Pioneer Funds Q2 2024 Performance: A Comprehensive Market Analysis

Pioneer Core Equity Fund Q2 2024 Performance And Market Commentary

See glossary of frequently used terms for definitions. Diversification does not assure a profit or protect against loss. Pioneer Core Equity focuses on high-quality, sustainable US large-cap companies trading at attractive valuations with the goal of maximizing risk-adjusted returns over a full market cycle. The Portfolio represents and combines the best ideas from the Amundi US Equity Research team of experienced career analysts with a disciplined portfolio construction and risk management framework. The portfolio managers seek to build a portfolio of companies with quality business models that can grow and/or sustain economic profitability beyond what the market is currently pricing into valuations. The S&P 500 Index (SPX) returned 4.28% in the second quarter on the back of continued enthusiasm for artificial intelligence and the Magnificent Seven. Six of the Magnificent Seven* stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla) outperformed in the quarter, with only Meta Platforms (META) underperforming the S&P 500 Index. Nvidia (NVDA) alone contributed more than 30% of the SPX return. The outperformance of the Magnificent Seven caused the SPX to outpace the returns of the average stock in the quarter. The S&P 500 Equal Weighted Index, which measures the performance of all stocks equally, returned -2.63%. Growth stocks continued to outperform value stocks, with the Russell 1000 Growth Index (RLG) returning 8.33%, compared to the -2.17% return of the Russell 1000 Value Index (RLV). Year-to-date, the SPX returned 15.29%, with 31 record closing highs during the period. The strong performance of the SPX was driven by a combination of rising stock valuations as measured by price-to-earnings (P/E) multiples along with better than expected earnings (most notably, from Nvidia). The Russell 1000 Growth Index (RLG) outperformed the Russell 1000 Value Index (RLV), with returns of 20.70% and 6.62% respectively, largely due to sustained enthusiasm for artificial intelligence. For the quarter, the Portfolio underperformed the 4.28% return of the S&P 500 Index. The main reason for the Portfolio's underperformance was weaker security selection in the information technology, communication services and consumer discretionary sectors. In addition, sector allocation results detracted during the quarter, led by our decision to underweight information technology. In contrast, positive security selection in healthcare, energy and materials contributed to relative performance. Among individual holdings, the largest relative detractor was our decision to avoid owning benchmark constituent Nvidia (which contributed over 30% of the S&P 500 Return for the period) for valuation reasons. Nvidia, which is a leading manufacturer of graphic processing units, remains at the forefront of AI and in the increasing demand for AI-ready hardware components and a continued increase in its data center revenue. While we believe Nvidia is a well-positioned company, we do not believe that its current valuation aligns with its future growth prospects. Another relative detractor was our overweight position in Ulta Beauty (ULTA). The stock was weaker in the quarter after the company cited slowing consumer trends in the first quarter. We continue to view Ulta as a high-quality and attractively valued stock with the retail category, relative to its own history and peers; and although it is influenced by overall consumer spending trends, we view it as being more resilient, fundamentally, compared to others in the sector. Conversely, our overweight position in Alphabet (GOOG,GOOGL) was the top individual contributor to performance during the quarter. The stock reported one of the strongest quarters for the company since early 2022, based on reported growth acceleration across the board, its first-ever dividend and a new $70B stock buyback. In addition, our decision to own an out-of-benchmark position in Pure Storage (PSTG), which is a data storage provider, was another top individual relative contributor to performance during the quarter. Although the stock retreated a bit late in the quarter, Pure Storage was up double-digits mid-quarter on increased confidence of gaining traction with cloud titans. In our view, Pure Storage is the most innovative enterprise storage vendor with a financial model that could continue to scale nicely over the next few years, and is attractively valued given its growth opportunities. There is a wide and increasing gap between the performance of the Cap Weighted Indicis and the average stock (Equally Weighted Indices). A large part of this may be due to the superior earnings growth of the Magnificent Seven over the past 12 months, and most particularly year-to-date. This may in part be driven by what appears to be a slowing economy, as the lagged impact of prior rate hikes takes effect despite the positive fiscal stimulus, while much of Magnificent Seven earnings growth has been driven by the AI theme and investments. This earnings outperformance gap is expected to decline in the second half, and during 2025 as year-over-year growth rates for the Magnificent Seven decline, and the earnings of the broader market increase somewhat. We believe if current expectations for AI related earnings suffer any kind of setback, then Cap Weighted Indices may struggle. Inflation has been moderating of late, after surprising to the upside earlier in the year. However, further progress may prove to be slower than currently anticipated, as the stickier elements remain quite firm. The Fed may continue its pause for longer than currently anticipated and disappoint the market should it not start to ease in September. Still, the Fed could react with potential cuts if the economy weakens faster than expected or if there is some kind of negative shock, for example an adverse geopolitical event. While it would be unusual for the economy