Global markets navigated a mixed environment during the second quarter of 2026, shaped by evolving monetary policy expectations, macroeconomic developments and geopolitical events. Equity markets experienced periods of volatility in June, initially supported by easing energy prices and broad gains across developed markets before coming under pressure from higher bond yields, hawkish central bank repricing and renewed tariff concerns. Despite this volatility, overall market resilience remained supported by solid economic and corporate fundamentals.
Economic conditions continued to diverge across regions. The US economy remained relatively resilient, with labour market conditions and consumer activity continuing to support growth despite some signs of moderation. This backdrop reinforced expectations that the Federal Reserve may need to maintain a restrictive policy stance for longer. In the eurozone, inflation eased further, helped by lower energy prices, although growth remained subdued and manufacturing activity continued to show limited momentum. Within Asia, Japan stood out positively, supported by strong labour market conditions, resilient business surveys and improving PMI data.
Geopolitical developments remained an important driver of market sentiment, particularly through their influence on energy markets. The easing of tensions in the Middle East helped reduce oil prices and near-term inflation concerns, providing support to investors even as central banks continued to signal caution regarding the inflation outlook.
Fixed income markets remained sensitive to changes in interest-rate expectations. Government bond yields were volatile as markets adjusted to a higher-for-longer policy backdrop. The Federal Reserve left rates unchanged while revising projections higher, whereas the European Central Bank raised rates by 25 basis points to 2.25%. As a result, core bond markets continued to face headwinds, particularly in longer-duration segments.
Across asset classes, equities continued to deliver the strongest performance, with emerging markets and Asia remaining among the leading contributors. Real assets generated positive returns supported by resilient underlying fundamentals, while credit markets remained relatively stable, benefiting from solid corporate fundamentals and attractive carry levels. Alternative strategies also continued to provide positive returns in an environment where income generation remained an important source of performance.
Overall, the second quarter highlighted the ongoing balance between resilient economic activity, moderating inflation and still-restrictive monetary policy. While uncertainty remains around the future path of interest rates and global growth, market performance continued to be supported by broadly resilient fundamentals across most asset classes.
As of Q2 2026, the Pensions Caixa 2, F.P. Fund delivered 8.1% YTD and a positive 1-year return of 10.3%. Over five years, the fund achieved an annualized return of 5.6%. Importantly, the fund continues to rank among the top 5% of pension funds in Spain over both 5- and 10-year periods within the Employment and Associated Systems. This consistent outperformance highlights the resilience and effectiveness of its long-term investment strategy.
In summary, the Pensions Caixa 2 Fund continued to make solid progress throughout the year, delivering results aligned with its objectives despite a complex market environment. While markets remain sensitive to monetary policy developments, economic data and geopolitical events, the fund continues to benefit from a disciplined and diversified investment approach. Its consistent long-term track record reinforces the strength of the strategy and its ability to generate sustainable value for members over time.