As equity allocators investing with an eye toward factor-based risks, we saw some active managers struggle in 2022 as the market rotated to a narrower set of beneficiaries amid immense shifts in commodity prices, economic conditions, government policy, and interest-rate expectations. Over the longer term, we believe fundamentals eventually win, but our research on the factor performance of the past couple of years suggests some important takeaways for allocators.

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Important Risks: Investing involves risk, including the possible loss of principal. • Different investment styles may go in and out of favor, which may cause a fund or investment to underperform the broader stock market. • Small- and mid-cap securities can have greater risks and volatility than large-cap securities. •  Diversification does not ensure a profit or protect against a loss in a declining market.  

The views expressed herein are those of Wellington Management, are for informational purposes only, and are subject to change based on prevailing market, economic, and other conditions. The views expressed may not reflect the opinions of Hartford Funds or any other sub-adviser to our funds. They should not be construed as research or investment advice nor should they be considered an offer or solicitation to buy or sell any security. This information is current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Wellington Management or Hartford Funds.