to fall into recession during an election year, we believe the risks of recession toward year-end or early 2025 remain elevated, no matter how the elections unfold later this year. Overall, we remain cautious, as elevated valuations reflect an optimistic outcome with respect to the economy, interest rates, inflation, the federal debt, and the elections. While the valuation gap between the top and average stocks is still growing, albeit at a slower pace, we believe the fundamentals behind the top stocks do not support such a large valuation differential, and the market could be set to normalize. Against this backdrop, we are focused on bottom-up, fundamental stock picking and we are opportunistically taking advantage of market volatility to pursue investments in what we believe are high-quality names whose valuations are meaningfully below where we think they should be, and that should offer a favorable risk/reward trade-off. From a positioning perspective, the Portfolio's largest overweight allocations at quarter end included materials, financials and energy. Conversely, the largest sector underweights included information technology, healthcare and industrials. The Portfolio has a meaningful overweight in the financial services industry where we own a few non-spread financials that, in our view, are not subject to interest rate or credit risks, which is something that we have concerns about in an evolving economy. The Portfolio also owned a couple of spread financials that we believe do not have credit risk. In health care, our biggest conviction was in the equipment and services segment, as we believe that hospital surgical procedures will remain strong, now that Covid is further behind us. In addition, we held stocks in the managed care sector, as we believe the market has overly discounted the viability of the industry. In terms of notable buys and sells this quarter, within the staples universe, we trimmed holdings in the household and personal products group after a strong run. We added to a position we view as a top operator within consumer staples. The stock has a diverse product mix and remains a defensive stalwart that is, in our view, trading at a relative discount. In addition, within healthcare, we trimmed our exposure to the equipment and services group to add to a pharmaceutical stock, which, in our view, has strong potential resulting from anticipated readouts of three high probability product readouts over the next six months. As we look at the Portfolio today, we are pleased with our current positioning. The Portfolio is meaningfully cheaper than its S&P 500 benchmark and its beta remains less than one. We continue to believe in our call on value over growth, which started in late 2020, and while this view did not render the results that we expected over the last 12 months, we have high conviction in the future prospects of this view and our positioning going forward. Separating the potential strong performers from the rest of the market will be key to portfolio performance over the next year and beyond. With so much uncertainty and variability across industries and companies, we believe it is essential today to actively manage portfolios as we find opportunities across markets and industries. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Pioneer Disciplined Growth Fund Q2 2024 Performance And Market Commentary

Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers, fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. Pioneer Disciplined Growth focuses on mispriced quality, sustainable US large-cap companies trading at attractive valuations with the goal of maximizing risk-adjusted returns over a full market cycle. Utilizing a comprehensive quantitative overlay combined with a disciplined portfolio construction and risk management framework, the investment team seeks to identify quality business models that can grow and/or sustain economic profitability beyond what the market is currently pricing into valuations. The portfolio managers draw upon the deep investment resources and expertise of the Amundi US Equity Research team of experienced career analysts, which provides fundamental and quantitative research on companies globally. The S&P 500 Index (SPX) returned 4.28% in the second quarter on the back of continued enthusiasm for artificial intelligence and the Magnificent Seven. Six of the Magnificent Seven* stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla) outperformed in the quarter, with only Meta Platforms (META) underperforming the S&P 500 Index. Nvidia (NVDA) alone contributed more than 30% of the SPX return. The outperformance of the Magnificent Seven caused the SPX to outpace the returns of the average stock in the quarter. The S&P 500 Equal Weighted Index, which measures the performance of all stocks equally, returned -2.63%. Growth stocks continued to outperform value stocks, with the Russell 1000 Growth Index (RLG) returning 8.33%, compared to the -2.17% return of the Russell 1000 Value Index (RLV). Year-to-date, the SPX returned 15.29%, with 31 record closing highs during the period. The strong performance of the SPX was driven by a combination of rising stock valuations as measured by price-to-earnings (P/E) multiples along with better than expected earnings (most notably, from Nvidia). The Russell 1000 Growth Index (RLG) outperformed the Russell 1000 Value Index (RLV), with returns of 20.70% and 6.62% respectively, largely due to sustained enthusiasm for artificial intelligence. During the quarter, the Portfolio, which employs a higher quality and valuation sensitive approach to investing in US large cap growth stocks, underperformed the 8.33% return of the Russell 1000 Growth Index. The Portfolio's relative underperformance reflected a combination of weaker sector allocation and security selection results. Specifically, weaker stock picks in information technology, alongside our decision to underweight information technology and overweight materials detracted from relative