- Global financial markets had mixed performance in June. The developed and emerging market equity index (MSCI ACWI IMI) increased +1.32% in June and +12.30% YTD. The S&P 500, which tracks large cap U.S. stocks, was up +2.33% in June and +15.25% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +1.94% in June and +17.54% YTD. The international developed equity index (MSCI EAFE) decreased by -1.13% in June and increased +8.83% YTD. The emerging markets index (MSCI EM) increased by +0.17% in June and up +7.45% YTD.
- In June, longer-term bond yields were mixed: the 30-year U.S. Treasury bond yield decreased by -20 bps to 2.06%; the 10-year yield decreased by -13 bps to 1.45%; and the 5-year yield increased by +8 bps to 0.87%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. Bond prices, increased by +70% in June and decreased by -1.60% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the first quarter of 2021 increased +6.4%, according to the “third” estimate released by the Bureau of Economic Analysis. The fourth quarter of 2020 GDP increased by +4.3%.
- The June Services PMI (formerly Non-Manufacturing Purchasing Managers Index) decreased to 60.10% from 64.00% in May, which represents expansion at a lower rate and below the market expectations of 63.50%. The June Manufacturing PMI decreased to 60.60% from May’s 61.20%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion.
- June non-farm employment increased by 850,000 jobs, and the unemployment rate held steady at 5.9%, as reported by the Bureau of Labor Statistics on July 2, 2021. This was higher than consensus estimates of adding 700,000 jobs. In June, employment increased in leisure and hospitality, public and private education, professional and business services and retail trade. Average Hourly Earnings (wages) increased +3.6% year-over-year in June.
FUND PERFORMANCE UPDATES
- In June, the Total Equity Fund increased by +0.88% and was up +12.55% YTD. The International Equity Fund decreased by -0.17% in June and was up +9.15% YTD. The Small Cap Equity Fund increased by +0.23% in June and was up +13.72% YTD. The Fixed Income Fund increased by +0.70% in June and was down -1.21% YTD.
- Managers that outperformed the benchmark included Baillie Gifford, while managers that underperformed the benchmark included QMA U.S. LC and BFF, Westfield Capital Management, Channing and RBC Emerging Market.
- All the Balanced Funds underperformed their respective benchmarks for the month, but all outperformed YTD. The Moderate Balanced Fund, UCF’s most popular fund, increased by +0.76% in June and was up +7.27% YTD. The Aggressive Balanced Fund was up +0.79% in June and+9.32% YTD. The Conservative Balanced Fund was up +0.73% in June and +3.87% YTD. The Alternatives Balanced Fund was up +0.32% in June and +7.96% YTD. Finally, the Beyond Fossil Fuels Balanced Fund increased by +0.71% in June and was up +8.68% YTD.