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Charts That Got Us Thinking

2Q 2020 Outlook: A Game Plan for the Volatility

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Multi-asset Views

Wide dispersion of potential US COVID-19 outcomes
Experts' assessment of trajectory of the COVID-19 outbreak in the US


Uncertainty is high. A wide range of economic and financial outcomes is based on the wide range of disease outcomes.


Actual results may differ significantly. Sums may not total due to rounding. | Source: University of Massachusetts Amherst, COVID19-Expert Forecast-Survey, March 25, 2020

Multi-asset Views

Multi-asset outlook process


Nanette Abuhoff Jacobson lowered her recommendations to the higher-risk markets and raised her recommendations to fixed income.

Nanette is a managing director and multi-asset strategist at Wellington Management and Global Investment Strategist for Hartford Funds.


As of March 2020. | Source: Wellington Management.

Multi-asset Views

The market impact of coronavirus


Few places to hide except US Treasuries and the US dollar.


All returns in local currency unless otherwise stated. Currency returns are versus the USD.
Past performance does not guarantee future results. The performance shown is index performance and not representative of a fund’s performance. Indices are unmanaged and not available for direct investment. | Sources: Bloomberg, Wellington Management | Please see representative index definitions below.

Global Fundamentals

China’s downturn is a bad omen as virus spreads


China is a good leading indicator for the global economy since it accounts for nearly one-third of global GDP growth.


1PMI (Purchasing manager’s index) is an indicator of the economic health of the manufacturing sector. A reading above 50 signals economic expansion; below 50 signals contraction. | Past performance does not guarantee future results. | Source: Bloomberg | Chart data: December 31, 2011 – February 29, 2020

Global Fundamentals

Lapses in market functioning, including US dollar shortage


Illiquidity and market stress were observable in a spike in the cross-currency basis swap between the yen and US dollars. Demand for US dollars outstripped supply.


1JPY-USD basis swaps: A cross-currency basis swap involves the exchange of interest payments in two different currencies typically on a quarterly basis. A negative premium means investors will receive less premium over the interest-rate differential. | Past performance does not guarantee future results. | Sources: Bloomberg | Chart data: August 2, 2011 – March 19, 2020

Global Fundamentals

Lower rates should eventually lift economies


Central banks around the world have cut interest rates. Lower interest rates have historically resulted in a better economy after 12-18 months.


Sources: Bloomberg, Wellington Management | Chart data: November 1991 – February 2020. X-axis scale range is May 1993 to August 2021 due to 10-year yield being forwarded 18 months. 10-year yield data is from November 1991 – February 2020. PMI data is from May 1993 – February 2020

Global Fundamentals

The global economy was turning up


Before COVID-19, the global economy was turning up.


1 Credit impulse: the change in new credit issued as % of GDP. | Sources: Bloomberg, Wellington Management | Chart data: March 2009 – February 2020. X-axis scale range is December 2009 to November 2020 due to China credit impulse data being forwarded nine months. China credit impulse data is from March 2009 to February 2020. Global manufacturing PMI data is from December 2009 to February 2020.

Global Fundamentals

The consumer was in good shape


Consumers were benefiting from low unemployment and rising wages, even in Europe—a region that is more exposed to China’s slowdown.


Sources: Bloomberg, Wellington Management | Chart data: March 2000 – June 2019

Global Fundamentals

Plunge in US rates puts earnings yield at attractive levels


Earnings yields, the inverse of Price/Earnings Ratio (P/E), is one way to compare equities to bonds. The gap is historically wide.


1 Spreads are the difference in yields between two fixed-income securities with the same maturity, but originating from different investment sectors. | 2 February 29, 2020 | US earnings yield is based on 12-month forwarded P/E ratio | Sources: Bloomberg, Datastream
Chart data: December 1996 – February 2020 | Price/Earnings or P/E is the ratio of a stock’s price to its earnings per share.

Global Fundamentals

Japan entered the crisis with an ill-timed tax hike


Japan’s value-added tax (VAT) increase was implemented when the economy was already softening.


