MARKETS
- Markets across the globe rebounded strongly in November, led by China. The developed and emerging market equity index (MSCI ACWI IMI) increased +7.76% in November and is down -15.02% The S&P 500, which tracks large cap U.S. stocks, increased +5.59% in November and is down -13.10% YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased +2.34% in November and is down -14.91% YTD. The international developed equity index (MSCI EAFE) increased +11.26% in November and is down -14.52% YTD. The emerging markets index (MSCI EM) increased +14.83% in November and down -18.95% YTD.
- In November, longer-term bond yields decreased: the 30-year U.S. Treasury bond yield decreased by -42 bps to 3.80%, the 10-year yield decreased by -42 bps to 3.68%, and the 5-year yield decreased by -45 bps to 3.82%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +3.68% in November and is down -12.62%
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the third quarter of 2022 increased +2.9%, according to the “2nd” estimate released by the Bureau of Economic Analysis. In the second quarter of 2022, GDP decreased -0.6%.
- The November Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 56.50% from 54.40% in October, which represents expansion at a higher rate and higher than market expectations of 53.30%. The November’s Manufacturing PMI decreased to 49.00% from October’s 50.20%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
- October’s non-farm employment increased by 263,000 jobs, and the unemployment rate remained unchanged at 3.7%, as reported by the Bureau of Labor Statistics on December 2, 2022. In November, employment increased in leisure and hospitality, health care and government. Average Hourly Earnings (wages) increased +5.1% year-over-year in November.
PERFORMANCE UPDATES
- In November, the Total Equity Fund increased +7.85% and was down -16.88% YTD. The International Equity Fund increased +12.87% in November and was down -21.18% YTD. The Small Cap Equity Fund increased +2.80% in November and was down -15.86% YTD. The Fixed Income Fund increased +3.27% in November and was down -12.72% YTD.
- Equity managers’ performance versus their respective benchmarks was mixed during the month. Equity managers that outperformed included international manager Ballie Gifford, emerging markets manager RBC, and small cap managers Blackrock and Channing, all net of fees.
- The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark but had positive absolute performance of 5.91% in November and was down -14.62% YTD. The Alternatives Balanced Fund increased +3.82% in November and was down -9.87% YTD. Finally, the Beyond Fossil Fuels Balanced Fund underperformed its benchmark but had positive absolute performance of 5.43% in November and was down -13.37% YTD.