The Hartford Emerging Markets Equity Fund recorded positive absolute returns in the fourth quarter of 2025 but underperformed its benchmark, the MSCI Emerging Markets Index. Security selection in certain sectors contributed to the relative underperformance. Emerging markets equities overall advanced during the period, driven by gains in Latin America.
Emerging-markets equities rose in the fourth quarter of 2025, with Latin America leading the gains, followed by Asia and the Europe, the Middle East, and Africa region. Within Latin America, Brazil experienced a significant surge following the United States' removal of 40% tariffs on Brazilian food products. Brazil's third-quarter GDP growth was limited, though specific figures were not detailed in the commentary.
The Hartford Emerging Markets Equity Fund, specifically the I share class (HERAX), achieved positive absolute returns for the quarter but lagged behind the MSCI Emerging Markets Index. The main factor behind this underperformance was security selection, particularly weaknesses in the information technology and industrials sectors. These setbacks were partly balanced by stronger selections in financials and real estate.
At the close of the period, the fund maintained its largest overweight positions in healthcare, energy, and information technology sectors. From a geographic standpoint, the portfolio held the biggest overweights in South Korea and Thailand. This positioning reflects the fund's strategy amid the broader market advances in emerging economies.
The commentary, published on March 9, 2026, provides insights into the fund's performance and adjustments, highlighting the challenges of sector-specific selections in a generally positive market environment.