MARKETS:
- Global equity markets continued their positive rally from the previous month, led by emerging markets, as China showed a strong rebound on the back of stimulus measures by the government. The global equity index (MSCI ACWI IMI) increased +2.32% in September and was up +18.66% YTD. The S&P 500, which tracks large cap U.S. stocks, increased +2.14% in September and was up +22.08% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, increased +0.70% in September and was up +11.17% YTD. The international developed equity index (MSCI EAFE) increased +0.92% in September and was up +12.99% YTD. The emerging markets index (MSCI EM) increased +6.68% in September and was up +16.86% YTD.
- In September, bond yields decreased across maturities. The 30-year U.S. Treasury bond yield decreased –6 bps to 4.14%; the 10-year yield decreased –10 bps to 3.81%, and the 2-year yield decreased -25 bps to 3.66%.
- The Barclays U.S. Aggregate Index, which is a measure of U.S. bond prices, increased +1.34% in September and was up +4.45% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- U.S. gross domestic product (GDP) in the second quarter of 2024 increased +3.0%, according to the “Third” estimate released by the Bureau of Economic Analysis. In the first quarter of 2024 GDP increased +1.6%.
- The September Services PMI increased to 54.90% from 51.50% in August. This represents expansion and is higher than market expectations of 51.70%. The September Manufacturing PMI remained unchanged at 47.20%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion, and below 50 is considered economic contraction.
- September non-farm employment increased by 254,000 jobs, and the unemployment rate decreased to 4.1%, as reported by the Bureau of Labor Statistics on October 4. In September, employment increased in food services, health care, government, social assistance and construction. Average Hourly Earnings (wages) increased +4.0% year-over-year in September.
PERFORMANCE UPDATES
- The Total Equity Fund increased +2.26% in September and was up +16.59% YTD. The International Equity Fund increased +3.01% in September and was up +12.11% YTD. The Small Cap Equity Fund increased +1.02% in September and was up +11.50% YTD. The Fixed Income Fund increased +1.47% in September and was up +4.90% YTD.
- Equity managers’ performance was mixed during the month, and the managers that outperformed their respective indices included Xponance, Westfield, Blackrock, Channing, Ballie Gifford and RBC, while the managers that underperformed their benchmarks included PGIM’s domestic and international quantitative strategy and LSV.
- The UCF Balanced Fund, UCF’s most popular fund, underperformed its benchmark, returning +1.87% in September, and was up +11.80% YTD. The Alternatives Balanced Fund increased +1.37% in September and was up +11.26% YTD. Finally, the Beyond Fossil Fuels Balanced Fund outperformed its benchmark, returning +1.64% in September, and was up +14.85% YTD.