Voya Financial's Q2 2024 Investment Strategies: A Comprehensive Overview

Voya Global Bond Strategy Q2 2024 Commentary

While the U.S. Federal Reserve held their data-dependent stance, the European Central Bank delivered a hawkish rate cut. Discover a World of Risk-adjusted Opportunities in Global Bond Markets Strategy overview Invests in broad global bond sectors, including a wide range of debt and derivative securities and currencies. Portfolio review For the quarter ended June 30, 2024, the Voya Global Bond Fund Class I Share outperformed the Index on a NAV basis. Sector allocation decisions drove performance, while duration and yield curve positioning as well as currency allocations were detractors for the period. During the second quarter, there was divergence in monetary policy across major global central banks. Global bond yields moved higher and prices declined, as uncertainty around U.S. central bank policy meant Treasury yields rose and peaked intra-quarter as Fed held their data-dependent stance while the ECB delivered a hawkish rate cut. The second quarter got off to a hotter start in the United States as inflation and labor market data demonstrated resilience. This meant Treasury rates rose as investors reassessed the timing of Fed rate cuts. In the latter part of the quarter, however, bond prices recovered as data on the inflation front delivered softer prints and the labor market likely fully rebalanced. In June, while the Fed held rates steady during the Federal Open Market Committee meeting, the ECB delivered their first rate cut, although did so amidst inflation and growth concerns. The French snap election added to the noise and rates sold off. The Bank of Canada (BOC) and the Swiss National Bank (SNB) also reduced their policy rates on better confidence that inflation is moving towards their target. An environment where the Fed held rates steady while other central banks began to their cutting cycle, while the Bank of Japan (BOJ) were reluctant to hike rates again meant interest rate differential continued to support the dollar. The quarter began with a significant upside surprise in the March Non-Farm Payroll (NFP) report, contradicting other employment indicators such as Institute for Supply Management (ISM) Employment and National Federation of Independent Business (NFIB) hiring intentions. Notably, job growth was primarily concentrated in part-time employment, potentially masking broader weakness that was evidenced by a decline in full-time employment that had been ongoing since peaking in May 2023. One month later, NFP missed to the downside, which helped to quell reflation fears but was still strong enough to avoid igniting concerns of a recession. Altogether, the trend over the quarter signaled a return to a more "balanced" labor market, with the pace of wage gains slowing, the quit rate declining, and the unemployment rate ticking up modestly off extreme lows. Similarly, consumer spending, which has led growth over the last several quarters, showed signs of softening, with modest growth numbers reported in both personal spending and retail sales data. Rising credit card delinquencies and a low savings rate further underscored the financial challenges facing some consumers. The disinflationary narrative, which came into question in 1Q24 following a series of upside surprises, regained credibility in 2Q24 as the data came in mostly in line with expectations. That said, Fed officials maintained a cautious stance, and emphasized that no immediate rate cuts were necessary. The Fed's updated dot plot in mid-June revealed a relatively hawkish stance, projecting only one rate cut through the end of the year, compared to three in the March projection. Markets, like the Fed, were very data-dependent. With better growth data reported at the beginning of the quarter, spreads continued to trade at tight levels and credit sectors posted solid excess returns. Interest rates also responding by continuing the selloff that was sparked by the hot inflation data in 1Q24, but ultimately finished the quarter only slightly higher. Corporate credit sectors were further supported by 1Q24 earnings, which again exceeded analyst expectations. While leverage and coverage ratios continued to slowly deteriorate, aggregate fundamental factors remained acceptable, and ratings trends continued to be positive overall. From a technical standpoint, both investment grade (IG) and high yield (HY) sectors were well bid due to higher all-in yields, despite tight spread levels. Securitized credit sectors also benefited from the positive macro backdrop. For example, commercial mortgage-backed securities (CMBS) managed to outperform as easier financial conditions and improved primary market activity has allowed for an easier path to refinance existing loans. Meanwhile on the residential side, primary activity remains subdued, however so did delinquencies and defaults as the employment picture still remains favorable along with borrowers having locked-in low mortgage rates during the covid era. Asset-backed securities (ABS) spreads also managed to tighten, despite the continued increase in delinquencies across subprime borrowers. Collateralized loan obligations (CLO) represented one of the best sources of excess returns on the quarter, likely due to the sectors floating rate attribute in an environment of still elevated rates. Sector allocation decisions drove performance, while duration and yield curve positioning as well as currency allocations were detractors for the period. The strongest contributions were sourced from securitized allocations, as positioning in securitized credit spanning agency mortgages, specifically collateralized mortgage obligations (CMO), including interest-only tranches faring well in a low prepayment environment, CMBS, non-agency residential mortgage-backed securities (RMBS) and ABS that included high yields CLOs all contributed. Allocations to corporate sectors, both IG and HY also added albeit at a smaller level. Our exposure to local emerging markets detracted over the