MARKETS:
- January was a volatile start for the U.S. equity market with a selloff due to new AI competition from China and then ending up due to strong company earnings. The global equity index (MSCI ACWI IMI) increased +3.36% in January and was up +3.36% YTD. The S&P 500, which tracks large cap U.S. stocks, increased +2.78% in January and was up +2.78% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +2.62% in January and was up +2.62% YTD. The international developed equity index (MSCI EAFE) increased +5.26% in January and was up +5.26% YTD. The emerging markets index (MSCI EM) increased +1.79% in January and was up +1.79% YTD.
- In January, bond yields increased across maturities; the 30-year U.S. Treasury bond yield decreased –13 bps to 4.65%, the 10-year yield decreased –13 bps to 4.45%, and the 2-year yield decreased –4 bps to 4.21%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +0.53% in January and was up +0.53%
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the fourth quarter of 2024 increased +2.3%, according to the “Advanced” estimate released by the Bureau of Economic Analysis. In the third quarter of 2024 GDP increased +3.1%.
- The January Services PMI decreased to 52.80% from 54.00% in December. This represents expansion and is above market expectations of 51.00%. The January Manufacturing PMI increased to 50.90% from 49.30% in December. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
- January non-farm employment increased by 143,000 jobs, and the unemployment rate declined to 4.0%, as reported by the Bureau of Labor Statistics on February 7. In January, employment increased in health care, retail and social assistance. Average Hourly Earnings (wages) increased +4.1% year-over-year in January.
PERFORMANCE UPDATES
- The Total Equity Fund increased +3.26% in January and was up +3.26% YTD. The International Equity Fund increased +3.86% in January and was up +3.86% YTD. The Small Cap Equity Fund increased +3.64% in January and was up +3.64% YTD. The Fixed Income Fund increased +0.61% in January and was up +0.61% YTD.
- Equity managers’ performance was mostly positive in January with Westfield, BlackRock, Channing, Baillie Gifford, LSV and PGIM Quant BFF outperforming, while all other managers were in line with their respective benchmarks.
- The UCF Balanced Fund, UCF’s most popular fund, outperformed its benchmark returning +2.24% in January and was up 2.24% YTD. The Alternatives Balanced Fund increased +2.22% in January and was up +2.22% YTD. Finally, the Beyond Fossil Fuels Balanced Fund outperformed its benchmark, returning +2.24% in January and was up +2.24% YTD.