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**Performance Review: BNY Mellon Income Stock Fund**
In the second quarter of 2024, the BNY Mellon Income Stock Fund (Class I shares) underperformed its benchmark, the Dow Jones U.S. Select Dividend Index. The fund’s performance was influenced by sector trends, with financials and materials contributing positively, while utilities and information technology detracted.
**Market Overview**
Global equity markets were mixed in June, with the S&P 500 Index rising 3.59%, while the MSCI EAFE Index declined 1.61%. Emerging markets, as measured by the MSCI Emerging Markets Index, gained 3.94%. In the US, growth stocks outperformed value stocks, and large caps outperformed small caps.
**Sector Performance**
Financials were a bright spot, driven by solid performance from bank names, particularly Goldman Sachs Group. Materials also contributed positively, led by effective stock selection in the metals and mining space. On the other hand, utilities were a drag on performance, due to an underweight position and unfavorable stock selection. Information technology also detracted from returns, primarily due to an overweight to the IT services subsector.
**Stock-Specific Performance**
Walgreens Boots Alliance, Inc. was a notable detractor, as the company cut its profit outlook and announced store closures. Applied Materials, Inc., on the other hand, was a strong performer, driven by its position as a beneficiary of increased spending on generative artificial intelligence. Goldman Sachs Group, Inc. also performed well, driven by its position as a well-capitalized bank with a strong investment banking franchise.
**Outlook**
As we enter the second half of 2024, we maintain a balanced approach to the markets, focusing on value investing and bottom-up, fundamental stock picking. While macro risks, including interest rates and inflation, remain a concern, we believe that companies with strong fundamentals, attractive valuations, and catalyst-driven business momentum will continue to outperform.
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