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January 2026 Market Review - United Church Funds

 MARKETS:

  • International markets continued to outperform U.S. equity markets, and small cap performed better than large cap stocks during the month. The global equity index (MSCI ACWI IMI) increased +2.96% in January and YTD. The S&P 500, which tracks large cap U.S. stocks, increased +1.45% in January and YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased +5.35% in January and YTD. The international developed equity index (MSCI EAFE) increased +5.22% in January and YTD. The emerging markets index (MSCI EM) increased +8.85% in January and YTD.
  • In January, bond yields increased across maturities. The 30-year U.S. treasury bond yield increased +3 bps to 4.87%, the 10-year yield increased +8 bps to 4.26%, and the 2-year yield increased +5 bps to 3.52%.
  • The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +0.11% in January and YTD.

ECONOMIC AND GEOPOLITICAL HEADLINES

  • U.S. gross domestic product (GDP) in the third quarter of 2025 increased +4.4%, according to the “updated” estimate released by the Bureau of Economic Analysis.
  • The January Services PMI was 53.80%, similar to December. The January Manufacturing PMI increased to 52.60% from 47.90% in December.
  • January non-farm employment increased by 130,000 jobs, and the unemployment rate was little changed at 4.3%, as reported by the Bureau of Labor Statistics on February 11. In January, employment increased in health care, social assistance and construction. Average Hourly Earnings (wages) increased +3.7% year-over-year in January.

PERFORMANCE UPDATES

  • The Total Equity Fund increased +3.52% in January and YTD. The International Equity Fund increased +5.24% in January and YTD. The Small Cap Equity Fund increased +6.29% in January and YTD. The Fixed Income Fund increased +0.31% in January and YTD.
  • Most equity managers outperformed in the month except for Xponance U.S. large cap, BlackRock small cap, Baillie Gifford International and RBC EME.
  • The UCF Balanced Fund returned +2.28 % in January and YTD. The Alternatives Balanced Fund increased +2.80% in January and YTD. Finally, the Beyond Fossil Fuels Balanced Fund returned +2.34% in January and YTD.