In this ‘Investment Environment Report’ Mike Frith, Manager, Economics, explains the global investment environment and its implications for the NZ Super Fund. Economic fundamentals remain sound, underpinned by strong momentum, favourable market sentiment, supportive financial conditions, and expansionary fiscal policy in the United States. Together, these support corporate earnings and equity markets. However, it is not all one-way traffic. The strong performance of equity markets through 2016 and 2017 has not been sustained into 2018 thus far. Central Bank liquidity is being slowly withdrawn and inflation expectations and interest rates have increased.