Fund Update - May 2021

State Street Global Equity Fund

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.