Voya Large-Cap Growth Fund Quarterly Commentary - 1Q26
Actively managed large cap growth strategy that relies on fundamental research and analysis to identify companies exhibiting superior capital investment and core profitability with attractive risk-reward profiles.
Portfolio review
Heightened geopolitical risks and changing economic expectations pushed U.S. equity markets lower during the first quarter of 2026. Broad weakness in large cap technology and software stocks, linked to concerns around artificial intelligence disruption, weighed on performance. The S&P 500 declined by –4.33% on a total return basis, while the Nasdaq Composite fell by –7.11% on a price return basis. Investors shifted market leadership toward more defensive and value focused areas, allowing the energy, materials, and utilities sectors to outperform, while financials, consumer discretionary, and communication services lagged. Value stocks proved more resilient than growth stocks, and small cap stocks outpaced large caps as overall market participation narrowed.
Despite the overall weakness, markets remained largely range bound for much of the quarter, with volatility occurring more beneath the surface than at the broad market level. AI continued to be a key theme, although investor sentiment became more selective as disruption concerns weighed on software and parts of large cap technology. While spending on AI infrastructure remained strong, investor attention shifted toward earnings visibility and return on investment, leading to wider differences in performance across the market.
For the quarter, the Fund underperformed the Index, on a NAV basis. Stock selection within the communication services, industrials, and health care sectors detracted from performance. Alternatively stock selection within the information technology, consumer discretionary, and real estate sectors contributed to performance.
Key detractors from performance were Costco Wholesale Corp., GE Vernova Inc., and Reddit, Inc.
Not owning Costco Wholesale Corp. (COST) detracted from performance as shares rose following a strong earnings report that highlighted improving sales trends and increased store traffic.
Not owning GE Vernova Inc. (GEV) detracted from performance as the stock advanced on continued growth optimism tied to AI-driven demand for power generation and electrification equipment.
Our positioning in Reddit, Inc. (RDDT) detracted from performance amid concerns over decelerating advertising growth and increased uncertainty surrounding the broader impact of agentic AI.
Key contributors to performance were Comfort Systems USA, Inc., Micron Technology, Inc., and Onto Innovation, Inc.
An overweight position in Comfort Systems USA, Inc. (FIX) contributed to performance, as the company delivered a strong earnings report, driven by robust demand tied to AI datacenter construction.
Owning a non-benchmark position in Micron Technology, Inc. (MU) contributed to performance. The company experienced continued demand for both dynamic random-access memory (DRAM) and Flash memory (NAND).
An overweight position in Onto Innovation, Inc. (ONTO) contributed to performance. The company benefited from increased demand for AI-related products, particularly its inspection systems used in advanced packaging for AI computing devices.
Current strategy and outlook
The U.S. economy entered 2026 in a strong position despite high interest rates and tighter financial conditions, as markets moved from expecting rate cuts to anticipating an extended period of steady policy. Consumer spending continued to support demand, while expectations for double-digit earnings growth led to shifts across sectors, especially in technology amid ongoing disruption from artificial intelligence. Market leadership expanded beyond mega cap stocks, and although labor market conditions eased, broader data pointed to moderation rather than a clear downturn.
Inflation trends and geopolitical events played a growing role in shaping interest rate expectations and asset performance. Ongoing inflation pressures and higher energy prices—linked to Middle East tensions involving Iran and disruptions near the Strait of Hormuz—supported a higher-for-longer interest rate environment. U.S. assets remained relatively strong, with the dollar posting its strongest quarterly gain since late 2024, defensive sectors and equal-weight equities showing resilience, and demand for safe-haven assets staying firm. Overall, the environment reflected high uncertainty alongside solid underlying economic fundamental factors.
Holdings detail
Companies mentioned in this report—percentage of Strategy investments, as of 03/31/26: Costco Wholesale Corp. 0%, GE Vernova Inc. 0%, Reddit, Inc. 0%, Comfort Systems USA, Inc. 1.10%, Micron Technology, Inc. 0.58%, and Onto Innovation, Inc. 0.67%; 0% indicates that the security is no longer in the portfolio. Portfolio holdings are subject to daily change.
Key Takeaways
Equity markets declined in 1Q26 as easing inflation momentum gave way to heightened geopolitical risk and policy uncertainty. Growth-oriented segments led the pullback, while value proved more resilient. Market participation narrowed, with sector performance becoming more mixed and energy emerging as a standout amid global supply concerns.
For the quarter, the Fund underperformed its benchmark, the Russell 1000 Growth Index (the Index), on a net asset value (NAV) basis.
Equity markets are navigating a more complex macro environment, influenced by geopolitical risk, policy uncertainty, and evolving growth dynamics. Leadership is rotating toward more defensive and quality-oriented areas, reinforcing the importance of selective positioning and active risk management in a more volatile environment.