This quarterly report relates to the state of affairs as of 31 March 2026. The developments and challenges in the first quarter of this year are analysed, and finally, an outlook on the changing market conditions from April 2026 is provided. In particular, the impact of political and economic changes as well as monetary policy decisions are highlighted.

The first quarter of 2026 was characterised by two distinct phases. While the first weeks of the year were marked by a continuation of the positive momentum from 2025, with all-time highs on the major stock exchanges worldwide, the outbreak of the Iran war on 28 February triggered a fundamental reassessment of almost all asset classes. The subsequent oil price shock, a worsening inflation situation and considerable uncertainty about the legality of US trade policy presented investors with extraordinary challenges.

Our Ginmon investment strategies proved highly resilient in this difficult environment. While the major international indices recorded significant losses, our strategies held up well, thereby proving the strength of a rule-based, globally diversified portfolio. The new allocation from the 2026 strategy update also proved its strength compared to the benchmark indices in its first practical quarter.

This quarterly report focuses on the following three topics:

Performance:

Despite a turbulent market environment, Global 10 achieved a positive quarterly result of +1.9% and stands at a total return of +138% since its launch in 2016.

Inflation and Interest Rate Policy:

Inflation in the Eurozone rose to 2.5% in March, and to 3.3% in the US. The ECB is keeping its core interest rate at 2.0%, the Fed at 3.50–3.75%. In light of the energy shock, interest rate cuts have receded into the distant future.

Global Impulses:

The Iran war and the blockade of the Strait of Hormuz triggered the largest monthly increase in oil prices in four decades. Tech stocks came under massive pressure due to the so-called "AI Loser Trade", while energy and commodity stocks benefited significantly.

How did our strategies perform?

Our investment strategies looked back on a turbulent first quarter and emerged as clear winners. While the major international indices recorded substantial losses, our strategies remained very stable. Particularly encouraging: the first quarter of 2026 was also the first quarter with the new allocation from our 2026 strategy update.

The DAX lost 7.6% in the quarter, the S&P 500 fell by 2.3% and the MSCI ACWI fell by 1.0%. Green 10 also remained virtually unchanged at -0.1%, proving more robust than key comparison indices. The more defensive Strategy Global 5 also ended the quarter with a slight gain of +0.7%.

These results are the fruit of a consistent investment strategy: global diversification, a clear focus on the factors Value and Size, and a new, optimised portfolio structure introduced as part of the 2026 strategy update.

Global 10 has achieved a total return of +138% since its launch in 2016, thus continuing its long-term upward trend despite numerous market turbulences.

Short-term market fluctuations, be it the Corona crisis in 2020, the interest rate turnaround in 2022 or the current Iran war, have never permanently interrupted the long-term upward trend. Those who invest with discipline are rewarded in the long term. This basic principle has once again been confirmed in the first quarter of 2026.

What is next for inflation and interest rates?

Inflation trends in the first quarter of 1846 were split in two, much like the quarter itself. Until the end of February, a continuation of the positive disinflationary dynamic was emerging: the inflation rate in the Eurozone was still at 1.7% in January, and at 2.7% in the US. Then came 28 February, and with it, the Iran war.

The subsequent oil price shock abruptly changed the inflation picture. In the Eurozone, inflation rose to 2.5% by March. In the US, the rate of price increases shot up from 2.4% in February to 3.3% in March. Energy importers are particularly hard hit: European gas prices rose by around 80% quarter-on-quarter. The OECD Economic Outlook Report of March 2026 predicts inflation of around 2.6% in the Eurozone and around 4.2% in the US for the full year 2026. This represents a significant increase compared to the December forecasts.

ECB: Key interest rate at 2.0% – rate cuts off the table for now

The European Central Bank (ECB) kept its key interest rate unchanged at 2.0% in the first quarter. Following a period of gradual rate cuts that brought the key rate down from its peak of 4.0% to its current level, the rate cut cycle has been paused for the time being in view of the new inflation risks.

ECB President Christine Lagarde made a clear U-turn in her communication: while she had signaled a positive assessment of the inflation situation in February, she warned in March that rising energy prices could drive inflation further up. Projections suggest that the ECB is more likely to raise than lower interest rates if the energy shock fuels price pressures in the long term.

Fed: Key interest rate at 3.50–3.75% 

In the US, the Federal Reserve also kept its key interest rate unchanged in the corridor of 3.50–3.75%. The yield on 10-year US Treasury bonds, which had briefly fallen to 3.9% in February, rose again to 4.3% by the end of March. This is a clear signal that the market is no longer pricing in interest rate cuts.

