Voya Large-Cap Growth Fund Quarterly Commentary - 2Q25
Actively managed large cap growth strategy that relies on fundamental research and analysis to identify companies exhibiting superior capital investment and core profitability with attractive risk-reward profiles.
Portfolio review
In the second quarter of 2025, U.S. equities rebounded significantly, with the S&P 500 increasing by 10.94% and the Nasdaq Composite rising by 17.75%. The technology and communication services sectors performed the best, while health care and energy sectors lagged, reflecting a mixed but generally positive market environment. Large-cap stocks outperformed small-cap stocks, and growth stocks beat value stocks.
The technology sector surged in 2Q25, driven by artificial intelligence (AI) growth as hyperscalers increased capital expenditure and improved ways to profit from their AI investments. Positive earnings from the Magnificent 7 stocks further boosted performance. The communication services sector also saw strong gains, benefiting from AI advancements and robust earnings. Conversely, policy and regulatory uncertainty weighed on the health care sector, affecting managed care and pharma companies. Weak oil prices and global growth concerns hampered energy companies, leading to their underperformance relative to the broader market. For the quarter, the Strategy outperformed its benchmark, the Russell 1000 Growth Index (the Index), on a NAV basis due to favorable stock selection. The outperformance can mainly be attributed to stock selection within information technology, communication services and industrials sectors. Alternatively negative stock selection within health care, consumer discretionary and financials sectors detracted from performance.
Key contributors to performance included Apple Inc., Axon Enterprise Inc. and Broadcom Inc.
An underweight position in Apple Inc. (AAPL) contributed as a lack of artificial intelligence (AI) innovation as well as continued tariff concerns weighed on the stock.
An overweight position in Axon Enterprise Inc. (AXON) contributed to performance. The company reported strong 1Q25 results with a favorable outlook boosted by new product launches and partnerships.
An overweight position in Broadcom Inc. (AVGO) contributed as demand for AI semiconductors remained strong, supported by their projects with major cloud clients.
Key detractors from performance were UnitedHealth Group Inc., Kenvue, Inc. and Vertex Pharmaceuticals Inc.
Our position in UnitedHealth Group Inc. (UNH) detracted from performance. The company reported earnings that came below expectations and faced regulatory scrutiny due to a Department of Justice (DOJ) probe into its Medicare Advantage business.
Owning a position in Kenvue, Inc. (KVUE) detracted from performance this quarter. Shares declined due to softer shipment volumes from retailer destocking and ongoing tariff-related pressures.
An overweight position in Vertex Pharmaceuticals, Inc. (VRTX) detracted as weaker international sales and challenges with a new drug launch weighed on the stock.
Current strategy and outlook
The U.S. economy demonstrated resilience despite continued inflationary pressures and a potential slowdown. The U.S. Federal Reserve kept the key borrowing rate between 4.25% and 4.50%, but signaled potential rate cuts by the end of 2025. However, Fed Chair Powell emphasized a data-dependent approach, with markets expecting rates to remain steady in July. The labor market remains stable with strong nonfarm payrolls, and inflation expectations have fallen, boosting consumer sentiment, but the impact of tariffs remains a risk. U.S. assets are attractive, with the U.S. dollar at its lowest since March 22, 2025. Attractive returns on equities and bonds, coupled with a resilient labor market and global economic leadership, continue to inspire investor confidence and market optimism.
Holdings detail
Companies mentioned in this report—percentage of Strategy investments, as of 06/30/25: Apple Inc. 8.02%, Axon Enterprise Inc. 1.02%, Broadcom Inc. 4.88%, UnitedHealth Group Inc. 0.00%, Kenvue, Inc. 0.45% and Vertex Pharmaceuticals, Inc. 1.20%; 0% indicates that the security is no longer in the portfolio. Portfolio holdings are subject to daily change.
Key Takeaways
Equity markets rebounded in the second quarter after April’s post-Liberation Day volatility, ending above the February peak. Growth outperformed value, driven by strength in technology and communication services, while energy and health care lagged. Easing inflation, selective rate cuts, and increased demand for safe-haven assets highlighted cross-asset dynamics.
For the quarter, the Fund outperformed its benchmark, the Russell 1000 Growth Index (the Index), on a net asset value (NAV) basis due to favorable stock selection.
As we enter the second half, investors face ongoing geopolitical risks and shifting monetary policy. Expanding leadership beyond mega-cap stocks is creating new opportunities, especially in defensive sectors. We remain focused on refining strategies to align with evolving conditions amid persistent uncertainty and inflationary pressures.