VAT tax introduced April 1, 1989 at 3%, increased to 5% April 1, 1989, increased to 8% October 1, 2014, increased to 10% October 1, 2019 | Sources: OECD, Wellington Management | Chart data: November 1980 – September 2019

Global Fundamentals

Spare capacity likely to weigh on oil markets


With low demand and increased production, the oil market is likely to remain oversupplied.


Sources: Bloomberg, EIA | Chart data: Acutal: January 1994 – February 2020; forecast March 2020 – December 2021

Global Fundamentals

Can Trump afford a recession?


A recession could challenge President Donald Trump’s positive approval ratings on the economy.


1 Overall job approval, the economy, and handling of Coronavirus as of March 25, 2020; approval of the direction of country and foreign policy as of March 24, 2020 | Source: Real Clear Politics

Regional Equities

High dispersion points to opportunities for active managers
Equities


High dispersion in equities points to opportunities for stock-pickers to choose between the winners and losers.


Past performance does not guarantee future results.
Sources: Russell, Wellington Management | Chart data: January 31, 2008 – March 19, 2020 | Please see representative index definitions below.

Regional Equities

Valuations are attractive


Valuations are fair in the US and cheap in Europe, Japan, and EM, but Nanette favors the US for its lower beta relative to other regions.


1 Price-to-book is the ratio of a stock’s price to its book value per share.
2 Shiller P/E ratio is a valuation measure, generally applied to broad equity indices, that uses real per-share earnings over a 10-year period.
As of March 31, 2020 | Sources: MSCI, Datastream, Wellington Management

Fixed Income

Fixed income continues to play diversification role


Though interest rates are much lower than in the past, returns are still negatively correlated to equities.


Blue-shaded areas represent US tightening cycles; gray-shaded areas represent US easing cycles. Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. | Source: Datastream | Chart data: June 1988 – February 2020 | Please see representative index definitions below.

Fixed Income

Rates stayed low post-WWII despite huge deficits


While debt/GDP is likely to rise in response to COVID-19, interest rates will not necessarily rise.


Debt: US Treasury securities outstanding (TreasuryDirect, Haver) monthly data 1952 – 2019, annual data with seasonally adjusted monthly interpolation, 1899 – 1951 | GDP: US nominal GDP (Macroeconomic Advisors, Haver, BEA) 1992 – 2019; FRED quarterly data, 1947 – 1991, quarterly econometric proxy using CPI, IP, and GNP from FRED and NBER; simple monthly interpolation, 1899 – 1947 | 10-year US Treasury yield: FRED US 10-year Treasury constant maturity, 1962 – 2019; GFD, 1919 – 1961; yields implied by GFD monthly price returns for 10-year US government bond, 1899 – 1918 | Blue shading of Treasury yield between 2% and 4% highlights the extended period yield has historically spent within this range. | Chart data: December 1899 – December 2019

Fixed Income

Hypothetical impact of rising and falling rates on fixed income


Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. For illustrative purposes only. Fixed-income sectors shown above are provided by Barclays and are represented by the following Bloomberg Barclays indices – Broad Market: US Aggregate Bond; Mortgage-backed securities: US MBS Fixed-Rate; Investment Grade Corporates: US Corporate Bond; Municipals: Municipal Bond 10-year; High Yield: US High Yield Corporate Bond; Floating Rate Notes: US FRN (BBB); Convertibles: US Convertible Liquid Bond; Asset-backed securities: Fixed-Rate Asset-Backed Securities (ABS); CMBS: US CMBS. Please see representative index definitions below. Change in price is calculated as New Price = (Price + (Price * -Duration* Change in Interest Rates))+(0.5 * Price * Convexity * (Change in Interest Rates)^2) | Data Sources: Bloomberg and Hartford Funds, 4/20.

Fixed Income

Multi-sector credit shows characteristics of a defensive-equity alternative


A multi-sector credit approach that equally blends high-yield bonds, bank loans, and EM debt has historically provided equity-like returns with significantly less volatility than equities.