Additional uncertainty arises from the impending leadership transition at the helm of the Federal Reserve: the nomination of Kevin Warsh as a potential successor to Jerome Powell led markets to price in a more restrictive monetary policy. Interest rate cuts in 2026 are now considered unlikely.

What moves the markets

Equity Markets

Until 27 February, there was a clear spirit of optimism: the DAX and S&P 500 reached new all-time highs, with AI euphoria driving technology stocks to record heights. The mood reversed abruptly with the start of the Iran war on 28 February.

The German stock market was particularly hard hit: the DAX lost 7.6% in the quarter, weighed down by Europe's high dependence on energy and structural reform weaknesses in Germany and France. US markets held up better thanks to the US's relative independence from energy imports, but suffered from the so-called "AI Loser Trade": US software stocks lost around 30%. Investors increasingly bet on the disruptive effect of Agentic AI on classic SaaS business models. Large companies such as Microsoft and Salesforce recorded declines of nearly 23% and 30% respectively.

On the winning side were energy and commodity stocks: the S&P 500 Energy sector gained +38%. Japan also showed resilience: the Nikkei closed the quarter up +1.1%, supported by government measures and safety in yen weakness. Emerging markets remained virtually unchanged, as gains in resource-rich countries like Brazil compensated for losses in Asia.

Rating, bonds and currencies

Fixed income markets clearly reflected the changed risk situation. The yield on 10-year US Treasury bonds rose to 4.3%, while UK Gilts recorded the worst quarterly result among major markets at -2.0%. Of particular note: central banks worldwide have sold around USD 90 billion of US Treasury bonds since the start of the Iran war, a sign of waning confidence.

Although the US dollar strengthened against most currencies, the classic "safe haven" reflex was historically weak. The euro lost around 1.6% against the dollar, but showed surprising resilience given the weak fundamentals. Gold and silver remained in positive territory during the quarter despite a sharp setback after 28 February: gold +8.1%, silver +5.0%.

A growing risk is posed by the private credit market: it is estimated that around one third of US private credit was granted to software companies. This is an industry now under considerable pressure due to AI disruption pressure.

Commodity prices

The dominant market factor in the first quarter was the energy price shock. Brent crude, which had started the year at under USD 61 per barrel, rose to over USD 100 by the end of March, an increase of more than 67% quarter-on-quarter. The main trigger: the closure of the Strait of Hormuz, through which around one-fifth of the world's oil supply flows.

European gas prices rose by around 80%, while they fell by about 22% in the US. This is a clear competitive advantage for the US economy. Industrial metals showed a mixed picture: aluminium increased by around 15.7% (energy-intensive production), while copper fell slightly. The Bloomberg Commodity Index was by far the best-performing asset class of the quarter, up +24.4%.

The chart illustrates the clear break at the end of February: up to 27 February, oil, gold and global equities moved along a moderate, positive path. With the start of the Iran war, the price of oil shot up steeply, while global equities (MSCI ACWI) slipped into negative territory. Gold held up well in positive territory, but lost some of its interim gains as rising bond yields forced investors to liquidate their gold positions.

Geopolitical uncertainties

The most important macroeconomic topic of the first quarter was inextricably linked with 28 February: the coordinated airstrikes by the US and Israel against Iranian targets ("Operation Epic Fury") and the resulting closure of the Strait of Hormuz. The conflict was still ongoing at the end of the quarter, but US President Trump's announcement of a possible early withdrawal from Iran in the final days of March brought a slight recovery to the markets.

In addition, there was another significant shift in US trade policy: on 20 February, the US Supreme Court overturned the Trump administration's IEEPA-based tariffs by a 6:3 majority. In response, the government introduced a flat 15 per cent tariff based on Section 122 of the Trade Act of 1974, a temporary regime legally limited to 150 days, which will expire in the summer of 2026. The WTO subsequently lowered its forecast for global trade growth in 2026 to just 0.5%.

The war in Ukraine also continued unabated, increasing global uncertainty about energy supplies and infrastructure in the context of the Iran conflict.

Factors Value and Size

In a quarter with such large sector divergences, the scientifically proven return drivers Value and Size proved their worth in different ways. The Value factor shone as a clear element of stability: in an environment where Growth stocks, especially US software and AI winners from previous years, came under massive pressure, fundamentally strong, cheaply-valued companies benefited from their relative attractiveness. Historical factor premiums show that in the first quarter of 2026, the Value premium reached its highest level since 2016 at around +3.2 percentage points, impressive proof of the strength of this factor in turbulent market phases.

