Insights

Liquidity Fund Monthly

16 November 2023

MARKET VOLATILE PICKS UP

October proved a difficult month as the global geopolitical environment deteriorated with the Hamas attack on Israel. As worries mounted about an escalation in violence and the potential for other parties to get involved, investor sentiment appeared rattled. Oil prices spiked in the immediate aftermath before partially retreating, while gold prices rallied. Diminished risk appetite was most evident in a broad equity market sell-off.

A significant driver of markets continues to be central bank policy and the resilient nature of US data releases renewed speculation that the Fed will persist with high interest rates for longer. The situation was somewhat different in the euro area where weaker-than-expected data and a downside inflation surprise underpinned gains for eurozone sovereign bonds. UK bonds were weaker as inflation remained stubbornly high.

In many cases, short-term market rates ended the month largely unchanged from their starting positions, reflecting expectations that neither policy rate hikes nor cuts are deemed especially likely in the next few months.

State Street EUR Liquidity LVNAV Fund

European Central Bank: The ECB Governing Council left policy rates unchanged in October, as expected.

Market Rates: One-month EURIBOR rose to 3.88% from 3.85%, while the 12-month rate fell to 4.05% from 4.23%. *

Macro: Headline annual inflation fell more than expected to 2.9% in October from 4.3%, with the core rate dropping to 4.2% from 4.5%.

ECB Deposit Facility Rate: 4.00%
1-month Fund Yield (Gross): 3.96%
1-month Fund Yield (Net): 3.81%**

Factsheet

State Street GBP Liquidity LVNAV Fund

Bank of England: In the absence of a Monetary Policy Committee meeting, rates were unchanged in October.

Market Rates: The 1-month ICE Term SONIA rate was barely changed at 5.21%, with the 12-month rate down to 5.27% from 5.45%. *

Macro: Annual CPI inflation was stable at 6.7% in September, a touch higher than expected, while the core rate ticked down to 6.1% from 6.2%.

Bank Base Rate: 5.25%
1-month Fund Yield (Gross): 5.41%
1-month Fund Yield (Net): 5.21%**

Factsheet

State Street USD Liquidity LVNAV Fund

Federal Reserve: The Federal Open Market Committee did not meet in October; hence, the federal funds rate was unchanged.

Market Rates: The 3-month US Treasury Bill yield ended the month at 5.48%, up from 5.46%. The 12-month yield was unchanged at 5.47%. *

Macro: US headline annual CPI inflation was steady at 3.7% for a second month, although the core rate — which excludes energy and food — fell to 4.1% from 4.2%.

Fed Funds Target Rate: 5.25% - 5.50%
1-month Fund Yield (Gross): 5.63%
1-month Fund Yield (Net): 5.43%**

Factsheet

State Street USD Treasury Liquidity Fund

Federal Reserve: Although the Fed did not have a rate-setting meeting in October, its officials continued to flag that policy rates will likely remain high for longer than markets are pricing.

Market Rates: Yields on short-dated securities moved little in October – the 1-month US Treasury Bill yield edged up 3bps to 5.40% in the month. *

Macro: Core Personal Consumption Expenditures (PCE), the Fed’s preferred inflation measure, fell from 3.8% to 3.7% in September.

Fed Funds Target Rate: 5.25% - 5.50%
1-month Fund Yield (Gross): 5.44%
1-month Fund Yield (Net): 5.24%**

Factsheet

Footnotes

Disclosure

Marketing Communication
FOR PROFESSIONAL CLIENT USE ONLY. Not for use with the public.

Belgium: State Street Global Advisors Belgium, Chaussée de La Hulpe 185, 1170 Brussels, Belgium. T: +32 2 663 2036. State Street Global Advisors Belgium is a branch office of State Street Global Advisors Europe Limited, registered in Ireland with company number 49934, authorised and regulated by the Central Bank of Ireland, and whose registered office is at 78 Sir John Rogerson’s Quay, Dublin 2.

