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Active Quantitative Equity (AQE)

Fund Update – August 2023

2 min read

Australian equities were soft in August, weighed down by lackluster guidance from companies during reporting season. Cyclical sectors on average delivered better than expected results, while defensives were more likely to disappoint – notably Healthcare. Company updates generally point to further deterioration in consumer spending trends in the 2H23, although the weaker outlook have largely not come as a surprise to many. From a sector perspective, Consumer Discretionary, REITs and Energy outperformed while Utilities, Staples and Industrial sectors were the worst performe


The State Street Australian Equity Fund underperformed the S&P/ASX 300 Index during August1, as reporting season results dominated relative returns of individual stocks. Sector wise, negative stock selection in defensives - Health Care (Resmed), Communication Services (Chorus), Staples and REITs were the key detractors. Conversely, our lower than benchmark exposure to Metals & Mining (underweight BHP) and good stock picking within Financials (Medibank Private) were the key contributors.

Notable changes during the month:

We implemented minimal turnover in August, resulting in a slight increase in overall exposure to Health Care and Financials, funded by small reductions in Communication Services and Energy. We increased our Pharmaceutical exposure via Sigma Healthcare on the back of robust growth, attractive quality and valuation scores. At the same time, we reduced our exposure to telecom provider Spark New Zealand and coal miner New Hope Corp following some deterioration in their sentiment scores.