Fund Update – January 2021

State Street Global Equity Fund

Nerves frayed across global markets through the latter part of January as ructions in a handful of heavily-shorted US small cap stocks stoked volatility and accentuated bubble fears. The extent and nature of the moves, as well as the impact on funds short the targeted names, stoked concerns around market resilience. From a sector perspective, Staples and Industrials fell the most while Energy and Health Care were the only positive sectors.

The State Street Global Equity Fund outperformed the broader index in January. From a sector perspective, good stock picking within IT and Staples were key contributors. This was partially offset by negative stock selection within Discretionary and having zero weight in Energy were key detractors. Currency hedging lost 0.2% as the AUD retraced 0.4c to $0.767. In January, we began to see some mean reversion of the extreme market environment over 2019 and 2020. As investors began to move away from betting on the ‘re-opening trade’ and focus more on fundamentals, we witnessed some outperformance of higher quality stocks.