Germany: State Street Global Advisors Europe Limited, Branch in Germany, Brienner Strasse 59, D-80333 Munich, Germany ("State Street Global Advisors Germany"). T +49 (0)89 55878 400. State Street Global Advisors Germany is a branch of State Street Global Advisors Europe Limited, registered in Ireland with company number 49934, authorised and regulated by the Central Bank of Ireland, and whose registered office is at 78 Sir John Rogerson’s Quay, Dublin 2. www.ssga.com

Ireland: State Street Global Advisors Europe Limited is regulated by the Central Bank of Ireland. Registered office address 78 Sir John Rogerson’s Quay, Dublin 2. Registered Number: 49934. T: +353 (0)1 776 3000. F: +353 (0)1 776 3300. Web: www.ssga.com.

Netherlands: State Street Global Advisors Netherlands, Apollo Building 7th floor, Herikerbergweg 29, 1101 CN Amsterdam, Netherlands. T: +31 20 7181 000. State Street Global Advisors Netherlands is a branch office of State Street Global Advisors Europe Limited, registered in Ireland with company number 49934, authorised and regulated by the Central Bank of Ireland, and whose registered office is at 78 Sir John Rogerson’s Quay, Dublin 2. www.ssga.com

United Kingdom: State Street Global Advisors Limited. Authorised and regulated by the Financial Conduct Authority. Registered in England. Registered No. 2509928. VAT No. 5776591 81. Registered office: 20 Churchill Place, Canary Wharf, London, E14 5HJ. T: 020 3395 6000. F: 020 3395 6350.

Switzerland: State Street Global Advisors AG, Beethovenstr. 19, CH-8027 Zurich. Registered with the Register of Commerce Zurich CHE-105.078.458. T: +41 (0)44 245 70 00. F: +41 (0)44 245 70 16.

For Investors in UK - Pooled Funds:
The Company has been registered for distribution in the UK pursuant to the UK’s temporary permissions regime under regulation 62 of the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019. The Company is directed at 'professional clients' in the UK (within the meaning of the rules of the Financial Services and Markets Act 2000) who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description should not rely on this communication. Many of the protections provided by the UK regulatory system do not apply to the operation of the Company, and compensation will not be available under the UK Financial Services Compensation Scheme.

For Investors in Switzerland:
The collective investment scheme referred to herein is a collective investment scheme under Irish law. Prospective investors may obtain the current sales prospectus, the articles of incorporation, the simplified prospectuses as well as the latest annual and semi-annual report free of charge from the Swiss Representative and Paying agent, State Street Bank GmbH Munich, Zurich Branch, Beethovenstrasse 19, 8027 Zurich as well as from the main distributor in Switzerland, State Street Global Advisors AG, Beethovenstrasse 19, 8027 Zurich. Before investing please read the prospectus and the KID, copies of which can be obtained from the Swiss representative, or at www.SSGA.com or www.ssga.com.

Actively managed funds do not seek to replicate the performance of a specified index

The fund is actively managed and may underperform its benchmarks. An investment in the fund is not appropriate for all investors and is not intended to be a complete investment program. Investing in the fund involves risks, including the risk that investors may receive little or no return on the investment or that investors may lose part or even all of the investment.

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 views expressed in this material are the views of EMEA Portfolio Management Team through the period ended 31 October 2023 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Investing involves risk including the risk of loss of principal.

Past performance is not a reliable indicator of future performance.

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’s express written consent.

The above targets are estimates based on certain assumptions and analysis. There is no guarantee that the estimates will be achieved.

The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor's or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor.

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This communication is directed at professional clients (this includes eligible counterparties as defined by the appropriate EU regulator, or applicable Swiss regulator, who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) should not rely on this communication.

These investments may have difficulty in liquidating an investment position without taking a significant discount from current market value, which can be a significant problem with certain lightly traded securities.

Please refer to the Fund’s latest Key Information Document (KID)/Key Investor Information Document (KIID) and Prospectus before making any final investment decision. The latest English version of the prospectus and the KID/KIID can be found at www.ssga.com. A summary of investor rights can be found here: https://www.ssga.com/library-content/products/fund-docs/summary-of-investor-rights/ssga-investors-rights-summary-template-non-etf-Lux.pdf

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The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

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