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Client Conversations 

Are You Prepared For Duration Risk?

Changing 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. Despite historically low interest rates, the duration of the Index is still relatively high at 5.69%. Duration measures the sensitivity of bonds to changes in interest rates. Investors should work with their financial advisors to seek bond funds that offer attractive yields without significant duration risk.

 

Duration of the Bloomberg Barclays US Aggregate Bond Index (1978–3/31/20)

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Source: Barclays Live, Bloomberg, and Hartford Funds, 4/20. 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 4/30/2020)
Overall
infoIcon:
Overall, 4 stars, 3-Year, 3 stars, 5-Year, 3 stars, and 10-Year, 4 stars, rated against 225, 225, 198 and 88 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.
©2020 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.
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225 Products | Bank Loan Category
Based on Risk-Adjusted Returns

Hartford Municipal Short Duration Fund (HMJIX)

I-Share Morningstar Rating
(as of 4/30/2020)
Overall
infoIcon:
Overall, 4 stars and 3-Year, 4 stars, rated against 182 and 182 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.
©2020 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.
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email
182 Products | Muni National Short Category
Based on Risk-Adjusted Returns

Hartford Short Duration Fund (HSDIX)

I-Share Morningstar Rating
(as of 4/30/2020)
Overall
infoIcon:
Overall, 4 stars, 3-Year, 3 stars, 5-Year, 3 stars, and 10-Year, 4 stars, rated against 512, 512, 444 and 284 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.
©2020 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
512 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; duration is subject to change. View the full list of Hartford Funds.

                               Talk to your financial advisor about bond funds                                    that seek to manage duration risk. 


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Past performance does not guarantee 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 Fund 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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