MARKETS:
- Inflationary pressure in fuel prices coinciding with a 25 bps Fed rate hike weighed down stock market performance for the month of September, especially in the financials, materials and real estate sectors. The global equity index (MSCI ACWI IMI) decreased -1.41% in September and was up +12.97% The S&P 500, which tracks large cap U.S. stocks, decreased -0.35% in September and was up +12.75% YTD. The Russell 2000 Index, which tracks domestic small cap stocks, decreased -5.25% in September and was up +13.71% YTD. The international developed equity index (MSCI EAFE) decreased -3.05% in September and was up +10.33% YTD. The emerging markets index (MSCI EM) decreased -0.56% in September and was up +23.38% YTD.
- In September, rates increased across the curve. The 30-year U.S. treasury bond yield increased +39 bps to 5.64%; the 10-year yield increased +54 bps to 5.29%, and the 2-year yield increased +54 bps to 4.88%. The Bloomberg U.S. Government Credit Index, a proxy for the U.S. fixed income market, decreased -2.40% in September and was down -2.85% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
- According to the Bureau of Economic Analysis, the third estimate for U.S. real gross domestic product (GDP) increased in the second quarter of 2026 by +2.2%, down from the first quarter 2026 increase of +2.5%.
- The September Services PMI was 54.9%, a decrease of -0.5% from August. The September Manufacturing PMI was 54.5%, down -0.1% from August. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion, and below 50 is considered economic contraction.
- As reported by the Bureau of Labor Statistics on October 2, September non-farm employment increased by 29,000 jobs, while the unemployment rate ticked up to 4.2%. In September, employment in all major industries changed little month-over-month, with small increases in healthcare, construction and manufacturing. There were minor decreases in financial activities employment. Average Hourly Earnings (wages) increased by 3.0% year-over-year.
PERFORMANCE UPDATES
- The Total Equity Fund decreased -1.78% in September and was up +12.75% The International Equity Fund decreased -2.47% in September and was up +13.16% YTD. The Small Cap Equity Fund decreased -5.32% in September and was up +12.14% YTD. The Fixed Income Fund decreased -2.86% in September and was down -3.17% YTD.
- Equity managers that outperformed in the month included BlackRock, LSV Asset Management, RBC Emerging Market Fund and BFF Global; while Westfield Capital, Channing Capital and Baillie Gifford underperformed.
- The UCF Balanced Fund decreased -2.14% in September and was up +6.48% The Alternatives Balanced Fund decreased -1.21% in September and was up +8.83% YTD. Finally, the Beyond Fossil Fuels Balanced Fund decreased -1.56% in September and was up +7.47% YTD.