1 MSC Blend is comprised of 1/3 BofA Merrill Lynch Global High Yield Constrained, 1/3 Credit Suisse Leveraged Loan Index, and 1/3 JPMorgan Emerging Markets Bond Index Plus. Past and hypothetical performance do not guarantee future results and an investment can lose value. The MSC Blend and its performance are hypothetical and not representative of an actual fund. Simulated performance is developed with the benefit of hindsight (i.e., actual knowledge of market conditions and the results of similar strategies) and thus has inherent limitations. Results are presented gross of fees; if fees were applied, returns would have been lower. | Sharpe Ratio is a measure of the excess fund return per unit of risk, as measured by standard deviation. | Sources: Bank of America Merrill Lynch, Credit Suisse, JPMorgan, MSCI, and Wellington Management. | Please see representative index definitions below.

Fixed Income

Tax-equivalent yields


1 The tax-equivalent yield is the pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond.
Data Sources: Bloomberg and Hartford Funds, 4/20.

Credit

Credit spreads offer attractive value


Credit spreads are more attractive than equity valuations, and credit could offer comparable returns to equities.


1 An OAS (Option-Adjusted Spread) is a measurement tool for evaluating yield differences between similar-maturity fixed-income products with different embedded options. | 2 March 31, 2020 | Sources: Bloomberg, Wellington Management

Credit

Spreads indicate positive excess returns
High Yield


Investors have earned in excess of 8% over US Treasuries on average over a 3-year timeframe when they’ve invested in high-yield spreads in the top quintile.


Past performance does not guarantee future results.
Sources: Barclays, Wellington Management

Credit

Spreads indicate positive excess returns
Corporates


Investors have earned in excess of 8% over US Treasuries on average over a 3-year timeframe when they’ve invested in Baa-rated corporate spreads in the top quintile.


Spreads are the difference in yields between two fixed-income securities with the same maturity, but originating from different investment sectors. Past performance does not guarantee future results. | Sources: Barclays, Wellington Management

Credit

Ratio of spreads to yield at widest level in investment-grade since the financial crisis


The ratio of spreads to total yields indicates that we’re at historically wide spreads compared to other crisis periods.


1 A basis point is a unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security. | Shaded areas represent historical crisis periods. | Past performance does not guarantee future results. | Sources: Bloomberg | Chart data: August 15, 2000 – March 17, 2020

Credit

High dispersion points to opportunities for active managers
Fixed Income


High dispersion in credit points to opportunities for active managers to pick the winners and losers, especially since downgrades are likely to increase.


Bloomberg Barclays Indices: Bloomberg Barclays US Corporate Index; Bloomberg Barclays US Corporate High Yield Index; Bloomberg Barclays Global Aggregate Corporate Index; and Bloomberg Barclays Global High Yield Index | Past performance does not guarantee future results. | Sources: ICE BofAML, Wellington Management | Chart data: December 31, 2008 – March 19, 2020 | Please see representative index definitions below.

Credit

Bank loans look attractive relative to high yield


Bank loans look more attractive than high yield.


1 March 19, 2020 | Indices used: Bloomberg Barclays US High Yield and JP Morgan Leveraged Loan Index | Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. | Sources: Bloomberg, JPMorgan | Chart data: January 31, 1992 – March 19, 2020

Credit

Upper-tier high yield is attractive


Higher-quality high yield looks attractive relative to lower quality investment-grade corporates.


1 March 31, 2020 | Past performance does not guarantee future results.
Source: Bloomberg | January 31, 1994 – March 23, 2020

Commodities

EMs have varying exposure to commodities


Some EM countries will be hurt by the drop in oil prices (exporters), while others will benefit (importers).


As of December 2018 | Chart consists of 70 emerging market countries. Countries labeled represent countries whose GDP is greater than US$500 billion | Past performance does not guarantee future results. | Sources: UN Comtrade, Wellington Management

Portfolio Construction

Consider diversifying exposure across economic environments


While our base case calls for conservative positioning in high-quality equities and bonds, inflation could be a long-term issue; this would make inflation-sensitive assets additive.


