As of 09-30-2017

Highlights

  • Market preferences shifted during the quarter from growth to value and large cap to small cap
  • Strong value-oriented stocks contributed to performance

Looking back

Just as in the second quarter of this year, the third quarter brought low positive returns (the Russell 3000 Index returned 4.57%) but a varying market environment. Large-cap stocks led small-cap stocks in the first two months of the quarter, but small caps did very well in September and ended the quarter just ahead of large cap (the small-cap Russell 2000 Index returned 5.67% during the quarter while the mega-cap Russell Top 200 Index returned 4.88%). On the style front, growth stocks outperformed value stocks in July and August, but value stocks offset part of the growth advantage in September (for the quarter, the Russell 3000 Growth Index returned 5.93% and the Russell 3000 Value Index returned 3.27%).

Performance

Federated MDT Large Cap Value Fund Institutional Shares returned 4.00% in the third quarter of 2017, outperforming the 3.11% return of its benchmark, the Russell 1000 Value Index.

Performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. Other share classes may have experienced different returns than the share class presented. To view performance current to the most recent month-end and for after-tax returns, click on the Performance tab.

Click the Performance tab for standard fund performance.

Performance Contributors

  • Strong value stocks with high tangible book-to-price, favorable cash flow and high structural earnings
  • Security selection in Industrials, Information Technology and Consumer Discretionary sectors
  • Strongest relative performers: Target Corporation, HP Inc. and Spirit AeroSystems Holdings, Inc.

Performance Detractors

  • Stocks with less strong value or growth characteristics
  • Security selection in Utilities and Financials sectors
  • Weakest relative performers: SCANA Corporation and Everest Re Group, Ltd. and Berkshire Hathaway Inc., which was not held by the fund

Click the Portfolio Characteristics tab for the fund’s top 10 holdings.

Looking ahead

The fund ended the third quarter roughly sector-neutral to the benchmark according to the Thomson Reuters I/B/E/S-based sector definitions used for the strategy. According to the GICS sectors, there was a significant underweight in Real Estate (the fund does not hold REITs). Within the GICS sectors, there were overweight positions in the banks, insurance and retailing industries. There were significant underweight positions in the diversified financials and real estate industries.