MARKETS:

  • Global equity markets posted positive returns in March, with fairly even performance across the markets while the participants continue to evaluate the Fed’s next move. The global equity index (MSCI ACWI IMI) increased +3.14% in March and was up +8.20% YTD. The S&P 500, which tracks large cap U.S. stocks, increased +3.22% in March and was up +10.56% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +3.58% in March and was up +5.18% YTD. The international developed equity index (MSCI EAFE) increased +3.29% in March and was up +5.78% YTD. The emerging markets index (MSCI EM) increased +2.48% in March and was up 2.37% YTD.
  • In March, bond yields decreased across maturities. The 30-year U.S. Treasury bond yield decreased –4 bps to +4.34%; the 10-year yield decreased -5 bps to +4.20%; and the 2-year yield decreased -5 bps to +4.59%.
  • The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +92% in March and was down -0.78% YTD.

ECONOMIC AND GEOPOLITICAL HEADLINES

  • U.S. gross domestic product (GDP) in the fourth quarter of 2023 increased +3.4%, according to the “Third” estimate released by the Bureau of Economic Analysis. In the third quarter of 2023 GDP increased +4.9%.
  • The March Services PMI decreased to 51.40% from 52.60% in February. This represents expansion and is lower than market expectations of 52.70%. The March Manufacturing PMI increased to 50.30% from February’s 47.80%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion, and below 50 is considered economic contraction.
  • March non-farm employment increased by 303,000 jobs, and the unemployment rate decreased to 3.8%, as reported by the Bureau of Labor Statistics on April 5. In March, employment increased in health care, government and construction. Average Hourly Earnings (wages) increased by 4.1% year-over-year in March.

PERFORMANCE UPDATES

  • The Total Equity Fund increased +2.91% in March and was up 7.40% YTD. The International Equity Fund increased +2.14% in March and was up 3.28% YTD. The Small Cap Equity Fund increased +3.83% in March and was up 7.42% YTD. The Fixed Income Fund increased +0.99% in March and was down -0.31% YTD.
  • Equity managers’ performance was mixed during the month, and the managers that outperformed the index included PGIM’s domestic and global quantitative strategies, Blackrock Channing and LSV, while the managers that underperformed their benchmarks included Xponance, Ballie Gifford, RBC and Westfield.
  • The UCF Balanced Fund, UCF’s most popular fund, slightly underperformed its benchmark, returning +2.19% in March, and was up +4.59% YTD. The Alternatives Balanced Fund increased +2.02% in March and was up +5.07% YTD. Finally, the Beyond Fossil Fuels Balanced Fund outperformed its benchmark, returning +2.78% in March, and was up +6.65% YTD.