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Common Annual Whole Returns for Class Y Shares
Month-to-Date
Quarter-to-Date
12 months-to-Date
1-12 months
3-12 months
5-12 months
10-12 months
Pioneer Mid Cap Worth (MUTF:PYCGX)
-1.95%
-4.28%
2.62%
10.03%
5.89%
9.14%
6.68%
Russell Midcap Worth Index (Benchmark)
-1.60%
-3.40%
4.54%
11.98%
3.65%
8.49%
7.60%
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Gross and Internet expense ratio: 0.98%
Name 1-800-225-6292 or go to Amundi US for the newest month-end efficiency outcomes. Present efficiency could also be decrease or larger than the efficiency knowledge quoted. The efficiency knowledge quoted represents previous efficiency, which isn’t any assure of future outcomes. Funding return and principal worth will fluctuate, and shares, when redeemed, could also be value roughly than their unique value. Class Y shares aren’t topic to gross sales prices and can be found for restricted teams of traders, together with institutional traders. Preliminary investments are topic to a $5 million funding minimal, which can be waived in some circumstances. All outcomes are historic and assume the reinvestment of dividends and capital good points. Durations of lower than one yr are precise, not annualized. Different share courses can be found for which efficiency and bills will differ.
Efficiency outcomes mirror any relevant expense waivers in impact throughout the durations proven. With out such waivers, fund efficiency could be decrease. Waivers will not be in impact for all funds. Sure payment waivers are contractual by a specified interval. In any other case, payment waivers may be rescinded at any time. See the prospectus and monetary statements for extra data.
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Funding Strategy
Seeks to spend money on higher-quality mid-cap worth shares, with a deal with valuation. The portfolio managers make use of a high-conviction funding technique, making use of a disciplined and repeatable strategy to basic evaluation that search to establish high-quality, mid-cap worth corporations which can be buying and selling at engaging valuations and have bettering or secure basic traits, in complement with deeper worth corporations to which managers allocate property opportunistically.
Sometimes, this quality-oriented funding strategy ends in a portfolio of fifty to 70 shares, with the intention of limiting threat, whereas looking for to generate above-average complete returns.
Market Assessment
The S&P 500 Index (SPX) returned 4.28% within the second quarter on the again of continued enthusiasm for synthetic intelligence and the Magnificent Seven*. Six of the Magnificent Seven shares (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla) outperformed within the quarter, with solely Meta Platforms (META) underperforming within the SPX. Nvidia (NVDA) alone contributed greater than 30% of the SPX return.
The outperformance of the Magnificent Seven brought on the SPX to outpace the returns of the typical inventory within the quarter. The S&P 500 Equal Weighted Index, which measures the efficiency of all shares equally, returned -2.63%. Development shares continued to outperform worth shares, with the Russell 1000 Development Index (RLG) returning 8.33%, in comparison with the -2.17% return of the Russell 1000 Worth Index (RLV). 12 months-to-date, the SPX returned 15.29%, with 31 file closing highs throughout the interval. The sturdy efficiency of the SPX was pushed by a mix of rising inventory valuations as measured by price-to-earnings (P/E) multiples, together with higher than anticipated earnings (most notably, from Nvidia). The RLG outperformed the RLV, with returns of 20.70% and 6.62% respectively, largely resulting from sustained enthusiasm for AI.
Efficiency Assessment
For the second quarter, mid-cap worth shares, as measured by the Portfolio’s benchmark, the RLV, underperformed the SPX, returning -1.60% versus the SPX’s 3.59%. Inside this surroundings, the Portfolio underperformed, returning -1.95%, resulting from a mix of allocation impact and inventory choice outcomes. Regardless of the constructive momentum produced from the industrials and data expertise sectors, our healthcare and shopper staples drew inventory choice outcomes barely decrease for the quarter. Relating to allocation impact, our obese to the poorly performing shopper staples sector and underweight the outperforming actual property sectors, detracted from the outcomes.
Turning to particular person holdings, positions in Zimmer Biomet (ZBH) and Walgreens Boots Alliance (WBA) have been among the many largest detractors. Zimmer Biomet, a medical gear supplier, offered long-range steerage throughout their Analyst Day that already matched analyst estimates. We imagine their plan has advantage and the basics are bettering, together with the steadiness sheets and the administration crew.
Walgreens Boots Alliance, a meals and drug retailer, continued to expertise stress on its US retail enterprise amidst a difficult shopper surroundings. We imagine there are alternatives for higher outcomes as new administration executes value financial savings initiatives and seeks to optimize their portfolio.
HP Inc (HPQ), a pc {hardware} firm, was a prime attributor for the interval, as the corporate reported indicators of restoration in industrial laptop demand and highlighted alternatives associated to the introduction of synthetic intelligence applied sciences of their PC and printer product segments. The corporate stays dedicated to execute on its value financial savings goal by finish of fiscal yr 2025.
One other contributor for the interval was AerCap (AER), an plane leasing agency, that delivered sturdy outcomes because it continues to profit from a brief provide of aircrafts and engines precipitated by OEM struggles. Consequently, the agency has exercised pricing energy, value and capital self-discipline. We expect the inventory stays engaging.
