Fund Update - February 2021

State Street Australian Equity Fund


The S&P/ASX 300 Index rose +1.5% in February 2021, underperforming global developed market equities. A strong reporting season which supported market returns in the first 2 weeks was offset in the second half by the Australian 10 year bond yield rising 79bps (to 1.88%). The rising bond yield dragged down long duration growth names (particularly in Tech) while Value sectors like Materials, Financials and Energy continued to outperform during the month.

The State Street Australian Equity Fund underperformed its benchmark
during February after fees. While our preference for cheaper names contributed towards performance, it was more than offset by the broader impacts of the risk-on rally and rising bond yields. From a sector perspective, stock selection within Health Care, Utilities and Staples were key detractors. Having a lower than benchmark weight towards cyclical names within Financials and Metals & Mining further detracted from relative performance. On the other hand, having a lower than benchmark exposure to IT and Discretionary added some relative value.