Federated MDT Large Cap Growth Fund (A) QALGX

Share Classes Product Type Asset Class Category
Mutual Fund Equity Large Cap
As of 06-30-2018

Highlights

  • Large-cap growth stocks outperformed large-cap value stocks
  • The stocks with the strongest growth characteristics contributed to performance
  • Fund ended quarter roughly sector neutral to benchmark

Looking back

The second quarter began with small positive returns in April, improved significantly in May for all but large-cap value and finished weakly positive again in June as uncertainty concerning the developing trade dispute may have diminished the optimism of market participants. The Russell 3000 ended the quarter with a return of 3.89%, led by small-cap stocks (the small-cap Russell 2000 Index returned 7.75%, the mega-cap Russell Top 200 Index returned 3.86% and the Russell Midcap Index trailed at 2.82%). Small-cap stocks benefited as people saw that they had less exposure to international trade. While growth did lead value in the Russell 3000, almost all of that lead was attributed to technology stocks: Microsoft plus the FAANGs – Facebook, Amazon Apple, Netflix and Alphabet (Google) – were the top contributors to the Russell 3000 Index. To us, the narrow focus on the popular FAANG stocks and the relatively strong performance of small-cap stocks are confirming signs of investor worry over the brewing trade war.

Performance

Federated MDT Large Cap Growth Fund Institutional Shares returned 5.97% in the second quarter of 2018, outperforming the 5.76% 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 strong price trend
  • Growth stocks with prices near 52-week highs, high analyst conviction and low structural earnings
  • Security selection in Health Care and Consumer Discretionary sectors
  • Relatively strong performers overweighted by the fund: Align Technology, Inc., ABIOMED, Inc. and Netflix, Inc.

Performance Detractors

  • Stocks with prices not near 52-week highs and structural earnings that were not low
  • Security selection in Information Technology and Financials sectors
  • Relatively weak performers overweighted by the fund: Applied Materials, Inc. and Lam Research Corporation
  • Relatively strong performers underweighted by the fund: Microsoft Corporation

How We Are Positioned

The fund ended the second 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 was an overweight position in the commercial and professional services industry. There were small underweight positions in the diversified financials, software and services and real estate industries.