Global equities rose +4.7% in AUD terms in June 2021. At the mid-point of the year, global vaccination rates continued to climb, and reflation and rotation (from growth to value) has been well under way. However, the Fed’s hawkish turn mid-June appears to have put a break on recent trends – with a sharp rotation in sector leadership caused by a flattening yield curve and a stall in the Value rally. While this may appear alarming to some, we expect this rotation to be largely fleeting in nature. Ongoing economic recovery, yield curve action, valuations and company fundamentals will be key drivers of returns going forward; we see that as supportive for the value stocks in 2H2021.
The State Street Global Equity Fund underperformed the broader index (MSCI World ex Australia TR Index) in June. The underperformance was largely driven by our lower than benchmark weight in US tech (including communication services), our overweight to US Staples, as well as negative stock selection in US Health Care. On the other hand, good stock picking within Japanese and US Industrials were key contributors towards relative performance. Currency hedging detracted 1.2% from returns during the
month as the AUD depreciated 3% against the USD to $0.75.
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 document and target market determination, available at www.ssga.com, before deciding whether to acquire or continue to hold units in the Funds.
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.
Source: Bloomberg Finance, L.P., SSGA as at 30 June 2021. Past performance is not a reliable indicator of future performance. 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. 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. 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 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.
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.
© 2021 State Street Corporation - All Rights Reserved
Adtrax Code: 3660338.1.1.ANZ.INST
Expiry: 31 July 2022