Systematic Equity Active (SEA)

Fund Update – January 2024

21 February 2024 5 min read

Global economic activity started 2024 on a strong footing, with performance of both Service and Manufacturing sectors improving. Data showed that the US and European economies diverged from each other further with Europe’s economy stagnating, while the US expanding in the last quarter of 2023. Labor market remained firm, while inflation moved slightly higher. Major central banks left policy rates unchanged in their first policy meetings of 2024 and signaled that rate cuts look less likely in the first quarter.

Attribution:

The State Street Global Equity Fund underperformed the MSCI World ex Australia Index during January.¹ Our Alpha model performance was up in January, with positive contribution from Sentiment factors followed by Catalyst, Quality and Value. From a country and sector perspective, good stock picking within US Consumer Discretionary and Japan Industrials sectors were key contributors towards relative performance. On the other hand, poor stock selection in US IT and UK Consumer Staples sectors were the key detractors. Currency hedging detracted -2.17 % during the month.

Notable changes during the month:

During January, 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 Oil & Gas Refining & Marketing industry within Energy sector, notably Marathon Petroleum Corporation on the back of increasing Quality score and Phillips 66, on the back of improving Sentiment score. At the same time, we reduced our exposure to Communications Equipment company – such as Juniper Networks, Inc. on the back of falling Value and Sentiment scores.

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Footnotes

Disclosure

Issued by State Street Global Advisors, Australia Services Limited (AFSL Number 274900, ABN 16 108 671 441) (“SSGA, ASL”). Registered office: Level 14, 420 George Street, Sydney, NSW 2000, Australia · Telephone: +612 9240-7600 · Web: www.ssga.com. State Street Global Advisors, Australia, Limited (AFSL Number 238276, ABN 42 003 914 225) (“SSGA Australia”) is the Investment Manager.

For Institutional / Professional Investors use only.

References to the State Street Global Equity Fund ("the Fund") in this communication are references to the managed investment schemes domiciled in Australia, promoted by SSGA Australia, in respect of which SSGA, ASL is the Responsible Entity. This general information has been prepared without taking into account your individual objectives, financial situation or needs and you should consider whether it is appropriate for you. You should seek professional advice and consider the product disclosure statement available at www.ssga.com/au, before deciding whether to acquire or continue to hold units in the Funds. The Target Market Determination is also available at ssga.com/au.

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.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.

This information should not be considered a recommendation to buy or sell any security or sector shown. It is not known whether the securities or sectors shown will be profitable in the future. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

Characteristics are as of the date indicated, subject to change, and should not be relied upon as current thereafter.

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.

Investing involves risk including the risk of loss of principal.

References to specific company stocks should not be construed as recommendations or investment advice. The statements and opinions are subject to change at any time, based on market and other conditions.

Equity securities may fluctuate in value and can decline significantly in response to the activities of individual companies and general market and economic conditions.

Currency Risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.

The "Value" style of investing that emphasizes undervalued companies with characteristics for improved valuations, which may never improve and may actually have lower returns than other styles of investing or the overall stock market.

The MSCI World ex Australia Unhedged (AUD) is a trademark of MSCI Inc. MSCI indices are the exclusive property of MSCI Inc. ("MSCI"). MSCI and the MSCI index names are service mark(s) of MSCI or its affiliates and have been licensed for use for certain purposes by State Street Global Advisors ("SSGA"). The financial securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such financial securities. No purchaser, seller or holder of this product, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote this product without first contacting MSCI to determine whether MSCI's permission is required. Under no circumstances may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI.

This communication is directed at institutional and wholesale clients only. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) are not entitled to rely on this communication.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA Australia’s express written consent.

Adtrax Code: 6400045.1.1.ANZ.INST
Expiry Date: 28/02/2025