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Active Quantitative Equity (AQE)

Fund Update – May 2023

2 min read

Australian equities fell in May, as the RBA's hawkish tone resumed and concerns lingered around US lawmakers intentions on the country's debt ceiling. The RBA surprised the market with a 25bps hike during the month, while the Fed hiked by the same amount. From a style perspective, Growth stocks outperformed Value stocks, driven by strong returns from Technology. At the sector level, Australian Technology names rose alongside their US counterparts. On the other hand, Discretionary was the worst performing sector – driven by Wesfarmers as they called out consumer pressure at their investor day while smaller retailers signalled a weakening in consumer spending.


The State Street Australian Equity Fund performed in-line with the S&P/ASX 300 Index during May.1 Sector wise, good stock picking within Industrials (Fletcher Building and Aurizon) and Discretionary (being underweight Wesfarmers) were the biggest contributor towards relative performance. Conversely, negative stock selection within Real Estate (Vicinity Centres) and having a higher than benchmark exposure to Staples were the key relative detractors.

Notable changes during the month:

During the month of May, we marginally increased our Discretionary exposure via Super Retail, funded by slightly reducing our exposure to Telstra and Brambles (both have now reached their upper weight limit in the portfolio). The upweight in Super Retail was driven by the stock’s strong momentum signals, and its attractive valuations – which looks cheap relative to the broader index.