Voya Corporate Leaders® 100 Fund Quarterly Commentary - 2Q25
A rules-based strategy designed to exploit market inefficiencies in a disciplined systematic manner.
Market review
In the second quarter of 2025, U.S. equities rebounded significantly, with the S&P 500 increasing by 10.94% and the Nasdaq Composite rising by 17.75%. The technology and communication services sectors performed the best, while health care and energy sectors lagged, reflecting a mixed but generally positive market environment. Large-cap stocks outperformed small-cap stocks, and growth stocks beat value stocks.
The technology sector surged in 2Q25, driven by artificial intelligence (AI) growth as hyperscalers increased capital expenditure and improved ways to profit from their AI investments. Positive earnings from the Magnificent 7 stocks further boosted performance. The communication services sector also saw strong gains, benefiting from AI advancements and robust earnings. Conversely, policy and regulatory uncertainty weighed on the health care sector, affecting managed care and pharma companies. Weak oil prices and global growth concerns hampered energy companies, leading to their underperformance relative to the broader market.
Over the reporting period, the underweight and stock selection in the information technology sector as well as the overweight and selection in the health care sector detracted from performance. Additionally, stock selection in the communication services sector had a negative impact. Among the largest individual detractors for the period were the underweight positions in NVIDIA Corp., Microsoft Corp., and Broadcom Inc.
By contrast, stock selection in financials contributed to performance. An underweight allocation to the energy sector also contributed to performance but this was partially offset by stock selection. On an individual stock level an underweight in Apple Inc., and overweight positions in Palantir Technologies Inc. and Oracle Corp. contributed to performance this quarter.
As of the end of the reporting period, the Fund’s largest sector overweight was to the industrials 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.
Current strategy and outlook
The U.S. economy demonstrated resilience despite continued inflationary pressures and a potential slowdown. The U.S. Federal Reserve kept the key borrowing rate between 4.25% and 4.50%, but signaled potential rate cuts by the end of 2025. However, Fed Chair Powell emphasized a data-dependent approach, with markets expecting rates to remain steady in July. The labor market remains stable with strong nonfarm payrolls, and inflation expectations have fallen, boosting consumer sentiment, but the impact of tariffs remains a risk. U.S. assets are attractive, with the U.S. dollar at its lowest since March 22, 2025. Attractive returns on equities and bonds, coupled with a resilient labor market and global economic leadership, continue to inspire investor confidence and market optimism.
Holdings detail
Companies mentioned in this report—percentage of Fund investments, as of 06/30/25: NVIDIA Corp. 1.34%, Microsoft Corp. 1.22%, Broadcom Inc. 1.00%, Apple Inc. 0.88%, Palantir Technologies Inc. 0.99% and Oracle Corp. 1.45%; 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.
Key Takeaways
For the quarter ended June 30, 2025, the Voya Corporate Leaders 100 Fund underperformed its benchmark on a net asset value (NAV) basis, the S&P 500 Index (the Index).
During the quarter, the Fund continued to follow its strict rules-based investment approach. At the beginning of the quarter, the Fund held equal-weighted positions in the stocks of the S&P 100 Index (implying that each holding represented about 1% of the portfolio).
Over the course of the quarter, if the value of a security increased by more than 50%,* the position size was reduced to 1%, and if the value of a security decreased by more than 30%,* the position was eliminated.