Voya Small Cap Growth Fund Quarterly Commentary - 1Q26

• 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 ended March 31, 2026, the Fund underperformed the Russell 2000 Growth Index (the Index) on a net asset value (NAV) basis, due to stock selection. Negative stock selection in the health care, financials, and consumer staples sectors were the leading detractors to underperformance. A positive stock selection effect in the technology and materials sectors combined with an overall positive allocation effect were additive to performance for the period. 
• 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.

For the quarter ended March 31, 2026, the Fund underperformed the Index on a NAV basis, due to stock selection. Negative stock selection in the health care, financials, and consumer staples sectors were the leading detractors to underperformance. A positive stock selection effect in the technology and materials sectors combined with an overall positive allocation effect were additive to performance for the period. 

Top individual detractors from performance included Herc Holdings, Inc., Repligen Corp., and Casella Waste Systems, Inc. 

Herc Holdings, Inc. (HRI), a heavy equipment rental and service company, was the largest detractor for the quarter. HRI continued to experience earnings before interest, tax, depreciation and amortization (EBITDA) margin pressure from their 2025 acquisition of H&E Equipment and 2026 EBITDA guidance was weaker than expected due to continued integration costs and softer local end market demand preventing the company’s ability to completely pass through inflation. Although the investment thesis is still intact, it will take longer to develop than originally planned and therefore we have trimmed our position during the quarter but continue to hold a position. 

Repligen Corp. (RGEN), is a global life sciences company providing bioprocessing technologies and solutions used in the process of manufacturing biological drugs. RGEN has faced a challenging demand environment and operating margin improvement has been elusive. Additionally, the lower end of the initial revenue guidance range was lower than expected, calling into question whether the expected 2026 improvement in demand would materialize. After considering the revenue growth assumptions embedded in guidance, we feel like initial guidance is conservative and are maintaining our position. 

Casella Waste Systems, Inc. (CWST), a provider of waste management services and operator of landfills across the United States, also detracted for the quarter. With the COO leaving the company, investors are concerned regarding operational leadership going forward. This concern has pressured the stock in early 2026, along with angst regarding landfill capacity runway in the northeast. Investor skepticism regarding newly acquired facilities in the Mid- Atlantic has been addressed, and fundamentals continue to be healthy as estimates remain stable. CWST continues to be a top holding in the portfolio. 

Top individual positive contributors included Lumentum Holdings, Inc., Onto Innovation, Inc., and Five Below, Inc. 

Lumentum Holdings, Inc. (LITE), a provider of optical and photonic products utilized in cloud, networking and industrial applications, was the top performer during the quarter. LITE’s Cloud Light Data center unit, which supports technologies critical for artificial intelligence and cloud infrastructure, continues to exceed investor expectations and the company’s valuation re -rated higher given strong visibility into 2027. That said, we are mindful of the inflated market capitalization and valuation and have trimmed the position several times. 

Onto Innovation, Inc. (ONTO), a designer, developer and manufacturer supporting high-performance control metrology, defect inspection, lithography, and data analysis systems used by microelectronics device manufacturers, was a top performer for the quarter, up over 23%. Strong demand for the company’s Dragonfly system, an automated optical inspection platform used by semiconductor manufacturers supplying advanced chips used in AI, fueled positive 4Q25 earnings and resulted in a 2026 increase in revenue guidance. We are maintaining our position. 

Five Below, Inc. (FIVE), a value retailer offering products ranging from fashion and leisure to party and snack items, was a contributor for the period. FIVE drove sizable upside to both revenue and earnings during the fourth quarter due to a strong holiday season and gave strong initial 2026 revenue and earnings guidance. Under the leadership of a new CEO, the company continues to execute well on their merchandising and marketing strategies, and we expect the company to continue to demonstrate strong results. We continue to hold our position in FIVE.

Following a volatile but constructive 2025, the current year started off on a strong note for small cap investors ahead of an expected acceleration in earnings growth, reasonable relative valuations, and forecasts for a more accommodative U.S. Federal Reserve in 2026. Entering 2026, the investment team identified several names that would benefit from this set up, particularly interest-rate sensitive cyclical stocks which were expected to benefit from a near-term inflection in demand and were trading at attractive valuations. This proved to be fruitful as markets began to broaden beyond the high-beta, high-momentum portion of the market fueled by the AI-driven capital expenditures cycle and resulted in strong outperformance in the first seven weeks of the quarter. 

In late February, this set up was challenged when the United States, in coordination with Israel, launched military strikes against Iran. As expected with a geopolitical event of this magnitude, markets have reacted accordingly and investors are monitoring potential economic impacts as it relates to rising oil prices, consumer spending, employment, and increasing cost inputs that have the potential to deteriorate near-term margins and slow revenue growth. Given the cyclical exposure within the portfolio, the outperformance in the first half of the quarter reversed course, resulting in underperformance during the quarter. Given the change in the potential economic backdrop, we have reduced the exposure to interest-rate sensitive areas of the market while being mindful that any positive change to the Iranian conflict could result in a re-broadening effect. 

The length of this conflict will determine the outcome for markets in 2026. While daily social media posts from both the Trump administration and the Iranian leaders are causing heightened volatility, the markets are currently trading more on sentiment than deteriorating fundamental factors. A quicker resolution should preserve many of the prior anticipated “tailwinds” for small caps, but it is a fluid situation. Rest assured we are monitoring holdings, making subtle adjustments at the stock level and currently looking closely at revision cycles and companies with visible upside to numbers to limit volatility until a more definitive resolution to the Middle East conflict occurs.

Companies mentioned in this report—percentage of portfolio investments, as of 03/31/26: Herc Holdings, Inc. 0.98%, Repligen Corp. 1.55%, Casella Waste Systems, Inc. 2.00%, Lumentum Holdings, Inc. 0.93%, Onto Innovation, Inc. 2.69%, and Five Below, Inc.2.05%; 0% indicates that the security is no longer in the Fund. Portfolio holdings are subject to daily change.