MARKETS:
- While the overall market seemed benign in July, there was extreme volatility in semiconductor names and AI-related companies. The global equity index (MSCI ACWI IMI) decreased -0.24% in July and was up +11.75% The S&P 500, which tracks large cap U.S. stocks, decreased -0.06% in July and was up +10.14% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, decreased -3.03% in July and was up +18.85% YTD. The international developed equity index (MSCI EAFE) increased +1.96% in July and was up +11.59% YTD. The emerging markets index (MSCI EM) decreased -3.07% in July and was up +20.04% YTD.
- In July, the bond yield curve steepened. The 30-year U.S. treasury bond yield increased +36 bps to 5.27%; the 10-year yield increased +31 bp to 4.75%; and the 2-year yield increased +14 bps to 4.28%. The Bloomberg U.S. Government Credit Index, a proxy for the U.S. fixed income market, decreased -1.29% in July and was down -0.80% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- According to the Bureau of Economic Analysis, U.S. real gross domestic product (GDP) increased in the second quarter of 2026 by +1.5%, down from the first quarter 2026 increase of +2.1%.
- The July Services Purchasing Managers’ Index (PMI) was 54.1%, up +0.1% from June. The July Manufacturing PMI was 55.6%, up +2.3% from June. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
- As reported by the Bureau of Labor Statistics on August 7, July non-farm employment decreased by 23,000 jobs, while the unemployment rate slightly decreased to 4.1%. In July, employment decreased in local government education and retail trade, while health care trended up. Average Hourly Earnings (wages) increased by 3.2% year-over-year.
PERFORMANCE UPDATES
- The Total Equity Fund decreased -0.22% in July and was up +11.93% The International Equity Fund increased +0.60% in July and was up +12.27% YTD. The Small Cap Equity Fund decreased -2.94% in July and was up +17.92% YTD. The Fixed Income Fund decreased -1.36% in July and was down -0.75% YTD.
- Equity managers that outperformed in the month included PGIM Quant (U.S. Large Cap and BFF Global), BlackRock, Channing Small Cap and LSV International, while Westfield Small Cap, Baillie Gifford and RBC Emerging Market Equity underperformed.
- The UCF Balanced Fund decreased -0.63% in July and was up +6.91% YTD. The Alternatives Balanced Fund increased +0.36% in July and was up +9.09% YTD. Finally, the Beyond Fossil Fuels Balanced Fund decreased -0.61%