MARKETS:
- Global equity markets turned negative in the month, reversing the positive rally from the previous month in anticipation of the U.S. Presidential election and Federal Reserve rate decisions. The global equity index (MSCI ACWI IMI) decreased -2.24% in October and was up +16.00% YTD. The S&P 500, which tracks large cap U.S. stocks, decreased -0.91% in October and was up +20.97% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, decreased -1.44% in October and was up +9.56% YTD. The international developed equity index (MSCI EAFE) decreased by –5.44% in October and was up +6.85% YTD. The emerging markets index (MSCI EM) decreased -4.45% in October and was up +11.66% YTD.
- In October, bond yields increased across maturities. The 30-year U.S. Treasury bond yield increased +33 bps to 4.47%; the 10-year yield increased +47 bps to 4.28%, and the 2-year yield increased by 50 bps to 4.16%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, decreased -2.48% in October and was up +1.86%
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the third quarter of 2024 increased +2.8%, according to the “Advance” estimate released by the Bureau of Economic Analysis. In the second quarter of 2024, GDP increased +3.0%.
- The October Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 56.00% from 54.90% in September. This represents expansion and is higher than market expectations of 53.80%. The October Manufacturing PMI declined to 46.50% from 47.20% in September. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion, and below 50 is considered economic contraction.
- October non-farm employment increased by 12,000 jobs, and the unemployment rate was unchanged at 4.1%, as reported by the Bureau of Labor Statistics on November 1. In October, employment increased in health care and government. Average Hourly Earnings (wages) increased +4.0% year-over-year in October.
PERFORMANCE UPDATES
- The Total Equity Fund decreased -2.71% in October and was up +13.42% YTD. The International Equity Fund decreased -5.39% in October and was up +6.06% YTD. The Small Cap Equity Fund decreased -1.65% in October and was up +9.66% YTD. The Fixed Income Fund decreased -2.39% in October and was up +2.39% YTD.
- Equity managers’ performance was weak during the month, with only Channing outperforming, while all other managers were either in line with or behind their respective benchmarks.
- The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark, returning -2.50% in October, and was up +9.00% YTD. The Alternatives Balanced Fund decreased -1.35% in October and was up +9.75% YTD. Finally, the Beyond Fossil Fuels Balanced Fund underperformed its benchmark, returning -2.44% in October, and was up +12.05% YTD.