At this point in the new year, we’re cautiously optimistic on the US bank-loan asset class. While we see continued macroeconomic headwinds, we believe bank loans will likely rebound from last year’s negative total returns.

Why? Bank loans may offer an attractive level of income. They have coupons above 8% and prices in the low-90s, which can provide capital-appreciation potential. However, we don’t think now is the time to stretch for yield given weakening fundamentals amid the uncertain macroeconomic backdrop. 

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. • Loans can be difficult to value and less liquid than other types of debt instruments; they are also subject to nonpayment, collateral, bankruptcy, default, extension, prepayment, and insolvency risks. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall. • Investments in high-yield ("junk") bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. • Derivatives are generally more volatile and sensitive to changes in market or economic conditions than other securities; their risks include currency, leverage, liquidity, index, pricing, regulatory, and counterparty risk. • Foreign investments may be more volatile and less liquid than US investments and are subject to the risk of currency fluctuations and adverse political, economic and regulatory developments. These risks may be greater, and include additional risks, for investments in emerging markets. • The Fund's investments may fluctuate in value over a short period of time. • Integration of environmental, sociaal, and/or governance (ESG) characteristics into the investment process may not work as intended. • Changes related to LIBOR could have an adverse impact on financial instruments that reference this rate.

Additional risks to Hartford Floating Rate High Income Fund:
Restricted securities may be more difficult to sell and price than other sercurities. • The Fund may have high portfolio turnover, which could increase its transaction costs and an investor's tax liability.

The Hartford Floating Rate Fund and Hartford Floating Rate High Income Fund should not be considered alternatives to CDs or money market funds. These funds are intended for investors who are looking to complement their traditional fixed-income investments.

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. The views and information discussed in this commentary are not a forecast, investment advice or a recommendation to buy or sell any security and are subject to change. 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.