guess the next announcement.”

Check your expectations

The biggest investment disappointments occur when the market does something beyond your sphere of expectations.

Although company earnings have been tracking well, it would be a mistake to assume this will continue uninterrupted in the future.

Higher oil prices will lead to inflation around the world, and as this happens, those great earnings could start to take a hit.

The other big risk of an AI correction might be overshadowed, but it hasn’t gone away entirely.

Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, says the uncomfortable concentration of power in a few ultra-large organisations means the narrative can change fast – particularly amid the AI hype cycle.

“The key question is not simply whether this is another bubble,” says Sullivan.

“The deeper question is whether AI earnings are becoming increasingly circular. These companies invest in each other, buy from each other, rent capacity from each other, and help justify each other’s growth expectations. That doesn’t mean the earnings are fake, but it does mean investors need to ask how much of the current boom is genuine demand, and how much is one part of the AI ecosystem feeding another. Bubble is the wrong analogy. A 'house of cards' is perhaps better.”

This is to say that just because your KiwiSaver looks good right now, it doesn’t necessarily mean it will stay that way indefinitely. The scales may be tipped in favour of the profit over the longer term, but even the most successful companies in the world can fall on hard times. Just ask long-time Nike investors how they’re feeling right now.

Market narratives can always change quickly – and the turnaround can be brutal for investors.

So are you pleased with your KiwiSaver right now? And how does this compare to your feelings about the broader economy? Let us know in the comments below.