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Retirement
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Investment market performance Q1 2025
As we navigate the complexities of the financial landscape, it’s important to stay informed about how investment markets are performing. The first quarter of 2025 (January 1 – March 31) presented both challenges and opportunities for investors. In this article, we take a closer look at how investment markets performed over the quarter, and we highlight some of the key economic factors from across the world that influenced these outcomes.
Australia
Share market: The S&P/ASX 200 Index, which represents Australia’s top 200 companies, was down -2.8% over the quarter. Negative returns were largely due to poor performance in the finance sector, driven by negative returns from some of Australia’s major banks, which was offset to some degree by a positive contribution from the mining sector, particularly by gold mining companies, as the price of gold continued to surge.
Interest rates: Australia’s inflation rate remained within the Reserve Bank of Australia’s (RBA) target range, but core inflation, which excludes volatile items like food and energy, remained above the target, despite decreasing from 3.6% to 3.2% from Q3 to Q4 in 2024. Key contributors to this include domestic holiday travel, accommodation costs and the annual tobacco excise increase. The RBA reduced the cash rate from 4.35% to 4.10% during the quarter, and the market is currently expecting two or three further rate cuts through 2025.
Housing market: The Australian housing market, as measured by CoreLogic's Home Value Index (HVI), recorded an increase of +0.5% in Q1 2025, reversing a slight decline of -0.1% in the previous quarter. The increase was attributed to buyers responding positively to Australia’s first interest rate cut since the Covid pandemic. In 2024, Australian home values were up +4.9%, adding approximately $38,000 to the median value of a home.
Australian dollar: The Australian dollar (AUD) increased slightly against the US Dollar over the quarter, rising +0.6% from 61.9 to 62.5. The change comes off the back of a sharp drop in AUD towards the end of 2024 that was mainly caused by shifts in US and Australian interest rate expectations and a negative outlook for the Chinese economy, which has impacted Australia's export sector.
New Zealand
Share market: The S&P/NZX 50 Index saw a -6.4% drop in Q1, caused mainly by political and economic uncertainty and the threat of tariffs from the new US administration.
Housing market: Following a flat January, the CoreLogic Home Value Index showed a +0.4% gain in February and a +0.5% gain in March, for a combined +0.9% increase for the quarter, as prices begin to tick up in the wake of recent interest rate cuts. The median property value nationally is now $812,195.
Interest rates: The official cash rate was reduced from 4.25% to 3.75% during Q1 2025, with the market expecting further reductions to around 3.00% through 2025 as inflation comes under control. New Zealand’s economy, which was in recession at the end of 2024, exited recession in Q1 2025 as the economy began to grow again, helped by the recent reduction in interest rates.
United States
Share market: The S&P 500 Index fell by -4.3% in Q1 2025, as share markets became increasingly volatile. Investors sold shares, particularly in US technology companies, as they began to question the valuations of these companies, given recent advances in Chinese technology such as the DeepSeek AI. Fears of tariffs, political uncertainty and slowing economic growth has also contributed to the recent sell-off.
Interest rates: The Federal Reserve kept interest rates on hold at both its Q1 2025 meetings. This was in line with the Fed’s goals of achieving maximum employment and price stability. The Personal Consumption Expenditures (PCE) inflation rate stood at +2.5% at the end of February, while core inflation had eased to +3.1%.
China
The Chinese share market has been an exception to the sell-off seen in Q1 2025, and has performed well, driven by improving Chinese consumer earnings. China's growth rate increased from 4.6% to 5.4% in Q4 2024, exceeding market estimates of 5%. This growth was driven by a front-loading of exports due to concerns about US protectionist policies, consumption-boosting trade-in programs, and monetary easing that made borrowing cheaper. However, analysts caution that this growth is unlikely to be sustainable as structural issues remain, such as the weak property sector and sluggish domestic demand, while ongoing trade tensions with the US are expected to create headwinds for exports.
