Fund Update - February 2021

State Street Global Equity Fund


Global markets rose +2.7% in February 2021 despite having pulled back towards the end of the month as global bond yields rose. Despite parallels being quickly drawn with the 2013 ‘taper tantrum’ and 1994 ‘bond market massacre’, much of the market turmoil in the last week of February was put down to issues with bond market microstructure and liquidity, rather than to changes in fundamental drivers. From a sector perspective, Energy and Financials were key outperformers while Staples, Utilities and Health Care ended the month in red.

The State Street Global Equity Fund underperformed the broader index (MSCI World ex Australia TR Index) in February, as the risk-on sentiment and favoured riskier, more cyclical names. From a sector perspective, good stock picking within Discretionary was more than offset by our lower than benchmark weight in Financials, and negative stock selection within Communication Services, Staples and Health Care. Currency hedging added 0.5% as the AUD rose against the USD on the back on strong commodity prices.