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Charts That Got Us Thinking

3Q 2020 Outlook: D for Disconnect or V for V-Shaped?

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Multi-asset Views

Multi-asset views


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


As of June 2020. | Source: Wellington Management.

Multi-asset Views

The market impact of coronavirus


Nearly half of these representative indices have retraced more than 75% of the March sell-off.


Percentage of the sell-off that has been retraced is based on the maximum index value during the time frame so the maximum retracement is 100% 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.

Multi-asset Views

Extreme market volatility


There have been more 5% or greater daily moves in the S&P 500 Index in 2020 than in all of 2008.


1 Through 6/16/20 | Past performance does not guarantee future results. | Source: Bloomberg, Wellington Management Chart data: 2000–6/16/20 | Please see representative index definitions below.

Multi-asset Views

Record cash on sidelines


Record flows into cash account for 60% of money market assets under management, so there’s plenty of dry powder for risk assets.


Source: EPFR | Data is monthly; universe is retail, institutional, active and passive. | Chart data: January 2007–May 2020

Multi-asset Views

COVID-19 crisis reverberates around the globe


Leading economic indicators across regions show how COVID-19 crushed economies around the world.


Source: Bloomberg | Chart data for all graphs: November 1999–May 2020

Multi-asset Views

US attitude return after COVID-19


Consumer behavior isn’t clear even with economies reopening.


1Survey was conducted with 10,957 US adults between 4/29/20-5/5/20. | Source: Pew Research Center Survey

Global Fundamentals

Strong fiscal response to COVID-19


Fiscal policy has been large and quick compared to the Global Financial Crisis (GFC). Action in the US has been most aggressive.


As of June 2020 | Source: Wellington Management

Global Fundamentals

Monetary conditions support a recovery


Central banks have stepped up by adding liquidity and by buying bonds as reflected in the surge in M1 money supply.


1 M1 is the money supply that is composed of physical currency and coin, demand deposits, travelers’ checks, other checkable deposits, and negotiable order of withdrawal (NOW) accounts. | Sources: Bloomberg | Chart data: US and Japan: May 2004–May 2020; Euro area: May 2004–April 2020

Global Fundamentals

Vaccine trials progress around the globe


Globally, these are some of the leading vaccines in development in Phase 1 or 2 clinical trials.


Source: https://www.gavi.org | Accessed: 7/7/20

Global Fundamentals

Shift in consumer spending trends


Nanette is watching more real-time data collected from credit card transactions. It shows a shift in consumer spending that can be used to potentionally uncover opportunities.


Consumer Edge Research’s CE-Transact panel of > 30 million credit and debit cards in the US covering > 6 billion transactions | Sources: Consumer Edge Research, Wellington Management | Chart data for all graphs: 12/31/19- 6/15/20

Global Fundamentals

Lower rates may eventually lift economies


Traditional measures such as interest rates may also shed light on economies—lower rates have historically helped lift the economy 12-18 months later.


Sources: Bloomberg, Wellington Management | Chart data: November 1991–May 2020. X-axis scale range is May 1993 to November 2021 due to 10-year yield being forwarded 18 months. | Purchasing Managers’ Index (PMI) is an indicator of the economic health of the manufacturing sector. A reading above 50 signals economic expansion; below 50 signals contraction.

Global Fundamentals

Plunge in rates puts earnings yield at attractive levels


Low yields also help to make equity valuations more attractive as seen in the wide earnings yield.


1 6/30/20 | US earnings yield is based on 12-month forwarded Price/Earnings (P/E) ratio | Price/Earnings is the ratio of a stock’s price to its earnings per share. | Sources: Bloomberg, Datastream | Chart data: December 1987–June 2020

Regional Equities

Valuations vary by region


The US stands out as being the most expensive relative to its own history and 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 6/30/20 | Sources: MSCI, Datastream, Wellington Management

Regional Equities

Value tends to shine during recovery


If the economy recovers strongly, value is likely to outperform growth.


Past performance does not guarantee future results. | The underlying data for the chart is the monthly excess return of MSCI USA Value Index over MSCI USA Growth Index. Each month of data is associated with an economic phase, so we are able to group the relative performance of US value vs US growth by phase. The analysis includes 543 months/datapoints, which can be broken down into: 126 bust, 192 expansion, 120 late stage, and 105 recovery. When the value vs growth monthly returns are grouped by phase, we can find the average return of that stream of data and then annualize it. We use the change in growth + the level of Composite Leading Indicator index to give us four phases of the economic cycle: late stage (decelerating, above-trend growth), bust (decelerating, below-trend growth), recovery (accelerating, below-trend growth), and expansion (accelerating, above-trend growth). We broadened the definition of “bust” to include slowdowns because significant drawdowns can and do occur without a recession. | Sources: Datastream, Wellington Management | Please see representative index definitions below.

Credit

Fixed income continues to play diversification role


Fixed income returns continue to be negatively correlated to equity returns despite low yields.


Blue-shaded areas represent US tightening cycles; gray-shaded areas represent US easing cycles. Past performance does not guarantee future results. Investors cannot directly invest in an index. | Source: Datastream | Chart data: June 1988–May 2020 | Please see representative index definitions below.

Credit

Credit spreads offer value


Credit spreads are attractive, and Nanette expects them to narrow given the Federal Reserve’s (Fed) credit programs.


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 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 indices, and the yield of a fixed-income security. | 3 6/30/20 | Sources: Bloomberg, Wellington Management

Credit

Spreads indicate positive excess returns
High Yield


At current spreads, average excess returns have historically been in the top quintile.


