Nick Stewart is a financial adviser and CEO at Stewart Group.
A week out from an election that will be fought partly on the cost of living, the S&P/NZX 50 carries an awkward statistic of its own.
Over the five years to September 30, the index returned about 1.2% a year including dividends, roughly 6% in total.
Consumer prices rose about 24% over the same period.
An investor who stayed local has lost about 14% of their purchasing power, before tax and fees. That is not a “wait it out” market. It is a structural problem. And it is the moment to stop pretending that “investing locally” is, on its own, a strategy.
The fair counter is that the index now sits close to its highs. But it took nearly five years to climb back above its January 2021 peak. Five years to get back to even.
Cast your mind back. In 2014, HSBC’s Paul Bloxham crowned New Zealand the “rock star economy”.
For most of the decade that followed, the NZX was among the best-performing developed-market indices in the world. Then ANZ business confidence sank to a 10-year low in 2018 and to near-pandemic depths in 2022. A decade on, the band has clearly stopped touring.
The home-bias problem
There is no shortage of reasonable explanations for holding mostly Kiwi assets: currency familiarity, imputation credits, the comfort of brands you pass on the street. None is good enough on its own.
Look at the scoreboard. The S&P 500 has returned about 13% a year in US dollars over five years.
Emerging markets returned 33.6% in 2025 and 23.4% in the nine months to September 30.
Past returns are not a reliable guide to future ones, and that cuts both ways.
But those gains came from the likes of TSMC, Samsung, Tencent and Alibaba – companies you cannot meaningfully access through a corner-office broker at the bottom of the world.
Asking a local broker to run a thoughtful Taiwanese or South Korean equity strategy is a bit like asking your local real estate agent for guidance on buying a Manhattan apartment. Wrong person for the job.
And here is the twist. In the nine months to September 30, the S&P/NZX 50 returned 2.1%.
The version that caps each stock at 5% lost 2.0%.
Every dog has its day, but a handful of heavyweights appear to be carrying this scoreboard. That alone is the case for diversification, even within New Zealand.
Spending in NZD does not mean investing only in NZD
“But I spend my money here.” True. You also retire here and pay your power bill here.
None of that requires 100% of your portfolio to be in New Zealand dollars.
Matching some of your retirement spending makes sense.
Matching all of it, in a market that has just gone backwards in real terms for half a decade, does not.
Not knowing a brand does not mean you should be afraid to own it.
The election adds another reason to look offshore
The election is on November 7. The Greens, on 15% in the latest 1News-Verian poll, are campaigning on a 2.5% tax on net assets above $10 million, with the family home exempt, and a 33% tax on inheritances and gifts above $1m, paid by the recipient.
Labour says it will not adopt that package. Most people would never pay either tax. But Labour’s leader has himself warned that people may simply move their money.
Whatever your politics, that is a hard backdrop for an aspirational, entrepreneurial outlook.
What good looks like
Careful diversification. Genuine fiduciary management.
A financial plan built around your goals and your currency liabilities, not around the logos you happen to recognise at the supermarket.
Unfamiliarity is not a risk in itself, concentration is.
The NZX 50 will have its day again. But the lesson of the past five years is the one markets have always taught: do not put all your eggs in one basket, no matter how comforting the basket feels.
A fiduciary adviser is bound to put your interests ahead of their own, and ahead of the logos you recognise. Position for your goals, not for a ballot box. When the noise gets loud, seek advice and wise counsel.
Nick Stewart is a financial adviser and CEO at Stewart Group.