Although the impact of tariffs on Australia has not yet had a direct impact, a long-term deterioration of the Chinese economy could result in reduced demand for Australian exports, from commodities to food and financial services. This dynamic has contributed to the sharp depreciation of the AUD seen towards the end of 2024, although it has recovered slightly in Q1 2025, rising +0.6% against the USD.
Tariff unveiling and outlook
In the first week of April, President Donald Trump unveiled severe tariffs against most of the US trading partners. From April 5th, universal tariffs of 10% were imposed on imports from all countries, including Australia and New Zealand. Countries with large trade deficits with the US face reciprocal tariffs of up to 50%, with Asian countries particularly hard hit. The volatility continued when on 9th April a 90-day pause on tariffs was announced for most countries, except China. While the situation is evolving, the economic impact is likely to take some time to flow through, depending on the evolution of trade policy and the timing and extent of any fiscal and monetary policy responses.
We continue to monitor the major drivers of markets and their impact on Resolution Life Australasian portfolios. While investing always involves managing uncertainty, the current environment is mired in elevated uncertainty. The best form of defence for portfolios is to continue to be well diversified, with exposure to a range of asset classes that can help during volatile times.
Sources:
1. S&P/ASX 200 Index Performance - ASX
2. NZX 50 Index Performance – NZX
3. S&P500 Index Performance - US
4. Reserve Bank of Australia Monetary Policy - RBA
5. Reserve Bank of New Zealand Official Cash Rate - RBNZ
6. Australian House Prices – CoreLogic
7. NZ house Prices – CoreLogic Home Value Index
What you need to know
Preparation of this document and the opinions expressed in it may involve material elements of subjective judgement and analysis. Unless specifically stated otherwise they are current as of 9 April 2025 and are subject to change without notice. Resolution Life does not make any representation or warranty as to the accuracy, reliability or completeness of information and does not accept any liability or responsibility for any acts or decisions, errors or omissions related to the information in this document.
For Professional Financial Advisers Only – Not for distribution or disclosure to retail or wholesale clients.
The information contained in this document is only for professional financial advisers acting in that capacity and does not contain any financial product advice. Resolution Life Australasia Limited ABN 84 079 300 379, AFSL No. 233671 (Resolution Life) can be contacted via resolutionlife.com.au/contact-us or by calling 133 731
New Weekly Annuity rates
Stay informed and ensure that your clients receive the most up to date Annuity rates. We're pleased to announce that our annuity rates are now available, delivered directly to your inbox at the start of each week.
How to sign up:
Signing up is quick and easy. Simply complete the form here to start receiving our weekly annuity rates email. Once registered, you'll start receiving the latest rates to your inbox.
Why sign up?
- Convenience - receive the latest annuity rates directly at the start of each week, saving you time searching for updates. All the information you need, right at your fingertips.
- Enhanced client service - take advantage of our bonus rates and competitive annuity options. Contact Simon Felice at simon.felice@resolutionlife.com.au / 0416 037 066 to learn more about the options available for you.
- Reliable solutions - we understand the importance of offering your clients reliable and up-to-date financial solutions. Our weekly annuity rates email is designed to help you deliver exceptional service and strengthen client relationships. Sign up today.
New retirement planning guides from Resolution Life
We’ve recently developed a series of age-based retirement guides, aimed at helping our superannuation customers plan for their retirement. The 4 retirement guides cover a range of topics from super contributions, navigating career changes, retirement income stream options, age pension eligibility and of course, the importance of financial advice to help them with their retirement planning. The guides are intended to be a place where customers can add in their own notes regarding their current financial situation and retirement goals, and we’re hoping this will kick-start some conversations with their financial advisers. Customers aged 50 and over will start receiving email communications from us, directing them to our website to view these retirement guides, alongside other helpful articles and retirement resources.
Updates to conventional products bonus rates
Customers holding Whole of Life or Endowment (Conventional) policies share in the profits of the respective underlying asset portfolios, with those profits distributed to policies through bonuses.
There are two types of bonuses:
1. Annual bonus
2. End/Terminal bonus.
For 2025, we are declaring higher Annual bonus rates for Super and Ordinary (non-Super) policies relative to the rates declared last year (typically 0.2%-0.3% increase).
