Following is a summary of the markets and our funds’ performance for the month of January 2019, provided by our Chief Investment Strategist David A. Klassen.


  • Global equity markets surged in January driven by investor optimism over a trade war hiatus and as the Fed turned dovish. The S&P 500, which tracks large cap U.S. stocks, was up 8.01% in January. The Russell 2000 Index, which tracks domestic small cap stocks, the best performing index for the month was up 11.25% in January. The International developed equity index (MSCI EAFE), increased 6.57% in January. The emerging markets index (MSCI EM) increased 8.76% in January.
  • In January, bond yields decreased, and prices increased; the 30-year U.S. Treasury bond yield declined 2bps to 3.00%, while the 10-year yield decreased 6bps to 2.63%, and the 5-year yield decreased 8 bps to 2.44%.
  • The Barclays Aggregate Index, which is a measure of U.S. Bond prices, increased 1.06% for January.


  • U.S. gross domestic product (GDP) in the third quarter of 2018 increased 3.4%, according to the “third” estimate released by the Bureau of Economic Analysis. Second quarter of 2018 GDP increased 4.2%.
  • The January Purchasing Managers Index (PMI) registered to 56.6, a 2.3 percentage point increase from the revised December reading of 54.3, indicating that the economy grew at a faster pace. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion.
  • In January, non-farm employment increased by 304,000 jobs, far above economists’ estimates of 165,000. However, it came on top of a whopping downward revision for December from 312,000 to 222,000. The Bureau of Labor Statistics (BLS) was funded during the shutdown period and was operating as usual. Data collection for the household and establishment surveys occurred as scheduled. The unemployment rate ticked up to 4.0% from the December rate of 3.9%. Average Hourly Earnings (wages) increased by 3.2% year-over-year. November and December non-farm payroll employment were revised by a combined total of 70,000 less than previously reported. After revisions, job gains over the past three months averaged 241,000.
  • The Fed left the target range for the federal funds rate unchanged at 2.25 to 2.5 percent. More importantly, the Fed expressed its willingness to be more patient and be flexible given economic data.


  • In January, the Total Equity Fund increased 8.27%. The International Equity Fund was up 7.87%. The Small Cap Equity Fund increased 11.91%. The Fixed Income Fund was up 1.64%.
  • All UCF equity managers had positive absolute returns in January. Relative performance was mixed. For international markets, developed manager LSV Asset Management outperformed while Baillie Gifford lagged its benchmark. The recently retained emerging markets manager RBC lagged its benchmark. Domestic Core equity manager Quantitative Management Associates (QMA) and State Street beat their benchmarks, while Fiduciary Management, Inc. (FMI) underperformed its benchmark. Small cap managers DFA, Westfield and recently retained manager Blackrock surpassed their respective benchmarks, while FMI underperformed its benchmark.
  • All Balanced Funds had positive absolute returns for December. The Moderate Balanced Fund, UCF’s most popular fund, increased 5.38%. The Aggressive Balanced Fund was up 6.45%, the Conservative Balanced Fund returned 3.87%. The Alternatives Balanced Fund was up 4.81% and the Beyond Fossil Fuels Balanced Fund increased 5.40%.