MARKETS:
- Global markets experienced mixed performance in March: U.S. markets declined on concerns over growth, inflation and tariffs; developed international markets were slightly negative; and emerging markets were positive. The global equity index (MSCI ACWI IMI) decreased -3.95% in March and was down -1.32% The S&P 500, which tracks large cap U.S. stocks, decreased -5.63% in March and was down -4.27% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, decreased -6.81% in March and was down -9.48% YTD. The international developed equity index (MSCI EAFE) decreased -0.40% in March and was up +6.86% YTD. The emerging markets index (MSCI EM) increased +0.63% in March and was up +2.93% YTD.
- In March, bond yields varied across maturities. The 30-year U.S. Treasury bond yield increased +8 bps to 4.59%; the 10-year yield decreased –1 bps to 4.23%; and the 2-year yield decreased –10 bps to 3.89%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +0.04% in March and was up +2.78%
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the fourth quarter of 2024 increased +2.4%, according to the “3rd” estimate released by the Bureau of Economic Analysis. In the third quarter of 2024, GDP increased +3.1%.
- The March Services PMI decreased to 50.80% from 53.50% in February. This represents expansion and is below market expectations of 53.00%. The March Manufacturing PMI decreased to 49.00% from 50.30% in February. 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 228,000 jobs, and the unemployment rate increased to 4.2%, as reported by the Bureau of Labor Statistics on April 4. In March, employment increased in health care, transportation and warehousing, and social assistance. Average Hourly Earnings (wages) increased +3.8% year-over-year in March.
PERFORMANCE UPDATES
- The Total Equity Fund decreased -4.04% in March and was down -2.04% YTD. The International Equity Fund increased +0.01% in March and was up +5.05% YTD. The Small Cap Equity Fund decreased -7.86% in March and was down -10.17% YTD. The Fixed Income Fund decreased -0.06% in March and was up +2.48% YTD.
- Equity managers’ performance was difficult in the quarter, with only BlackRock, LSV and RBC outperforming, while all other managers underperformed.
- The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark, returning -2.49% in March, and was down -0.32% YTD. The Alternatives Balanced Fund decreased -2.53% in March and was down -0.58% YTD. Finally, the Beyond Fossil Fuels Balanced Fund underperformed its benchmark, returning -2.59% in March, and was down -0.72% YTD.