Australian stocks rose during reporting season, with the S&P/ASX 300 Index up +2.6% in August. Performance was led by Technology, Defensive Staples and Health Care sectors. Mining was the worst performing sector due to a 25% fall in iron ore prices. Given rising vaccination rates and a shift in political rhetoric in favour of living with COVID-19, the market appears to be largely looking through COVID-19 driven downgrades which happened during reporting season.

The State Street Australian Equity Fund underperformed its benchmark during August after fees. From a sector perspective, the underperformance in August was largely driven by our lower than benchmark exposure to IT (not holding Afterpay and Wisetech) and Financials, as well as negative stock selection within Discretionary (Harvey Norman & not holding Dominos). On the other hand, overweight positions within Energy and Staples added a combined 41bps towards relative performance.