Fund Commentary
August was a positive month for markets as investors looked beyond geopolitics until the very end when attacks and counter strikes on ships in the Strait of Hormuz led to renewed anxiety. World equities rose 2.1% supported by economic resilience and a rebound in AI and technology related names which had been hit hard in July. Bonds were more rangebound as, although central banks left rates unchanged, there were more hawkish views to be heard.
US equities advanced and the S&P 500 had its best August for five years, rising 2.6%. The rebound in the technology sector, supported by strong results from Nvidia and booming capex and earnings, led the way supporting risk appetite bolstered by positive economic data. Although inflation eased 0.1%, Fed chair Warsh struck a hawkish tone at the Jackson Hole symposium warning that progress tackling inflation had stalled. The trade talks between the US and Canada collapsed with tariffs of up to 50% being announced by both countries and Trump then announced that he would like to rename Lake Ontario to Lake America.
Fixed income had a more stable month as government bond yields were subdued, trading on a more confident basis that there was not going to be immediate action to bring inflation back to target. Major central banks left rates unchanged at meetings held in August but the resumption of hostilities in the gulf looks set to challenge that. French government bond yields pushed towards their highest levels since 2008 as concerns mounted over next year’s budget and elections. Investment grade corporate bonds had a positive month strengthened by solid company results and decent income levels.
Modest economic growth in Europe supported similar equity performance. The European Central Bank remained relatively hawkish and rising oil and gas prices supports the market pricing of a couple of rate rises to come. UK equities lagged their European peers this time, with large caps slipping 0.4% on the month while Europe managed a small gain of 0.3%.
Asian markets were broadly firm, with the rebound in technology supporting Taiwan and Korea in particular. Korean chipmakers were back in focus after SK Hynix unveiled a buyback worth close to $29 billion, prompting Samsung to follow with an even larger shareholder return package worth up to $80 billion. Japanese equities performed well in August, supported by strong earnings results for the second quarter and positive guidance for future profits. Early in the month, Japan’s Ministry of Finance confirmed currency intervention to support the yen in co-ordination with the US Treasury. However, the intervention only provided temporary relief as consensus remains that the Bank of Japan needs to raise rates and reduce interest rate differentials.
Commodities had a mixed month. Gold jumped but oil was far more muted and the Hormuz standoff kept traders on edge. Wheat and other grain prices surged on the back of renewed fighting near the Black Sea and a record breaking El Nino pattern, pushing world food prices to their highest level in almost four years.
Global technology continues to develop at pace. The accumulation of space junk in orbit was brought into focus as the upper stage of a SpaceX rocket, launched in 2025, crashed into the moon. China held the World Humanoid Robot Games and various records were broken. The most notable was Usain Bolt’s 100m record of 9.58 seconds being beaten by a robot’s time of 9.39 seconds although the robot was far less elegant at stopping after the tape!
All performance figures are in GBP unless otherwise stated.
Monthly data as at: 28/08/2026.
