MARKETS:
- Global equity markets continued their positive rally from the previous month, and international developed markets continued to lead the way. The global equity index (MSCI ACWI IMI) increased +2.54% in August and was up +15.97% YTD. The S&P 500, which tracks large cap U.S. stocks, increased +2.43% in August and was up +19.53% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, decreased –1.49% in August and was up +10.39% YTD. The international developed equity index (MSCI EAFE) increased +3.25% in August and was up +11.96% YTD. The emerging markets index (MSCI EM) increased +1.61% in August and was up +9.55% YTD.
- In August, bond yields decreased across maturities. The 30-year U.S. Treasury bond yield decreased –15 bps to 4.20%; the 10-year yield decreased –18 bps to 3.91%; and the 2-year yield decreased -38 bps to 3.91%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +1.44% in August and was up +3.07% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the second quarter of 2024 increased +3.0%, according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter of 2024, GDP increased +1.4%.
- The August Services PMI increased to 51.50% from 51.40% in July. This represents expansion and is higher than market expectations of 51.10%. The August Manufacturing PMI increased to 47.20% from July’s 46.80%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
- August non-farm employment increased by 142,000 jobs, and the unemployment rate decreased to 4.2%, as reported by the Bureau of Labor Statistics on September 6. In August, employment increased in health care and construction. Average Hourly Earnings (wages) increased +3.8% year-over-year in August.
PERFORMANCE UPDATES
- The Total Equity Fund increased +1.78% in August and was up +14.01% YTD. The International Equity Fund increased +2.16% in August and was up +8.83% YTD. The Small Cap Equity Fund decreased -0.90% in August and was up +10.38% YTD. The Fixed Income Fund increased +1.68% in August and was up +3.38% YTD.
- Equity managers’ performance was mixed during the month, and managers that outperformed their respective indices included Westfield, Blackrock, Channing, Ballie Gifford and PGIM’s international quantitative strategy, while managers that underperformed their benchmarks included PGIM’s domestic quantitative strategy, Xponance, LSV and RBC.
- The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark, returning +1.67% in August, and was up 9.75% YTD. The Alternatives Balanced Fund increased +1.02% in August and was up 9.76% YTD. Finally, the Beyond Fossil Fuels Balanced Fund outperformed its benchmark, returning +2.04% in August, and was up 13.00% YTD.