Effective date: 30/09/2026Key highlights of the month
The month of September 2026 was marked by the return of major central banks to monetary tightening: within the span of a week, the ECB, the Fed, and the BoJ all raised their key interest rates by 25 bps, marking the first time these three central banks have done so in the same month. This move came against a backdrop of high energy prices. Indeed, the conflict between Iran and the United States intensified again at the beginning of the month, with attacks on both sides against ships near the Strait of Hormuz. As a result, Brent crude oil surpassed the $100 mark again on September 9.
The inflation indices published in September, covering the month of August, confirmed the divergence between the two sides of the Atlantic. In the eurozone, headline inflation accelerated sharply to 3.2% from 2.9% in July, its highest level since September 2023, driven by a renewed acceleration in the energy component (+14.3% year-on-year). In the United States, headline inflation (CPI) remained stable at 3.4% year-on-year. Activity indicators once again demonstrated the resilience of developed economies in the face of high energy prices. On September 16, the Fed unanimously raised the fed funds target range by 25 bps to 3.75/4%, its first rate hike since 2023. Kevin Warsh described this decision as the “removal of a dose of accommodation” rather than a tightening. Finally, the BoJ raised its main policy rate by 25 bps to 1.25%, its highest level since 1995.
As a result, bond yields rose sharply over the month, due to the combined effect of rising oil prices and monetary tightening. The US 10-year yield gained about 50 bps over the month, ending around 5.28%, its highest level since 2007. Equity markets stalled in September, penalized by the rise in long-term rates. The S&P 500 ended the month roughly unchanged (about -0.8%), while the financial sector significantly underperformed (-7.3% for the month, its worst monthly performance since March 2023).
Note:
The OECD emphasizes the need to correct economic signals that continue to encourage biodiversity loss. This is why the report highlights the Kunming-Montreal framework’s objective to eliminate or reform $500 billion per year in harmful biodiversity subsidies by 2030. For the OECD, this figure is likely even more structural than the $200 billion to be mobilized.
Summary of the main positions of the month:
In September 2026, the fund posted an underperformance of -0.2%. After a start to the period marked by a lag of up to -0.80%, the fund partially closed the gap in the second half of the month.
The main source of underperformance came from the absence of Meta (+30%), excluded for ESG reasons, generating an opportunity cost. The underweighting of large technology stocks, notably Apple (+7.5%) and Nvidia (+6%), also weighed on performance, as these stocks contributed significantly to the sector’s rise (+2% for the month). Conversely, the rebound in semiconductors such as AMD (+33%) and software publishers held in the portfolio (NetApp (+16%), Palo Alto (+6%)) helped to limit the gap. The absence of Tesla, which underperformed, was also beneficial over the quarter.
On the other hand, some environmental stocks such as Xylem (-6%) and Autodesk (-17%) negatively impacted the portfolio’s performance, following disappointing results and financial outlooks.
Portfolio movements were mainly dictated by ESG constraints and the desire to strengthen environmental coherence. Several arbitrages were made: exit from Central Japan Railway in favor of East Japan Railway, entry of John Deere (partially replacing Kubota), Waste Management and Veolia to strengthen exposure to recycling and energy efficiency themes. Synopsys and Eaton were increased or introduced for their technological and environmental profiles. Profit-taking was carried out on NetApp, Brambles, and Qantas after strong performances, while Simon Property Group was sold due to pressure on green real estate.
The portfolio remains positioned on strong environmental themes, with increased exposure to energy efficiency and recycling, while maintaining prudent sector diversification. ESG constraints continue to guide stock selection, which limits exposure to large technology stocks but strengthens thematic commitment.
Outlook for the following month:
Regarding market outlook, the main message is that the end of 2026 is heading towards an environment more exposed to inflation and more fragile geopolitically, without signaling a generalized financial risk. The main driver is the resurgence of tensions in the Middle East between the United States and Iran, which has pushed up oil prices, increased inflationary pressures, and made central banks more cautious. At the same time, several reports indicate that markets have largely absorbed previous episodes of liquidity stress, with spreads and ETF prices returning to near-normal levels, while most fund and issuer safety margins remain healthy.
In terms of monetary policy, the dominant expectation is for sustainably higher rates, even if the trajectory varies by region. The Fed, ECB, and BoJ are all described as restrictive or in a normalization phase, with some sources even mentioning further rate hikes in September 2026. This outlines an environment in which bond yields remain high, the traditional role of sovereign bonds as a “safety net” in the event of recession is weaker, and macroeconomic volatility is expected to remain high. Despite these headwinds, the investment outlook remains moderately risk-on, particularly for equities and credit. Global equities are generally viewed positively, with a preference for the United States and Japan, and in Europe for segments less exposed to weak consumption. At the sector level, banks, industry, information technology, value style, and quality are favored, while real estate and consumer sectors appear less attractive.