MARKETS:
- Markets diverged in June as investors shifted from large company stocks to small company stocks and international stocks. The global equity index (MSCI ACWI IMI) decreased -0.57% in June and was up +12.01% The S&P 500, which tracks large cap U.S. stocks, decreased -0.95% in June and was up +10.21% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +3.74% in June and was up +22.57% YTD. The international developed equity index (MSCI EAFE) increased +0.07% in June and was up +9.44% YTD. The emerging markets index (MSCI EM) decreased -1.41% in June and was up +23.85% YTD.
- In June, the bond yield curve flattened. The 30-year U.S. treasury bond yield decreased -8 bps to 4.91%; the 10-year yield decreased -1 bp to 4.44%; and the 2-year yield increased +16 bps to 4.14%. The Bloomberg U.S. Government Credit Index, a proxy for the U.S. fixed income market, increased +0.25% in June and was up +0.49% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- According to the Bureau of Economic Analysis, U.S. real gross domestic product (GDP) increased in the first quarter of 2026 by +2.1%, up from the fourth quarter of 2025 increase of +0.5%.
- The June Services PMI was 54.0%, down -0.50% from May. The June Manufacturing PMI was 53.3%, down -0.70% from May. 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 July 2, June non-farm employment increased by 57,000 jobs, and the unemployment rate decreased slightly to 4.2%. In June, employment increased in health care, professional and business services, and social assistance. Leisure and hospitality lost jobs. Average hourly earnings (wages) increased by 3.5% year-over-year.
PERFORMANCE UPDATES
- The Total Equity Fund decreased -0.15% in June and was up +12.17% The International Equity Fund decreased -0.45% in June and was up +11.60% YTD. The Small Cap Equity Fund increased +3.49% in June and was up +21.49% YTD. The Fixed Income Fund increased +0.35% in June and was up +0.62% YTD.
- Equity managers that outperformed in the month included both PGIM Quant U.S. Large Cap and BFF, Channing Small Cap, Baillie Gifford International and RBC Emerging Market Equity. Equity managers that detracted during the month included Xponance, Westfield Small Cap, BlackRock Small Cap and LSV International.
- The UCF Balanced Fund increased +0.01% in June and was up +7.59% The Alternatives Balanced Fund increased +0.10% in June and was up +8.70% YTD. Finally, the Beyond Fossil Fuels Balanced Fund decreased -0.21% in June and was up +7.95% YTD.