quarter. We actively added risk across spread corporate and securitized sectors, with the most notable increases being in IG corporates, and CMBS. Duration was added when Fed policy uncertainty caused rates to rise but reduced as rates rallied on softer data in the latter part of the quarter. Current strategy and outlook From a fundamental perspective, the outlook has undoubtedly improved. Inflation has managed to decline without significantly impacting growth, and labor markets have managed to rebalance without a meaningful uptick in unemployment. We believe inflation will continue to trend lower, as the lagged impact of declining rent prices will take hold in the coming months, and overcapacity in China will keep goods prices in deflation. We expect growth to remain positive but will continue at a more measured pace. Consumption growth will likely slow due to slowing wage gains and higher prices but will remain positive as the wealth effect (stock prices and home values at all-time highs) continues to be supportive. Similarly, high financing costs will likely curb private investment, however this will be at least partially offset by investment in artificial intelligence technology. Growth in Europe and China have bottomed and will contribute to global growth, driven by local consumption and trade respectively. This will offset the slowdown in the U.S. Stress on lower income consumers is, unfortunately, a key outlier in this otherwise positive dynamic. While not a systemic risk, we do think this will allow the Fed to cut rates prior to the election. That said, with the labor market still intact and consumer spending still supportive in aggregate, along with inflation still above 2%, we believe the extent to which the Fed will cut will be limited and the pace will be slow. While the macro backdrop looks favorable, valuations are rich, for example, the IG corporate index carried a spread of less the 100 basis points (bp) and HY was slightly above 300 bp. Securitized credit sectors appear more attractive from a relative value perspective, as such, we continue to favor an allocation to these sectors; however, we are still avoiding the most vulnerable areas (subprime consumer ABS, non-qualified mortgage RMBS, subordinated CLOs). Meanwhile, duration-oriented risks are poised to benefit from the implementation of central bank policy and the resulting decrease in rate volatility. While strong fundamental factors will continue to support tight spreads, periods of volatility spurred by expectations of lower growth and post-election policies changes will provide opportunities to episodically add risk. You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options; or mutual funds offered through a retirement plan, carefully before investing. The prospectuses / prospectus summaries / information booklets contain this and other information, which can be obtained by contacting your local representative or by calling (800) 992-0180. Please read the information carefully before investing. The Bloomberg Global Aggregate Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-rate debt markets. The Index does not reflect fees, brokerage commissions, taxes or other expenses of investing. Investors cannot invest directly in an index. Principal Risks: All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield. Currency To the extent that the Portfolio invests directly in foreign currencies or in securities denominated in, or that trade in, foreign (non-U.S.) currencies, it is subject to the risk that those currencies will decline in value relative to the U.S. dollar or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged. Derivative Instruments Derivative instruments are subject to a number of risks, including the risk of changes in the market price of the underlying securities, credit risk with respect to the counterparty, risk of loss due to changes in interest rates and liquidity risk. The use of certain derivatives may also have a leveraging effect which may increase the volatility of the Portfolio and reduce its returns. Foreign Investments/Developing and Emerging Markets Investing in foreign (non- U.S.) securities may result in the Portfolio experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, and nationalization, expropriation or confiscatory taxation, foreign currency fluctuations, currency blockage, or political changes or diplomatic developments. Foreign investment risks typically are greater in developing and emerging markets than in developed markets. Asset-Backed (including Mortgage-Related) Securities Defaults on or the low credit quality or liquidity of the underlying assets of the asset-backed (including mortgage-related) securities held by the Portfolio may impair the value of the securities. Credit Derivatives The Portfolio may enter into credit default swaps, either as a buyer or a seller of the swap. As a buyer of the swap, the Portfolio pays a fee to protect against the risk that a security held by the Portfolio will default. As a seller of the swap, the Portfolio receives payment(s) in return for its obligation to pay the counterparty an agreed upon value of a security in the event of a default of the security issuer. Credit default swaps are largely unregulated and susceptible to liquidity, credit, and counterparty risks. Other risks of the Portfolio include but are not limited to: Leverage, Liquidity, Other Investment Companies, Call, Credit, High-Yield Securities, Prepayment and Extension and Securities Lending. Investors should consult the Portfolio's Prospectus and Statement of Additional Information for a more detailed discussion of the Portfolio's risks. An investment in the Portfolio is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. The strategy employs a quantitative investment process. The process is based on a collection of proprietary computer programs, or models, that calculate expected return rankings based on variables such as earnings growth prospects, valuation, and relative strength. Portfolio construction uses a traditional optimizer that maximizes expected return of the portfolio, while managing tracking error. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance. Furthermore, there can be no assurance that the quantitative models used in managing the Fund will perform as anticipated or enable the Fund to achieve its objective. The strategy is available as a mutual fund or variable portfolio. The mutual fund may be available to you as part of your employer sponsored retirement plan. There may be additional plan level fees resulting in personal performance that varies from stated performance. Please call your benefits office for more information. Variable annuities and group annuities are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59½, an IRS 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more or less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective. All guarantees are based on the financial strength and claims paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies. Insurance products, annuities and funding agreements issued by Voya Retirement Insurance and Annuity Company ("VRIAC"), One Orange Way, Windsor, CT 06095, which is solely responsible for meeting its obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan Services, LLC ("VIPS"). Securities distributed by or offered through Voya Financial Partners, LLC ("VFP") (member SIPC)or other broker-dealers with which it has a selling agreement. Only Voya Retirement Insurance and Annuity Company is admitted and can issue products in the state of New York. All companies are members of Voya Financial. This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. Past performance does not guarantee future results. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors. ©2024 Voya Investments Distributor, LLC * 230 Park Ave, New York, NY 10169 * All rights reserved. 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Voya Index Solution Portfolios SM Q2 2024 Commentary

We continue hold a balanced posture between stocks and bonds and favor higher quality U.S. assets. Multi Asset Strategies and Solutions Key takeaways U.S. stock and bond markets initially struggled with high inflation expectations but rebounded as improved May inflation data boosted hopes for U.S. Federal Reserve rate cuts, leading to gains in broad equity markets, particularly in large-cap and growth stocks. In our view, a softening labor market should contribute to slower yet steady economic growth and declining inflation, but no immediate expectations of a recession. We continue hold a balanced posture between stocks and bonds and favor higher quality U.S. assets. The Portfolios' posted positive absolute returns for the period but underperformed their strategic composite benchmarks on a net asset value (NAV) basis. Market review U.S. stock and bond markets faced challenges at the beginning of the second quarter, as hot inflation readings dampened expectations for Fed rate cuts. Towards the end of the quarter, however, the outlook improved as favorable May inflation data increased investor confidence in potential Fed rate reductions by September. This, along with continued strength in the labor market and rising earnings optimism helped broad equity markets post gains for the period. Large-cap stocks outperformed small caps and growth beat value. Within the S&P 500 Index (SP500,SPX) , technology, communication services and utilities sectors led, while materials, industrials and energy lagged. International stocks also moved higher, with emerging markets ('EM') outperforming developed. China and India, the two largest countries within the EM equity index, both performed well. Chinese equities were helped by government support for the real estate sector and improving industrial production, while Indian equities saw strong performance continue after general elections concluded and Prime Minister Modi secured his third term in office. Japanese stocks underperformed in the period primarily due to uncertainty surrounding the Bank of Japan's monetary policy normalization and the expected appreciation of the yen, which raise concerns about the competitiveness of Japanese exports. Fixed income markets had mixed performance but declined in aggregate as the U.S. Treasury yield curve rose slightly. High yield ('HY') bonds performed well due to strong corporate earnings pulling spreads tighter. Like international equities, EM bonds outperformed developed market issues, as French government bonds dropped on political uncertainty. Outlook The impact of high interest rates is evident as growth trends below normal, putting downward pressure on prices. Recent data shows a quarterly gross domestic product (GDP) growth slowdown to 1.4% and a slight increase in unemployment to 4.1%. While employment indicators suggest a softening job market, a rise in job openings to 8.1 million indicates a gradual cooling. Disinflationary trends are resuming, which should support real incomes aligned with 2% inflation. While higher rates counteract some easing financial conditions, we expect inflation to continue decreasing without spiking unemployment, thus averting a recession. Equity markets may not see significant gains soon, especially with expected volatility as U.S. elections approach. In this late-cycle environment, we maintain a neutral stance between stocks and bonds, balancing the risks associated with both asset types. The current global economic landscape and market dynamics favor U.S. assets, particularly large cap stocks. Despite macroeconomic challenges, the United States is better positioned than most regions. U.S. capital markets, a global destination for investor flows, benefit from stable economic conditions, technological innovation and robust financial markets. Consequently, the U.S. is our preferred region, with large cap stocks appealing for their earnings quality, growth potential and momentum. Technology- driven sectors offer unrivaled pricing power, promising positive real returns regardless of inflation levels. However, earnings expectations have outpaced actual earnings, and with nominal GDP growth