performance. On the positive side, security selection in healthcare, consumer staples and financials contributed. The top relative individual detractor during the quarter was our decision to avoid owning benchmark constituent Nvidia, which does not currently meet our strict valuation criteria. Nvidia, which is a leading manufacturer of graphic processing units, had another strong quarter and remains at the forefront of AI and in the increasing demand for AI-ready hardware components. While we believe Nvidia is a good company, we continue to be the opinion that it is overvalued, though not excessively, given its future growth prospects. Another relative detractor was our overweight position in Lululemon Athletica (LULU). Even though the company reported a solid quarter and raised its full year guidance modestly, shares of the stock couldn't retrace the soft May effect that drove the stock price lower. In our view, we continue to see ample room for growth in the long term, particularly in international markets. Conversely, our overweight position in Alnylam Pharmaceuticals (ALNY) contributed most favorably this quarter in addition to our decision to avoid owning benchmark constituents Mastercard (MA). Share of Alnylam Pharmaceuticals, a leader in RNA interference (RNAi) therapeutics, soared late in the quarter following the announcement of positive top-line results from its phase 3 study. While Mastercard remains one of the largest payment processors globally, the stock's recent decline comes as the company faces a recent setback in the likeliness of a long-standing antitrust lawsuit getting approved. There is a wide and increasing gap between the performance of the Cap Weighted Indicis and the average stock (Equally Weighted Indices). A large part of this may be due to the superior earnings growth of the Magnificent Seven over the past 12 months, and most particularly year-to-date. This may in part be driven by what appears to be a slowing economy as the lagged impact of prior rate hikes takes effect despite the positive fiscal stimulus, while much of Magnificent Seven earnings growth has been driven by the AI theme and investments. This earnings outperformance gap is expected to decline in the second half, and during 2025 as year-over-year growth rates for the Magnificent Seven decline, and the earnings of the broader market increase somewhat. We believe if current expectations for AI related earnings suffer any kind of setback, then Cap Weighted Indices may struggle. Inflation has been moderating of late, after surprising to the upside earlier in the year. However, further progress may prove to be slower than currently anticipated, as the stickier elements remain quite firm. The Fed may continue its pause for longer than currently anticipated and disappoint the market should it not start to ease in September. Still, the Fed could react with potential cuts if the economy weakens faster than expected or if there is some kind of negative shock, for example an adverse geopolitical event While it would be unusual for the economy to fall into recession during an election year, we believe the risks of recession toward year-end or early 2025 remain elevated, no matter how the elections unfold later this year. Overall, we remain cautious, as elevated valuations reflect an optimistic outcome with respect to the economy, interest rates, inflation, the federal debt, and the elections. At quarter end, we have continued to emphasize bottom-up, fundamental stock picking and have added to areas where we have stronger conviction and are finding valuations that are more attractive. From a positioning perspective, the Portfolio's largest sector overweights versus the Russell 1000 Growth Index included materials, consumer staples and energy. With regard to energy, we believe companies in the sector could continue to benefit from higher commodity prices and strong global demand; and while energy is not considered a traditional growth segment, we believe that underinvestment in the energy complex for nearly a decade may lead to underappreciated, structural and more stable growth than the market is discounting. The Portfolio's largest sector underweights are information technology, consumer discretionary and a slight underweight in utilities. The respective underweights in these sectors are valuation-driven as the companies are generally great, in our view, but we believe that is more than priced-in currently. Particularly for information technology, where the Portfolio has a relatively large underweight, we believe that group does not offer sufficient value today despite the hype. We currently go where there is relative value and we are not currently finding that in information technology. In terms of notable changes this quarter, we selectively reduced our consumer discretionary exposure, specifically the specialty retail segment, based on valuation. In addition, while we remain relatively benchmark-neutral in the communication services, we did, however, add to the interactive media and services segments. Separating the potential winners from the rest of the market will be key to Portfolio's success over the next year and beyond. With so much uncertainty and variability across industries and companies, we believe it is essential today to actively manage portfolios as we find opportunities across markets and industries. As we look at the Portfolio today, we are pleased with our current positioning and we strive to reduce risk given our concerns about potential economic volatility. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Pioneer Equity Income Fund Q2 2024 Performance And Market Commentary

Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers, fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. To seek current income and long-term capital growth primarily through income-producing equity securities of US companies. The Fund invests primarily in stocks of companies that have a strong history of paying above-average dividends and uses fundamental research to identify those that are undervalued but possess solid assets, market leadership and management ownership. (Dividends are not guaranteed.) The investment team views a healthy dividend policy as an indicator of a company's quality, both quality of management and quality of the business. The portfolio managers believe maintaining a diversified portfolio of sustainable companies that pay, sustain, and increase dividends over time can provide competitive performance with less risk. The S&P 500 Index (SPX) returned 4.28% in the second quarter on the back of continued enthusiasm for artificial intelligence and the Magnificent 7*. Companies related to the AI theme performed exceptionally well, with a return of more than 14% in the quarter, while the rest of the market had a negative return (-1.2%), according to FactSet. Six of the seven Magnificent 7 stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla ) outperformed in the quarter, with only Meta Platforms (META) underperforming the SPX. Nvidia (NVDA) alone contributed more than 30% of the SPX return. The outperformance of the Magnificent 7 caused the SPX to outpace the returns of the average stock in the quarter. The S&P 500 Equal Weighted Index, which measures the performance of all stocks equally, returned -2.77%. Growth stocks continued to outperform value stocks, with the Russell 1000 Growth Index (RLG) returning 8.33%, compared to the -2.17% return of the Russell 1000 Value Index (RLV). Year-to-date, the SPX returned 15.05%, with a record 31 closing highs during the period. The strong performance of the SPX was driven by a combination of rising stock valuations as measured by price-to-earnings (P/E) multiples along with better-than-expected earnings (most notably, from Nvidia). The RLG outperformed the RLV, with returns of 20.70% and 6.62% respectively, largely due to sustained enthusiasm for AI. For the second quarter of 2024, Pioneer Equity Income Fund Class Y shares underperformed the benchmark, returning -4.11% vs -2.17% respectively. Stock selection results in consumer staples and industrials were the largest detractors to performance for the period, and although stock selection in consumer discretionary and financials aided results for the period, they were not enough to outweigh the aforementioned headwinds. Stocks that detracted from relative performance included Walgreens (WBA) and Disney (DIS). Walgreens Boots Alliance, a food and drug retailer, continued to see pressure on its US retail business amidst a challenging consumer environment. In our view, we see opportunities for better results moving forward as the new management team executes on cost savings initiatives and optimizes the portfolio. Disney, an entertainment and media company, saw shares pull back on commentaries of moderating demands in its amusement parks business as attendance normalizes from a post-COVID boost. We see progress with management's effort to return the company to sustainable growth as the streaming business approaches break-even, alongside other announced partnerships and cost savings effort. Newmont (NEM), a leading gold company and producer of copper, silver, zinc and lead, was the top contributor for the quarter after it reported strong production volumes and benefited from rising gold price. Newmont has continued to deliver on synergies with its recent acquisition, Newcrest Mining, and a focus on its Tier 1 assets, which we believe may lead to improved free cash flow over time. TJX, an off-price retailer that includes the TJ Maxx, Marshalls, HomeGoods, Homesense and Sierra concepts, also contributed for the quarter after the company reported an earnings beat as consumers continued to gravitate towards value in their discretionary purchases and were drawn to the expansive assortments that TJX offers. With its resilient business model and advantaged buying capabilities, we see room for continued growth and market share gain, in our view. Recently, we have begun to see evidence suggesting that the economy is experiencing a slowdown, mainly due to the impact of previous interest rate hikes. Manufacturing is contracting, and there are signs of weakening employment, with job openings and the quits rate declining. As a result, the likelihood of a rate cut in September has increased. While many investors still believe in a softlanding scenario, it is important to note that we believe equity valuations are high in the face of slower growth. If the economy continues to slow and the Federal Reserve responds by reducing interest rates, we believe it is probable that earnings estimates will be revised downward for the remainder of the year and into 2025. It is worth noting that the initial rate cuts typically do not have a positive impact on equity markets. Overall, we believe caution is advised due to the high valuations in the market, which are based on an optimistic outlook for the economy, interest rates, inflation, federal debt, and the elections. While the valuation gap between the top stocks and average stocks continues to widen, albeit at a slower pace, we believe that the fundamentals of the top stocks do not justify such a significant valuation difference. Therefore, we anticipate that the market may normalize. In light of this, we are focusing on bottomup, fundamental stock picking and seeking to taking advantage of market volatility to invest in high-quality stocks that we believe are undervalued relative to their potential, which may offer a favorable risk/reward trade-off. In terms of portfolio positioning, the Portfolio has a benchmark-relative overweight exposure to the cyclical sectors that we expect to do well during an economic recovery, including consumer discretionary, materials, and energy. To balance the Portfolio's cyclical positioning, given the uncertain trajectory of the economic recovery, we also have maintained portfolio exposures to the more defensive areas of the market, such as the consumer staples sector. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.