Voya Corporate Leaders® 100 Fund Quarterly Commentary - 1Q26
A rules-based strategy designed to exploit market inefficiencies in a disciplined systematic manner.
Portfolio review
Heightened geopolitical risks and changing economic expectations pushed U.S. equity markets lower during the first quarter of 2026. Broad weakness in large cap technology and software stocks, linked to concerns around artificial intelligence disruption, weighed on performance. The S&P 500 declined by –4.33% on a total return basis, while the Nasdaq Composite fell by –7.11% on a price return basis. Investors shifted market leadership toward more defensive and value focused areas, allowing the energy, materials, and utilities sectors to outperform, while financials, consumer discretionary, and communication services lagged. Value stocks proved more resilient than growth stocks, and small cap stocks outpaced large caps as overall market participation narrowed.
Selling pressure also weakened U.S. Treasury markets during the quarter, pushing prices lower and driving yields higher. Ongoing inflation pressures and elevated geopolitical risks reduced expectations for U.S. Federal Reserve interest rate cuts, briefly pushing the 10 year U.S. Treasury yield to its highest level since mid 2025 before it ended the quarter around 4.30%.
Over the reporting period, an underweight allocation to the information technology sector, and an overweight allocation to the consumer staples and industrial sectors contributed the most to performance. Stock selection within the communication services, health care, and consumer staples sectors contributed to performance. On an individual stock level an underweight to Microsoft Corp., and overweight positions in Conoco Philips and FedEx Corp. contributed the most to performance.
By contrast, stock selection in information technology, financials, and real estate sectors detracted from performance. An overweight to the financials sector and an underweight to the materials sector detracted from performance. Among the largest individual detractors for the period were our positioning in Micron Technology, Inc., PayPal Holdings, Inc., and ServiceNow, Inc.
As of the end of the reporting period, the Fund’s largest sector overweight was to the industrials sector, while the largest sector underweight was to the information technology sector. Sector exposures are purely a function of the strategy’s rules -based investment discipline and are not actively managed.
Current strategy and outlook
The U.S. economy entered 2026 in a strong position despite high interest rates and tighter financial conditions, as markets moved from expecting rate cuts to anticipating an extended period of steady policy. Consumer spending continued to support demand, while expectations for double digit earnings growth led to shifts across sectors, especially in technology amid ongoing disruption from AI. Market leadership expanded beyond mega cap stocks, and although labor market conditions eased, broader data pointed to moderation rather than a clear downturn.
Inflation trends and geopolitical events played a growing role in shaping interest rate expectations and asset performance. Ongoing inflation pressures and higher energy prices—linked to Middle East tensions involving Iran and disruptions near the Strait of Hormuz—supported a higher for longer interest rate environment. U.S. assets remained relatively strong, with the dollar posting its strongest quarterly gain since late 2024, defensive sectors and equal weight equities showing resilience, and demand for safe haven assets staying firm. Overall, the environment reflected high uncertainty alongside solid underlying economic fundamental factors.
Holdings detail
Companies mentioned in this report—percentage of Fund investments, as of 03/31/26: Microsoft Corp. 0.80%, Conoco Philips 0.96%, FedEx Corp. 1.28%, Micron Technology, Inc. 0.77%, PayPal Holdings, Inc. 0.00%, and ServiceNow, Inc. 0.00%; 0% indicates that the security is no longer in the Fund. Portfolio holdings are subject to daily change.
*If a security is underperforming the S&P 500® Index and the S&P 500® Index is positive on an intra-quarter basis, the security will typically be sold when it declines by 30% or more, irrespective of the percentage difference versus the S&P 500® Index. If a security is underperforming the S&P 500® Index and the S&P 500® Index is negative on an intra-quarter basis, the security will typically be sold when it underperforms the S&P 500® Index by 30 percentage points or more. This change went into effect on 5/18/20.
Key Takeaways
For the quarter ended March 31, 2026, the Voya Corporate Leaders 100 Fund outperformed its benchmark on a net asset value (NAV) basis, 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.