MARKETS:

  • Global equity markets posted strong returns in November, as companies reported better-than-expected earnings in Q3, and the U.S. economy remained resilient with strong GDP growth. The global equity index (MSCI ACWI IMI) increased +9.23% in November and was up +16.60% YTD. The S&P 500, which tracks large cap U.S. stocks, increased +9.13% in November and was up +20.80% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +9.05% in November and was up +4.20% YTD. The international developed equity index (MSCI EAFE) increased +9.28% in November and was up +12.27% YTD. The emerging markets index (MSCI EM) increased +8.00% in November and was up +5.70% YTD.
  • In November, long-term bond yields decreased more than short-term yields while exhibiting intra-month volatility. The 30-year U.S. Treasury bond yield decreased –50 bps to 54%, the 10-year yield decreased -51 bps to 4.37%, and the 2-year yield decreased -34 bps to 4.73%.
  • The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +53% in November and was up +1.64% YTD.

ECONOMIC AND GEOPOLITICAL HEADLINES

  • U.S. gross domestic product (GDP) in the third quarter of 2023 increased +5.2%, according to the “Second” estimate released by the Bureau of Economic Analysis. In the second quarter of 2023, GDP increased +2.1%.
  • The November Services Purchasing Manager Index (PMI) increased to 52.70% from 51.80% in October. This represents expansion and higher than market expectations of 52.00%. The November Manufacturing PMI remained unchanged at 46.70%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
  • November non-farm employment increased by 199,000 jobs, and the unemployment rate decreased to 3.7%, as reported by the Bureau of Labor Statistics on December 8. In November, employment increased in health care and government. Average Hourly Earnings (wages) increased by 4.0% year-over-year in November.

PERFORMANCE UPDATES

  • The Total Equity Fund increased +9.13% in November and was up +13.78% YTD. The International Equity Fund increased +9.31% in November and was up +8.25% YTD. The Small Cap Equity Fund increased +8.28% in November and was up +5.48% YTD. The Fixed Income Fund increased by +4.17% in November and was up +1.93% YTD.
  • Equity managers’ performance was mixed during the month, and the managers that outperformed their respective benchmarks were PGIM’s quantitative strategies, Xponance, Westfield, Blackrock, and Baillie Gifford; whereas the managers that underperformed were Channing, LSV and RBC.
  • The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark returning +7.15% in November, and was up +9.11% YTD. The Alternatives Balanced Fund increased +4.96% in November and was up +7.32% YTD. Finally, the Beyond Fossil Fuels Balanced Fund underperformed its benchmark, returning +7.12% in November and was up +11.63% YTD.