Fund Return 2026-2027

Graph of returns 

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Investment Commentary

Provided by Marsh - CERS Investment Adviser

Market Developments

Global equities rose 2.7% in August, despite continued tensions in the Middle East keeping oil prices elevated, concerns around AI spending, a trade dispute with Canada, and fears around the fiscal deficit putting upward pressure on long-dated Treasury yields. US Value underperformed growth, while US small caps underperformed large caps. US equities returned 2.7%, non-U.S. developed markets returned 2.0%, and emerging markets returned 3.4%. The dollar weakened against most currencies as the Treasury acted to strengthen the Japanese Yen, the first such intervention in almost 30 years. The Treasury Department also announced more market interventions at the long end of the Treasury curve. Long-dated yields ended the month marginally lower which, along with high coupons, led to slightly positive fixed income returns, even if spreads widened a little.

Headline U.S. inflation fell to 3.4% year-over-year in July, driven mostly by falling oil prices; core CPI fell to 2.5%. Headline inflation rose to 2.9% in both the U.K. and Eurozone and rose to 1.9% in Japan. The European Central Bank, Bank of England, Bank of Canada, Bank of Japan, and Federal Reserve will next meet in September for rate decisions, while the People’s Bank of China maintained rates at their current level. The market views a possibility that the Federal Reserve may increase rates as early as September and has priced in one hike by the end of the year. Federal Reserve Chairman Warsh’s speech at Jackson Hole in late August was interpreted as being hawkish by market participants. The US tightened economic sanctions on Iran and those who do business with its regime and increasingly took control of the Strait of Hormuz, allowing more friendly vessels to pass through. The US also re-engaged with Canada in trade discussions, which broke down and resulted in a 50% tariff on some Canadian goods, which Canada responded to with retaliatory tariffs of their own. Many states held primaries ahead of the midterm elections, with more extreme candidates winning in some places but not everywhere. Polls ahead of the midterms remain more competitive than usual.

Global REITs and listed infrastructure were negative in August, underperforming equities. Natural resources and commodities posted positive returns as oil held firm and gold rose 9.1% on a weaker dollar. Year-to-date, broad commodities, natural resources, and oil continue to outperform global equities by a wide margin.

Outlook

In the US, the labour market is consistent with full employment, but inflation is more concerning which is the Fed's predominant focus right now. Data continues to show heathy economic activity, led by investment but inflation pressures remain. Profits continue to grow at a rapid rate with profit share of GDP making new highs. The trend is broadly consistent with robust investment spending.

In the euro area, monetary indicators are signalling trend growth rate, but some surveys are consistent with a slightly lower growth. The European Commission survey showed a broad-based improvement in confidence, which was led by the services sector.

August 2026 Market Commentary

Notes