Effective date: 31/08/2026Key highlights of the month
In August, the main event was the rise in long-term yields globally, fueled by persistent inflation concerns and renewed fiscal worries. In the United States, the 30-year Treasury yield reached a post-2007 high of 5.31% on August 17; in Germany, the 30-year hit 3.81% on August 31, its highest level since 2011; in Japan, the 30-year rose to 4.14% on August 18, its highest level since this maturity was issued in 1999.
The activity statistics published during the month generally supported the idea of a still robust economy. The eurozone flash composite PMI reached 52.1 in August, its highest level in nine months. At the same time, energy tensions reinforced inflationary pressures: Brent remained volatile throughout the month and closed around 89 to 90 USD/barrel, after periods of decline linked to hopes of negotiations and then a rebound following geopolitical tensions between the United States and Iran.
In the United States, headline inflation slowed to 3.4% year-on-year in July; in the eurozone, inflation accelerated to 2.9% in July, up from 2.8% in June, driven by energy. At Jackson Hole, Kevin Warsh’s speech was perceived as more hawkish than expected regarding the priority to be given to price stability, which maintained upward pressure on rates. In Europe, the ECB minutes suggested increased sensitivity to rising energy prices, while in Japan several BoJ officials indicated that a faster tightening remained possible.
Equity markets, overall, held up well in this context of high rates and firm oil prices. The S&P 500 ended the month up about 2.6%, the Euro Stoxx 600 rose slightly by 0.5%, the Topix also advanced; and emerging markets delivered a strong performance, driven by technology stocks.
At the style and sector level, the reading for the month remains clear: growth stocks, and particularly technology, drove the indices, while segments more sensitive to rates suffered more from the rise in long-term yields. The strength of earnings releases and the resilience of activity supported earnings revisions in several cyclical and technology segments, but markets mainly focused on the message of higher long-term rates, which favored selective rotation rather than a uniformly bullish market move.
Summary of the main positions of the month
Over the month, the fund outperformed its benchmark index.
We note a positive sector effect, particularly a good contribution from Technology and Utilities, but a negative one in the Real Estate and Energy sectors. The country effect was also positive, notably with a good contribution from Emerging Markets and Europe but negative in North America and Japan.
We also observe a positive effect from our blend factor, with a contribution of around 0.54%, and at the same time note a negative effect from our defensive factor, showing a contribution of -0.48%.
The market capitalization size effect was negligible.
During the review period, we were overweight on the quality factor and underweight on the dividend yield factor.
At the stock level, we saw very strong contributors to performance such as China Gold International Resources (OW, 47.4%), Agnico Eagle Mines Limited (OW, 38.5%), Asia Vital Components Co., Ltd. (OW, 50%), NVIDIA (OW, 8.9%).
Conversely, the following stocks penalized us: Comfort Systems USA (OW, -11.4%), Tesla Inc (UW, 17.1%), Dollarama (OW, -8.1%), Canadian Tire Corporation (OW, -8%).
There were no transactions during the month.
Outlook for the following month
The current market environment is increasingly characterized by structural breaks rather than a classic end-of-cycle pattern. Geopolitical tensions, energy disruptions, and technological acceleration are sustaining more persistent inflation, higher public deficits, and more lasting macroeconomic uncertainty than in previous cycles. Investors should therefore not expect a quick return to the calmer environment before 2026, and resilience is becoming a central investment criterion.
Equities remain in a constructive environment, but opportunities are more selective. Markets have shown they can absorb higher long-term rates as long as earnings momentum remains strong and growth expectations are well oriented. Artificial intelligence remains the main structural driver, but the theme is broadening beyond the initial winners to include infrastructure, energy, application software, and associated industrial suppliers, which should strengthen its durability.
Regionally, the United States maintains solid fundamentals, but valuations are high and concentration risk remains a point of vigilance. Europe appears more attractive on a relative basis, especially when factoring in the currency effect, and seems better able to absorb higher energy prices than feared. Financials, industrials, utilities, and certain quality stocks stand out as the best-positioned segments in this context.
Emerging markets also offer opportunities, but with a strong need for selection. Some markets have already been repriced, improving long-term entry points, while China remains a stock-picking market rather than a broad allocation theme. Japan continues to be supported by strong corporate fundamentals, although after its sharp rise, the approach should become more selective. Overall, positioning remains moderately pro-risk, with a focus on diversification, quality, and structural growth drivers rather than the most consensus market names.