MARKETS:

  • Global equity markets remained strong in July. The global equity index (MSCI ACWI IMI) increased +3.66% in July and was up +18.11% The S&P 500, which tracks large cap U.S. stocks, increased +3.21% in July and was up +20.65% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +6.12% in July and was up +14.70% YTD. The international developed equity index (MSCI EAFE) increased +3.24% in July and was up +15.28% YTD. The emerging markets index (MSCI EM) increased +6.23% in July and was up +11.42% YTD.
  • In July, long-term bond yields increased more than short-term yields, while exhibiting intra-month volatility: the 30-year U.S. Treasury bond yield increased +17 bps to 4.02%, the 10-year yield increased +16 bps to 3.97%, and the 2-year yield increased +1 bps to 4.88%.
  • The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, decreased -0.07% in July and was up +2.02%

ECONOMIC AND GEOPOLITICAL HEADLINES

  • U.S. gross domestic product (GDP) in the second quarter of 2023 increased +2.4%, according to the “Advanced” estimate released by the Bureau of Economic Analysis. In the first quarter of 2023, GDP increased +2.0%.
  • The July Services PMI (formerly Non-Manufacturing Purchasing Managers Index) decreased to 52.70% from 53.90% in June. This represents expansion and was lower than market expectations of 53.00%. The July Manufacturing PMI increased to 46.40% from June’s 46.00%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
  • July non-farm employment increased by 187,000 jobs, and the unemployment rate decreased to 3.5%, as reported by the Bureau of Labor Statistics on August 4. In July, employment increased in health care, social assistance, financial activities and wholesale trade. Average Hourly Earnings (wages) increased +4.4% year-over-year in July.

PERFORMANCE UPDATES 

  • The Total Equity Fund increased +3.79% in July and was up +17.44% YTD. The International Equity Fund increased +4.23% in July and was up +14.21% YTD. The Small Cap Equity Fund increased +4.24% in July and was up +14.83% YTD. The Fixed Income Fund decreased -0.01% in July and was up +2.42% YTD.
  • Equity managers’ performance was strong during the month, and the managers that outperformed their respective benchmarks were Baillie Gifford, Xponance, LSV and PGIM’s quantitative strategies, whereas the managers that underperformed were Westfield, Blackrock, Channing and RBC.
  • The UCF Balanced Fund, UCF’s most popular fund, outperformed its benchmark, returning +2.39% in July and was up +11.41% YTD. The Alternatives Balanced Fund increased +2.64% in July and was up +9.51% YTD. Finally, the Beyond Fossil Fuels Balanced Fund outperformed its benchmark, returning +2.44% in July and was up +12.26% YTD.