The Pension Boards - PBUCC - Market Update from CIO Lan Cai, CFA

Market Update from CIO Lan Cai, CFA – June 2025

June experienced a strong recovery led by emerging market equities, followed by the U.S. despite U.S. military action against Iran and tariff concerns. The global equity index (MSCI ACWI IMI) was positive at +4.49% in June and is up +10.05% YTD. The S&P 500, which tracks large cap U.S. stocks, increased by +5.09% in June and is up +6.20% YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased by +5.44% in June and is down -1.79% YTD. The International developed equity index (MSCI EAFE) increased by +2.20% in June and is up +19.45% YTD. The emerging markets index (MSCI EM) increased by +6.01% in June and is up +15.27% YTD.
In June, bond yields lowered across maturities; the 30-year U.S. Treasury bond yield decreased by 14 bps to 4.78%, the 10-year yield decreased by 17 bps to 4.24%, and the 2-year yield decreased by 17 bps to 3.72%.
The Barclays U.S. Aggregate Index, which is a measure of U.S. Bond prices, increased by +1.54% in June and is up +4.02% YTD.

U.S. gross domestic product (GDP) in the first quarter of 2025 decreased by -0.5%, according to the “3rd” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2024 GDP increased by 2.4%.
The June Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 50.80% from 49.90% in May. This represents expansion. The June Manufacturing PMI increased to 49.00% from 48.50% in May.
June non-farm employment increased by 147,000 jobs, and the unemployment rate dropped to 4.1%, as reported by the Bureau of Labor Statistics on July 3rd, 2025. In June employment increased in state government and health care. Average Hourly Earnings (wages) increased by 3.7% year-over-year in June.

The Equity Fund increased by +3.95% in June and is up +7.51% YTD. The Bond Fund increased by +1.58% in June and is up +3.73% YTD. The Stable Value Fund was up +0.24% for June and is up +1.19% YTD. The Northern Trust World Selection Index Fund increased by +4.00% in June and is up +8.31% YTD.
The Balanced Fund increased by +2.98% in June and is up +6.34% YTD. The Target Annuitization Date TAD 2025; TAD 2030; TAD 2035; TAD 2040 TAD 2045 and TAD 2050 returns were +1.24%, +2.33%, +2.89%, +3.10%, +3.28% and +3.46% respectively for June and +3.06%, +4.94%, +5.87%, +6.21%, +6.49% and +6.78% YTD.