Diversification does not ensure a profit or protect against a loss in a declining market.
EMD: Emerging Markets Debt
REITs: Real Estate Investment Trust
ILBs: Inflation-Linked Bonds
MBS: Mortgage-Backed Securities
TIPS: Treasury-Inflation Protected Securities

The example presented is for illustrative purposes and reflects the current opinions of Wellington Management Global Multi-Asset Strategiessm team as of the date appearing in this material only. This is based on historical assumptions and is not intended to be a prediction of how any asset class will perform in the future. | Economic environments are defined by year-over-year changes in GDP growth and inflation. Growth: + GDP growth, – inflation. Weak growth: – GDP growth, – inflation. Inflation: + GDP growth, + inflation. Stagflation: – GDP growth, + inflation.

Investor Behavior

Asset class returns vs. the average investor
20-year annualized returns by asset class (1990–2019)


According to a study by Dalbar, the average investor has underperformed both equity and bond indices by buying and selling at the wrong time.


Performance data for indices represents a lump sum investment in January 1, 1990 to December 31, 2019 with no withdrawals. US Equities are represented by the S&P 500 Index. US Bonds are represented by the Bloomberg Barclays US Aggregate Bond Index. Indices are unmanaged, unavailable for direct investment, and do not reflect fees, expenses, or sales charges. Index performance is not indicative of any Hartford fund.
Please see representative index definitions below.
Average equity investor and average bond 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 Barclays Index Products to compare mutual fund investor returns to an appropriate set of benchmarks. Covering the period from January 1, 1990 to December 31, 2019, 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

The price of panic could be costly
$10,000 invested in S&P 500 Index (1970–2019)


Past performance does not guarantee future results. Equity returns are represented by the S&P 500 Index. Bond returns are represented by the Bloomberg Barclays Long-Term US Treasury Total Return Index. Reactionary returns indicate the results of an investor who invested in S&P 500 Index, moved 100% into 90-Day T-Bills each time the market dropped 30% and then moved 100% back into S&P 500 Index two years later. Balanced returns are represented by 50% S&P 500 Index and 50% Bloomberg Barclays Long-Term US Treasury Total Return Index. Cash returns are represented by 90-Day T-Bills. Data Source: Ned Davis Research, 12/19. For illustrative purposes only. Indices are unmanaged and not available for direct investment. Please see representative index definitions below.

Investor Behavior

Are you an opportunistic or apprehensive investor?
Hypothetical growth of $10,000 invested in S&P 500 Index (1980–2019)


1 T-Bills are guaranteed as to the timely payment of principal and interest by the US Government and generally have lower risk-and-return than bonds and equity. Equity investments are subject to market volatility and have greater risk than T-Bills and other cash investments. | Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. Assumes reinvestment of capital gains and dividends and no taxes. | Data Sources: Thomson Reuters and Hartford Funds, 1/20. | Please see representative index definitions below.

Investor Behavior

Buying stocks when fear runs high has historically led to long-term gains
VIX levels of 40 or higher indicate extremely high levels of fear


* This column shows the S&P 500 Index’s one-day loss on the date shown in column 1. | Past performance does not guarantee future results. Assumes reinvestment of capital gains and dividends and no taxes. | The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. VIX, commonly referred to as the “Fear Index,” is the ticker symbol for the CBOE’s Volatility Index and measures the market’s expectation of 30-day volatility. VIX levels below 20 reflect complacency, while levels of 40 or higher reflect extremely high levels of volatility. | Data Sources: Morningstar and Hartford Funds, 4/20. | Please see representative index definitions below.

Investor Behavior

Resist the urge to panic
Did you participate in the post-financial-crisis rebound?


Past performance does not guarantee future results. For illustrative purposes only. Indices are unmanaged and not available for direct investment. Data sources: Factset and Investment Company Institute, 12/19. | Please see representative index definitions below.

Investor Behavior

When markets fall we search—especially for CNBC
Google searches for CNBC vs. S&P 500 Index


This is a study of Google searches for “CNBC” compared with S&P 500 Index performance. The blue line represents the S&P 500 Index and the red line represents Google searches. Do you see a pattern? There’s a correlation between poor market performance and CNBC searches. Please see representative index definitions below.

Investor Behavior

Intra-year dips in the S&P 500 Index happen frequently


Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. 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, 4/20. | Please see representative index definitions below.

