Hartford Floating Rate Fund (I Share) underperformed the Morningstar LSTA US Leveraged Loan Index during the quarter as global fixed-income markets faced a challenging backdrop from inflation shocks.
Sector allocation for the Fund was neutral, as overweights to technology and energy contributed while underweights to chemicals and healthcare detracted from relative performance.
The Fund's out-of-benchmark allocation to high-yield credit had a negative impact on relative performance as credit spreads widened later in the quarter.
In late February, fears around AI displacement in the software-heavy leveraged loan market sparked a sell-off that drove much of the asset class's Q1 returns.
Liability management exercise activity has increased in the bank loan market and is likely to continue, as LMEs have become more prevalent than traditional bankruptcy filings.
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Market Overview
Global fixed-income markets faced a more challenging backdrop in the first quarter of 2026, as the inflation shock from the Iran War reset monetary policy expectations and shifted government bonds yields higher across the
