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Duration measures the sensitivity of an asset or portfolio’s price to nominal interest-rate movement.
*The views expressed are those of Nanette Abuhoff Jacobson, Managing Director and Multi-Asset Strategist at Wellington Management Company and Global Investment Strategist for Hartford Funds, and Wellington Management’s Investment Strategy Team. Views expressed have a 6−12 month horizon, are as of March 2023, are based on available information, and are subject to change without notice. This material is not intended to constitute investment advice or an offer to sell, or the solicitation of an offer to purchase shares or other securities.

Outlook

Economic Snapshot

Inflation Rate: 5.0%

Average 12-Month CD Rate: 2.43%

As of 3/31/23. Data Sources: FactSet; Inflation–US Department of Labor via FactSet; Average 12-Month CD Rate–Bloomberg, 4/23.

Outlook

US GDP Growth Is Decelerating

Annual Real GDP Growth Rates (%)

As of 12/31/22. Source: imf.org, 1/23. Most recent data available.

Outlook

S&P 500 Index Earnings Set a New Record

S&P 500 Index Earnings ($) and Price-to-Earnings (P/E) Ratio

Past performance does not guarantee future results. As of 3/31/23. Indices are unmanaged and not available for direct investment. P/E ratio is the ratio of the S&P 500 Index’s price divided by earnings per share. Please see representative index definitions below. Source: FactSet, 4/23.

Past performance does not guarantee future results. As of 3/31/23. Nominal yield, also known as the coupon yield, is a bond’s yield as a fixed percentage of its par value. Real yield is the nominal yield of a bond minus the inflation rate. For illustrative purposes only. Source: FactSet, 4/23.

Historical Perspective

Investors Need to Carefully Balance Income Potential With Risk and Diversification

Fixed Income vs. Equity Correlation Chart (2007–2022)

Past performance does not guarantee future results. As of 12/31/22. Asset classes are represented by: Cash: Bloomberg US Treasury Bill 1-3 Month Index; US Treasuries: Bloomberg US 7-10 Year Treasury Bond Index; MBS: Bloomberg US MBS Index; ABS: Bloomberg US Aggregate ABS Index; Global Government: Bloomberg Global Aggregate Bond Index; Municipals: Bloomberg  Municipal Bond Index; Investment-Grade Corporate: Bloomberg US Corporate Index; EM Debt: Bloomberg Emerging Markets Aggregate Bond Index; Bank Loans: Morningstar LSTA Leveraged Loan Index; High Yield Bond: Bloomberg Global High Yield Index. Yield is yield to maturity (i.e., the expected total return if a bond is held until maturity) for all indices except Municipals, which is Yield to Worst (i.e., the lowest possible yield on a bond without it defaulting). For illustrative purposes only. Please see representative index definitions below. Diversification does not ensure a profit or protect against a loss in a declining market. Data Sources: Bloomberg, S&P Dow Jones, and Morningstar, 1/23.

As of 3/31/23. Please see representative index definitions below. Data Sources: FactSet and Morningstar, 4/23.

Past performance does not guarantee future results. As of 12/31/22. Based on the annual calendar-year returns of 50 highest-performing stocks of the MSCI ACWI Index. For illustrative purposes only. Source: FactSet, 1/23.

Past performance does not guarantee future results. As of 12/31/22. Assumes reinvestment of capital gains and dividends and no taxes. Drawdown refers to the largest market drop from peak to trough during the calendar year. Data Sources: Morningstar and Hartford Funds, 1/23.

Past performance does not guarantee future results. As of 12/31/22. Assumes reinvestment of capital gains and dividends and no taxes. Drawdown refers to the largest market drop from peak to trough during the calendar year. Please see representative index definitions below. Data Sources: Morningstar and Hartford Funds, 1/23.

Past performance does not guarantee future results. As of 12/31/22. Assumes reinvestment of capital gains and dividends and no taxes. Drawdown refers to the largest market drop from peak to trough during the calendar year. Please see representative index definitions below. Data Sources: Morningstar and Hartford Funds, 1/23.

Past performance does not guarantee future results. As of 3/31/23. The chart shows the S&P 500 Index’s returns minus the MSCI World ex USA Index’s returns. When the line is above 0,domestic stocks outperformed international stocks. When the line is below 0, international stocks outperformed domestic stocks. The performance shown above is index performance and is not representative of any Hartford Fund’s performance. Indices are unmanaged and not available for direct investment. US equity is represented by the S&P 500 Index. International equity is representedby the MSCI World ex USA Index. For illustrative purposes only. Data Sources: Morningstar, Bloomberg, and Hartford Funds, 4/23.

