Mid Cap Diverse Leadership Fund Commentary
Formerly Mid Cap Core Equity Fund
Equity markets produced positive returns in the second quarter. Large-cap stocks led mid caps, which outperformed small caps. Growth indices also performed better than value ones by a wide margin in the large- and mid-cap space whereas growth and value were about equal in small caps. The technology sector produced large returns, which helped the growth trade. Energy also had a good quarter, but other cyclical areas, including financials and industrials, slowed down. The high-beta (more volatile stocks) trade that was so popular after the COVID-19 vaccine announcements in late 2020 through the first quarter of 2021 also died out as higher quality stocks did better in the second quarter.
Morningstar Star Rating
Overall Morningstar RatingTM out of 357 Mid Cap Blend funds (for the overall period, Institutional Shares) Morningstar star ratings are based on risk adjusted total returns.
Positioning the Mid Cap Diverse Leadership Fund
Portfolio composition is subject to change. The Fund is still leaning on some of the cyclical themes, including energy, financials, industrials, and discretionary, as well as technology. From a style perspective, we also tend to hold lower-volatility names and those with higher quality and profitability metrics. In addition, the Fund continues to pursue lower environmental, social and governance (ESG) risk and companies that have displayed more recognition for diverse leadership and strong governance principles.
Why should investors consider investing in this Fund?
The Fund provides exposure to high-quality, mid-cap stocks in a manner that we believe is generally less risky than many of the other funds in the mid-cap peer group (which can hold more small caps and more speculative names). The ESG aspect of the Fund may also appeal to some investors who wish to reduce that risk and invest in companies that are working on issues of fairness with and between employees.
An investor should consider a fund’s investment objectives, risks and charges and expenses carefully before investing or sending money This and other important information about an investment company can be found in the fund’s prospectus. To obtain a Cavanal Hill Funds prospectus or summary prospectus, please call 800-762-7085 or visit us at www.cavanalhillfunds.com. Please read it carefully before investing.