Effective date: 31/08/2026The month of August 2026 was dominated by concerns over long-term interest rates. The deadlock in negotiations between Iran and the United States, against a backdrop of sporadic attacks, maintained oil volatility, with Brent ending the month at $89. The persistence of energy prices at high levels rekindled inflation fears and weighed on bond markets. In response to the rise in long-term rates, U.S. Treasury Secretary Scott Bessent announced at least a doubling of long-term Treasury buybacks for the quarter.
The inflation figures published in August, relating to the month of July, sent a mixed signal. In the United States, headline inflation (CPI) slowed to 3.4% year-on-year, compared to 3.5% in June, while core inflation fell to 2.5%, its lowest level of the year. In the eurozone, by contrast, inflation accelerated to 2.9%, compared to 2.8% in June, driven by a renewed increase in the energy component (+10.3% year-on-year), linked to oil and gas prices. Core inflation there came out at 2.5%.
Business surveys remained generally well oriented despite energy pressures. In the eurozone, the composite PMI rose for the third consecutive month to 52.1 in August, a high since November, supported by German industry. In the United States, the ISM manufacturing index jumped to 55.6 in July, its best level since May 2022, while the ISM services index held steady at 54.1. Conversely, the July employment report disappointed, with 23,000 net non-farm job losses and significant downward revisions, even though the unemployment rate fell to 4.1%, a thirteen-month low, due to a further decline in the participation rate. In Japan, unemployment fell to 2.4% in July, while Tokyo inflation reached a five-month high in August. China remains lagging, with PMIs falling to a four-month low in July, still reflecting the contrast between AI-related segments and the rest of the economy.
No major central bank met in August. The main event was Jackson Hole, where Kevin Warsh was rather reassuring on employment but concerned about the inflation trajectory. For the first time since the start of his term, he indicated that the Fed's attention should now focus primarily on price stability. In the eurozone, ECB minutes suggest that a majority of the Governing Council would be ready to raise rates in September to contain the effects of rising energy prices. In Japan, several BoJ officials called for an acceleration of tightening, with markets now anticipating a strong probability of a 1.25% rate as early as September.
Equity markets held up well to oil volatility, supported by renewed interest in the artificial intelligence theme. The S&P 500 set several new records before ending the month up 2.6%. The Eurostoxx 600 also reached a historic high, before finishing with a more modest gain (+0.3%). The Nikkei gained 3%, still driven by semiconductors, while the MSCI Emerging rose 3.2%, also supported by technology.
Bond yields generally rose, especially at the end of the month after Kevin Warsh's speech. The U.S. 10-year ended at 4.74%, a high since the start of 2025. The German 10-year rose sharply to 3.30%, its highest level since 2011, amid expectations of an ECB rate hike, while sovereign spreads in the eurozone widened slightly. In Japan, the 10-year also rose to 2.92% in anticipation of BoJ tightening. Finally, gold rebounded strongly (+9.6% for the month), its best monthly performance since January, supported by interventionist measures from the U.S. Treasury.
During the month, the fund outperformed its benchmark index. Technology was the main positive contributor, driven primarily by a strong rebound in software stocks, a segment in which the portfolio maintains a significant overweight. Even though our exposure to SaaS remains relatively limited — even as this segment performed particularly well over the period — cybersecurity, vertical software, and DevOps posted solid performances, supported by a series of robust quarterly reports.
In cybersecurity, the market continues to shift from a reactive protection logic to more integrated approaches to cyber resilience, capable of supporting increasingly autonomous environments. As companies deploy AI agents, security is increasingly seen as a prerequisite for broader adoption of these uses. This shift is resulting in accelerated consolidation around platforms and sustained growth in net new ARR in the sector. On the DevOps side, the continued rise of machine-to-machine flows and, more broadly, the intensification of data volumes are fueling the most favorable growth trends seen in several years.
In network infrastructure, both Arista Networks and Lumentum reported results well above expectations and significantly raised their outlooks, reinforcing the idea that high-speed optical connectivity solutions and Ethernet architectures are among the main beneficiaries of the current AI infrastructure investment cycle. In addition, a new growth driver, often referred to as "scale-across," is gradually emerging as a significant source of revenue. It refers to the increasing complexity of networking needs between very large AI clusters or between different data center pods.
Semiconductors, on the other hand, paused somewhat during the month, despite another generally strong earnings season. The sector has become more controversial in the context of the midterm elections, with the market increasingly pricing in the risk of a political tightening around data center development. While access to electricity, capital intensity, compute availability, and labor constraints are generally identified as the main barriers to data center expansion, risks related to administrative permits and local opposition remain underestimated and are becoming an increasingly important issue for investors.
Outside technology, Adyen rose by 20%, as the group continued its work to rebuild investor confidence after a solid second quarter. The results highlighted further progress in the breadth of the offering — notably in agent-related features, loyalty, and billing — as well as good commercial momentum, illustrated among others by OpenAI, and new wallet share gains among existing clients. DoorDash also stood out, with a 17% increase, driven by record growth in the DashPass subscription program and a sharp acceleration in its advertising business, which is more margin-contributive.
In terms of movements, we took some profits in software in order to redeploy capital to other segments, notably solar and selected semiconductor stocks.