MARKETS:
- International markets continued to outperform U.S. equity markets, and small cap continued to outperform large cap stocks during the month of February. The global equity index (MSCI ACWI IMI) increased +1.29% in February and was up +4.29% The S&P 500, which tracks large cap U.S. stocks, decreased -0.76% in February and was up +0.68% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +0.80% in February and was up +6.20% YTD. The international developed equity index (MSCI EAFE) increased +4.63% in February and was up +10.09% YTD. The emerging markets index (MSCI EM) increased +5.50% in February and was up +14.83% YTD.
- In February, bond yields decreased across maturities. The 30-year U.S. treasury bond yield decreased -23 bps to 4.64%; the 10-year yield decreased –29 bps to 3.97%; and the 2-year yield decreased +14 bps to 3.38%. The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +1.64% in February and was up +1.75% YTD. Bond yields and prices have an inverse relationship.
ECONOMIC AND GEOPOLITICAL HEADLINES
- According to the second estimate released by the Bureau of Economic Analysis, U.S. gross domestic product (GDP) increased in the fourth quarter of 2025 by 0.7%, down from the third quarter increase of +4.4%.
- The February Services PMI was 56.10%, up +2.3% from January. The February Manufacturing PMI decreased slightly to 52.40% from 52.60% in January.
- February non-farm employment decreased by 92,000 jobs, and the unemployment rate increased to 4.4%, as reported by the Bureau of Labor Statistics on March 6. In February, employment decreased in health care, information and federal government. Average Hourly Earnings (wages) increased +3.8% year-over-year in February.
PERFORMANCE UPDATES
- The Total Equity Fund increased +1.32% in February and was up +4.89% The International Equity Fund increased +3.38% in February and was up +8.80% YTD. The Small Cap Equity Fund increased +2.76% in February and was up +9.22% YTD. The Fixed Income Fund increased +1.51% in February and was up +1.82% YTD.
- Most equity managers outperformed in the month, except for Xponance U.S. large cap and Baillie Gifford International.
- The UCF Balanced Fund returned +1.38% in February and was up +3.69% The Alternatives Balanced Fund increased +1.34% in February and was up +4.18% YTD. Finally, the Beyond Fossil Fuels Balanced Fund increased +2.14% in February and was up +4.54% YTD.