Fund Update - March 2021

State Street Australian Equity Fund

The S&P/ASX 300 Index rose +2.3% in March 2021, underperforming global developed market equities. Large caps led the market higher again, with the S&P/ASX 50 Index up 1.8% compared to a 0.2% increase in the S&P/ASX Small Ordinaries Index. The US 10-year yield rose nearly 28bps in March, driven by an increase in real yields. In contrast, Australia’s 10-year yield fell ~10bps, supporting yield sensitive sectors like Utilities, Discretionary and REITs. Metals & Mining was the worst performing sector, in part due a slowdown in China’s economic expansion and concerns about high iron ore prices.

The State Street Australian Equity Fund outperformed its benchmark during March after fees. From a sector perspective, outperformance was largely driven by good stock picking within Health Care (Sonic, Ansell and Fisher & Paykel Healthcare), Staples (Select Harvests and Coles), Industrials (Brambles and Aurizon) and an overweight position in Utilities. Many of our outperformers in March were previously lagging the broader market (post-vaccine announcement), but have bounced back during the month as the junk / risk-on rally lost steam.