Prime Relative Detractors and Contributors – Second Quarter 2024
Relative Contributors
Common % of Portfolio
Relative Detractors
Common % of Portfolio
─
AerCap
2.86%
─
Zimmer Biomet
2.92%
─
Public Service Enterprise Group (PEG)
2.60%
─
GE Healthcare (GEHC)
2.23%
─
Motorola (MSI)
2.15%
─
AGCO Company (AGCO)
1.80%
─
HP
1.73%
─
Dentsply Sirona (XRAY)
1.11%
─
Brink’s (BCO)
1.60%
─
Walgreens Boots Alliance
0.93%
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Securities listed above are holdings of the Portfolio, or benchmark elements that weren’t held within the Portfolio, and the typical proportion of the Portfolio’s invested property they represented as of the quarterly interval proven, in descending order from biggest to least, when it comes to contribution to or detraction from the Portfolio’s efficiency relative to the benchmark. See Web page 4 for extra details about efficiency attribution.
See glossary of often used phrases for definitions.
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Prime 10 Holdings (as of June 30, 2024)
% of Portfolio
% of Portfolio
1. State Avenue (STT)
3.4%
6. Zimmer Biomet (ZBH)
2.7%
2. Ebay (EBAY)
3.2%
7. M&T Financial institution (MTB)
2.6%
3. Coterra Power (CTRA)
3.0%
8. Truist Monetary (TFC)
2.6%
4. Aercap (AER)
2.8%
9. Chord Power (CHRD)
2.5%
5. Public Service Enterprise (PEG)
2.7%
10. American Intl Group (AIG)
2.5%
Click on to enlarge The portfolio is actively managed and present data is topic to vary. The holdings listed shouldn’t be thought-about suggestions to purchase or promote any safety.
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Market Outlook and Positioning
There’s a vast and growing hole between the efficiency of the Cap Weighted Indices and the typical inventory (Equally Weighted Indices). A big a part of this can be because of the engaging incomes development of the Magnificent Seven over the previous 12 months, and most notably year-to-date. This will likely partially be pushed by what seems to be a slowing economic system because the lagged influence of prior price hikes takes impact regardless of the constructive fiscal stimulus, whereas a lot of Magnificent Seven earnings development has been pushed by the AI theme and investments.
The earnings outperformance hole is anticipated to say no within the second half of 2024 and through 2025 as year-over-year development charges of the Magnificent Seven decline and broader market earnings enhance. If present expectations for AI associated earnings endure any setbacks, we imagine Cap Weighted Indices could wrestle.
Inflation has been moderating as of late, after a shocking upside earlier within the yr. Nevertheless, from our perspective, additional progress could also be slower than at the moment anticipated, because the stickier parts stay agency. The Federal Reserve (the Fed) could proceed to delay reducing charges for longer than anticipated and disappoint the market, ought to it not begin to ease in September. Nonetheless, the Fed may react with price cuts if the economic system weakens earlier than anticipated or there be some sort of unfavorable shock, for instance, an antagonistic geopolitical occasion.
Whereas it will be uncommon for the economic system to fall right into a recession throughout an election yr, we imagine the chance stays and doubtlessly could happen in the direction of the tip of the yr, or the start of 2025 – irrespective of how the elections unfold. We stay cautious, as elevated valuations mirror an optimistic consequence with respect to the economic system, rates of interest, inflation, federal debt and the elections.
In opposition to this backdrop, we’ve maintained the Fund’s obese place within the monetary and power sectors. We’re additionally obese in shopper staples, the place we imagine we’ve recognized good worth concepts. Company earnings in our view, result in higher share-price efficiency for the intrinsically undervalued shares we favor.
We stay obese in banks with sticky deposit bases, footprints in rising geographies, and conservative underwriting cultures and imagine we’re shopping for these traits at engaging valuations.
Our publicity to power takes the type of inventory particular funding instances with minimal reliance upon solely the worth of oil. The latest capital self-discipline on show throughout power corporations, in our view, is admirable and will result in vital worth creation.
We’re underweight in industrials and data expertise, based on valuations, that are elevated in comparison with the remainder of the Index and historic ranges.
*As of June 30, 2024, the Portfolio didn’t personal Apple, Amazon, Nvidia, META Platforms, Tesla, Alphabet or Microsoft. See glossary of often used phrases for definitions. Diversification doesn’t guarantee a revenue or defend towards loss.
See glossary of often used phrases for definitions.
Efficiency Attribution: Extra Info
This efficiency attribution seeks to establish and quantify the drivers of portfolio efficiency relative to that of its benchmark. Utilizing FactSet software program, we create hypothetical subportfolios by segmenting the portfolio and its benchmark, then measure the worth (weight) and returns of these hypothetical subportfolios. This lets us measure the efficiency influence of a call to obese or underweight a portfolio phase. It additionally lets us measure the efficiency influence of a particular safety choice inside every phase.
