Fund Update – October 2023
Global equity markets declined for the third consecutive month, as broad-based weakness continued to underscore markets. Equities fell globally as prospects of higher-for-longer rates hurt multiples and the Israel-Hamas conflict dampened investor sentiment.
Attribution:
The State Street Global Equity Fund underperformed the MSCI World ex Australia Index during October.1 Our Alpha model performance was strong in October, with positive contribution from Sentiment factors followed by Catalyst, and Quality. Conversely, Value factors detracted from relative returns. From a country and sector perspective, underweight exposure US Information Technology and poor stock selection within Japan Information Technology sectors were the key detractors. On the other hand, good stock picking within US Health Care and US industrials sectors were key contributors towards relative performance. Currency hedging detracted -1.31 % during the month.
Notable changes during the month:
During October, 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 Independent Power Producers & Energy Traders (notably Vistra Corp. on the back of increasing Sentiment and Quality scores) and Multi Utilities company Centrica plc on the back of improving Sentiment score. At the same time, we reduced our exposure to Integrated Telecommunication Services companies – such as Nippon Telegraph and Telephone Corporation and AT&T Inc. on the back of falling Value scores.