Fund Update - July 2021

State Street Australian Equity Fund


The S&P/ASX 300 Index rose +1.1 % in July 2021. The increasing spread of the Covid-19 delta variant and the widespread lockdowns dampened growth expectations in July. Bond yields retracted globally, with the Australian 10-year bond yield declining 23bps to 1.18%. Commodity prices moderated, while sectors least impacted by the slowing domestic growth outperformed. Globally orientated Materials sector was the best performer during July, while more resilient staples and utilities also outperformed. On the other hand, Information Technology, Energy and Financials were the worst performers.

The State Street Australian Equity Fund outperformed its benchmark during July after fees. From a sector perspective, the outperformance was driven by a combination of being overweight in the more defensive stocks within Staples (Coles, Woolworths and Select Harvest) and Healthcare (Resmed and Sonic), as well as not owning the big four Banks and expensive Tech (namely Afterpay). On the other hand, negative stock selection within Metals & Mining ex Gold (lower exposure to BHP) and Real Estate were key detractors from relative performance.