Active Quantitative Equity (AQE)

Fund Update – November 2023

28 December 2023 2 min read

Australian equities rose in November, lifted by a strong rebound in Healthcare stocks. Softer economic data, ongoing disinflation and expectations of peak interest rates in Australia saw a sharp fall in bond yields – reversing the valuation headwinds of recent months. From a sector and industry perspective, the fall in bond yields were a major tailwind for the top two performing sectors Health Care and Real Estate. On the other hand, Energy was the worst performing sector; driven by a decline in oil and gas prices that has occurred despite ongoing geopolitical conflict in the Middle East

Attribution:

The State Street Australian Equity Fund underperformed the S&P/ASX 300 Index during November.¹ Sector wise, being underweight Health Care names (CSL) and overweight Staples (Coles, Metcash) were key detractors from relative performance. Conversely, good stock picking within Energy (Woodside) and Metals & Mining ex Gold (South32) were key contributors.

Notable changes during the month

We implemented a small amount of turnover in November, resulting in a slight increase in overall exposure to Staples and Industrials, funded by small reductions in Real Estate. Within Staples, we once again increased our weight in agribusiness Graincorp on the back of highly attractive quality, valuation and risk scores. At the same time, we reduced our exposure to shopping centre operator Vicinity Centres - which is looking increasingly risky due to rising debt costs, cap rates and sharply slowing quarterly sales growth (a key leading indicator for medium term operating income). These have been translating to notably lower sentiment scores and stock prices.

Download Performance & Attribution Report

Footnotes

Disclosure

Issued by State Street Global Advisors, Australia Services Limited (AFSL Number 274900, ABN 16 108 671 441) (“SSGA, ASL”). Registered office: Level 14, 420 George Street, Sydney, NSW 2000, Australia · Telephone: +612 9240-7600 · Web: www.ssga.com. State Street Global Advisors, Australia, Limited (AFSL Number 238276, ABN 42 003 914 225) (“SSGA Australia”) is the Investment Manager

For Institutional / Professional Investors use only.

References to the State Street Australian Equity Fund ("the Fund") in this communication are references to the managed investment schemes domiciled in Australia, promoted by SSGA Australia, in respect of which SSGA, ASL is the Responsible Entity. This general information has been prepared without taking into account your individual objectives, financial situation or needs and you should consider whether it is appropriate for you. You should seek professional advice and consider the Product Disclosure Statement and Target Market Determination, available at www.ssga.com, before deciding whether to acquire or continue to hold units in the Funds.

This material should not be considered a solicitation to apply for interests in the Funds and investors should obtain independent financial and other professional advice before making investment decisions. There is no representation or warranty as to the currency or accuracy of, nor liability for, decisions based on such information.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.

This information should not be considered a recommendation to buy or sell any security or sector shown. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. It is not known whether the securities or sectors shown will be profitable in the future. Characteristics are as of the date indicated, subject to change, and should not be relied upon as current thereafter.

Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss and the reinvestment of dividends and other income.

References to specific company stocks should not be construed as recommendations or investment advice. The statements and opinions are subject to change at any time, based on market and other conditions.

Investing involves risk including the risk of loss of principal.

Diversification does not ensure a profit or guarantee against loss.

Equity securities may fluctuate in value and can decline significantly in response to the activities of individual companies and general market and economic conditions.

This communication is directed at institutional and wholesale clients only. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) are not entitled to rely on this communication.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA Australia’s express written consent.

Adtrax Code: 6176052.1.1.ANZ.INST

Expiry Date: 31/12/2024