- Global financial markets were positive in March, led by large cap and value stocks. The developed and emerging market equity index (MSCI ACWI IMI) increased +2.67% in March and +4.57% YTD. The S&P 500, which tracks large cap U.S. stocks, was up +4.38% in March and +6.17% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +1.00% in March and +12.70% YTD. The international developed equity index (MSCI EAFE) increased by +2.30% in March and +3.48% YTD. The emerging markets index (MSCI EM) decreased by –1.51% in March and was up +2.29% YTD.
- In March, longer-term bond yields increased; the 30-year U.S. Treasury bond yield increased by +24 bps to +2.41%, the 10-year yield increased by +30 bps to +1.74% and the 5-year yield increased by +17 bps to +0.92%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, decreased -1.25% for March and -3.37% YTD.
ECONOMIC AND GEOPOLITIC2AL HEADLINES
- U.S. gross domestic product (GDP) in the fourth quarter of 2020 increased +4.3%, according to the “third” estimate released by the Bureau of Economic Analysis. The third quarter of 2020 GDP increased +33.4%.
- The March Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 63.70% from 55.30% in February. This increase represents expansion at a higher rate and is well above market expectations of 59%. The March Manufacturing PMI increased to 64.70% from February’s 60.80%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion.
- March non-farm employment increased by 916,000 jobs, and the unemployment rate was decreased to 6%, as reported by the Bureau of Labor Statistics on April 2, 2021. In March, employment increased in leisure and hospitality, public and private education and construction. Average Hourly Earnings (wages) increased +4.2% year-over-year in March.
FUND PERFORMANCE UPDATES
- In March, the Total Equity Fund increased by +2.62% and was up +5.86% YTD. The International Equity Fund increased by +1.04% in March and was up +3.80% YTD. The Small Cap Equity Fund increased by +0.19% in March and was up +10.32% YTD. The Fixed Income Fund decreased by ‑1.13% in March and was down -3.28% YTD.
- Managers that outperformed their benchmarks included Quantitative Management, Westfield Capital Management, RBC, and LSV Asset Management.
- All Balanced Fund except Alternatives Balanced Fund outperformed their respective benchmarks in March. The Moderate Balanced Fund, UCF’s most popular fund, increased by +1.26% in March and was up +2.52% YTD. The Aggressive Balanced Fund was up +1.80% in March and was up +3.87% YTD. The Conservative Balanced Fund was up +0.32% in March and was up +0.22% YTD. The Alternatives Balanced Fund was down -0.24% in March and was up +1.87% YTD. Finally, the Beyond Fossil Fuels Balanced Fund increased by +2.46% in March and was up +3.66% YTD.