Fund Update – February 2024
Global economic activity accelerated in February, with both the service and manufacturing sectors growing and manufacturing business conditions improving. The US and European economies diverged from each other further with Europe’s manufacturing activity contracting at a faster rate, driven largely by Germany. Labor market continued to remain strong, while inflation data surprised to the upside.
Attribution:
The State Street Global Equity Fund underperformed the MSCI World ex Australia Index during February1. Our Alpha model performance was up in February, with positive contribution from Sentiment factors followed by Catalyst. Conversely, Quality and Value were down for the period. From a country and sector perspective, good stock picking within US Utilities and US Consumer Staples sectors were key contributors towards relative performance. On the other hand, poor stock selection in US IT and UK Communication Services sectors were the key detractors. Currency hedging detracted -1.02 % during the month.
Notable changes during the month:
During February, we made minor adjustments to the overall portfolio with the aim of improving expected risk-adjusted returns. The rebalance involved slightly increasing our exposure to select names in the Life & Health Insurance industry within Financial sector, notably Prudential Financial Inc. on the back of increasing Sentiment and Catalyst scores. At the same time, we reduced our exposure to Packaged Foods & Meats companies – such as Conagra Brands, Inc. and Hershey Company, on the back of falling Quality and Catalyst scores.