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

Credit

Spreads indicate positive excess returns
Corporates


At current spreads, investors have earned excess returns in the 4th quintile.


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

Credit

Bank loans look attractive relative to high yield


Bank loans are an attractive alternative to high yield if you can accept the lower liquidity.


1 5/29/20 | Indices used: Bloomberg Barclays US High Yield and JP Morgan Leveraged Loan Index | Past performance does not guarantee future results. Investors cannot directly invest in indices. | Sources: Bloomberg, JPMorgan | Chart data: 1/31/92–5/29/20 | Please see representative index definitions below.

Interest Rates

Rates stayed low post-WWII despite huge debts


Rates are likely to stay low because of coordination between the US Treasury and the Fed. This is somewhat similar to what happened post-WWII.


Debt: US Treasury securities outstanding (TreasuryDirect, Haver) monthly data 1952–present, annual data with seasonally adjusted monthly interpolation, 1899–1951 | GDP: US nominal GDP (Macroeconomic Advisors, Haver, BEA) 1992–present; 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–present; 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–March 2020

Risks

Favor securitized assets in residential housing


Housing affordability has rebounded given low mortgage rates, rising personal income, and lower home prices. Securitized assets can be one way to potentially capitalize on this dynamic.


Source: Bloomberg | Chart data: December 1998–March 2020 | Housing Affordability Indices compare the cost of purchasing a home in different locations. Points above 100 indicate that a typical family may struggle to qualify for a mortgage on a home in the area, while a value of 100 indicates that the typical family has more than enough money to qualify.

Risks

Shift in battleground states
Risks are increased by trade tensions and Democratic sweep


President Trump could face challenges from his approval ratings and high unemployment in swing states.


Views expressed are those of Nanette Abuhoff Jacobson. Views are as of date indicated, are based on available information, and are subject to change without notice. | 1 Trump 2016 election margin is based on 2016 presidential election and the margin represents the difference between votes received for Trump and Clinton. | 2 The current net polling is based on Trump’s net approval rating as of 6/29/20, then the number of lost voters is extrapolated by using the approval rating and number of registered voters in each state. | 3 The current continuing unemployment claims are for the week ending 6/13/20. | Sources: New York Times, United States Census Bureau, United States Department of Labor

Risks

Protectionism likely to persist


Based on recent polls, most Americans support getting tough on China.


National tracking poll based on 1,994 registered US voters with margin of error of ±2%. Conducted 5/15/20–5/18/20 Sources: Morning Consult, Politico National Tracking Poll

Risks

Shift towards populism in US and around the world


A Democratic sweep is likely to mean higher corporate and individual taxes.


Views expressed are those of Nanette Abuhoff Jacobson. Views are as of date indicated, are based on available information, and are subject to change without notice. | Sources: Wellington Management

Portfolio Construction

Consider diversifying exposure across economic environments


Investors should consider balancing their portfolios by owning assets that may not align with their base case for economic growth and inflation.


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 1/1/90 to 12/31/19 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 1/1/1990 to 12/31/19, 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. | 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. 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)


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 (1/1/90-3/31/20)


* 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 (1/31/04-3/31/20)


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 (1/1/00-6/30/20)


* 2020 YTD performance as of 6/30/20.
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, 7/20. | Please see representative index definitions below.

Investor Behavior

Intra-year dips in EM equities happen frequently (1/1/00-6/30/20)


* 2020 YTD performance as of 6/30/20.
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, 7/20. | 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, 7/20 | Please see representative index definitions below.

Investor Behavior

Stocks have historically recovered quickly from epidemics


As we’ve seen with COVID-19, epidemics can have a short-term impact on stocks. But in the long term, stocks are driven more by earnings growth than epidemics.


Past performance does not guarantee future results. Data source: Morningstar, 7/20. * 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 (2000-2019)


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, 7/20. 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.

Multi-asset views

The market impact of coronavirus

Extreme market volatility

Record cash on sidelines

COVID-19 crisis reverberates around the globe

US attitude toward return after COVID-19

Strong fiscal response to COVID-19

Monetary conditions support a recovery

Vaccine trials progress around the globe

Shift in consumer spending trends

Lower rates may eventually lift economies

Plunge in rates puts earnings yield at attractive levels

Valuations vary by region

Value tends to shine during recovery

Fixed income continues to play diversification role

Credit spreads offer value

Spreads indicate positive excess returns - High yield

Spreads indicate positive excess returns - Corporates

Bank loans look attractive relative to high yield

Rates stayed low post-WWII despite huge debts

Favor securitized assets in residential housing

Shift in battleground states

Protectionism likely to persist

Shift towards populism in US and around the world

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 EM 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

Bloomberg Barclays US Treasury Long Index measures US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury with 10 years or more to maturity.
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 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.
Credit Suisse Leveraged Loan Index is an unmanaged, trader-priced index that tracks leveraged loans.
Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 of the largest, most widely held stocks traded on the NYSE.
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.
J.P. Morgan Emerging Markets Bond Index Plus is a market capitalization-weighted index based on bonds in emerging markets.
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 Korea Index is a free-float adjusted market-capitalization index designed to measure large- and mid-cap segments of the South Korean market.
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 Growth Index captures large- and mid-cap securities exhibiting overall growth style characteristics in the US.
MSCI USA Health Care Index is designed to measure the performance of the large- and mid-cap segments of the US equity universe that are classified in the healthcare 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 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 USA Value Index captures large- and mid-cap securities exhibiting overall value style characteristics in the US.
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 June 30, 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 Hartford Floating Rate Fund and the Hartford Floating Rate High Income Fund should not be considered an alternative 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 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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