Investor Behavior

Intra-year dips in emerging-market equities happen frequently


Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. 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, 4/20. | Please see representative index definitions below.

Investor Behavior

Top 10 stock market drops & recoveries
10 worst single-day percentage declines for US Stocks (1980–2019)


Past performance does not guarantee future results. Data sources: Morningstar, Ned Davis Research, and Hartford Funds, 3/20. Data shown is for the S&P 500 Price Index as of 12/31/19 and does not include the reinvestment of dividend payments. Indices are unmanaged and not available for direct investment. List does not include single-day declines in 2020 in order to provide returns from the ensuing 1-, 3-, and 5-year periods. Please see representative index definitions below.

Investor Behavior

Missing the market’s best days has been costly
S&P 500 Index average annual total returns (1990–2019)


Missing the market’s 10 best days over the past 20 years would have cost you half of your investment returns; this highlights how costly timing the market can be.


Past performance does not guarantee future results. For illustrative purposes only. Indices are unmanaged and not available for direct investment. | Data sources: Ned Davis Research, Morningstar, and Hartford Funds, 1/20 | Please see representative index definitions below.

Investor Behavior

Bear markets are a normal part of investing
S&P 500 Index declines of 20% or more (2/20/1928–12/31/2019)


Source: Ned Davis Research, 1/20. Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. | Please see representative index definitions below.

Investor Behavior

Stocks performance has often been positive during recessions
S&P 500 Index performance during recessions (1945–2019)


Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. For illustrative purposes only. Data sources: Morningstar, Ned Davis Research, and Hartford Funds, 3/20. | Please see representative index definitions below.

Investor Behavior

Stocks have performed well after significant oil price declines
WTI crude oil price (1985-2020)


West Texas Intermediate (WTI), also known as Texas light sweet, is a grade of crude oil used as a benchmark for oil prices. Data Sources: Factset and Morningstar | Please see representative index definitions below.

Investor Behavior

Stocks have historically recovered quickly from epidemics


Past performance does not guarantee future results. Data source: Morningstar, 3/20. *Date of market bottom is the lowest trough during the 12-months following the initial outbreak. Days to recovery is the number of trading days it took for the Index to return to its pre-epidemic level off that trough. Please see representative index definitions below.

Investor Behavior

Dividend-paying stocks have significantly outperformed dividend non-payers in the long run
Returns for S&P 500 Index stocks by dividend policy: Growth of $100 (1/31/72 – 12/31/19)


Investing in dividend-paying stocks can be a prudent approach in uncertain markets. Companies that grew or initiated a dividend have historically enjoyed a significant performance advantage.


Past performance does not guarantee future results. 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. Please see representative index definitions below. 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 | Source: Ned Davis Research, 1/20.

Investor Behavior

Balance out volatility with a balanced portfolio
Cumulative returns for stocks, bonds, and a balanced portfolio


A balanced portfolio consisting of 60% stocks and 40% bonds would have provided nearly all the upside of stocks with less volatile returns.


Stocks represented by S&P 500 Index; Balanced Portfolio represented by 60% S&P 500 Index and 40% Bloomberg Barclays US Aggregate Bond Index; Bonds represented by 100% Bloomberg Barclays US Aggregate Bond Index. Past performance does not guarantee future results. For illustrative purposes only. Indices are unmanaged and not available for direct investment. Source: Morningstar and Hartford Funds, 1/20. Please see representative index definitions below.

Investor Behavior

Dollar cost averaging: a systematic way to build wealth
Lucky, unlucky, and systematic investors all fared well


Data Sources: Morningstar and Hartford Funds, 3/20. Past performance does not guarantee future results. Assumes reinvestment of dividends and capital gains and no taxes or transaction costs. For illustrative purposes only. Dollar cost averaging neither assures a profit nor protects against a loss. Because systematic investing involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices. Please see representative index definitions below.

Investor Behavior

Fund flows


Data includes flows through 2/20 and excludes ETFs. | ICI data subject to periodic revisions. World equity flows are inclusive of emerging market, global equity and regional equity flows. | Hybrid flows include asset allocation, balanced fund, flexible portfolio, and mixed income flows. Data Sources: Investment Company Institute and Hartford Funds, 4/20.

