- Developed financial markets turned positive in March, while emerging markets continued to be negative, as volatility continued due to geopolitical concerns. The developed and emerging market equity index (MSCI ACWI IMI) increased +2.17% in March and decreased -5.36% YTD. The S&P 500, which tracks large cap U.S. stocks, was up +3.71% in March and decreased -4.60% YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased +1.24% in March and decreased -7.53% YTD. The International developed equity index (MSCI EAFE) increased +0.64% in March and decreased -5.91% YTD. The emerging markets index (MSCI EM) decreased –2.26% in March and -6.97% YTD.
- In March, longer-term bond yields increased: the 30-year U.S. Treasury bond yield increased by +27 bps to 2.44%, the 10-year yield increased by +49 bps to 2.32%, and the 5-year yield increased by +71 bps to 2.42%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, decreased -2.78% in March and -5.93% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the fourth quarter of 2021 increased +6.9%, according to the “third” estimate released by the Bureau of Economic Analysis. The third quarter of 2021 GDP increased by +2.3%.
- The March Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 58.30% from 56.50% in February, which represents expansion at a higher rate and slightly lower than market expectations of 58.50%. The March’s Manufacturing PMI decreased to 57.10% from February’s 58.60%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion.
- March’s non-farm employment increased by 431,000 jobs, and the unemployment rate decreased to 3.6%, as reported by the Bureau of Labor Statistics on April 1, 2022. In March, employment increased in leisure and hospitality, professional and business services, retail trade and manufacturing. Average Hourly Earnings (wages) increased +5.6% year-over-year in March.
- In March, the Total Equity Fund increased +1.35% and decreased -7.33% YTD. The International Equity Fund decreased -0.83% in March and -10.86% YTD. The Small Cap Equity Fund decreased -0.36% in March and -7.35% YTD. The Fixed Income Fund decreased ‑2.47% in March and -5.38% YTD.
- Equity managers had mixed performance in March. Managers that outperformed their benchmarks were SSGA, Westfield, RBC and LSV, whereas managers that underperformed their benchmarks were QMA, Blackrock, Channing and Baillie Gifford.
- The UCF Balanced Fund (formerly Moderate Balanced Fund), our most popular fund, underperformed its benchmark, and increased +0.10% in March and decreased -6.34% YTD. The Alternatives Balanced Fund increased +0.76% in March and decreased -4.34% YTD. Finally, the Beyond Fossil Fuels Balanced Fund outperformed its benchmark, increasing 0.85% in March and decreasing -5.36 YTD.