declining, sales growth will be challenging. While high profit margins and returns on equity may support valuations, they are too high to expect further expansion. Much depends on the earnings growth of U.S. technology megacaps, which have driven recent gains but face scrutiny over their artificial intelligence investments. These firms must eventually demonstrate revenue and earnings from these investments, but immediate results aren't necessary as AI infrastructure providers are generating significant cash flows. Companies need time to transition from training to production models before making accurate assessments. We also value the stability of large companies to buffer against global economic and geopolitical uncertainties, offering a compelling risk- reward opportunity. For as long as we've favored U.S. large caps, we've been underweight real estate investment trusts ('REIT') due to rising interest rates increasing borrowing costs and pressuring their performance. The significant amount of commercial real estate debt needing refinancing at higher rates poses financial risks, especially for office and retail sectors facing structural challenges. Additionally, the volatility and potential overvaluation of publicly traded REITs relative to their net asset values raise concerns about their return potential. Given these factors, we see more attractive investment opportunities elsewhere. International stocks present mixed prospects. Japan struggles with a weak currency and challenges in normalizing monetary policy, despite potential rate hikes influenced by easing U.S. inflation and European Central Bank cuts. Europe faces sluggish growth due to high labor costs, persistent core inflation and geopolitical tensions, exacerbated by domestic political instability, particularly in France. In contrast, the United Kingdom appears more stable and attractive to investors, buoyed by political shifts towards labour under Sir Kier Starmer, anticipated Bank of England rate cuts and favorable macroeconomic data. Meanwhile, China's stock market has rallied, driven by strong GDP growth and robust sectors like electric vehicles and industrial robotics. However, significant risks linger due to its ongoing property crisis and sensitive international relations, especially with the U.S. We maintain a preference for higher quality within fixed income. Despite limited upside from tight spreads, the supportive macroeconomic environment and solid corporate fundamental factors make the yield from investment grade ('IG') bonds appealing. Securitized credit products, particularly consumer-oriented asset-backed securities and residential mortgage-backed securities, are attractive. The commercial mortgage-backed securities ('CMBS') sector, though beaten down, offers value opportunities for astute investors. Although higher interest costs impact HY credit quality, defaults remain limited, keeping us neutral due to increasing tail-risks. We lack a strong conviction on the near-term direction of rates but maintain a modest long duration in aggressive, equity-heavy portfolios for added stability. We prefer nominal over real bonds to hedge against equity downturns. With some foreign central banks cutting rates, certain international bond markets are appealing. However, due to a strong U.S. dollar and potential negative currency impacts, we remain underweight on non-U.S. bonds. Positioning At the beginning of the period there were no open tactical positions. At the end of February, Portfolios enacted their glide downs, leading to lower strategic equity weights in the 2050- 2025 vintages. At the same time, the Portfolios' strategic asset allocations were reset, with all tactical positions at the beginning of the period being subsumed into the revised strategic asset allocation, thereby becoming longer-term views. In early April, U.S. large cap equites were reduced in favor of U.S. mid cap equities. This shift was made to decrease concentration risk in U.S. large cap stocks after significant outperformance, with large stocks producing their best one-year stretch in versus U.S. mid caps since the 1990s. From a factor perspective, diversifying away from momentum and loading higher on value and size was also a motivation. Overall, Portfolios continue to favor U.S. assets and maintain balanced posture overall with a preference for U.S. large cap equities and core IG fixed income. Performance The Voya Index Solution Portfolios' primary performance objective is to outperform its strategic allocation benchmark over the long term through tactical asset allocation, which involves making short- to medium-term changes in the asset allocation to benefit from temporary mispricings or market inefficiencies. The benchmark return is the weighted average return of indices that represent asset classes included in the strategic allocation benchmark. Index returns are gross of all fees. The Portfolios invest in passive index funds to gain exposure to asset classes. The Portfolios generally are rebalanced monthly and the strategic asset allocations are updated annually to reflect changes to our capital market assumptions. The Portfolios' posted positive absolute returns for the period, but underperformed their strategic composite benchmarks on a NAV basis. Tactical asset allocation had a negative impact on performance during the period. Portfolios' tactical overweight to U.S. mid cap and underweight in U.S. large cap equities was a detractor. A broadening rally into other sectors and down capitalization size did not materialize, as megacap technology stocks continued to drive market gains. Despite the robust performance of large-cap stocks, the second quarter saw a significant divergence in the U.S. equity market, with most stocks experiencing declines. In fact, gains were primarily seen in the largest and most growth-oriented stocks. Themes of size, quality and momentum continued to dominate, as riskier trades fell behind against a backdrop of underwhelming earnings for most equities. The Voya Index Solution Portfolios are comprised of passive index