From 1 April 2025 or 1 May 2025 (based on policy type), we are declaring higher End/Terminal bonus rates for both Super and Ordinary policies relative to the rates declared last year. The increase for each policy will depend on the policy and how long the policy has been held.
The Annual Statement will show the impact of both bonus declarations on each customer’s policy.
Tables containing the Annual and End/Terminal bonus rates that are applicable for the different types of business and bonus scales are available on our website - resolutionlife.com.au/whole-life-and-endowment.
What does this mean for policy owners?
Resolution Life has declared higher Annual bonus rates (typically an increase of 0.2%-0.3%) from the rates declared last year. This means policies will receive higher annual bonuses as a proportion of Sum Insured and existing Annual bonuses compared to last year. Annual bonuses are credited to policies once a year and, once credited, are a permanent (guaranteed) addition to their policy’s maturity and claim value (unless bonuses are cashed, or the policy is altered).
The End/Terminal bonuses shown on Annual Statements represent the End/Terminal bonuses that would be received if a claim or maturity benefit was paid on the date of the Annual Statement. Unlike accrued Annual bonuses, End/Terminal bonuses are not guaranteed.
Resolution Life are declaring higher End/Terminal bonus rates for applicable policies effective from either 1 April or 1 May. The higher End/Terminal bonus rates combined with the additional Annual bonuses credited to policies since the previous year, mean that the policy maturity and claim values shown on Annual Statements will typically be higher than the previous year.
Withdrawal (surrender) benefits will also typically increase with the additional Annual bonuses and higher End/Terminal bonus rates. Withdrawal benefits for policies are shown on policyholders’ Annual Statements.
Please note: End/Terminal bonuses are not guaranteed which means that End/Terminal bonus rates can be increased or decreased at any time.
Bonus rate flyers providing general information on this bonus declaration for customers will be available on our website by the end of April - resolutionlife.com.au/whole-life-and-endowment.
Performance during 2024
The investment performance of the assets supporting these policies is an important factor in the levels of bonuses that can be declared. As market values fluctuate over time, we analyse investment performance since the last bonus declaration and update bonus rates to reflect the impacts of changes to investment markets and expected future earnings rates. Bonus rates are reviewed throughout the year, although changes are normally declared annually.
When setting Annual bonus rates, Resolution Life considers both past returns and estimates of future investment returns, with the aim of declaring sustainable bonus rates over the longer term. Traditionally, movements in Annual bonus rates have trended directionally with historical movements in long-term bond yields. Long-term bond yields influence our expectations for future investment returns and impact the amounts we need to set aside to ensure we can meet our contractual obligations to our policyholders. While fluctuating during 2024, medium-to-long-term bond yields in Australia ended the year at higher levels than at the start, and remain considerably higher than the levels seen during the recent years of low bond yields.
End/Terminal bonuses are a way of passing on a greater level of capital appreciation, usually from growth-oriented assets such as equities (shares) and property. While there is some smoothing of returns, End/Terminal bonuses more closely reflect actual investment returns and, as such, can be more volatile than Annual bonuses.
Underlying portfolio investment returns performed well over 2024, with aggregate returns ahead of expectations. Returns from growth-type assets were driven in particular by strong returns on global / overseas equities (shares) and on infrastructure assets.
We aim to set Annual and End/Terminal bonus rates that are supportable and fair to our policyholders over the lifetimes of their policies. Accordingly, we are declaring increases to both Annual bonus rates (an additional 0.2% - 0.3%) and End/Terminal bonus rates relative to the rates declared last year.
Additional information on policy value impacts
Annual and End/Terminal bonuses are only payable in full on maturity or claim.
Like interest on a bank account, Annual bonuses accumulate and compound over time. Annual bonuses that are yet to accrue (those for future years) are not guaranteed.
End/Terminal bonuses reflect the investment returns not already added as Annual bonuses and are not guaranteed. The risk that a fall in the market values of the underlying asset portfolios reduces or even erases past capital appreciation means that we cannot guarantee payment of End/Terminal bonuses in the future and End/Terminal bonus rates can rise and fall.
