MARKETS:
- Global equity markets continued the positive rally from the previous month, although July was led by international developed markets outside the U.S. Within the U.S., small cap stocks outperformed, as investors evaluated their positioning with the Mag-7. The global equity index (MSCI ACWI IMI) increased +1.61% in July and was up +13.10% YTD. The S&P 500, which tracks large cap U.S. stocks, increased by +1.22% in July and was up +16.70% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +0.16% in July and was up +12.07% YTD. The international developed equity index (MSCI EAFE) increased +2.93% in July and was up +8.43% YTD. The emerging markets index (MSCI EM) increased +0.30% in July and was up +7.81% YTD.
- In July, bond yields decreased across maturities. The 30-year U.S. Treasury bond yield decreased –16 bps to 4.35%; the 10-year yield decreased –27 bps to 4.09%; and the 2-year yield decreased –42 bps to 4.29%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased by +2.34% in July and was up +1.61% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the second quarter of 2024 increased +2.8%, according to the “advanced” estimate released by the Bureau of Economic Analysis. In the first quarter of 2024, GDP increased +1.4%.
- The July Services PMI increased to 51.40% from 48.80% in June. This represents expansion and is higher than market expectations of 51.30%. The July Manufacturing PMI decreased to 46.80% from June’s 48.50%. 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 114,000 jobs, and the unemployment rate increased to 4.3%, as reported by the Bureau of Labor Statistics on August 2. In July, employment increased in health care, construction, and transportation and warehousing. Average Hourly Earnings (wages) increased +3.6% year-over-year in July.
PERFORMANCE UPDATES
- The Total Equity Fund increased +2.44% in July and was up +12.01% YTD. The International Equity Fund increased +2.28% in July and was up +6.53% YTD. The Small Cap Equity Fund increased +8.75% in July and was up +11.38% YTD. The Fixed Income Fund increased +2.01% in July and was up +1.67% YTD.
- Equity managers’ performance was mixed during the month and the managers that outperformed their respective indices included Blackrock, LSV and RBC while the managers that underperformed their benchmarks included PGIM’s international and domestic quantitative strategy, Xponance, Westfield, Channing and Ballie Gifford.
- The UCF Balanced Fund, UCF’s most popular fund, outperformed its benchmark, returning +2.20% in July, and was up +7.95% YTD. The Alternatives Balanced Fund increased +1.88% in July and was up +8.65% YTD. Finally, the Beyond Fossil Fuels Balanced Fund underperformed its benchmark, returning +1.90% in July, and was up +10.74% YTD.