Global equities rose +1.2% in AUD terms during May 2021, as Covid vaccine roll-outs continued. US economic momentum showed further signs of acceleration on the back of reopening and vaccine roll-outs. Corporate earnings reflected the economic vigour, with Q1 earnings on track to be the strongest in over a decade. At the sector level, the outperformance of financials and energy along with poor returns from Technology and Utilities is consistent with a market positioning for inflation and rising bond yields. This is despite the fact that bond yields were little changed over the month.
The State Street Global Equity Fund outperformed the broader index (MSCI World ex Australia TR Index) in May. The outperformance was largely driven by good stock picking within Discretionary, Health Care and Communication Services. On the other hand, having a lower than benchmark weight in Energy and Financials were key detractors from relative performance. Currency hedging detracted 8bps from returns during the month, but
has added 2.8% YTD.
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Source: Bloomberg Finance, L.P., SSGA as at 31 May 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.
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