funds. The funds may not perfectly track the performance of the underlying asset class benchmarks. During the quarter, index funds' performance differences detracted. You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options; or mutual funds offered through a retirement plan, carefully before investing. The prospectuses / prospectus summaries / information booklets contain this and other information, which can be obtained by contacting your local representative or by calling (800) 992-0180. Please read the information carefully before investing. Principal Risks: There is no guarantee that any investment option will achieve its stated objective. Principal value fluctuates and there is no guarantee of value at any time, including the target date. The target date is the approximate date when an investor plans to start withdrawing his or her money. When their target date is achieved they may have more or less than the original amount invested. For each target-date portfolio, until the day prior to its target date, the Portfolio will seek to provide total return consistent with an asset allocation targeted at retirement in approximately each Portfolio's designated target year. On the target date, the Portfolio's investment objective will be to seek to provide a combination of total return and stability of principal consistent with an asset allocation targeted to retirement. Stocks are more volatile than bonds, and portfolios with a higher concentration of stocks are more likely to experience greater fluctuations in value than portfolios with a higher concentration in bonds. Foreign stocks and small and mid cap stocks may be more volatile than large cap stocks. Investing in bonds also entails credit risk and interest rate risk. Generally, investors with longer timeframes can consider assuming more risk in their investment portfolios. The Voya Index Solution Portfolios are actively managed and the asset allocation is adjusted over time. The portfolios may merge with or change to other portfolios over time. Refer to the prospectus for more information about the specific risks of investing in the various assets classes included in the Voya Index Solution Portfolios. As with any portfolio, you could lose money on your investment in the Voya Solution Portfolios. Although asset allocation seeks to optimize returns given various levels of risk tolerance, you still may lose money and experience volatility. Market and asset class performance may differ in the future from historical performance and the assumptions used to form the asset allocations for the Voya Solution Portfolios. There is a risk that you could achieve better returns in an underlying portfolio or other portfolios representing a single asset class than in the Voya Solution Portfolios. Please keep in mind, using asset allocation as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets. The share price of the Portfolios normally changes daily based on changes in the value of the securities that the Portfolios hold. The investment strategies used may not produce the intended results. The principal risks of investing in the Portfolios and the circumstances reasonably likely to cause the value of your investment in the Portfolios to decline include: asset allocation risk, credit risk, debt securities risk, equity securities risk, foreign investment risk, growth investing risk, inflation indexed bonds risk, interest rate risk, market and company risk, real estate risk, REITs risk, U.S. Government securities and obligations risk, derivatives risk and value investing risk. If you would like additional information regarding the risks of the Portfolios' underlying funds, please see "Description of the Investment Objectives, Main Investments and Risks of the Underlying Funds" and the "More Information on Risks" sections of the Prospectus. The strategy employs a quantitative model to execute the strategy. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect performance. Furthermore, there can be no assurance that the quantitative models used in managing the strategy will perform as anticipated or enable the strategy to achieve its objective. Variable annuities and group annuities are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59½, an IRS 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more or less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective. All guarantees are based on the financial strength and claims paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies. Insurance products, annuities and funding agreements issued by Voya Retirement Insurance and Annuity Company ("VRIAC"), One Orange Way, Windsor, CT 06095, which is solely responsible for meeting its obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan Services, LLC ("VIPS"). Securities distributed by or offered through Voya Financial Partners, LLC ("VFP") (member SIPC)or other broker-dealers with which it has a selling agreement. Only Voya Retirement Insurance and Annuity Company is admitted and can issue products in the state of New York. All companies are members of Voya Financial. This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an otter to sell or solicitation of an otter to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. Past performance is no guarantee of future results. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors. The Fund discussed may be available to you as part of your employer sponsored retirement plan. There may be additional plan level fees resulting in personal performance to vary from stated performance. Please call your benefits office for more information. ©2024 Voya Investments Distributor, LLC * 230 Park Ave, New York, NY 10169 * All rights reserved. Not FDIC Insured | May Lose Value | No Bank Guarantee Voya IM Home - Access Key Insights and Solutions | Voya Investment Management Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. We help investors push what's possible through differentiated solutions across our fixed income, equity and multi-asset platforms, including private markets and alternatives.

