Active Quantitative Equity (AQE)

Fund Update – August 2022



Global equities struggled in August, as hawkish commentary from the Fed’s annual Jackson Hole symposium softened investor sentiment. Commodity prices fell after a de-escalation in Iraq stabilized oil exports. From a sector perspective, the Consumer Discretionary, IT and Industrials sectors relatively outperformed while Communication Services, Health Care and Consumer Staples sectors underperformed.

Attribution:

The State Street Global Equity Fund outperformed the MSCI World ex Australia Index during August.1 From a country and sector perspective, good stock picking within US Staples, US Tech and Japanese Industrials were key contributors. On the other hand, negative stock selection within US Financials, US Communication Services and UK Staples were key detractors from relative performance. The dynamic currency hedging overlay detracted 0.8% during the month largely due to a stronger USD (vs AUD).

Notable changes during the month:

During the month, we marginally increased our allocation to select Materials and Energy names as part of regular rebalancing – including Oil companies Marathon Petroleum and Canadian Natural Resources, as well as Agricultural chemical company Corteva. At the same time, we have decreased some of our positions in Financials – such as consumer finance company Capital One Financial and private equity firm Blackstone, mainly as a result of falling Quality scores and overall portfolio construction considerations.