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Floating Rate Fund

Objective

Seeks to provide high current income and long-term total return.

Overview

A fund that typically invests in floating-rate loans and securities that are below-investment-grade.

More About Floating Rate Fund 

A Hedge Against Rising Rates

The prices of traditional bonds generally drop as interest rates rise. This happens because as new bonds are issued at higher rates, existing bonds with lower rates become less attractive to investors, causing them to drop in value.

The Fund invests in bank loans that adjust their interest rates every 30, 60, or 90 days, so they may be less affected by rising interest rates.

Attractive Yield and Diversification

The Fund may offer a higher yield than, and low correlation to, traditional bonds; it may add an extra layer of income and diversification to your fixed-income portfolio.

Experienced Management

Bank loans are a small asset class, which makes them difficult for individual investors to access. The Fund is run by a veteran in bank-loan investing, Michael Bacevich. He has been managing bank loans since the asset class was created and is backed by Wellington Management’s deep fixed-income resources.


Michael Bacevich
Managing Director
Fixed-Income Portfolio Manager

Portfolio managers are supported by the full resources of Wellington Management

Video Commentaries

bacevich_thumbnail1

Investment Process (2:39)
Portfolio Manager Michael Bacevich

 

floating-rate-outlook-thumbnail

Fund Outlook & Commentary (4:21)
Portfolio Manager Michael Bacevich

Performance

Average Annual Total Returns (%)
(as of 8/31/2016)
YTD 1YR 3YR 5YR 10YR SI
Floating Rate  A 6.91 3.34 2.10 4.47 3.30 3.65
With 3.0% Max
Sales Charge
--- 0.24 1.07 3.83 2.98 3.38
Benchmark 6.53 3.74 3.41 5.32 4.27 ---
Morningstar Bank Loan Category 6.26 3.17 2.49 4.77 3.32 ---
Average Annual Total Returns (%)
(as of 6/30/2016)
YTD 1YR 3YR 5YR 10YR SI
Floating Rate  A 4.41 -0.47 1.65 3.04 3.19 3.49
With 3.0% Max
Sales Charge
--- -3.46 0.62 2.42 2.87 3.21
Benchmark 4.23 0.93 3.04 4.00 4.17 ---
Morningstar Bank Loan Category 4.03 0.19 2.11 3.43 3.23 ---

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.

