State Street Global Equity (SST0050AU) Report & Performance

What is the State Street Global Equity fund?

State Street Global Equity aims to outperform the Benchmark over a full market cycle of approximately 5 – 7 years, with lower volatility than the Benchmark. It also seeks to mitigate currency risk associated with the Benchmark.

  • The Fund invests in listed global equities selected from the Benchmark and excludes companies, subject to materiality thresholds identified by MSCI, involved in tobacco and controversial weapons.
  • The Fund uses derivatives in the form of forward contracts to manage foreign currency exposure.
  • The Fund is intended to be suited to investors who: • Seek long term capital growth, but with a lower risk profile than the broader global equity market index; and • Are prepared to accept some volatility in investment returns.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For State Street Global Equity

State Street Global Equity Fund Commentary March 31, 2023

During February, value factors were additive to the Active Quantitative Equity (AQE) team’s portfolio performance in almost every region across equities. This prompted a series of questions for the team: Would the same observation be made for value style investing more generally? Would a fundamental manager with a value style and a concentrated portfolio also perform well? Not necessarily, we concluded. Stock selection always matters, though. When a factor performs “well” there is always nuance. The way the factor exposure transfers into portfolio holdings matters. Here we will highlight some of the results’ nuances and illustrate how those nuances could lead to decidedly different outcomes for portfolios.

On the face of it, February looked like a month where the performance of value versus growth was not meaningful. In fact, if one was to compare two well profiled market capitalizationweighted (cap-weighted) indices — The MSCI World Value Index (returning -2.92%) and the MSCI World Growth Index (returning -1.87%) — one would conclude that growth outperformed value. From a cap-weighted perspective this observation would be true. However, this picture is clouded by a small number of large, high-profile names, and if evaluated on a more diversified basis, value signals performed quite well.

Keeping in line with the cap-weighted approach that drives index performance, we can compare the market cap-weighted quintile spread return of Value using our proprietary signal. Although the top quintile or cohort of good value names did outperform the broad market, it underperformed the most expensive group by 1.8% (market cap-weighted spread or MC spread in Figure 1). Does this mean that value did underperform growth? Upon further evaluation, we would say no, actually. If we take a more diversified and uniform approach to evaluating the signal strength of Value using an equal-weighted approach, we discover a positive return for the month, up 1.2% (equal-weighted spread or EW spread in Figure 1).

READ HISTORICAL PERFORMANCE COMMENTARIES

Product Snapshot

  • Product Overview
  • Performance Review
  • Peer Comparison
  • Product Details

Product Overview

Fund Name APIR Code
? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.
Structure
?
Asset Class
? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.
Asset Category
? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.
Peer Benchmark Name
? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.
Broad Market Index
? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.
FUM
? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.
Management Fee
? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.
Performance Fee
? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.
Spread
? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
State Street Global EquitySST0050AUManaged FundsForeign EquityLarge Blend - QuantitativeForeign Equity - Large Quantitative IndexDeveloped -World Index264.00 M0.85%00.13%

Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
State Street Global Equity2.33%4.45%6.72%7.48%9.09%8%11.16%9.95%-4.58%-13.8%-15.57%

Peer Comparison

Fund Name Peer Index Name
? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.
12 Months Excess Return
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
Excess Return Annualised Since Inception
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
12 Months Alpha
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
Alpha Annualised Since Inception
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
12 Months Beta
? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Beta Annualised Since Inception
? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
12 Months Tracking Error
? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
Tracking Error Since Inception
? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
12 Months Correlation
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Correlation Since Inception
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
State Street Global EquityForeign Equity - Large Quantitative Index-9.92%-1.83%-0.85%-0.08%-0.08%0.995.35%4.11%0.770.92

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
State Street Global EquityYes-https://www.ssga.com/-

Product Due Diligence

What is State Street Global Equity

State Street Global Equity is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Quantitative Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The State Street Global Equity has Assets Under Management of 264.00 M with a management fee of 0.85%, a performance fee of 0 and a buy/sell spread fee of 0.13%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the State Street Global Equity has returned 2.33% in the last month. The previous three years have returned 7.48% annualised and 9.95% each year since inception, which is when the State Street Global Equity first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since State Street Global Equity first started, the Sharpe ratio is 0.77 with an annualised volatility of 9.95%. The maximum drawdown of the investment product in the last 12 months is -4.58% and -15.57% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The State Street Global Equity has a 12-month excess return when compared to the Foreign Equity - Large Quantitative Index of -9.92% and -1.83% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. State Street Global Equity has produced Alpha over the Foreign Equity - Large Quantitative Index of -0.85% in the last 12 months and -0.08% since inception.

