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Client Conversations 

Client Conversations: Duration Risk Is Rising: Are You Prepared?

Rising interest rates may have a significant effect on fixed-income investments.

Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.

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Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.


The Bloomberg Barclays US Aggregate Bond Index is a widely used proxy for the US bond market. With interest rates beginning to rise, there’s a warning light flashing within the Index. Duration, which measures the sensitivity of bonds within a portfolio to interest rates, recently exceeded six years in the Index for the first time since 1978.

 

Duration of the Bloomberg Barclays US Aggregate Bond Index (1/1/78–3/31/19)


Data Sources: Bloomberg and Hartford Funds, 4/19. For illustrative purposes only. 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. Indices are unmanaged and not available for direct investment. 

 

Select Hartford Funds with short duration*

 

Hartford Floating Rate Fund (HFLIX)

I-Share Morningstar Rating
(as of 5/31/2019)
Overall
infoIcon:
Overall, 4 stars, 3-Year, 4 stars, 5-Year, 3 stars, and 10-Year, 4 stars, rated against 218, 218, 197 and 81 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures. Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2019 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
 infoIcon:
email
218 Products | Bank Loan Category
Based on Risk-Adjusted Returns

Hartford Floating Rate High Income Fund (HFHIX)

I-Share Morningstar Rating
(as of 5/31/2019)
Overall
infoIcon:
Overall, 4 stars, 3-Year, 5 stars, and 5-Year, 3 stars, rated against 218, 218 and 197 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures. Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2019 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
 infoIcon:
email
218 Products | Bank Loan Category
Based on Risk-Adjusted Returns

Hartford Municipal Short Duration Fund (HMJIX)

I-Share Morningstar Rating
(as of 5/31/2019)
Overall
infoIcon:
Overall, 4 stars and 3-Year, 4 stars, rated against 178 and 178 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures. Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2019 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
 infoIcon:
email
178 Products | Muni National Short Category
Based on Risk-Adjusted Returns

Hartford Short Duration Fund (HSDIX)

I-Share Morningstar Rating
(as of 5/31/2019)
Overall
infoIcon:
Overall, 4 stars, 3-Year, 4 stars, 5-Year, 4 stars, and 10-Year, 4 stars, rated against 481, 481, 425 and 271 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures. Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2019 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
 infoIcon:
email
481 Products | Short-Term Bond Category
Based on Risk-Adjusted Returns

Hartford Short Duration ETF (HSRT)
(unrated)

*Funds listed have a duration of three years or less as of 3/31/2019; duration is subject to change. View the full list of Hartford Funds.

Talk to your financial advisor today about how to prepare your portfolio for rising interest rates


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Past performance is not a guarantee of future results.

ETFs are not mutual funds. Unlike traditional open-ended mutual funds, ETF shares are bought and sold in the secondary market through a stockbroker. ETFs trade on major stock exchanges and their prices will fluctuate throughout the day. Both ETFs and mutual funds are subject to risk and volatility. 

Investing involves risk, including the possible loss of principal. ● Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall. ● 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. ● 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.

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

 

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