As of 03-31-2018

Highlights

  • The market favored growth over value consistently, but shifted from large cap to small cap
  • Strong value-oriented stocks contributed to performance while strong growth-oriented stocks detracted from performance
  • Fund ended quarter roughly sector neutral to benchmark

Looking back

The first quarter of this year started strong as the year-to-date return of the Russell 3000 Index peaked at 7.11% on Jan. 26, but that entire gain had vanished by mid-February. Each tentative rally thereafter was reversed and the Russell 3000 Index ended the quarter with a net loss of ‑0.64%. Growth-oriented stocks led in the first two months and value stocks led in the last month, just as they had during the quarter ended in December 2017. At the end of the quarter, growth stocks were still substantially ahead of value stocks (Russell 3000 Growth at 1.48%, Russell 3000 Value at -2.82%, with similar spreads in all the capitalization ranges). While there were differences between the capitalization ranges during the quarter (large cap started strong and small cap ended strong), those differences netted out to nothing at the end of the quarter (the small-cap Russell 2000 Index returned ‑0.08%, while the mega-cap Russell Top 200 Index returned ‑0.78%).

Performance

Federated MDT Small Cap Core Fund Institutional Shares returned 0.00% in the first quarter of 2018, outperforming the ‑0.08% return of its benchmark, the Russell 2000 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.

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

Performance Contributors

  • Stocks with an improving relative price trend and very high analyst conviction
  • Underweighting the Real Estate sector, security selection in the Industrials, Financials and Information Technology sectors
  • Relatively strong performers overweighted by the fund: Cimpress N.V., Proofpoint, Inc., and MKS Instruments, Inc.

Performance Detractors

  • Value stocks with high structural earnings
  • Security selection in the Consumer Discretionary sector
  • Relatively weak performers overweighted by the fund: Nutrisystem, Inc., Tile Shop Holdings, Inc. and Lannett Company, Inc.

How We Are Positioned

The fund ended the first quarter roughly sector-neutral to the benchmark according to the GICS sectors, except for an underweight in Real Estate (the fund does not hold REITs). Within the sectors, there were overweight positions in the retailing and banks industries. There was a significant underweight position in the real estate industry and a smaller underweight position in consumer services. The fund had equal weights in value and growth stocks.