Multi-asset views

Wide dispersion of potential US COVID-19 outcomes

Multi-asset views

The market impact of coronavirus

China’s downturn is a bad omen as virus spreads

Lapses in market functioning, including US dollar shortage

Lower rates should eventually lift economies

The global economy was turning up

The consumer was in good shape

Plunge in US rates puts earnings yield at attractive levels

Japan entered the crisis with an ill-timed tax hike

Spare capacity likely to weigh on oil markets

Can Trump afford a recession?

High dispersion points to opportunities for active managers - Equities

Valuations are attractive

Fixed income continues to play diversification role

Rates stayed low post-WWII despite huge deficits

Hypothetical impact of rising and falling rates on fixed income

Multi-sector credit shows characteristics of a defensive-equity alternative

Tax-equivalent yields

Credit spreads offer attractive value

Spreads indicate positive excess returns - High yield

Spreads indicate positive excess returns - Corporates

Ratio of spreads to yield at widest level in investment-grade since the financial crisis

High dispersion points to opportunities for active managers - Fixed income

Bank loans look attractive relative to high yield

Upper-tier high yield is attractive

EMs have varying exposure to commodities

Consider diversifying exposure across economic environments

Asset class returns vs. the average investor

The price of panic could be costly

Are you an opportunistic or apprehensive investor?

Buying stocks when fear runs high has historically led to long-term gains

Resist the urge to panic

When markets fall we search—especially for CNBC

Intra-year dips in the S&P 500 Index happen frequently

Intra-year dips in emerging-market equities happen frequently

Top 10 stock market drops & recoveries

Missing the market’s best days has been costly

Bear markets are a normal part of investing

Stocks performance has often been positive during recessions

Stocks have performed well after significant oil price declines

Stocks have historically recovered quickly from epidemics

Dividend-paying stocks have significantly outperformed dividend non-payers in the long run

