Voya Corporate Leaders® 100 Fund Quarterly Commentary - 3Q26
A rules-based strategy designed to exploit market inefficiencies in a disciplined systematic manner.
Portfolio review
U.S. equities posted modest gains during the third quarter, although performance was increasingly concentrated in a handful of large cap technology and energy companies. The S&P 500 gained 2.30% on a total return basis and the Nasdaq advanced 2.47% on a price return basis, supported by resilient economic growth, strong corporate earnings, and continued enthusiasm surrounding artificial intelligence. Investors also navigated persistent inflation pressures, the U.S. Federal Reserve's first rate increase since 2023, and sharply higher Treasury yields as expectations for additional policy tightening increased. However, stable labor market conditions and expectations for another quarter of robust earnings growth continued to support investor sentiment. Against this backdrop, large cap stocks significantly outperformed small cap stocks, while value stocks outpaced growth stocks during the quarter. Energy, information technology, and healthcare led market performance, while utilities, industrials, and real estate lagged.
Sector performance varied significantly during the quarter. Energy was the strongest-performing sector, as rising oil prices and geopolitical tensions supported the outlook for producers. Information technology advanced, driven by ongoing demand for AI infrastructure, software, and cloud computing, while healthcare benefited from strength in medical technology, hospitals, and biotechnology. In contrast, utilities, industrials, and real estate lagged as rising Treasury yields pressured rate-sensitive industries and increased financing costs. Sector performance reflected two competing forces during the quarter: strong demand for AI-related technologies and rising energy prices supported market leaders, while higher interest rates pressured many rate-sensitive areas of the market.
Over the reporting period, an underweight allocation to the information technology sector and, to a lesser extent, overweight allocations to the industrials and consumer staples sectors detracted the most from performance. Stock selection within the consumer discretionary, financials, and information technology sectors also detracted from performance. On an individual stock level, the key detractors were underweight positions in Microsoft Corp., NVIDIA Corp., and Apple Inc.
By contrast, stock selection in the health care, industrials, and communication services sectors contributed the most to performance. An overweight allocation to the health care sector also contributed. Among the largest individual contributors were overweight positions in Accenture Plc., Salesforce, Inc., and Palantir Technologies 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 information technology. Sector exposures are purely a function of the strategy’s rules-based investment discipline and are not actively managed.
Current strategy and outlook
U.S. equities enter the fourth quarter supported by resilient economic growth, stable labor market conditions, strong corporate earnings, and continued investment tied to AI. Demand for technology, software, cloud infrastructure, and AI-related spending remains strong, supporting a favorable backdrop for corporate investment and innovation.
The primary risk to the outlook remains inflation and its impact on interest rates. The Fed raised its target range for the fed funds rate by 25 basis points to 3.75%–4.00% in September, signaling a continued focus on containing inflation. Combined with hawkish policy signals and Treasury yields near multi-decade highs, this suggests financial conditions could remain restrictive. Investors will be closely watching whether inflation moderates without significantly weakening growth or consumer demand.
Ongoing investment in AI infrastructure and the growing adoption of AI tools across industries would remain important drivers of earnings growth. Growing interest in agentic AI and emerging monetization opportunities are also broadening investor focus beyond infrastructure providers toward companies positioned to benefit from implementation and commercial adoption. The path of inflation, interest rates, earnings growth, and the adoption of AI are likely to be a key determinant of equity performance in the months ahead.
Holdings detail
Companies mentioned in this report—percentage of Fund investments, as of 09/30/26: Microsoft Corp. 1.44%, NVIDIA Corp. 1.21%, Apple Inc. 1.22%, Accenture Plc. 1.00%, Salesforce, Inc. 0.95%, and Palantir Technologies Inc. 1.10%. 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 September 30, 2026, the Voya Corporate Leaders 100 Fund underperformed 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.