Effective date: 31/08/2026August had started off rather well, with hopes for the restoration of traffic in the Strait of Hormuz. The rest of the month was more turbulent, with renewed tensions between Iran and the United States, new tariffs between the United States and Canada in particular, and intensified Russian bombings in Ukraine while the front appears to be at a standstill.
From a macroeconomic perspective, activity remains well oriented in the United States, even though economic surprises are deteriorating, while Europe is in a more uncertain dynamic.
In this context, markets focused on the end of earnings releases and the outlook provided by companies, which remain positive and show strong growth.
Ultimately, equity markets reached new highs in August. The gold, “Momo,” and technology sectors outperformed, while “Value” stocks, Treasuries, and bond securities underperformed.
However, concerns about “fiscal dominance,” the Fed’s credibility, and the sharp rise in issuances led to an increase in interest rates, which weighed on equities from mid-month onwards. These concerns are likely to persist as government debt levels remain high and significant electoral deadlines lie ahead (mid-terms, French presidential elections, elections in Italy).
In terms of sector performance, Materials driven by gold stocks, Tech boosted by large caps, Energy by rising oil prices, and Healthcare where Medtech is rebounding on low valuations, posted the best gains. Conversely, more defensive sectors affected by rising rates underperformed, including Utilities, Real Estate, Telecoms, and Consumer Staples.
August marked the true launch of the US midterm election campaign. It saw the Democratic opposition sharply criticize the installation of data centers. This led to massive profit-taking on industrial stocks that had benefited so much in their order books from these installation projects. Order books remain full and the projects will go ahead, but in the short term, fear prevails.
In August, the fund fell by -1.9% compared to a +1.7% rise for the MSCI ACWI, showing an underperformance of 3.6%. This underperformance is explained by the decline in industrial stocks, which contributed negatively by -1.8%, the lack of exposure to technology stocks, which cost a relative 1.1%, and exposure to utilities, which cost 1% in relative performance. The rise in interest rates is the main reason for the decline in Utilities. Industrial stocks suffered profit-taking linked to the vehemence of the US midterm campaign arguments from Democratic candidates opposing the installation of data centers. Yet, these projects have been the main growth driver for industrial order books this year. In this context, the declines were indiscriminate and affected almost all players. Added to this was the announcement of a new executive order from President Trump banning the import of foreign inverters, which caused a sharp drop in Sungrow.
Ultimately, the elections will take place in early November and until then, the volatility of our strategy could remain high. However, once this turbulent period has passed and more reasonable valuation levels are restored, the strengthened outlook for industrial stocks should allow us to return to performance. This is all the more true as our exposure is based on long-term trends that are not solely dependent on the installation of data centers. In fact, these only represent the fifth growth driver for global electricity demand, far behind industry (conversion and capacity increases), buildings (heat pumps and, more recently, air conditioning in Europe, which is only 30% equipped), and mobility (38% of electric vehicle sales in France in August 2026 vs 19% in August 2025, linked to the rise in gasoline prices).