Fund Update – January 2021

State Street Australian Equity Fund

The S&P/ASX 300 Index eked out a small gain of 0.3% in January. In contrast to the recent trend, large caps were the outperformers. Banks were solid performers during the month, rising ~4%. The spike in bond yields after the US democrats won the Senate seats in Georgia supported gains near the start of the month. Since then, yields have fallen back a little, but the macro backdrop appears supportive of higher yields in 2021. Discretionary and Communication Services also outperformed. On the other hand, real estate was the worst performing sector, likely due to the rise in bond yields.

 The State Street Australian Equity Fund underperformed its benchmark during January after fees. From a sector perspective, our lower than benchmark weight in Financials (not holding the big 4 banks) was a key detractor. Negative stock selection within Materials also detracted from relative performance. On the other hand, good stock picking within Health Care (not holding CSL, Fisher & Paykel Healthcare, Sonic Healthcare) and Communication Services (Telstra) were key value adds.