Fund Update – June 2023
The global economy expanded in the second quarter, but the momentum slowed in June as activity in the services sector grew more slowly than in previous months. Services in the United States (US) remained the key driver, while elsewhere its momentum slowed. The job market continued to remain tight. Inflation peaked but remained well above the central bank’s target levels.
Attribution:
The State Street Global Equity Fund outperformed the MSCI World ex Australia Index during June1. At the factor level, stock selection was positively impacted by performance of our Value factor whereas the more defensively geared Sentiment and Quality came in flat. From a country and sector perspective, being underweight within Consumer Staples and Healthcare sectors in the US were key detractors. On the other hand, good stock picking within Japanese Industrials and US IT were key contributors towards relative performance. Currency hedging contributed +1.47% during the month.
Notable changes during the month:
During June, 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 IT Consulting & Other Services industry within Information Technology (notably NEC Corp. on the back of improving Quality score) and American Technology company Dell Technologies, on the back of strong Catalyst and Quality scores. At the same time, we reduced our exposure to select Packaged Foods & Meats companies General Mills, Inc., Hershey Company and Conagra Brands, Inc., on the back of falling Sentiment scores.