- Global financial markets had strong positive performance in October across the board. The developed and emerging market equity index (MSCI ACWI IMI) increased +5.10% in October and was up +16.79% YTD. The S&P 500, which tracks large cap U.S. stocks, was up +7.01% in October and up +24.04% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +4.25% in October and +17.19% YTD. The international developed equity index (MSCI EAFE) increased by +2.46% in October and +11.01% YTD. The emerging markets index (MSCI EM) increased by 0.99% in October and decreased -0.27% YTD.
- In October longer-term bond yields were mixed: the 30-year U.S. Treasury bond yield decreased by –15 bps to 1.93%; the 10-year yield increased by +3 bps to 1.55%; and the 5-year yield increased by +20 bps to 1.18%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, decreased by -0.03% in October and -1.58% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the third quarter of 2021 increased +2.0%, according to the “Advance” estimate released by the Bureau of Economic Analysis. GDP in the second quarter of 2021 increased by +6.7%.
- The October Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 66.7% from 61.9% in October, which represents expansion at a higher rate and above the market expectations of 62%. The October Manufacturing PMI decreased to 60.8% from September’s 61.1%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion.
- October non-farm employment increased by 531,000 jobs, and the unemployment rate decreased to 4.6%, as reported by the Bureau of Labor Statistics on November 5. In October, employment increased in leisure and hospitality, professional and business services and manufacturing, as well as in transportation and warehousing. Average Hourly Earnings (wages) increased +4.9% year-over-year in October.
UCF FUND PERFORMANCE UPDATES
- In October, the Total Equity Fund increased by +4.62% and was up +15.78% YTD. The International Equity Fund increased by +2.08% in October and was up +7.39% YTD. The Small Cap Equity Fund increased by +4.80% in October and was up +15.34% YTD. The Fixed Income Fund decreased by -0.10% in October and was down -1.60% YTD.
- The equity managers that outperformed their respective benchmarks in October were SSGA, Westfield, Blackrock, Channing and Baillie Gifford. The managers that underperformed the benchmarks in October were QMA, LSV and RBC.
- The Balanced Funds’ performance was mostly in line with their benchmarks. The Moderate Balanced Fund, UCF’s most popular fund, increased by +2.93% in October and is up +9.10% YTD. The Aggressive Balanced Fund was up +3.60% in October and is up +11.70% YTD. The Conservative Balanced Fund was up +1.76% in October and is up +4.80% YTD. The Alternatives Balanced Fund was up +3.26% in October and is up +11.05% YTD. Finally, the Beyond Fossil Fuels Balanced Fund increased by +2.79% in October and is up +11.36% YTD.