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Voya MidCap Opportunities Strategy Quarterly Commentary - 4Q25

Key Takeaways

Equity markets advanced in 4Q25, buoyed by moderating inflation and robust earnings. Technology remained dominant, fueled by accelerating artificial intelligence (AI) adoption, while industrials benefited from strong capital expenditure trends, although energy softened after early strength.

For the quarter ended December 31, 2025, the Fund underperformed its benchmark, the Russell Mid Cap Growth Index (the Index) on a net asset value (NAV) basis, mainly due to unfavorable stock selection.

Looking ahead, investors face geopolitical risks and policy uncertainty. Market leadership is widening beyond mega-cap growth, supported by AI-driven innovation and sustained corporate capital expenditure. Opportunities are emerging in defensives and rate-sensitive sectors, reinforcing the need for nimble positioning amid evolving macro conditions.

Actively managed mid-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

U.S. equity markets closed 4Q25 on a positive note, driven by moderating inflation and robust earnings. The S&P 500 Index advanced 2.66%, and the technology-heavy Nasdaq Composite gained 2.57%. The healthcare and communications services sectors led, while real estate and utilities sectors lagged. Large cap stocks beat small cap stocks, and value outperformed growth stocks. 

The U.S. Federal Reserve supported markets in 4Q25 with two 25 basis point rate cuts. At its December meeting, the Fed signaled a balanced tone and improved growth and inflation outlook. At the same time, AI remained a dominant theme, with strong headlines around innovation and elevated capital investment by major technology firms. Increased spending on AI infrastructure and adoption trends reinforced optimism about its role as a key driver of future growth.

For the quarter, the Fund underperformed the Index on a NAV basis due largely to unfavorable stock selection. Stock selection in the consumer discretionary, industrials, and health care sectors detracted from results. Conversely, stock selection within the energy, consumer staples, and information technology sectors contributed the most to performance. 

Key detractors from performance included Roblox Corp., Doximity, Inc., and Natera, Inc. 

An overweight position in Roblox Corp. (RBLX) detracted from performance. The stock declined following quarterly earnings, which signaled slower profit growth and uncertainty around future bookings. 

An overweight position in Doximity, Inc. (DOCS) detracted from performance. The stock declined following a quarterly earnings report signaling cautious guidance and uncertainty after recent healthcare policy changes. 

Not owning Natera, Inc. (NTRA) detracted from performance. The stock rose after its earnings announcement, signaling a strong revenue beat. 

Key contributors to performance included Vera Therapeutics, Inc., Comfort Systems USA, Inc., and Dollar Tree, Inc. 

Owning a non-benchmark position in Vera Therapeutics, Inc. (VERA) contributed to performance driven by positive phase three clinical trial results for their kidney disease treatment, and AI-enabled drug discovery. 

An overweight position in Comfort Systems USA, Inc. (FIX) contributed to performance. The stock rallied after the company reported stronger-than-expected 3Q25 revenue, driven by robust demand for data centers and AI-related infrastructure. 

A non-benchmark position in Dollar Tree, Inc. (DLTR) contributed to performance driven by better-than-expected third-quarter earnings due to increased seasonal demand. The company’s move to offer prices above $1 boosted margins and profitability.

Current strategy and outlook

The U.S. economy enters 2026 with a foundation of resilience. We expect moderate growth supported by consumer spending and productivity gains, helped by lower rates. The Fed’s recent rate cut reflects heightened concern over labor market softening and confidence that tariff-driven inflation pressures will fade. 

While the outlook suggests a soft landing with moderate growth and gradual disinflation, caution is warranted as geopolitical risks and policy uncertainty persist. In addition, broadening of the narrow market leadership beyond mega-cap growth, underpinned by AI innovation and corporate investment should support market growth.

Holdings Detail

Companies mentioned in this report–percentage of portfolio investments, as of 12/31/25: Roblox Corp. 2.26%, Doximity, Inc. 0.77%, Natera, Inc. 0.00%, Vera Therapeutics, Inc. 0.93%, Comfort Systems USA, Inc. 2.97% and Dollar Tree, Inc. 0.92%; 0% indicates that the security is no longer in the portfolio. Portfolio holdings are subject to daily change.

Related Resources

Voya MidCap Opportunities Fund Fact Sheet

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The Russell Midcap Growth Index is an unmanaged index that measures the performance of those companies included in the Russell Midcap Index with relatively higher price-to-book ratios and higher forecasted growth values.

Index returns do not reflect fees, brokerage commissions, taxes or other expenses of investing. Investors cannot invest directly in an index.

All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investing. Foreign Investing does pose special risks including currency fluctuation, economic and political risks not found in investments that are solely domestic. Investing in stocks of Mid-Sized Companies may entail greater volatility and less liquidity than larger companies. The Fund may use Derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance. Other risks of the Fund include but are not limited to: Growth Investing Risks; Market Trends Risks; Other Investment Companies Risks; Price Volatility Risks; Inability to Sell Securities Risks; Securities Lending Risks; and Portfolio Turnover Risks. Investors should consult the Fund's Prospectus and Statement of Additional Information for a more detailed discussion of the Fund's risks.

The strategy is available as a mutual fund or variable portfolio. The mutual fund may be available to you as part of your employer sponsored retirement plan. There may be additional plan level fees resulting in personal performance that varies from stated performance. Please call your benefits office for more information.

Variable annuities and group annuities are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59½, an IRS 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. All guarantees are based on the financial strength and claims paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies. Insurance products, annuities and funding agreements issued by Voya Retirement Insurance and Annuity Company (“VRIAC”), One Orange Way, Windsor, CT 06095, which is solely responsible for meeting its obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan Services, LLC (“VIPS”). Securities distributed by or offered through Voya Financial Partners, LLC (“VFP”) (member SIPC) or other broker-dealers with which it has a selling agreement. Only Voya Retirement Insurance and Annuity Company is admitted and can issue products in the state of New York.

This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities.

The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors. Past Performance does not guarantee future results.

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