MARKETS:

• Global equity market returns turned negative in April as geopolitical worries increased, and expectations for the Fed’s rate cut were reduced following stickier inflation data. The global equity index (MSCI ACWI IMI) decreased –3.30% in April and was up +4.63% YTD. The S&P 500, which tracks large cap U.S. stocks, decreased –4.08% in April and was up +6.04% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, decreased –7.04% in April and was down –2.22% YTD. The international developed equity index (MSCI EAFE) decreased -2.56% in April and was up +3.08% YTD. The emerging markets index (MSCI EM) increased +0.45% in April and was up +2.83% YTD.
• In April, bond yields increased across maturities. The 30-year U.S. Treasury bond yield increased +45 bps to +4.79%; the 10-year yield increased +49 bps to +4.69%; and the 2-year yield increased +45 bps to +5.04%.
• The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, decreased –2.53% in April and was down -3.28% YTD.

ECONOMIC AND GEOPOLITICAL HEADLINES

• U.S. gross domestic product (GDP) in the first quarter of 2024 increased +1.6%, according to the “Advanced” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2023 GDP increased +3.4%.
• The April Services PMI decreased to 49.40% from 51.40% in March. This represents contraction and is lower than market expectations of 52.00%. The April Manufacturing PMI decreased to 49.20% from March’s 50.30%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
• April non-farm employment increased by 175,000 jobs, and the unemployment rate increased to 3.9%, as reported by the Bureau of Labor Statistics on May 3. In April, employment increased in health care, social assistance, transportation and warehousing. Average Hourly Earnings (wages) increased by 3.9% year-over-year in April.

PERFORMANCE UPDATES

• The Total Equity Fund decreased -3.69% in April and was up 3.44% YTD. The International Equity Fund decreased -2.01% in April and was up 1.21% YTD. The Small Cap Equity Fund decreased -6.81% in April and was up 0.11% YTD. The Fixed Income Fund decreased -2.44% in April and was down -2.74% YTD.
• Equity managers’ performance was mixed during the month, and the managers that outperformed the index included Xponance, Blackrock and LSV, while the managers that underperformed their benchmarks included PGIM’s domestic and global quantitative strategies, Channing, Ballie Gifford, RBC and Westfield.
• The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark, returning -3.24% in April, and was up 1.20% YTD. The Alternatives Balanced Fund decreased by -1.15% in April and was up 3.85% YTD. Finally, the Beyond Fossil Fuels Balanced Fund underperformed its benchmark, returning -3.19% in April, and was up 3.25% YTD.