Balance out volatility with a balanced portfolio

Dollar cost averaging: a systematic way to build wealth

Fund flows

Bloomberg Barclays US Fixed-Rate Asset-Backed Securities (ABS) Index covers fixed-rate ABS with the following collateral types: credit cards, autos, home equity loans and stranded-cost utility (rate reduction bonds).
Bloomberg Barclays Global Aggregate Corporate Index is an index used by bond traders, mutual funds, and ETFs as a benchmark to measure relative performance. It includes government securities, mortgage-backed securities, asset-backed securities, and corporate securities to simulate the universe of bonds in the market.
Bloomberg Barclays Global High Yield Index is an unmanaged index considered representative of fixed rate, non-investment grade debt of companies in the US, developed markets and emerging markets.
Bloomberg Barclays Municipal Bond 10-Year Index is a sub-index of the Barclays Municipal Bond Index. It is a rules-based market value-weighted index of bonds with maturities of 10 years engineered for the tax-exempt bond market.
Bloomberg Barclays US Aggregate Bond Index is composed of securities from the Barclays Government/Credit Bond Index, Mortgage-Backed Securities Index, Asset- Backed Securities Index, and Commercial Mortgage-Backed Securities Index.
Bloomberg Barclays US CMBS Index measures the market of conduit and fusion Commercial Mortgage-Backed Securities deals with a minimum current deal size of
Bloomberg Barclays US Convertible Liquid Bond Index tracks US convertible securities, such as convertible bonds.
Bloomberg Barclays US Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market.
Bloomberg Barclays US High Yield Corporate Bond Index is an unmanaged broad-based market-value weighted index that tracks the total return performance of non-investment grade, fixed-rate publicly placed, dollar-denominated and nonconvertible debt registered with the Securities and Exchange Commission.
Bloomberg Barclays US Corporate Index is a market-weighted index of investment-grade corporate fixed-rate debt issues with maturities of one year or more.
Bloomberg Barclays US FRN (BBB) is a subset of the US Floating-Rate Note (FRN) Index, which measures the performance of USD-denominated, investment-grade, floating-rate notes across corporate and government-related sector.
Bloomberg Barclays US High Yield Corporate Bond Index is an unmanaged broad-based market-value weighted index that tracks the total return performance of non-investment grade, fixed-rate publicly placed, dollar-denominated and nonconvertible debt registered with the Securities and Exchange Commission.
Bloomberg Barclays US Long Treasury Index measures US dollar-denominated, fixed rate, nominal debt issued by the US Treasury. Treasury bills are excluded by the maturity constraint, but are part of a separate Short Treasury Index.
Bloomberg Barclays US MBS Fixed-Rate Index measures the performance of investment grade fixed-rate mortgage-backed pass-through securities of Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC).
Credit Suisse Leveraged Loan Index is an unmanaged, trader-priced index that tracks leveraged loans.
ICE BofAML Global High Yield Constrained Index tracks the performance of below investment grade corporate debt denominated in US dollars, Canadian dollars, pounds and euros that are publicly issued in the major US or Eurobond markets.
J.P. Morgan Emerging Markets Bond Index Plus is a market capitalization-weighted index based on bonds in emerging markets.
J.P. Morgan Leveraged Loan Index is designed to mirror the investable universe of US dollar institutional leveraged loans, including U.S. and international borrowers.
MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
MSCI Europe Index is a free-float adjusted market-capitalization-weighted index designed to measure the equity market performance of the developed markets in Europe.
MSCI Japan Index is a free-float adjusted market-capitalization index designed to measure large- and mid-cap Japanese equity market performance.
MSCI USA Consumer Staples Index is designed to capture the large- and mid-cap segments of the US equity universe that are classified in the consumer staples sector.
MSCI USA Discretionary Index is designed to capture the large- and mid-cap segments of the US equity universe that are classified in the consumer discretionary sector.
MSCI USA Energy Index is designed to capture the large- and mid-cap segments of the US equity universe that are classified in the energy sector.
MSCI USA Financials Index is designed to measure the performance of the large- and midcap segments of the US equity universe that are classified in the financials sector.
MSCI USA Index is a free float-adjusted market capitalization index that is designed to measure the performance of the large and mid cap segments of the US market.
MSCI USA Info Tech Index is designed to capture the large and mid cap segments of the US equity universe that are classified in the information technology sector.
MSCI USA Utilities Index is designed to capture the large and mid cap segments of the US equity universe that are classified in the utilities sector.
MSCI World Index captures large and mid cap representation across Developed Markets countries.
Russell 1000 Index measures the performance of the large-cap segment of the US equity universe. It is a subset of the Russell 3000 Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership.
S&P 500 Index is a market capitalization-weighted price index composed of 500 widely held common stocks.

 

The Hartford Funds Ideas discussed here reflect the views of Hartford Funds as of March 31, 2020 and are subject to change without notice. These views are not intended to be a prediction of future events or a guarantee of future results. This material should not be considered investment advice or a recommendation to buy, hold, or sell any security.

Important Risks: Investing involves risk, including the possible loss of principal. • Foreign investments may be more volatile and less liquid than US investments and are subject to the risk of currency fluctuations and adverse political and economic developments. These risks may be greater for investments in emerging markets. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. • Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. • Municipal securities may be adversely impacted by state/local, political, economic, or market conditions. Investors may be subject to the federal Alternative Minimum Tax as well as state and local income taxes. Capital gains, if any, are taxable. • Bank loans can be difficult to value and highly illiquid; they are also subject to nonpayment, collateral, bankruptcy, default, extension, prepayment and insolvency risks. • US Treasury securities are backed by the full faith and credit of the US government as to the timely payment of principal and interest. • Commodities may be more volatile than investments in traditional securities. • Diversification does not ensure a profit or protect against a loss in a declining market.

The views expressed here are those of Nanette Abuhoff Jacobson. They should not be construed as investment advice. They are based on available information and are subject to change without notice. Portfolio positioning is at the discretion of the individual portfolio management teams; individual portfolio management teams and different fund sub-advisers may hold different views and may make different investment decisions for different clients or portfolios. This material and/or its contents are current as of 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.

Additional Information About Index Providers:
Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

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