Fund Inception: 4/29/05

Operating Expenses

Net  0.99% |  Gross 0.99%  
 

Growth of $10,000

(as of 8/31/2016)
[{"date":"2016/08/31","value":"13833"},{"date":"2016/07/31","value":"13703"},{"date":"2016/06/30","value":"13509"},{"date":"2016/05/31","value":"13544"},{"date":"2016/04/30","value":"13448"},{"date":"2016/03/31","value":"13129"},{"date":"2016/02/29","value":"12696"},{"date":"2016/01/31","value":"12763"},{"date":"2015/12/31","value":"12938"},{"date":"2015/11/30","value":"13128"},{"date":"2015/10/31","value":"13289"},{"date":"2015/09/30","value":"13289"},{"date":"2015/08/31","value":"13386"},{"date":"2015/07/31","value":"13542"},{"date":"2015/06/30","value":"13574"},{"date":"2015/05/31","value":"13653"},{"date":"2015/04/30","value":"13638"},{"date":"2015/03/31","value":"13484"},{"date":"2015/02/28","value":"13455"},{"date":"2015/01/31","value":"13210"},{"date":"2014/12/31","value":"13221"},{"date":"2014/11/30","value":"13482"},{"date":"2014/10/31","value":"13450"},{"date":"2014/09/30","value":"13408"},{"date":"2014/08/31","value":"13542"},{"date":"2014/07/31","value":"13499"},{"date":"2014/06/30","value":"13532"},{"date":"2014/05/31","value":"13461"},{"date":"2014/04/30","value":"13376"},{"date":"2014/03/31","value":"13380"},{"date":"2014/02/28","value":"13334"},{"date":"2014/01/31","value":"13325"},{"date":"2013/12/31","value":"13254"},{"date":"2013/11/30","value":"13196"},{"date":"2013/10/31","value":"13141"},{"date":"2013/09/30","value":"13026"},{"date":"2013/08/31","value":"12995"},{"date":"2013/07/31","value":"13025"},{"date":"2013/06/30","value":"12864"},{"date":"2013/05/31","value":"12966"},{"date":"2013/04/30","value":"12970"},{"date":"2013/03/31","value":"12893"},{"date":"2013/02/28","value":"12763"},{"date":"2013/01/31","value":"12748"},{"date":"2012/12/31","value":"12613"},{"date":"2012/11/30","value":"12535"},{"date":"2012/10/31","value":"12506"},{"date":"2012/09/30","value":"12456"},{"date":"2012/08/31","value":"12306"},{"date":"2012/07/31","value":"12207"},{"date":"2012/06/30","value":"12101"},{"date":"2012/05/31","value":"11999"},{"date":"2012/04/30","value":"12125"},{"date":"2012/03/31","value":"12021"},{"date":"2012/02/29","value":"11933"},{"date":"2012/01/31","value":"11806"},{"date":"2011/12/31","value":"11553"},{"date":"2011/11/30","value":"11467"},{"date":"2011/10/31","value":"11528"},{"date":"2011/09/30","value":"11145"},{"date":"2011/08/31","value":"11117"},{"date":"2011/07/31","value":"11664"},{"date":"2011/06/30","value":"11630"},{"date":"2011/05/31","value":"11689"},{"date":"2011/04/30","value":"11696"},{"date":"2011/03/31","value":"11616"},{"date":"2011/02/28","value":"11607"},{"date":"2011/01/31","value":"11577"},{"date":"2010/12/31","value":"11372"},{"date":"2010/11/30","value":"11249"},{"date":"2010/10/31","value":"11202"},{"date":"2010/09/30","value":"11029"},{"date":"2010/08/31","value":"10880"},{"date":"2010/07/31","value":"10828"},{"date":"2010/06/30","value":"10607"},{"date":"2010/05/31","value":"10633"},{"date":"2010/04/30","value":"10916"},{"date":"2010/03/31","value":"10760"},{"date":"2010/02/28","value":"10517"},{"date":"2010/01/31","value":"10471"},{"date":"2009/12/31","value":"10298"},{"date":"2009/11/30","value":"10039"},{"date":"2009/10/31","value":"10003"},{"date":"2009/09/30","value":"9915"},{"date":"2009/08/31","value":"9664"},{"date":"2009/07/31","value":"9475"},{"date":"2009/06/30","value":"9186"},{"date":"2009/05/31","value":"8909"},{"date":"2009/04/30","value":"8542"},{"date":"2009/03/31","value":"7920"},{"date":"2009/02/28","value":"7848"},{"date":"2009/01/31","value":"7671"},{"date":"2008/12/31","value":"7172"},{"date":"2008/11/30","value":"7532"},{"date":"2008/10/31","value":"8088"},{"date":"2008/09/30","value":"9528"},{"date":"2008/08/31","value":"10058"},{"date":"2008/07/31","value":"10073"},{"date":"2008/06/30","value":"10175"},{"date":"2008/05/31","value":"10173"},{"date":"2008/04/30","value":"10053"},{"date":"2008/03/31","value":"9713"},{"date":"2008/02/29","value":"9708"},{"date":"2008/01/31","value":"9984"},{"date":"2007/12/31","value":"10314"},{"date":"2007/11/30","value":"10298"},{"date":"2007/10/31","value":"10469"},{"date":"2007/09/30","value":"10380"},{"date":"2007/08/31","value":"10180"},{"date":"2007/07/31","value":"10179"},{"date":"2007/06/30","value":"10568"},{"date":"2007/05/31","value":"10553"},{"date":"2007/04/30","value":"10493"},{"date":"2007/03/31","value":"10435"},{"date":"2007/02/28","value":"10398"},{"date":"2007/01/31","value":"10324"},{"date":"2006/12/31","value":"10225"},{"date":"2006/11/30","value":"10168"},{"date":"2006/10/31","value":"10111"},{"date":"2006/09/30","value":"10044"},{"date":"2006/08/31","value":"10000"}]

 
Growth of $10,000

Excludes sales charges. If sales charges and taxes had been included, the value would have been lower.

Calendar Year Returns (%)
Fund Benchmark
2015 -2.14 -0.38
2014 -0.26 2.06
2013 5.07 6.15
2012 9.16 9.43
2011 1.59 1.82
2010 10.41 9.98
2009 43.61 44.87
2008 -30.46 -28.75
2007 0.88 1.88
2006 6.68 7.33

Excludes sales charges. If sales charges and taxes had been included, the value would have been lower.

Characteristics Holdings are subject to change. Percentages may be rounded.

Statistics
As of Date 8/31/2016
# of Holdings 284
Turnover (6/30/2016) 34%
Dividend Frequency Monthly
Holdings Characteristics
(as of 8/31/2016)
Fund
% in Bank Loans 88.22
Bank Loan Average Price $93.23
Effective Duration 0.28 yrs.
Yields
As of Date 8/31/2016
Distribution Yield at NAV 4.17%
Trailing 12 Month Yield 4.14%
30 Day SEC Yield 4.27%
Unsubsidized 30-Day SEC Yield 4.26%
Fund Essentials
Inception Date 04/29/2005
Net Assets $3.7 billion
Symbol HFLAX
CUSIP 416648558
Fund Number 1209

Top Ten Issuers (%)

(as of 8/31/2016)
label percentageholding
Calpine Corp. 2.04
JBS USA LLC 1.81
Level 3 Financing, Inc. 1.80
Valeant Pharmaceuticals International, Inc. 1.78
First Data Corp. 1.69
California Resources Corp. 1.32
Sedgwick Claims Management Services, Inc. 1.30
Advantage Sales & Marketing, Inc. 1.20
Brickman Group Ltd. 1.17
Virgin Media Investment Holdings Ltd. 1.12
Total Portfolio % 15.23
(as of 6/30/2016)
label percentageholding
JBS USA LLC 1.82
Level 3 Financing, Inc. 1.79
First Data Corp. 1.72
Valeant Pharmaceuticals International, Inc. 1.61
Calpine Corp. 1.31
Sedgwick Claims Management Services, Inc. 1.28
Avago Technologies Cayman Ltd. 1.23
Brickman Group Ltd. 1.16
Advantage Sales & Marketing, Inc. 1.13
Virgin Media Investment Holdings Ltd. 1.10
Total Portfolio % 14.15

