Voya Corporate Leaders® 100 Fund Quarterly Commentary - 4Q24

U.S. stocks continued their upward trajectory during the fourth quarter following Donald Trump’s presidential victory, with the S&P 500 Index rising by 2.41% and the Nasdaq Composite advancing by 6.17%. The consumer discretionary and communication services sectors led, while materials and healthcare lagged. Large cap stocks outperformed small caps, and growth stocks significantly beat value stocks. 

The U.S. bond market struggled during the quarter on concerns about sticky inflation and the U.S. Federal Reserve’s more conservative rate-cut path. The Bloomberg U.S. Aggregate Bond Index declined by –3.06% and the 10-year U.S. Treasury yield rose by more than 80 basis points (bp), ending the quarter at 4.58%. The Fed cut rates by 25 bp in November and December. However, the central bank now projects just two rate cuts in 2025, reflecting a more cautious stance in response to strong economic data. 

Over the reporting period, stock selection in financials, health care and industrials sectors contributed the most to performance. At the individual stock level, an underweight in Microsoft Corp., an overweight in Capital One Financial Corp. and General Motors Co. contributed the most to performance. 

By contrast, stock selection in consumer discretionary, information technology and communication services sectors detracted the most. Allocation effects, specifically an underweight to information technology was another headwind. Among the largest individual detractors for the period was the underweight positions in NVIDIA Corp., Amazon.com, Inc. and Apple Inc. 

As of the end of the reporting period, the Fund’s largest sector overweight was to the consumer staples sector, while the largest sector underweight was information technology. Sector exposures are purely a function of the strategy’s rules-based investment discipline and are not actively managed.

After months of noise surrounding the U.S. presidential election, markets have now refocused on macroeconomic data, which offer mixed signals. Key concerns include global geopolitical tensions, especially around tariffs, and deteriorating sentiment tied to mega-cap positioning and broader market weakness. Despite these challenges, U.S. equities should continue to benefit from robust consumer spending, optimism around artificial intelligence and solid corporate earnings. U.S. inflation is projected at 2.5% for 2025, but the new administration’s policies could reverse the disinflation trend.

Companies mentioned in this report – percentage of Fund investments, as of 12/31/24: Microsoft Corp. 0.98%, Capital One Financial Corp. 1.19%, General Motors Co. 1.14%, NVIDIA Corp. 1.10%, Amazon.com, Inc. 1.16% and Apple Inc. 1.10%; 0% indicates that the security is no longer in the Fund. Portfolio holdings are subject to daily change. 

*If a security is underperforming the S&P 500® Index and the S&P 500® Index is positive on an intra-quarter basis, the security will typically be sold when it declines by 30% or more, irrespective of the percentage difference versus the S&P 500® Index. If a security is underperforming the S&P 500® Index and the S&P 500® Index is negative on an intra-quarter basis, the security will typically be sold when it underperforms the S&P 500® Index by 30 percentage points or more. This change went into effect on 5/18/20.