MARKETS:
- Despite the elevated interest rate environment and heavy AI capital expenditure concerns, August was an overall strong month for the stock market, especially among the energy and technology sectors. The global equity index (MSCI ACWI IMI) increased +2.81% in August and was up +14.89% The S&P 500, which tracks large cap U.S. stocks, increased +2.72% in August and was up +13.14% YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased +0.98% in August and was up +20.01% YTD. The international developed equity index (MSCI EAFE) increased +1.99% in August and was up +13.81% YTD. The emerging markets index (MSCI EM) increased +3.37% in August and was up +24.08% YTD.
- In August, the bond yield curve slightly flattened. The 30-year U.S. treasury bond yield decreased -2 bps to 5.25%, the 10-year yield remained unchanged at 4.75%; and the 2-year yield increased +6 bps to 4.34%. The Bloomberg U.S. Government Credit Index, a proxy for the U.S. fixed income market, increased +0.35% in August and was down -0.45% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- According to the Bureau of Economic Analysis, the second estimate for U.S. real gross domestic product (GDP) increased in the second quarter of 2026 by +1.5%, down from the first quarter 2026 increase of +2.1%.
- The August Services PMI was 55.4%, up +1.3% from July. The August Manufacturing PMI was 54.6%, down -1.0% from July. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
- As reported by the Bureau of Labor Statistics on September 4, August non-farm employment increased by 162,000 jobs, while the unemployment rate remained unchanged at 1%. In August, employment increased in food services and in local government education while the information industry lost jobs. Average Hourly Earnings (wages) increased by 3.1% year-over-year.
PERFORMANCE UPDATES
- The Total Equity Fund increased +2.57% in August and was up +14.80% The International Equity Fund increased +3.34% in August and was up +16.02% YTD. The Small Cap Equity Fund increased +0.45% in August and was up +18.45% YTD. The Fixed Income Fund increased +0.44% in August and was down -0.31% YTD.
- Equity managers that outperformed in the month included both PGIM Quant U.S. Large Cap, Westfield Capital Management, BlackRock, Ballie Gifford and LSV Asset Management; while Channing Capital, Beyond Fossil Fuels Global, Xponance and RBC Emerging Market Equity underperformed.
- The UCF Balanced Fund increased +1.78% in August and was up +8.81% The Alternatives Balanced Fund increased +0.98% in August and was up +10.16% YTD. Finally, the Beyond Fossil Fuels Balanced Fund increased +1.75% in August and was up +9.17% YTD.