MARKETS:

  • Global equity markets rallied in March despite volatility created by U.S. regional bank and European bank failures. The global equity index (MSCI ACWI IMI) increased +3.08% in March and was up +7.31% The S&P 500, which tracks large cap U.S. stocks, increased +3.67% in March and was up +7.50% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, decreased –4.78% in March and was up +2.74% YTD. The international developed equity index (MSCI EAFE) increased +2.48% in March and was up +8.47% YTD. The emerging markets index (MSCI EM) increased +3.03% in March and was up +3.96% YTD.
  • In March, longer-term bond yields decreased: the 30-year U.S. Treasury bond yield decreased -26 bps to 3.67%; the 10-year yield decreased -54 bps to 3.48%; and the 2-year yield decreased -75 bps to 4.06%.
  • The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +2.54% in March and is up +2.96%

ECONOMIC AND GEOPOLITICAL HEADLINES

  • U.S. gross domestic product (GDP) in the fourth quarter of 2022 increased +2.6%, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter of 2022, GDP increased +3.2%.
  • The March Services PMI (formerly Non-Manufacturing Purchasing Managers Index) decreased to 51.20% from 55.10% in February, which represents expansion territory but was below market expectations. The March Manufacturing PMI decreased to 46.30% from February’s 47.70%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
  • March’s non-farm employment increased by 236,000 jobs, and the unemployment rate changed a little to 3.5% from February’s 3.6%, as reported by the Bureau of Labor Statistics on April 7. In March, employment increased in leisure and hospitality, government, professional and business services and health care. Average Hourly Earnings (wages) increased +4.2% year-over-year in March.

PERFORMANCE UPDATES

  • The Total Equity Fund increased +2.04% in March and was up +7.03% YTD. The International Equity Fund increased +2.22% in March and was up +7.30% YTD. The Small Cap Equity Fund decreased -4.24% in March and was up +4.20% YTD. The Fixed Income Fund increased +2.24% in March and was up +3.00% YTD.
  • Most equity managers outperformed versus their respective benchmarks during the month, including Xponance, Westfield, Blackrock, Channing, Ballie Gifford and RBC.
  • The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark, returning 2.02% in March, and was up +5.31% YTD. The Alternatives Balanced Fund increased +0.81% in March and was up 3.57% YTD. Finally, the Beyond Fossil Fuels Balanced Fund underperformed its benchmark, returning 2.05% in March, and was up +5.33% YTD.