Investment Commentary | Voya Investment Management

Investment Commentary

Voya Intermediate Bond Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • For the quarter, on a net asset value (NAV) basis, the Strategy’s class I shares underperformed the benchmark, the Bloomberg U.S. Aggregate index (the “index”).
  • Sector allocation weighed the most on performance. Security selection also detracted, while duration and yield curve positioning did not impact performance.
  • Allocations across corporate credit as well as many securitized credit sectors were reduced during the quarter, reflecting a desire to reduce risk and increase liquidity.
  • The Strategy remains underweight U.S. Treasuries and neutral agency residential mortgage-backed securities (RMBS), while allocating risk across the corporate and securitized credit spectrum.
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Voya Securitized Credit Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • 2Q22 was largely a continuation of 1Q22. Growth was slower than expected, inflation persisted and yields continued to climb.
  • A key difference is that in 1Q22 the rise in rates was driven partially by a rise in inflation expectations, while in 2Q22 the continued rise in rates was driven entirely by Federal Reserve (the “Fed”) hawkishness, since they, and the market, believe that inflation will move lower but will still be above their target.
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Voya Strategic Income Opportunities Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • For the quarter, the Strategy underperformed its benchmark, the ICE Bank of America U.S. Dollar Three-Month Deposit Offered Rate Constant Maturity index (the “index”).
  • The 2Q22 was largely a continuation of 1Q21. Growth was slower than expected, inflation persisted, and Treasury yields continued to climb.
  • Spreads moved wider and lower-quality sectors trailed higher-quality sectors.
  • Rates and credit spread volatility led to detractions from sector allocation and duration and yield curve decisions. security selection was mixed and in total was a more modest detraction
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Voya GNMA Income Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • The Federal Reserve (the “Fed”) aggressively removed accommodation, raising short-term interest rates by 1.25% during the quarter. Fed purchases of U.S. Treasuries and agency mortgage-backed securities (MBS) declined as quantitative easing (QE) came to a conclusion.
  • Interest rates, including mortgage rates, continued to rise. At this point, nearly 99% of the MBS index has lost its economic incentive to refinance.
  • Generic MBS suffered underperformance versus rates due to elevated rate volatility and general market “risk-off” sentiment.
  • In the face of higher volatility, option-adjusted spreads (OAS) stayed constant through 2Q22 for most coupons.
  • The housing market continued to slow through the period as prices and rates increased. Housing fundamentals remain solid, however, with delinquencies low, and prices expected to stabilize later in the year.
  • For the quarter, the Voya GNMA Income Fund (the “Fund”) outperformed the Bloomberg GNMA index (the “index”).
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Voya Large-Cap Growth Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • The global financial markets sustained sizeable losses in the second quarter — including commodities, which until June had posted positive returns.
  • The Federal Reserve has pivoted to raising interest rates aggressively to fight surging inflation. The Fed policy response raises worries that rate hikes will overshoot curbing inflation and cause a recession.
  • Declining financial markets, higher rates and a stronger U.S. dollar ought to curb inflation enough to give the Fed room to moderate its policy stance. Hopefully, this would allow the economy to stabilize without slipping into recession.
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Voya Corporate Leaders® Trust Fund Series B Quarterly Commentary - 2Q22

June 30, 2022

Market Review

The U.S. and non-U.S. financial markets sustained sizeable losses in the second quarter — including commodities, which until June had posted positive returns. With losses of more than 20%, large capitalization growth and technology stocks sank deeper into bear market territory. The S&P 500 index, a broad market gauge, edged toward a bear market cliff but didn’t fall over it. Globally, bonds also sustained losses as persistent high inflation, and attempts to control it by raising interest rates, sent yields up and prices down. The only assets to post positive returns were short maturity debt instruments such as 1–3 month U.S. Treasury bills.

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Voya Corporate Leaders® 100 Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • For the quarter ended June 30, 2022, the Voya Corporate Leaders 100 Fund (the “Fund”) outperformed its benchmark, the S&P 500 index (the “index”).
  • During the quarter, the Fund continued to follow its strict rules-based investment approach.
  • At the beginning of the quarter, the Fund held equal-weighted positions in the stocks of the S&P 100 index (implying that each holding represented about 1% of the portfolio).
  • Over the course of the quarter, if the value of a security increased by more than 50%,* the position size was reduced to 1%, and if the value of a security decreased by more than 30%,* the position was eliminated.
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Voya Floating Rate Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • In 2Q22, a confluence of macro risks weighed on investor sentiment in the loan market, leading to notable weakness in the secondary market, muted new loan issuance and outflows from retail loan funds and exchange-traded funds (ETFs).
  • Against this backdrop, the S&P/LSTA Leveraged Loan index (the “index”) lost 4.45% for the quarter.
  • Market technical factors reversed the healthy dynamics seen in 1Q22, as new loan supply was muted in the last two months and totaled just $56 billion for the quarter, a 50% reduction from 1Q22
  • For the quarter, the Fund return underperformed the index
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Voya Senior Income Fund Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways

  • In 2Q22, a confluence of macro risks weighed on investor sentiment in the loan market, leading to notable weakness in the secondary market, muted new loan issuance and outflows from retail loan funds and exchange-traded funds (ETFs).
  • Against this backdrop, the S&P/LSTA Leveraged Loan index (the “index”) lost 4.45% for the quarter.
  • Market technical factors reversed the healthy dynamics seen in 1Q22, as new loan supply was muted in the last two months and totaled just $56 billion for the quarter, a 50% reduction from 1Q22.
  • For the quarter, the Fund return underperformed the index.
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Voya MidCap Opportunities Strategy Quarterly Commentary - 2Q22

June 30, 2022

Key Takeaways:

  • For the quarter, the Strategy outperformed its benchmark, the Russell Midcap Growth index (the “index”), primarily due to allocation effects.
  • An allocation to cash, although within the typical range, along with stock selection in the industrials sector contributed the most to performance.
  • Stock selection within the consumer discretionary and health care sectors proved to be the greatest headwind.
  • Russia’s war on Ukraine continued to warp market dynamics, pushing a surge of inflation.
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