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.
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.
1Source: SSGA as of 31 August 2022. Past performance is not a reliable indicator of future performance. Performance returns for periods of less than one year are not annualized. The performance figures contained herein reflect Total Returns and are provided on a net of fees basis. Performance figures are calculated using end-of-month exit prices and assume the reinvestment of distributions and make no allowance for tax. Net performance figures are after management and transaction costs. 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 as applicable.
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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.
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You should seek professional advice and consider the Product Disclosure Statement (PDS) and target market determination, available at www.ssga.com, before deciding whether to acquire or continue to hold units in the Funds.
You can access our PDS online or by calling us. The offer made in our PDS is available to persons receiving the PDS within Australia and applications from outside Australia will not be accepted. Past performance is not a reliable indicator of future performance. Investing entails risks and there can be no assurance that State Street Global Advisors will achieve profits or avoid incurring losses.
Investing involves risk including the risk of loss of principal. 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. Performance quoted represents past performance, which is not a reliable indicator of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.