The Russell Midcap® Index moved higher during the quarter, returning 7.70%. Information technology and energy stocks advanced more than 11% during the quarter, while utilities and financials returned 2% and 1.2%, respectively. Companies with the highest long-term growth rate outperformed their slower-growing peers during the period. The markets preference for growth is clearly reflected in the results of the style indices, where the Russell Midcap® Growth Index returned 9.34%, compared with the Russell Midcap® Value Index return of 5.89%.
The Multi-Manager Mid Cap Fund outperformed the benchmark during the quarter with a return of 9.28%, compared with the Russell Midcap® Index return of 7.70%. Strong stock selection drove performance, while sector allocation had a modestly positive impact. Stock selection was favorable in eight out of 10 sectors, with the best results coming from the consumer discretionary area. Selection within health care and utilities detracted marginally. From a sector perspective, the Funds bets are modest, with small overweight positions in technology and industrials and an underweight to consumer stocks.
Following a difficult second quarter, sub-adviser Geneva Capital delivered a very strong third quarter, gaining nearly 11% and outperforming both the broad market and their style benchmark. Consumer discretionary stocks drove much of Genevas outperformance during the period. Sub-adviser Systematic also had a very favorable quarter, with positive contributions from eight out of 10 sectors.
If you're a long-term investor looking to diversify your investments by pursuing the growth potential of mid-sized company stocks, then this Fund may be right for you. It is intended for investors who are aware that mid-sized company stocks are generally riskier than large-company stocks due to greater volatility and less liquidity.
- Invest in mid-cap stocks through a variety of external mid-cap managers who have distinct investment styles and strategies.
- Select complementary managers from a broad universe of investment managers.
- Blend managers into a single fund in an effort to provide an attractive combination of risk and return.