Third quarter 2026: what moved for a euro investor

Measured by share indices, the third quarter of 2026 was uneventful: the DAX closed on 30 September at 25,199 points, 0.8 per cent higher than at the end of June, and the S&P 500 gained 2.0 per cent in dollars. What moved was the price of money. The yield on ten-year German government bonds rose from 2.93 to 3.64 per cent, the ECB and the Federal Reserve both raised rates in September, and Brent crude ended the quarter far above where it started. For a portfolio with private holdings, most of that has not arrived in the numbers yet.

What happened in the quarter

After its first increase in June, which we covered in the first-half review, the ECB left its rates unchanged on 23 July and raised them by a quarter point on 10 September. The deposit facility rate has been 2.50 per cent since 16 September. The Governing Council's stated reason was that the conflict in the Middle East continues to generate inflation pressures; its staff now project euro-area inflation of 3.0 per cent for 2026 and 2.5 per cent for 2027. Germany's provisional figure for September, published by the Federal Statistical Office on 30 September, was 3.3 per cent, with energy 14.9 per cent dearer than a year earlier.

The Fed followed on 16 September with a unanimous quarter-point increase to a target range of 3.75 to 4 per cent. CNBC described it as the first increase since 2023.

Bond markets moved more than the central banks. The ten-year US Treasury yield went from 4.44 per cent on 30 June to 5.29 per cent on 30 September. The Bundesbank's estimate for ten-year Bunds rose by 0.71 percentage points over the same three months and touched 3.69 per cent on 28 September. Oil is the most visible reason: the Brent spot price published by the US Energy Information Administration stood near USD 70 at the end of June, reached about USD 131 in mid-September and was about USD 114 on 29 September.

Shares took this calmly until September and then less so. The DAX lost 4.0 per cent in the final month and kept a small gain for the quarter. Gold was fixed in London at about USD 4,163 on 29 September, some 3 per cent above the end of June.

The euro barely changed against the dollar from end to end: the ECB reference rate was 1.1394 on 30 June and 1.1355 on 30 September. In between it reached 1.1699 on 21 August. An S&P 500 holding therefore returned about 2.4 per cent in euros for the quarter, slightly more than in dollars. That is the reverse of the first half of 2025, when the currency took away what the index gave.

Why the private part of the portfolio does not show it yet

A fund's quarterly report arrives weeks, often two months or more, after the quarter it describes. The NAV in your records on 30 September is, for most funds, the NAV as at 30 June, adjusted for the capital calls and distributions since then. It was struck when the ten-year Bund yielded under 3 per cent.

Higher yields reach private valuations through three channels, and none of them is immediate. Valuers discount future cash flows at a higher rate. Listed comparables, which many funds use for their marks, were weaker in September. And debt for buyouts and property becomes dearer, which lowers what a buyer can pay. The 30 September reports, due from November, will be the first to reflect any of it. We explained how to read those reports, and which figures to cross-check, in how to read a quarterly fund report.

This is not a forecast that marks will fall. It is a reminder of what the number on your screen is. A total that adds a liquid depot priced yesterday to fund stakes priced three months ago mixes two dates, and after a quarter like this one the gap between the dates matters more than usual.

Distributions are the other open question. PitchBook's venture research for the quarter notes that exit value this year is high while distributions remain low, at 7.9 per cent of NAV against a long-run average of 14.5 per cent. Exits that are announced are not yet cash in an LP's account, and a quarter of rising rates does not speed that up.

Where the rate move reaches a private investor first

Property owners feel it before fund investors do. Interhyp put ten-year mortgage rates at about 4.2 per cent in its update of 10 September, the day of the ECB decision, and noted that mortgage rates follow Bund yields rather than the policy rate. Bund yields kept rising after that date.

The arithmetic for a loan whose fixed-rate period ends soon is plain. Say EUR 400,000 of debt remains. Each percentage point of interest is EUR 4,000 a year. If the 0.71 points by which the Bund yield rose this quarter were passed on in full, the follow-on loan would cost about EUR 2,840 a year more than an offer from the end of June. Against a net rent of, say, EUR 21,000, that is a visible part of the surplus. We worked through the options in the fixed-rate period ends; the point here is only that the inputs have changed.

For holders of dollar funds, the quarter is a lesson in value dates. A distribution of USD 100,000 was worth EUR 85,477 at the reference rate of 21 August and EUR 88,067 at that of 29 September. The fund paid the same amount; your euro record differs by about EUR 2,590 depending on the day. End-of-quarter rates hide that swing completely.

What to check in your own portfolio now

A quarter end is a good moment for a short review, because the documents of the last three months are in and the next reports are not. Five things:

• Every capital call and distribution of the quarter is booked at its value date, in its own currency, with the euro amount at that day's rate.
• Each fund shows the date of its NAV. Where it reads 30 June or earlier, treat the value as dated, not current.
• Your unfunded commitment is set against liquid assets as they are today, after September, not as they were in August.
• For each property loan, the end of the fixed-rate period and the remaining debt at that date are written down, with debt service recalculated at around 4 per cent.
• The share of the portfolio that is private is computed twice: once with the stale NAVs as reported, once with a haircut you consider plausible. If your decisions differ between the two, wait for the September reports before committing more.

We would not rebalance on the strength of one quarter. But if you are due to sign a new commitment this autumn, the fifth item is where to start, and the third decides how large that commitment can be.