Federated MDT All Cap Core Fund (R6) QKACX

Share Classes Product Type Asset Class Category
Mutual Fund Equity Large Cap
As of 09-30-2017

Highlights

  • Market preferences shifted during the quarter from large cap and growth to small cap and value
  • Strong growth-oriented stocks contributed to performance
  • Fund ended quarter roughly sector neutral to benchmark with a value-over-growth bias

Looking back

Just as in the second quarter of this year, the third quarter brought low positive returns (the Russell 3000 Index returned 4.57%) but a varying market environment. Large-cap stocks led small-cap stocks in the first two months of the quarter, but small caps did very well in September and ended the quarter just ahead of large caps (the small-cap Russell 2000 Index returned 5.67% during the quarter while the mega-cap Russell Top 200 Index returned 4.88%). On the style front, growth stocks outperformed value stocks in July and August, but value stocks offset part of the growth advantage in September (for the quarter, the Russell 3000 Growth Index returned 5.93% and the Russell 3000 Value Index returned 3.27%).  

Performance

Federated MDT All Cap Core Fund Institutional Shares returned 6.47% in the third quarter of 2017, outperforming the 4.57% 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.

Performance Contributors

  • Strong growth stocks with very high analyst conviction and prices near 52-week highs
  • Security selection in Information Technology and Health Care sectors
  • Strongest relative performers: Lam Research Corporation, Align Technology, Inc. and Applied Materials, Inc.

Performance Detractors

  • Value stocks with high structural earnings and low analyst conviction
  • Security selection in Financials sector
  • Weakest relative performers: Microsoft Corporation, Boeing Company and CenturyLink, Inc. Microsoft and Boeing outperformed the benchmark but were not held by the fund.

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

Looking ahead

The fund entered 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 a small overweight in Information Technology and an underweight in Real Estate (the fund does not hold REITs). Within the GICS sectors, there were overweight positions in the insurance, food, beverage & tobacco, and semiconductor and semiconductor equipment industries. There were underweight positions in the real estate and diversified financials industries. At the start of the new period, the fund was overweight value stocks relative to growth stocks.