Quarterly Market Insight

A Time for Steady Hands and Strategic Positioning

September Quarter 2025

Inflation Retreats: A Moment to Reassess, Not Retreat

After two years of inflation dominating headlines and portfolios, we’re finally seeing signs of relief. Inflation is easing globally, and central banks—particularly the US Federal Reserve and the RBA—are holding steady. This isn’t a moment for panic or dramatic repositioning. It’s a moment to pause, reassess, and ensure your strategy is aligned with the next phase of the cycle.

For those still accumulating wealth, this means reviewing growth exposures and ensuring you're not over-leveraged. For retirees, it’s about confirming your income streams remain resilient and diversified. The tone in markets has shifted from fear to cautious optimism—and that’s a signal worth listening to.

Gold: From Safe Haven to Strategic Anchor

Gold has quietly become one of the standout performers this quarter, reaching record highs of around US$4,100 per ounce. Why? Central banks are buying aggressively, geopolitical tensions remain elevated, and equity markets are showing signs of fatigue.

For Australian investors, this isn’t just a headline—it’s a structural shift. Treasury now expects gold exports to surpass LNG by 2025–26, hitting A$60 billion. That’s a major development for national income, but more importantly, it reinforces gold’s role as a strategic hedge in high-net-worth portfolios.

If you’ve been underweight gold, now may be the time to revisit its role—not as a speculative play, but as a stabiliser in times of uncertainty.

US Interest Rates: A Pause, Not a Pivot

The US Fed trimmed rates by 0.25% in September, with inflation now sitting at 2.5%—close to target. While another cut is possible, it’s not guaranteed. The Fed is watching employment data closely, and any softness there could accelerate easing.

The IMF’s forecast of 2.3% US growth in 2025 suggests a soft landing is achievable. For investors, this supports maintaining exposure to quality US equities, especially in sectors like healthcare, consumer staples, and infrastructure—areas that tend to weather rate changes well.

If you’ve been considering trimming US exposure, we’d suggest holding your position or rotating into quality rather than exiting altogether.

Equity Markets: The Rotation to Quality Is Underway

The ASX 200 fell 1.8% over the quarter, but the story beneath the surface is more telling. The speculative growth rally of the past two years is fading. Investors are now favouring dividend-paying, cash-generative businesses—a shift that aligns perfectly with our income-focused strategies.

Financials, particularly ANZ, were a bright spot, hitting decade highs. Meanwhile, technology, property, and healthcare faced pressure. This rotation isn’t a short-term trend—it’s a broader revaluation of risk and return.

For clients nearing or in retirement, this environment rewards discipline and selectivity. It’s not about chasing the next big thing—it’s about owning quality, generating income, and preserving capital.

RBA Holds Steady: What It Means for Retirees

The Reserve Bank of Australia has kept the cash rate at 3.6% since May. Inflation is easing (2.1%) and unemployment remains stable (4.2%). The RBA’s stance is clear: no rush to cut, but no appetite to tighten either.

Markets are now pricing in a potential rate cut by mid-2026, though that could come sooner if household spending or employment weakens. For retirees, this reinforces the importance of flexible drawdown strategies and diversified income sources—especially as term deposit rates begin to plateau.

If you’re relying heavily on cash or fixed income, now’s a good time to review whether your portfolio is positioned for a lower-rate environment ahead.

Oil Prices: A Double-Edged Sword for Australia

Oil traded between US$82 and US$95 per barrel this quarter, driven by OPEC+ supply cuts and Middle East tensions. For Australia, this supports export earnings—but it also risks reigniting inflation.

For retirees and those on fixed incomes, rising fuel costs can quietly erode purchasing power. This is where inflation-linked assets and active portfolio management become critical. We’re watching this closely and adjusting exposures where necessary.

Policy Watch: Superannuation, Resources, and the Dollar

Several policy shifts this quarter carry real implications for high-net-worth individuals:

• Superannuation Tax Reform: The government has walked back its proposal to tax unrealised gains in super balances over $3 million. Instead, realised gains will be taxed at 30% (up to $10 million) and 40% (above $10 million). This is more measured, but it still demands careful structuring of large super balances—especially for SMSF trustees and those with concentrated positions.

• Critical Minerals Strategy: A $1.2 billion stockpile initiative is underway to secure Australia’s resource future. This could be a tailwind for mining and energy investors, particularly those exposed to lithium, rare earths, and copper.

• Industrial Support: A $600 million package will keep Glencore’s Mount Isa and Townsville operations running. This isn’t just about jobs—it’s a signal that the government is serious about supporting domestic industry.

• Currency Movements: The Australian dollar traded between US63c and US67c, buoyed by commodity prices but constrained by global uncertainty. For globally diversified investors, currency hedging remains essential—especially for those drawing income from offshore assets.

Looking Ahead: Stay the Course, Stay Selective

As we approach the end of 2025, the global economy is settling into a more balanced rhythm. Inflation is easing. Labour markets are holding up. Central banks are signalling patience.

For our clients—whether accumulating or drawing down—the message is clear:Stay diversified. Stay disciplined. Stay focused on quality.

Volatility will persist, but the foundations for long-term wealth creation remain intact. If you haven’t reviewed your portfolio recently, now is a good time to do so. Let’s ensure your strategy is aligned with the opportunities ahead.

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