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June 2025 Market Review - United Church Funds

MARKETS:

  • June experienced a strong recovery, led by emerging market equities and followed by the U.S., despite U.S. military action against Iran and renewed tariff concerns. The global equity index (MSCI ACWI IMI) was positive at +4.49% in June and was up +10.05% YTD. The S&P 500, which tracks large cap U.S. stocks, increased +5.09% in June and was up +6.20% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +5.44% in June and was down -1.79% YTD. The international developed equity index (MSCI EAFE) increased +2.20% in June and was up +19.45% YTD. The emerging markets index (MSCI EM) increased +6.01% in June and was up +15.27% YTD.
  • In June, bond yields lowered across maturities. The 30-year U.S. Treasury bond yield decreased 14 bps to 4.78%; the 10-year yield decreased 17 bps to 4.24%; and the 2-year yield decreased -17 bps to 3.72%.
  • The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +1.54% in June and was up +4.02%

ECONOMIC AND GEOPOLITICAL HEADLINES

  • U.S. gross domestic product (GDP) in the first quarter of 2025 decreased -0.5%, according to the “3rd” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2024, GDP increased by 2.4%.
  • The June Services PMI increased to 50.80% from 49.90% in May. This represents expansion. The June Manufacturing PMI increased to 49.00% from 48.50% in May.
  • June non-farm employment increased by 147,000 jobs, and the unemployment rate dropped to 4.1%, as reported by the Bureau of Labor Statistics on July 3. In June, employment increased in state government and health care. Average Hourly Earnings (wages) increased +3.7% year-over-year in June.

PERFORMANCE UPDATES

  • The Total Equity Fund increased +4.49% in June and was up +8.82% YTD. The International Equity Fund increased +3.48% in June and was up +17.92% YTD. The Small Cap Equity Fund increased +5.56% in June and was down -1.69% YTD. The Fixed Income Fund increased +1.64% in June and was up +3.93% YTD.
  • Equity managers’ performance was mixed in the month, with PGIM Quant (Beyond Fossil Fuels Fund) and Channing outperforming, while all other managers underperformed.
  • The UCF Balanced Fund returned +3.31% in June and was up +6.77% YTD. The Alternatives Balanced Fund increased +2.83% in June and was up +5.17% YTD. Finally, the Beyond Fossil Fuels Balanced Fund outperformed its benchmark, returning +3.90% in June, and is up +8.07% YTD.