What are similar investment products?

For a full list of investment products in the Foreign Equity - Large Quantitative Index category, you can click here for the Peer Investment Report.

What level of diversification will State Street Global Equity provide?

State Street Global Equity has a correlation coefficient of 0.92 and a beta of 0.99 when compared to the Foreign Equity - Large Quantitative Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on State Street Global Equity and its peer investments, you can click here for the Peer Investment Report.

How do I compare the State Street Global Equity with the Developed -World Index?

For a full quantitative report on State Street Global Equity compared to the Developed -World Index, you can click here.

Can I sort and compare the State Street Global Equity to do my own analysis?

To sort and compare the State Street Global Equity financial metrics, please refer to the table above.

Has the State Street Global Equity been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in State Street Global Equity?

If you or your self managed super fund would like to invest in the State Street Global Equity please contact via phone or via email .

How do I get in contact with the State Street Global Equity?

If you would like to get in contact with the State Street Global Equity manager, please call .

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the State Street Global Equity. All data and commentary for this fund is provided free of charge for our readers general information.

Historical Performance Commentary

Performance Commentary - February 28, 2023

Stocks that meet criterion across all themes — Value, Quality, and Sentiment — can help insulate portfolios from market gyrations. Assessing stocks through a robust, multi-dimensional approach is pivotal to building resilient portfolios for the long term.

The Active Quantitative Equity (AQE) team evaluates a broad range of metrics to forge a multidimensional view of stocks, based on key themes of Value, Quality, and Sentiment. We believe that it is important to assess stocks across all three dimensions, preferring names with attractive valuations, high quality fundamentals, and positive sentiment. Stocks that meet all these three criterion give us greater confidence over the long term and help insulate portfolios from sudden and unexpected market pivots.

Performance Commentary - January 31, 2023

Over the course of 2022, the AQE team had plenty of opportunity to analyze sharp drops in the equity market, and shape different views of volatility and equity risk. Broadly, the team was reminded that traditional high risk segments do not always underperform in market drawdowns. This concept was notably demonstrated when Energy stocks outperformed the rest of the market even when the market was down sharply.

Furthermore, we sought to highlight nuances associated with our preference for “low risk” stocks during the year. In 2022 our cornerstone thematic signals — Value, Quality, and Sentiment — pointed toward lower risk names more than was typical in other years. Yet throughout the prior year, we also had a strong preference for Energy stocks (high risk), and generally a negative view on the Real Estate sector. Our team also reflected on the lack of cushion that traditionally lower risk segments like Real Estate, Utilities, and Telecommunications had during last September’s sell-off. The events of September stood out as an unusual drawdown because the relative pay-off to low-volatility stocks was notably lower than is usually the case. Our explanation of why these events played out the way they did is because of the importance of the dimensions that we specified above in predicting stock returns — Value, Quality, and Sentiment measures.

As we look out to 2023, fundamentals, diversification of factor exposures, and retaining high quality or defensive exposures are the themes investors should be focused on in equity portfolios. The equity market drawdown in 2022 creates a valuation cushion as compared to the end of 2021; however, other risks, and the macroeconomic and market conditions that were prevalent last year still abound. Although we may have passed peak inflation, the outcomes of the fine balancing act for central banks globally between inflation, interest rates, and growth risks still need to play out.

With that uncertainty we expect elevated levels of market volatility to persist and Sentiment reversals to be common. We therefore believe it is important to balance exposures within a portfolio — for example marrying Sentiment exposure with Quality and Value factors. Similarly, we favor balancing investments in traditionally low risk sectors with more cyclical exposures rather than betting on one very specific path for the economy. Importantly, this balanced approach enables fundamentals and diversification to guide our stock selection.

Performance Commentary - December 31, 2022

When tracked as a standalone signal, sustainability has delivered strong results, over the last three years. In fact, when compared with our core themes (Value, Sentiment, and Quality), sustainability delivered returns almost as high as sentiment and value, but with lower volatility, and delivered a higher return than quality.

