On 28 February 2026, US and Israeli forces struck multiple targets in Iran. Several sources have described the strikes as significant in scale. The targets included missile and air defence infrastructure, as well as senior political and military sites. Since, the death of Iranian Supreme Leader Ayatollah Ali Khamenei has been confirmed. In retaliation, Iran has launched missiles and drones at Israel, US assets, and other countries across the Gulf.

Implications for the global and financial markets

The initial market impacts have seen the NZX50 fall moderately at the start of the week commencing Monday 2 March, with similar outcomes in global markets. There has been an increase in the price of gold as investors sought traditionally ‘safe haven’ assets. Oil supply concerns, particularly regarding potential disruption of traffic through the Strait of Hormuz (which accounts for around 20% of global seaborne oil), have contributed to a rise in the cost per barrel.

Considerations

Mercer’s investment team are meeting regularly and as required, closely monitoring developments.

Mercer is not making knee-jerk portfolio changes based on headlines and the approach remains disciplined and diversified, with risk management strategies focused on the long term.

While the portfolios may experience short-term volatility as markets respond to events, they are designed to aim to withstand uncertainty, including geopolitical events, over long-term horizons.

In past conflicts, making large, rapid changes to investments early on has generally not supported long-term results. Mercer has found that staying diversified and making careful, evidence-based adjustments when necessary is a more effective approach.

Member guidance

Mercer encourages members to stay the course—portfolios are designed for uncertainty through diversification and long-term positioning.

Avoid reacting to short-term headlines. Staying invested through volatility has historically been important to achieving beneficial long-term outcomes.

_{This information has been prepared and published by Mercer (N.Z.) Limited (Mercer). The information contained in this article is intended for general guidance only and does not take account of the investment objectives, financial situation and/or particular needs of any person. Before making any investment decision, you should refer to the Product Disclosure Statement or take financial advice as to whether your intended action is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee or indicator of future performance. The information contained in this article is based on information received in good faith from sources within the market and on our understanding of legislation and government press releases at the date of publication which we believe to be reliable and accurate. Neither Mercer nor any of its related parties accepts any responsibility for any inaccuracy. Copyright 2026 Mercer (N.Z.) Limited. All rights reserved.}