2 weeks Ago
primeimages/E+ via Getty Images Market Overview US equities surged for the third consecutive quarter as the S&P 500 Index ( SP500 , SPX ) registered a series of record highs. Performance was narrowly driven by a select group of mega-cap technology companies, resulting in a significant performance differential between the market-cap weighted S&P 500 Index and the equal-weighted version of the Index, as well as the considerable outperformance of growth stocks vs. their value counterparts.
The Federal Reserve's median projection showed that policymakers expect only one 25 basis-points reduction in interest rates in 2024. This is down from three cuts projected in March, although a majority of economists forecast two cuts this year. The Russell MidCap Value Index returned -3.
40% for the period. Within the Index, eight out of 11 sectors fell over the quarter. Consumer staples, healthcare, and materials were the worst performing sectors, while utilities, information technology, and real estate were the top performing sectors.
Performance Summary The Hartford MidCap Value Fund ( MUTF: HMVJX , I Share) outperformed the Russell MidCap Value Index during the quarter. Security selection was the primary driver of relative outperformance. Strong selection within financials, consumer staples, and communication services was partially offset by selection within materials and healthcare.
Sector allocation, a result of our bottom-up stock selection process, detracted from relative results. Allocation effect was driven by our underweight to real estate, but partially offset by our underweight to allocation materials. The top relative contributors were overweight allocations to Coherent ( COHR , information technology) and ICU Medical ( ICUI , healthcare), while our top two detractors included overweight allocations to Middleby ( MIDD , industrials) and Fortune Brands ( FBIN , industrials).
Positioning & Outlook Top Ten Holdings (%) M&T Bank Corp. ( MTB ) 2.10 Kemper Corp.
( KMPR ) 2.09 U.S.
Foods Holding Corp. ( USFD ) 1.89 Allstate Corp.
( ALL ) 1.76 Reliance, Inc. ( RS ) 1.
75 Kimco Realty Corp. ( KIM ) 1.74 EQT Corp.
( EQT ) 1.73 NiSource, Inc. ( NI ) 1.
73 Everest Group Ltd. ( EG ) 1.71 Wyndham Hotels & Resorts, Inc.
( WH ) 1.70 Percentage Of Portfolio 18.20 Holdings and characteristics are subject to change.
Percentages may be rounded. Click to enlarge Given the range of economic outcomes, we continue to emphasize quality across the portfolio, are stress testing models and balance sheets, and are actively identifying new opportunities created by market volatility. New initiatives by the new management to implement better processes, invest in innovation, and change compensation could result in organic revenue growth acceleration to mid-single digit, even against a somewhat flat defense budget environment.
We continue to target opportunities that offer a compelling combination of valuation, quality, and capital return. As we look ahead, we're excited about the opportunities we see across the portfolio and the new ideas we're actively exploring. We appreciate your continued support of the team and look forward to updating you next quarter.
Our largest overweights at the end of the period were in the consumer staples and healthcare sectors. We were most underweight to real estate and information technology. Click to enlarge Performance (%) Average Annual Total Returns Expenses 1 Class QTD YTD 1 Year 3 Year 5 Year 10 Year SI Gross Net A -3.
14 3.02 10.16 6.
35 9.38 6.81 8.
21 1.16% 1.16% A with 5.
5% Max Sales Charge - - 4.1 4.37 8.
15 6.2 7.94 - - F -3.
04 3.3 10.58 6.
77 9.83 7.22 8.
46 0.76% 0.76% I -3.
09 3.17 10.49 6.
67 9.73 7.13 8.
42 0.86% 0.86% R3 -3.
26 2.88 9.76 5.
99 9.05 6.49 8.
22 1.48% 1.48% R4 -3.
2 3.01 10.12 6.
31 9.38 6.81 8.
42 1.18% 1.18% R5 -3.
09 3.18 10.41 6.
63 9.71 7.14 8.
61 0.88% 0.88% R6 -3.
09 3.23 10.59 6.
76 9.83 7.22 8.
46 0.77% 0.77% Y -3.
08 3.23 10.49 6.
65 9.74 7.2 8.
66 0.87% 0.87% Russell Midcap Value Index -3.
4 4.54 11.98 3.
65 8.49 7.6 - - - Morningstar Category -3.
78 3.72 11.74 4.
97 9.26 7.35 - - - Lipper Peer Group -3.
69 3.67 10.95 4.
81 8.79 7.11 - - - Click to enlarge NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE Morningstar ® Category Mid-Cap Value Lipper Peer Group Mid-Cap Value Performance data quoted represents past performance and does not guarantee future results.
The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For more current performance information to the most recent month ended, please visit Home .
Share Class Inception: A, Y - 4/30/01; F - 2/28/17; I - 5/28/10; R3, R4, R5 - 5/28/10. Performance shown prior to the inception of a class reflects performance and operating expenses of another class(es) (excluding sales charges, if applicable). Had fees and expenses of a class been reflected for the periods prior to the inception of that class, performance would be different.
Since inception (SI) performance is from 4/30/01. Performance and expenses for other share classes will vary. Additional information is in the prospectus.
Only Class A assesses a sales charge. Russell Midcap Value Index measures the performance of the mid-cap value segment of the U.S.
equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. Indices are unmanaged and not available for direct investment.
1 Expenses as shown in the Fund's most recent prospectus. Important Risks: Investing involves risk, including the possible loss of principal. Security prices fluctuate in value depending on general market and economic conditions and the prospects of individual companies.
• Mid-cap securities can have greater risks and volatility than large-cap securities. • Different investment styles may go in and out of favor, which may cause the Fund to underperform the broader stock market. • Foreign investments may be more volatile and less liquid than U.
S. investments and are subject to the risk of currency fluctuations and adverse political, economic and regulatory developments. • To the extent the Fund focuses on one or more sectors, the Fund may be subject to increased volatility and risk of loss if adverse developments occur.
Investors should carefully consider a fund's investment objectives, risks, charges and expenses. This and other important information is contained in a fund's full prospectus and summary prospectus, which can be obtained by visiting Home . Please read it carefully before investing.
Mutual funds are distributed by Hartford Funds Distributors, LLC (HFD), Member FINRA. Advisory services are provided by Hartford Funds Management Company, LLC (HFMC). Certain funds are sub-advised by Wellington Management Company LLP.
HFMC and Wellington Management are SEC registered investment advisers. HFD and HFMC are not affiliated with any sub-adviser. Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
.