If a policyholder does not wish to continue with their policy, the amount that would be payable now (on surrender) is called the Withdrawal (or surrender) benefit. This value is not guaranteed and can increase or decrease. The Withdrawal benefit is calculated by applying a series of actuarial factors that are relevant for each policy. The calculation is derived based on elements such as policy type and the length of time the policy has been active, and typically includes a present cash value of all policy components (Sum Insured, accrued Annual bonuses and End/Terminal bonuses).
As with claim and maturity values, each Annual bonus added will usually increases the Withdrawal benefit. The Withdrawal benefit will also generally increase or decrease as End/Terminal bonus rates change. Where the End/Terminal bonus rates increase the Withdrawal benefit will typically increase, and conversely, decreases in End/Terminal bonus rates will typically reduce the Withdrawal benefit.
As the full value of the Sum Insured and bonuses are only payable in full when the Sum Insured becomes payable (usually on claim or maturity), this means that the Withdrawal benefit for a policy is generally less than the amount received upon claim or maturity.
If bonus rates remain unchanged and premiums are paid on time as scheduled, Withdrawal benefits will typically increase as policies age.
More information
If you need to contact us:
- The fastest way is to chat with us online at resolutionlife.com.au
- Submit an online enquiry at resolutionlife.com.au/enquiry
- Call us on 133 731
Our new digital campaign for over 60s insurance customers
We recently launched a digital campaign to some of our insurance customers aged over 60, to help reconfirm the continued value of life insurance. This personalised, content-rich campaign emphasises product relevance, insurance value, and flexibility at this important age milestone. Our goal is to highlight the importance of maintaining coverage and providing valuable information on how their policies can support them in later years. Read more on our Life Insurance for over 60s section.
Digital first: Changes to how customers receive policy information
Throughout 2025, we will be contacting our Australian life insurance and super and investment customers, asking them to transition from receiving their policy correspondence by post to receiving it digitally. Only customers who hold a valid email address and who have not previously informed us of their communication preference, will be contacted.
Customers that switch to digital communication will be notified by email when their important policy updates are available, such as annual statements or insurance renewal notices. The information is then accessible via the My Resolution Life portal. These changes help our customers:
- Receive important policy information quickly, making it accessible 24/7 via My Resolution Life portal
- Keep their policy correspondence secure, reducing the risk of their personal information being exposed through lost or stolen mail and
- Reduce the impact on the environment with less paper, print and mail.
Customers can “opt out” of the switch via the My Resolution Life portal, by choosing the “post” option in My profile → Communication preferences. Alternatively, they can visit Online enquiry - Resolution Life, choose “Update Communication Preferences,” and request postal correspondence.
For professional financial advisers only – not for distribution or disclosure to retail or wholesale clients.
Resolution Life Australasia Limited ABN 84 079 300 379, AFSL No. 233671 (Resolution Life) is part of the Resolution Life Group and can be contacted via resolutionlife.com.au/contact-us or by calling 133 731.
The information contained in this document is only for professional financial advisers acting in that capacity and does not contain any financial product advice.
Protecting your data in the age of artificial intelligence (AI)
The rise of generative AI technologies is becoming faster, spreading wider and encroaching on all parts of our lives. Examples of AI such as ChatGPT, Google Gemini, Grok and similar large language models, have transformed the way many of us interact with technology.
These AI tools can answer questions, draft emails and help with various daily tasks, making life simpler and more efficient. Once upon a time it was something that would happen in the future. Now? Many people ask Google or speak to Siri when interacting with technology to get information they want sooner, quicker, faster!
However, as these AI technologies become increasingly common, it's important to be aware of potential risks, especially when it comes to unintentionally sharing your personal data.
What is AI data leakage?
AI data leakage occurs when personal or sensitive information is accidentally shared with an AI system. Once shared, this data might be stored and potentially used to improve the AI model.