The Russell Midcap Worth Index measures the efficiency of the mid-capitalization worth sectors of the US fairness market. The Russell Midcap Development Index measures the efficiency of the mid-capitalization development sectors of the US fairness market. The Russell 1000 Development Index measures the efficiency of the large-capitalization development sector of the US fairness market. The Russell 1000 Worth Index measure the efficiency of the large-capitalization worth sectors of the US fairness market. The S&P 500 Index measures the efficiency of the broad US inventory market. Indices are unmanaged and their returns assume reinvestment of dividends and don’t mirror any charges or bills. It isn’t attainable to take a position instantly in an index.
Glossary of Often Used Phrases
Alpha- measures risk-adjusted efficiency, representing extra return relative to the return of the benchmark. A constructive alpha suggests threat adjusted worth added by the supervisor versus the index.
Beta – measures an funding’s sensitivity to market actions in relation to an index. A beta of 1 signifies that the safety’s value has moved with the market. A beta of lower than 1 signifies that the safety has been much less unstable than the market. A beta of better than 1 signifies that the safety’s value has been extra unstable than the market.
Foundation Level- A unit of measure used to explain the proportion change within the worth or price of a monetary instrument. One foundation level is equal to 0.01% (1/a centesimal of a p.c) or 0.0001 in decimal type. Generally, it refers to modifications in rates of interest and bond yields.
Correlation- The diploma to which property or asset class costs have moved in relation to 1 one other. Correlation ranges from -1 (at all times shifting in reverse instructions) by 0 (completely unbiased) to 1 (at all times shifting collectively).
Value of Capital — Represents a calculation of the minimal return an organization would want to justify a capital- budgeting undertaking, akin to constructing a brand new manufacturing facility.
Credit score Spreads (or Spreads) – The variations in yield between two fixed-income securities with related maturities.
Dividend yield- refers to a inventory’s annual dividend funds to shareholders, expressed as a proportion of the inventory’s present value.
Earnings Per Share (EPS) – The portion of an organization’s revenue allotted to every excellent share of frequent inventory.
Value to Earnings (P/E) Ratio- The value of a inventory divided by its earnings per share.
Normal Deviation- A statistical measure of the historic volatility of a portfolio; a decrease customary deviation signifies traditionally much less volatility. Trailing P/E (value/earnings)- The sum of an organization’s price-to-earnings, calculated by taking the present inventory value and dividing it by the trailing earnings per share for the previous 12 months.
Huge Moat – a sort of sustainable aggressive benefit possessed by a enterprise that makes it tough for rivals to put on down its market share. Upside/Draw back Seize- The ratio of the upside and draw back of an funding versus a benchmark. These ratios clarify how an funding sometimes performs in relation to a benchmark index.
Yield Curve (Curve)- A yield curve is a line that plots the rates of interest, at a set cut-off date, of bonds having equal credit score high quality however differing maturity dates.
The views expressed are these of Amundi US and are present by June 30, 2024. These views are topic to vary at any time primarily based on market or different situations, and Amundi US disclaims any duty to replace such views. These views will not be relied upon as funding recommendation and, as a result of funding selections for methods are primarily based on many elements, will not be relied upon as a sign of buying and selling intent on behalf of any portfolio.
A Phrase about Danger The market costs of securities could go up or down, typically quickly or unpredictably, resulting from common market situations, akin to actual or perceived antagonistic financial, political, or regulatory situations, recessions, inflation, modifications in curiosity or foreign money charges, lack of liquidity within the bond markets, the unfold of infectious sickness or different public well being points or antagonistic investor sentiment. Investments in mid-sized corporations could supply the potential for larger returns, however are additionally topic to better short-term value fluctuations than bigger, extra established corporations Investing in international and/or rising markets securities entails dangers referring to rates of interest, foreign money trade charges, financial, and political situations. The portfolio invests in REIT securities, the worth of which may fall for a wide range of causes, akin to declines in rental earnings, fluctuating rates of interest, poor property administration, environmental liabilities, uninsured harm, elevated competitors, or modifications in actual property tax legal guidelines. The market value of securities could fluctuate when rates of interest change. When rates of interest rise, the costs of fastened earnings securities within the Fund will typically fall. Conversely, when rates of interest fall, the costs of fastened earnings securities within the Fund will typically rise.
Earlier than investing, take into account the product’s funding goals, dangers, prices and bills. Contact your monetary skilled or Amundi Asset Administration US for a prospectus or a abstract prospectus containing this data. Learn it rigorously.
People are inspired to hunt recommendation from their monetary, authorized, tax and different acceptable professionals earlier than making any funding or monetary selections or buying any monetary, securities or investment-related services or products, together with any services or products described in these supplies.
Amundi US doesn’t present funding recommendation or funding advice.
Securities supplied by Amundi Distributor US, Inc.
Underwriter of Pioneer mutual funds, Member SIPC
60 State Avenue, Boston, Massachusetts 02109
©2024 Amundi Asset Administration US
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Editor’s Be aware: The abstract bullets for this text have been chosen by In search of Alpha editors.
Editor’s Be aware: This text discusses a number of securities that don’t commerce on a serious U.S. trade. Please pay attention to the dangers related to these shares.
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