Voya Solution Portfolios Q2 2024 Commentary

We continue to hold a balanced posture between stocks and bonds and favor higher quality U.S. assets. The Target Date Choice to Help Keep Retirement Goals on Track Key takeaways U.S. stock and bond markets initially struggled with high inflation expectations but rebounded as improved May inflation data boosted hopes for U.S. Federal Reserve rate cuts, leading to gains in broad equity markets, particularly in large-cap and growth stocks. In our view, a softening labor market should contribute to slower yet steady economic growth and declining inflation, but no immediate expectations of a recession. We continue to hold a balanced posture between stocks and bonds and favor higher quality U.S. assets. The Portfolios posted positive absolute and relative returns for the period on a net asset value (NAV) basis. Market review U.S. stock and bond markets faced challenges at the beginning of the second quarter, as hot inflation readings dampened expectations for Fed rate cuts. Towards the end of the quarter, however, the outlook improved as favorable May inflation data increased investor confidence in potential Fed rate reductions by September. This, along with continued strength in the labor market and rising earnings optimism helped broad equity markets post gains for the period. Large-cap stocks outperformed small caps and growth beat value. Within the S&P 500 Index (SP500, SPX), technology, communication services and utilities sectors led, while materials, industrials and energy lagged. International stocks also moved higher, with emerging markets ('EM') outperforming developed. China and India, the two largest countries within the EM Equity Index, both performed well. Chinese equities were helped by government support for the real estate sector and improving industrial production, while Indian equities saw strong performance continue after general elections concluded, and Prime Minister Modi secured his third term in office. Japanese stocks underperformed in the period primarily due to uncertainty surrounding the Bank of Japan's monetary policy normalization and the expected appreciation of the yen, which raises concern about the competitiveness of Japanese exports. Fixed income markets had mixed performance but declined in aggregate as the U.S. Treasury yield curve rose slightly. High yield ('HY') bonds performed well due to strong corporate earnings, pulling spreads tighter. Like international equities, EM bonds outperformed developed market issues, as French government bonds dropped on political uncertainty. Outlook The impact of high interest rates is evident as growth trends below normal, putting downward pressure on prices. Recent data shows a quarterly gross domestic product (GDP) growth slowdown to 1.4% and a slight increase in unemployment to 4.1%. While employment indicators suggest a softening job market, a rise in job openings to 8.1 million indicates a gradual cooling. Disinflationary trends are resuming, which should support real incomes aligned with 2% inflation. While higher rates counteract some easing financial conditions, we expect inflation to continue decreasing without spiking unemployment, thus averting a recession. Equity markets may not see significant gains soon, especially with expected volatility as U.S. elections approach. In this late-cycle environment, we maintain a neutral stance between stocks and bonds, balancing the risks associated with both asset types. The current global economic landscape and market dynamics favor U.S. assets, particularly large cap stocks. Despite macroeconomic challenges, the United States is better positioned than most regions. U.S. capital markets, a global destination for investor flows, benefit from stable economic conditions, technological innovation and robust financial markets. Consequently, the U.S. is our preferred region, with large cap stocks appealing for their earnings quality, growth potential and momentum. Technology-driven sectors offer unrivaled pricing power, promising positive real returns regardless of inflation levels. However, earnings expectations have outpaced actual earnings, and with nominal GDP growth declining, sales growth will be challenging. While high profit margins and returns on equity may support valuations, they are too high to expect further expansion. Much depends on the earnings growth of U.S. technology mega-caps, which have driven recent gains but face scrutiny over their artificial intelligence investments. These firms must eventually demonstrate revenue and earnings from these investments, but immediate results are not necessary as AI infrastructure providers are generating significant cash flows. Companies need time to transition from training to production models before making accurate assessments. We also value the stability of large companies to buffer against global economic and geopolitical uncertainties, offering a compelling risk-reward opportunity. For as long as we have favored U.S. large caps, we have been underweight in real estate investment trusts ('REIT') due to rising interest rates increasing borrowing