Common examples of leaked information include private details, personal documents, financial data and other sensitive information. People often assume their interactions with AI chat tools are completely private and confidential, but this isn't always the case.
While reputable providers like OpenAI offer clear privacy options, it's crucial to understand how your data might be used and how to protect yourself effectively.
How can you protect your personal data?
If you, your family members, or younger relatives frequently use ChatGPT, Google Gemini, Grok or other AI services, here are some straightforward steps to keep your information safe:
1. Check AI privacy
Before using any AI service, spend a few moments reviewing the providers’ privacy settings. Some platforms/providers let you opt out of data retention for AI training purposes. For example, ChatGPT allows users to turn off the option "Improve the model for everyone", which helps prevent your conversations from being stored or used to train future AI models. It’s worth knowing that this isn’t the case for all providers so always check, unless you’re happy to share whatever content you create using AI.
2. Think before you share your info / data
You should treat AI conversations like you're speaking in a public place. Never enter sensitive details such as your home address, passwords, financial details, or medical information into an AI chat tool. If the AI tool doesn’t explicitly guarantee your privacy, assume that your input could be saved and shared by the tool.
3. Use AI for general tasks, not sensitive ones
AI tools are excellent for general activities like brainstorming ideas, summarising articles, planning events, or drafting routine emails. However, for personal or sensitive tasks—such as managing finances, legal matters, or health issues—stick to secure and trusted platforms explicitly designed for these matters and to protect your privacy.
4. Watch out for new AI features in other applications and services
Have you ever been chatting with someone about something and the next thing you know, content is being served to you via your favourite social media platform? Many popular social platforms, websites and applications have started integrating AI chat features or AI-powered recommendations. Be mindful that these services may be collecting your data, potentially sharing it with third parties. Always review the privacy policy to understand exactly what data these services collect and how they handle your information.
The bottom line
Generative AI technologies can greatly enhance daily life, but it’s essential to use them wisely. By understanding how AI platforms handle personal data, following these simple precautions and sharing or discussing these tips with your family members, you can safely enjoy the benefits of AI without unintentionally compromising your privacy.
Taking small, proactive steps can significantly protect your personal information in our AI-powered world.
Introducing Annqua Murray
Annqua Murray joins Resolution Life, bringing with her extensive experience in the insurance industry and a passion for protecting the lives of Australians. Annqua is responsible for strengthening adviser relationships in NSW and QLD, utilising the multiple resources available at Resolution Life Australasia. She works closely with her Adviser Support Manager, Jennifer Ayoub, to foster strong relationships and provide comprehensive support to our key partners. Outside of work, Annqua is a mum to two girls, and enjoys playing tennis in her spare time.
Introducing Chris Starritt
Chris joins Resolution Life in his new role as Strategic Partnership Manager servicing Victoria, WA, SA and Tasmania. Chris joined from AIA where he held various roles including Senior Client Development manager and Relationship Manager, and most recently, Partnership Manager where he developed and supported Life and Health insurance distribution programs with partners at a national level. Prior to joining AIA, Chris ran his own financial planning and mortgage broking business for 6 years. This experience means Chris has a deep and varied knowledge of the advice industry and the challenges that advisers face on a day-to-day basis. With a collaborative approach to business, Chris will bring his unique experience to the team and is looking forward to deepening Resolution Life’s relationships with the advice network. Outside of work, Chris enjoys keeping active with cycling, hiking and golf and spending time with family and friends.
Important information
Any advice and information on this website is general in nature and is provided by Resolution Life Australasia Limited ABN 84 079 300 379, AFSL No. 233671 (Resolution Life), which is part of the Resolution Life Group and can be contacted on 133 731 or via the contact us page. The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on the advice, you should consider the appropriateness of the advice, having regard to those matters as well as the relevant product disclosure statement (PDS), available from Resolution Life at resolutionlife.com.au or by calling 133 731, before making a decision about the product. Consider speaking to a financial adviser if you have any concerns.
If you decide to purchase or vary a financial product, Resolution Life and/or other companies within the Resolution Life Group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.
