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Active Quantitative Equity (AQE)

Fund Update – January 2023

2 min read

Equities rallied over January off the back of stabilising recessionary expectations and easing rate hike fears after a soft US Global Domestic Product (GDP) print. In a ‘risk-on’ month, investors are now pricing in significant probabilities of a soft landing in 2023 – supported by the rapid re-opening of China and lower gas prices in Europe. From a sector perspective, higher risk stocks in Discretionary, Communication Services and IT were the top performers. On the other hand, defensive sectors such as Health Care, Utilities and Staples ended the month in the red.


The State Street Global Equity Fund underperformed the MSCI World ex Australia Index during January.1 From a country and sector perspective, being overweight US Health Care, and negative stock selection within US Discretionary and US Staples were key detractors from relative performance. On the other hand, good stock picking within UK Staples and US Energy were key contributors. Currency hedging added +2.2% during the month as the AUD appreciated against the USD.

Notable changes during the month:

During December, 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 Staples (food manufacturing and retailing on the back of attractive valuations) and Mining (Rio Tinto on balance of risk return opportunities). At the same time, we reduced our exposure to select Health Care names, with Swiss pharmaceutical company Roche being a notable sell. Roche is experiencing falling Sentiment as outlook has been worse than expected.