Yields are currently among the highest we've seen in the post-global financial crisis era.

At the core of the Fund’s equity strategy is a value-oriented, dividend-income approach that targets undervalued companies with low price-to-earnings (P/E) ratios. The Fund seeks quality companies that are attractively priced due to near-term challenges or underappreciated secular trends. These companies often have a history of above-average dividends or strong expectations for dividend growth with the potential to provide a sustainable income stream for investors. The investment team believes markets often underestimate the long-term impact of dividends on shareholder returns, which have historically been significant (FIGURE 2).

This stems from investors’ tendency to focus excessively on the short term and anchor future expectations to recent results. This often leads to overreactions to short-term events and a lack of attention to long-term structural changes.

Fixed-Income Component Helps Add Stability

The fixed-income portion of the Fund plays a critical role in potentially reducing volatility. The Fund primarily invests in investment-grade credit, while also incorporating exposure to emerging-markets debt and high-yield bonds to help enhance income and diversify return sources.

The fixed-income strategy is fundamentally driven, characterized by low turnover, and emphasizes investments in the bond market rather than relying heavily on derivative instruments. Moreover, we believe the current market environment presents an attractive entry point for fixed-income investors, with yields currently  among the highest seen in the post-Global Financial Crisis era (FIGURE 3).

In addition to potentially earning attractive yields, investors have the potential to benefit from excess returns (i.e., returns that exceed the returns of the Fund’s benchmark over a specific time period) through sector rotation and security selection—two foundational pillars of active fixed-income management. We believe inefficiencies persist in the corporate bond market due to its segmented buyer base and the inconsistent treatment of issuers by rating agencies. We strive to capitalize on these inefficiencies through rigorous, bottom-up, independent fundamental analysis.

The Fund seeks to deliver consistent returns across a variety of market conditions.

Expert Insights Across the Capital Structure and Risk Management

The Fund draws on the deep expertise of dedicated career credit research analysts who collaborate closely with their equity counterparts. This cross-disciplinary approach enables a holistic assessment of risk and value, which may lead to more informed decisions and higher-conviction investment theses.

We believe the Fund’s disciplined investment process and thoughtful risk-management framework are key to mitigating downside surprises. As a testament to our philosophy and investment process, we highlight the Fund’s consistent top-quartile—and in many periods, top-decile—performance relative to its Morningstar peer group (FIGURE 4).

Role for Clients

The Fund’s conservative and diversified approach may make it a notable choice for investors seeking a balanced mix of income and growth in today’s uncertain market environment. By focusing on high-quality companies with sustainable dividends and implementing a disciplined fixed-income strategy, the Fund seeks to deliver consistent returns across a variety of market conditions.

We think including the Fund in a portfolio can help investors achieve a thoughtful balance between stability and growth—one that provides an income stream while also offering the potential for long-term capital appreciation.

For more information on the Hartford Balanced Income Fund, please talk to your financial professional.

¹ Russell 1000 Growth Index has returned 54.48% over the 3-year period ending 4/30/25 vs.24.61% for the Russell 1000 Value Index. Past performance does not guarantee future results. 

² The Russell 1000 Value Index returned -0.98% year to date through 4/30/25 vs. -8.37% for the Russell 1000 Growth Index. Past performance does not guarantee future results. 

³ The price-to-earnings ratio measures a company’s share price relative to its earnings-per-share and helps assess the relative value of a company’s stock.

Index Definitions

Bloomberg US High Yield 2% Issuer Cap Index is a market capitalization-weighted index that tracks the performance of US dollar-denominated, non-investment-grade, fixed-rate corporate bonds. 

Bloomberg US Corporate Index is a market-weighted index of investment-grade corporate fixed-rate debt issues with maturities of one year or more.

JPMorgan Emerging Markets Bond Index Plus is a broad-based, unmanaged index which tracks total return for external currency denominated debt (Brady bonds, loans, Eurobonds and US dollar-denominated local market instruments) in emerging markets.

Russell 1000 Growth Index is an unmanaged index which measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.

Russell 1000 Value Index is an unmanaged index measuring the performance of those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values. Indices are unmanaged and not available for direct investment.

S&P 500 Index is a market capitalization-weighted price index composed of 500 widely held common stocks.

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. • The portfolio managers may allocate a portion of the Fund’s assets to specialist portfolio managers, and among different asset classes, each of which may not work as intended. • Fixed income security risks include credit, liquidity, call, duration, event and interest-rate risk. As interest rates rise, bond prices generally fall. • For dividend-paying stocks, dividends are not guaranteed and may decrease without notice. • Value investing style may go in and out of favor, which may cause the Fund to underperform other funds that use different investing styles. • 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. • Restricted securities may be more difficult to sell and price than other 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, valuation, and counterparty risk. 

Diversification does not ensure a profit or protect against a loss.