Credit Exposure

(as of 8/31/2016)
label value
Baa/BBB 3.2%
Ba/BB 33.9%
B 45.6%
Caa/CCC or lower 10.0%
Not Rated 3.4%
Cash & Cash Offsets 4.0%

Credit exposure is the credit ratings for the underlying securities of the Fund as provided by Standard and Poor's (S&P), Moody's Investors Service, or Fitch and typically range from AAA/Aaa (highest) to C/D (lowest). If S&P, Moody's, and Fitch assign different ratings, the median rating is used. If only two agencies assign ratings, the lower rating is used. Securities that are not rated by any of the three agencies are listed as "Not Rated." Ratings do not apply to the Fund itself or to Fund shares. Ratings may change.

Sector Distribution
Sectors 06/30/2016 Fund 08/31/2016 Benchmark 08/31/2016 UNDERWEIGHT / OVERWEIGHT -5 0 5
Energy 7.2 7.9 3.8
Overweight 80.0%
Consumer Non-Cyclical 21.0 21.3 18.4
Overweight 60.0%
Financial Institutions 8.0 8.3 6.5
Overweight 20.0%
Other Industrial 2.9 3.0 2.5
Overweight 20.0%
Utilities 3.9 3.9 2.8
Overweight 20.0%
Cash and Cash Equivalents 5.5 4.0 0.0
Overweight 0.0%
Government & Government Related 0.0 0.1 0.0
Overweight 0.0%
Other Securities 0.2 0.2 0.0
Overweight 0.0%
Transportation 1.7 1.8 2.4
Overweight 0.0%
Basic Industry 5.4 5.5 6.2
Overweight 20.0%
Capital Goods 7.3 6.7 8.2
Overweight 20.0%
Other High Yield 0.2 0.2 0.8
Overweight 20.0%
Communications 10.8 11.0 12.9
Overweight 40.0%
Technology 9.8 9.5 13.4
Overweight 80.0%
Consumer Cyclical 16.2 16.7 22.0
Overweight 100.0%

Insights

pdf

Bank Loans: A Sector That May Be Poised to Benefit from the Recent Rise in U.S. LIBOR 

09/26/2016
Bank loans are getting renewed interest from investors, with the long-anticipated start of higher interest rates looking like it might finally materialize in the US.
pdf

Bank Loans: A Sector That May Be Poised to Benefit from the Recent Rise in U.S. LIBOR 

09/26/2016
Bank loans are getting renewed interest from investors, with the long-anticipated start of higher interest rates looking like it might finally materialize in the US.
pdf

3Q 2016 Outlooks  

07/22/2016
Thought leaders from Wellington Management provide their outlooks on the risks and opportunities available in equities, fixed income, asset allocation, and commodities.

Literature

Fund Literature

Select All

Fact Sheet

06/30/2016 | pdf
Get FINRA Letter

Max 100

Fund Story

06/30/2016 | pdf
Get FINRA Letter

Max 50

Commentary

06/30/2016 | pdf
Get FINRA Letter

Max 100

Expanded Commentary

06/30/2016 | pdf

Summary Prospectus

03/01/2016 | pdf

Available For
Download Only

Pitchbook

06/30/2016 | pdf

Flyer

12/31/2015 | pdf
Get FINRA Letter

Max 100

Semi-Annual Report

04/30/2016 | pdf

Available For
Download Only

Statutory Prospectus

03/01/2016 | pdf

Available For
Download Only

SAI

03/01/2016 | pdf

Available For
Download Only

Annual Report

10/31/2015 | pdf

Available For
Download Only

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A WORD ABOUT RISK

All investments are subject to risk, including the possible loss of principal. There is no guarantee the Fund will achieve its stated objective. The Fund’s share price may fluctuate due to market risk and/or security selections that may underperform the market or relevant benchmarks. Fixed Income risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall; these risks are currently heightened due to the historically low interest rate environment. Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. Loans can be difficult to value and highly illiquid; they are subject to credit risk, bankruptcy risk, and insolvency. Foreign investments can be riskier than U.S. investments due to the adverse effects of currency exchange rates, differences in market structure and liquidity, as well as political and economic developments in foreign countries and regions.
Floating Rate Fund should not be considered an alternative to CDs or money market funds. This Fund is for investors who are looking to complement their traditional fixed-income investments.

Effective September 30, 2009, Class B shares of The Hartford Funds closed to new investors, and no new or additional investments, including investments through a systematic investment plan, will be allowed in Class B shares, except for permitted exchanges. For additional information about your privileges with respect to Class B shares, please refer to your prospectus and its supplements.

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