Past performance does not guarantee future results. As of 3/31/23. The chart shows the values of the Russell 1000 Growth Index returns minus the Russell 1000 Value Index returns. When the line is above 0, growth stocks outperformed value stocks. When the line is below 0, value stocks outperformed growth stocks. The performance shown above is index performance and is not representative of any Hartford Fund’s performance. Growth stocks are represented by the Russell 1000 Growth Index. Value stocks are represented by the Russell 1000 Value Index. Please see representative index definitions below. For illustrative purposes only. Data Source: Morningstar and Hartford Funds, 4/23.

Past performance does not guarantee future results. Data shown is for the S&P 500 Price Index as of 12/31/22 and does not include the reinvestment of dividend payments. Please see representative index definitions below. Data Sources: Morningstar, Ned Davis Research, and Hartford Funds, 1/23.

Historical Perspective

Missing the Market’s Best Days Has Been Costly

S&P 500 Index Growth of $10,000 (1993–2022)

Past performance does not guarantee future results. As of 12/31/22. Indices are unmanaged and not available for direct investment. For illustrative purposes only. Data Sources: Ned Davis Research, Morningstar, and Hartford Funds, 1/23.

Historical Perspective

Bear Markets Are a Normal Part of Investing

S&P 500 Index Declines of 20% or More (1928–3/31/2022)

Past performance does not guarantee future results. As of 3/31/23. Source: Ned Davis Research, 4/23.

Past performance does not guarantee future results. Chart data is for 1/1/80–3/31/23. Indices are unmanaged and not available for direct investment. For illustrative purposes only. The graph is not representative of any Hartford Fund’s performance, and does not take into account fees and charges associated with actual investments. Dividend Growers & Initiators – Grew or initiated a dividend in the past 12 months; Dividend Payers – Paid a dividend in the past 12 months; No Change – Maintained their dividend level in the past 12 months; Dividend Non-Payers – Did not pay a dividend in the past 12 months; Dividend Cutters & Eliminators – Lowered or eliminated their dividends in the past 12 months. Sources: Ned Davis Research and Hartford Funds, 4/23.

Historical Perspective

A Balanced Portfolio Can Help Balance Out Volatility

Cumulative Returns for Stocks, Bonds, and a Balanced Portfolio (2000–2022)

Past performance does not guarantee future results. As of 12/31/22. Stocks are represented by S&P 500 Index. Bonds are represented by the Bloomberg US Aggregate Bond Index. Balanced Portfolio is represented by 50% S&P 500 Index and 50% Bloomberg US Aggregate Bond Index. For illustrative purposes only. Please see representative index definitions below. Source: Morningstar and Hartford Funds, 1/23.

Investor Behavior

Buying and Selling at the Wrong Times Could Be Costly

30-year Annualized Returns by Asset Class (%) (1992–2022)

As of 12/31/22. Performance data for indices represents a lump sum investment in 1/1/92–12/31/22 with no withdrawals. US Equities are represented by the S&P 500 Index. US Bonds are represented by the Bloomberg US Aggregate Bond Index. Index performance is not indicative of any Hartford fund’s performance. Most recent data available.
Average Equity Fund Investor and Average Fixed Income Fund Investor performance results are calculated using data supplied by the Investment Company Institute. Investor returns are represented by the change in total mutual fund assets after excluding sales, redemptions, and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. After calculating investor returns in dollar terms, two percentages are calculated for the period examined: Total investor return rate and annualized investor-return rate. Total investor-return rate is determined by calculating the investor-return dollars as a percentage of the net of the sales, redemptions, and exchanges for each period.
Dalbar’s Quantitative Analysis of Investor Behavior Methodology – Dalbar’s Quantitative Analysis of Investor Behavior uses data from the Investment Company Institute (ICI), Standard & Poor’s and Bloomberg Index Products to compare mutual-fund investor returns to an appropriate set of benchmarks. Covering the period from 1/1/1992–12/31/22, the study utilizes mutual-fund sales, redemptions and exchanges each month as the measure of investor behavior. These behaviors reflect the “average investor.” Based on this behavior, the analysis calculates the “average investor return” for various periods. These results are then compared to the returns of respective indices.

Investor Behavior

Buying Stocks After Big Market Drops Has Historically Been Profitable

S&P 500 Index Hypothetical Growth of $10,000 (1980–2022)

Past performance does not guarantee future results. As of 12/31/22. Assumes reinvestment of capital gains and dividends and no taxes. Data Sources: Thomson Reuters and Hartford Funds, 1/23.

Past performance does not guarantee future results. As of 3/31/23. S&P 500 Price Index doesn’t reflect the reivestment of dividends and capital gains. For illustrative purposes only. Data Sources: FactSet and Investment Company Institute, 4/23.

As of 12/31/22. This is a study of Google searches for “CNBC” compared with S&P 500 Price Index performance. There’s a correlation between poor market performance and CNBC searches.