As of 09-30-2018

Highlights

  • The market favored large-cap stocks over small-cap stocks and growth over value
  • Strong growth-oriented stocks contributed to outperformance
  • The fund ended the quarter roughly sector neutral to benchmark except for its Real Estate underweight

Looking back

This year’s third quarter opened with two strong months for the domestic equity market but finished with a less favorable month in September (the Russell 3000 Index returned 3.32%, 3.51% and 0.17% in the respective months for a total quarterly return of 7.12%). Large caps led the market: the mega-cap Russell Top 200 Index returned 8.38%, the Russell Midcap Index returned 5.00%, the small-cap Russell 2000 Index returned 3.58% and the Russell Microcap Index returned only 0.83%. The style results showed the Russell 3000 Growth Index returning 8.88% for the quarter, topping the Russell 3000 Value Index return of 5.39%. Last quarter, the Russell 3000 Growth Index had topped the Russell 3000 Value Index by even more but the entire growth advantage had been very narrow, driven by just the technology stocks in the mega-cap Russell Top 200 Index. This quarter, the advantage for growth stocks was broader and more consistent: growth led value by a similar amount in every one of Russell’s capitalization ranges.

Performance

Federated MDT All Cap Core Fund Institutional Shares returned 7.93% in the third quarter of 2018, outperforming the 7.12% return of its benchmark, the Russell 3000 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 on the Portfolio Characteristics tab for fund’s top 10 holdings.

Performance Contributors

  • Growth stocks with prices near 52-week highs and very high analyst conviction
  • Stocks with prices near 52-week highs and neutral to high analyst conviction but worsening earnings- to-price
  • Security selection in Health Care and Information Technology sectors
  • Relatively strong performers overweighted by the fund: Eli Lilly and Company, Cintas Corporation and Mastercard Incorporated (Class A)

Performance Detractors

  • Stocks without strong value or strong growth characteristics
  • Security selection in Consumer Discretionary sector
  • Relatively strong performers underweighted by the fund: Amazon.com, Inc. and Microsoft Corporation

How We Are Positioned

The fund ended the third 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 insurance and health care equipment and services industries. There were underweight positions in the real estate industry and in the diversified financials industry. At the end of the period, the fund was tilted toward growth stocks.