Performance Commentary - October 31, 2022

The Active Quantitative Equity (AQE) team has been closely examining the September equity drawdown to better understand what was “conventional” versus “unconventional” about it and how these findings inform the AQE team’s process. September’s decline of more than 9% was the eighth worst monthly return for the MSCI World Index in 30 years. Historically, investors concerned about a market drawdown have looked to lower-risk, defensive segments like Real Estate, Utilities, Telecoms, Consumer Staples, and Health Care. And investors concerned about a market drawdown have also typically avoided higher-risk segments like Financials, Materials, Industrials, and Technology.

Performance Commentary - September 30, 2022

The AQE team sees a relationship between improving Conference Call Sentiment and cyclical versus defensive characteristics broadly. The global economy has been stuttering this year, and company management and investors are worried about the impact of inflation and slowing growth on company earnings. It is understandable, therefore, that the majority of the industries with “attractive and improving” quarter-over-quarter CCS scores are non-cyclical or defensive in nature, as they are better able to withstand the current environment. The opposite is true within the “attractive but declining” bucket, where the majority of industries are cyclical and the outlook may be starting to wane.

Among industries with unattractive CCS scores, we again find a relationship with cyclicality; the majority of industries where management is showing less confidence reside in the cyclical space, notably Financials and IT Hardware. However, some industries do not show a relationship between CCS and cyclicality.

The Internet and Direct Marketing Retail, Air Freight and Logistics, and Road and Rail sectors are cyclical but have a CCS factor that is positive and still improving. On the flip side, management in Health Care Technology and Household Product companies, although within naturally defensive sectors, seem less confident about the outlook and demonstrate a declining CCS.

Performance Commentary - June 30, 2022

By design, the Active Quantitative Equity (AQE) team’s alpha model favors securities with high-quality balance sheets, reasonable growth expectations, improving market sentiment, and attractive valuations. Focusing on these themes can lead to differences over time in the riskiness1 of our most preferred stocks. Because of current market conditions, our most preferred stocks at the moment are, in total, quite a bit less risky than the average stock. In fact, each of the three main themes we focus on — Value, Quality, and Sentiment — are all pointing toward lower-risk names than has been typical for AQE over time (see Figure 1).

By some measures, the Energy sector is high risk; however, we hold a very positive view of that sector overall. How can this be? Let’s take a closer look.
Due to the tremendous increase in both Sentiment and Quality metrics within the Energy sector over the last year, as well as the improving Valuation scores, our model sees the Energy sector — broadly one of the highest-risk segments of the market — as the most attractive of all sectors.

As of the end of May, the Energy sector on average, using our measure of risk, is the second most risky sector, only trailing Consumer Discretionary stocks, the riskiest sector, by a tight margin. While the Energy sector is up over 50% year to date, earnings-per-share (EPS) growth estimates are up over 60% this year, outpacing the index. We think the Energy sector is even more of a bargain than it was at the start of the year. This has led to a decline in the price-to-earnings ratio (P/E) of the sector broadly. As a result, we continue to find opportunities in the sector. A few segments of the Energy sector that we like are highlighted in Figure 2.

Real Estate is another sector that shows how our process, although risk-aware, is not overly constrained by its influence. The Real Estate sector is one of the least risky; however, it ranks as one of the lowest categories from our total alpha perspective. This is largely driven by extremely poor valuation across the board, coupled with varying levels of Quality and relatively average Sentiment metrics. Real Estate has had a challenging year to date — down nearly 15% — while EPS estimates for the sector have been flat. We do not see this trend easing, particularly on
the corporate Real Estate side, as companies move to more remote and hybrid return-to-work models for their workforces.

Although the sector has experienced a slight decline in multiples, we still view the sector as more expensive than other parts of the market. When combined with unappealing Quality and Sentiment scores, our outlook for the sector becomes poor (see Figure 3).

Risk is often associated with a particular sector or segment of the market. In reality, however, risk usually does not appear in isolation. Instead, risk manifests within sectors, industries, regions, or countries (or combinations of these) simultaneously. In assessing risk and its complexities, the AQE team relies on a balanced, disciplined, and diversified bottom-up approach, which allows us to effectively target opportunities as they present themselves — even when views on risk within sectors diverge.

Performance Commentary - December 31, 2021

The State Street Global Equity Fund (‘the Fund’) seeks to outperform the MSCI World ex-Australia Index (“the Benchmark”), before management costs, over a full market cycle of approximately 5 – 7 years, with lower volatility than the Benchmark. It also seeks to mitigate currency risk associated with the Benchmark.

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