The Size factor provided a more nuanced picture. The Size premium was also positive in the first quarter of 2026, standing at around +1.1 percentage points, a solid result in an environment dominated by macro shocks. Smaller companies benefited primarily in commodity-related segments and outside Europe, while European small caps faced greater pressure due to higher energy cost burdens.

The chart illustrates that despite short-term fluctuations, both factors consistently deliver positive premiums over long periods of time.

Our investment strategies deliberately focus on both evidence-based factors, Value and Size, as they have proven to be robust and return-enhancing over long periods. In the current environment, the Value component in particular is proving to be a stabilizing element in our portfolios. The combination of global diversification, clear risk rules and a focus on these scientifically proven return drivers remains the core of our investment concept.

The Ginmon Strategy Update 2026

The first quarter of 2026 was special not only because of the turbulent market environment, it was also the first full quarter in which our fundamentally revised Global and Green strategies were running in their new allocation.

As part of the update, we made three key improvements:

• New allocation: The weightings now represent the midpoint between market capitalisation and actual economic strength, with adjusted regional weights and a stronger focus on emerging markets.

• Significantly lower ETF costs: Ongoing charges (TER) were reduced by an average of 30% for the Global strategies (new range: 0.09–0.15%), and by 29% for the Green strategies (new range: 0.14–0.16%).

• Factor investing also in Green: The Value and Size factors have now also been consistently anchored in the Green strategies; the Value share increased by 4.1 percentage points, and the small-cap share by 9.3 percentage points.

  
  

All details about the Strategy Update 2026 can be found here:

https://www.ginmon.de/maerkte-und-meinungen/strategie-update-2026

Looking ahead

The second quarter of 2026 is likely to be shaped by the same forces that dominated the first quarter, with crucial turning points in several areas:

• Iran conflict and energy supply: Developments in the Strait of Hormuz remain the key factor for energy and inflation expectations. A ceasefire would trigger a massive relief rally; further escalation could trigger a global recession.

• Interest rate path and leadership transition at the Fed: The first public statements of nominated Fed successor Kevin Warsh will decide whether bond yields test the 5% mark or stabilise.

• AI spending by hyperscalers: Markets will closely monitor whether the approximately USD 700 billion planned for AI infrastructure spending in 2026 is maintained, or if initial signs of saturation weigh on semiconductor stocks.

• US tariff policy: The expiration of the 150-day period for Section 122 tariffs in the summer of 2026 will lead to positioning battles in Congress and uncertainty for global trade companies as early as the second quarter.

• Private Credit and Software Sector: Should payment defaults increase in the pressured SaaS sector, this could place the private credit market under stress.

  
  

For investors, this means the environment remains volatile and driven by short-term news. The combination of global diversification, clear risk rules and a scientifically sound investment strategy remains the best protection, as the first quarter of 2026 has once again demonstrated.

Conclusion

The first quarter of 2026 was marked by an exogenous shock of enormous impact: the Iran war and the blockade of the Strait of Hormuz triggered the largest monthly oil price increase in four decades, dashed hopes for rate cuts and put the diversification of investment portfolios to a severe test. At the same time, the quarter revealed the structural weaknesses of the European energy market, the vulnerability of classic SaaS business models to Agentic AI and the growing skepticism of global central banks towards US Treasuries.

Our new strategies held up strongly in this environment. Global 10 closed up +1.9%, the only one of the strategies and indices under consideration to finish clearly in positive territory, standing at +138% since launch. This is the result of a disciplined, long-term investment strategy and the 2026 Strategy Update, which became fully effective for the first time in the first quarter.

Our recommendation:

1. Think long-term: The first quarter of 2026 has once again shown how quickly the market environment can change. Those who remain calm and true to their strategy in times of geopolitical turmoil and economic uncertainty will be rewarded in the long term. The numbers speak for themselves: anyone who has remained invested since the launch of our Global 10 strategy in 2016 has more than doubled their capital.

2. Utilise liquidity: The current environment of elevated inflation, uncertain interest rate policy and volatile markets underlines how important it is to invest excess liquidity sensibly in the medium to long term. A rule-based, globally diversified strategy with a focus on Value and Size offers the best long-term return opportunities. This is particularly true for new investors and savers with regular contributions: the best time to invest is now.