Voya MidCap Opportunities Strategy Quarterly Commentary - 3Q26
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Voya MidCap Opportunities Strategy Quarterly Commentary - 3Q26

Key Takeaways

Large cap equities advanced during the third quarter, while mid and small cap indices declined and value generally outperformed growth. Sector leadership favored energy, technology, and health care, supported by resilient earnings and continued investment in AI-related infrastructure. As the quarter progressed, renewed enthusiasm around AI and the emerging opportunities associated with agentic AI supported select growth-oriented areas of the market, even as broader participation remained uneven.

For the quarter ended September 30, 2026, the Fund outperformed its benchmark, the Russell Mid Cap Growth Index (the Index) on a net asset value (NAV) basis, due to both allocation and stock selection effects. 

Equity markets continue to navigate a mixed backdrop of resilient economic activity and corporate earnings alongside elevated valuations, interest-rate uncertainty, and geopolitical and policy risks. Continued investment in AI infrastructure remains an important source of earnings growth, while increasing focus on agentic AI is broadening attention from the infrastructure buildout toward companies positioned to benefit from AI adoption and monetization. Against this backdrop, we believe a selective approach remains warranted, with opportunities across both secular growth themes and attractively valued areas of the market.

Actively managed mid-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

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. 

For the quarter, the Fund outperformed the Index on a NAV basis, driven by positive allocation and stock selection effects. Stock selection in the health care sector contributed the most to performance, followed by favorable selection in industrials and consumer staples. An underweight allocation to consumer discretionary also contributed. In contrast, stock selection and an underweight allocation to information technology detracted from performance, as did, to a lesser extent, stock selection in materials. 

Key contributors to performance included Cloudflare, Inc., Natera, Inc., and Snowflake Inc. 

An overweight position in Cloudflare, Inc. (NET) contributed to performance as the company delivered a strong earnings report, exceeding revenue expectations and demonstrating continued demand for its cloud and cybersecurity platform. 

Our positioning in Natera, Inc. (NTRA) contributed to performance following a solid earnings report, highlighted by strong revenue growth and increased guidance. 

An overweight position in Snowflake Inc. (SNOW) contributed to performance as the company reported strong revenue growth and raised its outlook, reinforcing confidence in demand for its data-cloud platform. 

Key detractors from performance were MaxLinear, Inc., Atlassian Corp., and GlobalFoundries Inc. 

Our positioning in MaxLinear, Inc. (MXL) detracted from performance. Despite delivering solid earnings, the stock declined as results missed elevated investor expectations and broader weakness among AI infrastructure stocks. 

Not owning Atlassian Corp. (TEAM) detracted from performance, as the company reported solid earnings, strong revenue growth, and accelerating cloud adoption. 

Our positioning in GlobalFoundries Inc. (GFS) detracted from performance, as the stock declined amid a broader semiconductor selloff and concerns over a slower recovery in consumer electronics demand.

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 portfolio investments, as of 09/30/26: Cloudflare, Inc. 5.04%, Natera, Inc. 1.46%, Snowflake Inc. 5.01%, MaxLinear, Inc. 0.00%, Atlassian Corp. 0.00% and GlobalFoundries Inc. 0.00%; 0% indicates that the security is no longer in the portfolio. Portfolio holdings are subject to daily change.

Related Resources

Voya MidCap Opportunities Fund Fact Sheet

Related Products

Voya MidCap Opportunities Fund

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The Russell Midcap Growth Index is an unmanaged index that measures the performance of those companies included in the Russell Midcap Index with relatively higher price-to-book ratios and higher forecasted growth values.

Index returns do not reflect fees, brokerage commissions, taxes or other expenses of investing. Investors cannot invest directly in an index.

All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investing. Foreign Investing does pose special risks including currency fluctuation, economic and political risks not found in investments that are solely domestic. Investing in stocks of Mid-Sized Companies may entail greater volatility and less liquidity than larger companies. The Fund may use Derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance. Other risks of the Fund include but are not limited to: Growth Investing Risks; Market Trends Risks; Other Investment Companies Risks; Price Volatility Risks; Inability to Sell Securities Risks; Securities Lending Risks; and Portfolio Turnover Risks. Investors should consult the Fund's Prospectus and Statement of Additional Information for a more detailed discussion of the Fund's risks.

The strategy is available as a mutual fund or variable portfolio. The mutual fund may be available to you as part of your employer sponsored retirement plan. There may be additional plan level fees resulting in personal performance that varies from stated performance. Please call your benefits office for more information.

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This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities.

The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors. Past Performance does not guarantee future results.

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