Federated MDT All Cap Core Fund (R6) QKACX

Share Classes Product Type Asset Class Category
Mutual Fund Equity Large Cap
As of 03-31-2018

Highlights

  • Market preferences shifted during the quarter from growth to value
  • Strong growth-oriented stocks contributed to 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 the 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 All Cap Core Fund Institutional Shares returned 2.78% in the first quarter of 2018, outperforming the ‑0.64% 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

  • Strong growth stocks with very high analyst conviction
  • Security selection in Information Technology, Consumer Staples and Financials sectors
  • Relatively strong performers overweighted by the fund: Red Hat, Inc., Dr Pepper Snapple Group, Inc., Mastercard Incorporated (Class A) and Estee Lauder Companies Inc. (Class A).

Performance Detractors

  • Value stocks with strong cash flow and above-average structural earnings
  • No sectors were significant detractors
  • Relatively weak performers overweighted by the fund: Prudential Financial, Inc. and Eli Lilly and Company
  • Relatively strong performer not held by the Fund: Amazon.com, 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 insurance and semiconductors & semiconductor equipment industries. There were underweight positions in the real estate, diversified financials, and software and services industries. At the end of the period, the fund was tilted slightly toward growth stocks.