Federated MDT Large Cap Growth Fund (A) QALGX

Share Classes Product Type Asset Class Category
Mutual Fund Equity Large Cap
As of 12-31-2017

Highlights

  • Market preferences shifted during the quarter from growth to value
  • Growth-oriented stocks with some favorable value characteristics contributed to performance

Looking Back

The fourth quarter of this year was another good quarter for the domestic equity market (the Russell 3000 Index returned 6.34%). The market was changeable (just as in the third quarter), as market participants watched Congress and tried to anticipate which companies would be favored in the final tax bill. While the month of September had been strongest for small-cap value stocks, October was strongest for large-cap growth stocks. November was then neutral, style-wise—every one of the indexes inside of the Russell 3000 returned about 3%. In December, large cap was favored over small cap, and value was favored in the large caps and growth was favored in the small caps. At the end of the fourth quarter, all indexes in the Russell 3000 family were positive for the quarter, with the large-cap Russell Top 200 Growth Index leading with a return of 8.02%, and the small-cap Russell 2000 Value trailing at 2.05%.

Performance

Federated MDT Large Cap Growth Fund Institutional Shares returned 7.82% in the fourth quarter of 2017, underperforming the 7.86% return of its benchmark, the Russell 1000 Growth 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 the fund’s top 10 holdings.

Performance Contributors

  • Strong growth stocks, including those with very high analyst conviction, prices near 52-week highs and not-low cash flow
  • Growth stocks with neutral to high analyst conviction, prices near 52-week highs and not-low structural earnings
  • Security selection in Industrials, Materials and Financials sectors
  • Relatively strong performers overweighted by the Fund: W.W. Grainger, Inc., Align Technology, Inc. and Deere & Company

Performance Detractors

  • Stocks with high analyst conviction, prices near 52-week highs but low structural earnings
  • Stocks with negative analyst conviction, flat or worsening earnings-to-price, but high structural earnings
  • Security selection in Information Technology sector
  • Relatively weak performer overweighted by the Fund: Celgene Corporation
  • Relatively strong performer underweighted by the Fund: Microsoft Corporation
  • Relatively strong performer not held by the Fund: Alphabet Inc.

How We Are Positioned

The fund ended the fourth 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 an overweight in Information Technology and an underweight in Real Estate (the fund does not hold REITs). Within the GICS sectors, there was an overweight position in the semiconductors and semiconductor equipment industry. There were small underweight positions in the consumer services and real estate industries.