costs and pressuring their performance. The significant amount of commercial real estate debt needing refinancing at higher rates poses financial risks, especially for office and retail sectors facing structural challenges. Additionally, the volatility and potential overvaluation of publicly traded REITs relative to their net asset values raise concerns about their return potential. Given these factors, we see more attractive investment opportunities elsewhere. International stocks present mixed prospects. Japan struggles with a weak currency and challenges in normalizing monetary policy, despite potential rate hikes influenced by easing U.S. inflation and European Central Bank cuts. Europe faces sluggish growth due to high labor costs, persistent core inflation and geopolitical tensions, exacerbated by domestic political instability, particularly in France. In contrast, the United Kingdom appears more stable and attractive to investors, buoyed by political shifts towards labor under Sir Kier Starmer, anticipated Bank of England rate cuts, and favorable macroeconomic data. Meanwhile, China's stock market has rallied, driven by strong GDP growth and robust sectors like electric vehicles and industrial robotics. However, significant risks linger due to its ongoing property crisis and sensitive international relations, especially with the U.S. We maintain a preference for higher quality within fixed income. Despite limited upside from tight spreads, the supportive macroeconomic environment and solid corporate fundamental factors make the yield from investment grade ('IG') bonds appealing. Securitized credit products, particularly consumer-oriented asset- backed securities and residential mortgage-backed securities, are attractive. The commercial mortgage-backed securities sector, though beaten down, offers value opportunities for astute investors. Although higher interest costs impact HY credit quality, defaults remain limited, keeping us neutral due to increasing tail-risks. We lack a strong conviction on the near-term direction of rates but maintain a modest long duration in aggressive, equity-heavy portfolios for added stability. We prefer nominal over real bonds to hedge against equity downturns. With some foreign central banks cutting rates, certain international bond markets are appealing. However, due to a strong U.S. dollar and potential negative currency impacts, we remain underweight in non-U.S. bonds. Positioning At the beginning of the period there were no open tactical positions. At the end of February, Portfolios enacted their glide downs, leading to lower strategic equity weights in the 2050-2025 vintages. At the same time, the Portfolio' strategic asset allocations were reset, with all tactical positions at the beginning of the period being subsumed into the revised strategic asset allocation, thereby becoming longer-term views. In early April, U.S. large cap equites were reduced in favor of U.S. mid cap equities. This shift was made to decrease concentration risk in U.S. large cap stocks after significant outperformance, with large stocks producing their best one-year stretch in versus U.S. mid caps since the 1990s. From a factor perspective, diversifying away from momentum and loading higher on value and size was also a motivation. Portfolios continue to favor U.S. assets and maintain balanced posture overall with a preference for U.S. large cap equities and core IG fixed income. Performance The Voya Solution Portfolios' primary performance objective is to outperform its strategic allocation benchmark over the long-term through tactical asset allocation, i.e., deviating from the composite benchmark over the short and medium-term and active manager selection. The benchmark return is the weighted average return of indices that represent asset classes included in the strategic allocation benchmark. Index returns are gross of all fees. The Portfolios are generally rebalanced monthly and the strategic asset allocations are updated annually to reflect changes to our capital market assumptions. The Portfolios posted positive absolute and relative returns for the period on a NAV basis. Tactical asset allocation detracted while manager selection contributed. Tactical asset allocation had a negative impact on performance during the period. Funds' tactical overweight to U.S. mid cap and underweight in U.S. large cap equities was a detractor. A broadening rally into other sectors and down capitalization size did not materialize, as mega-cap technology stocks continued to drive market gains. Despite the robust performance of large-cap stocks, the second quarter saw a significant divergence in the U.S. equity market, with most stocks experiencing declines. In fact, gains were primarily seen in the largest and most growth-oriented stocks. Themes of size, quality and momentum continued to dominate, as riskier trades fell behind against a backdrop of underwhelming earnings for most equities. Underlying manager selection contributed to performance for the period. Strategies that contributed most to excess returns in the quarter were Voya Intermediate Bond, Voya Small Cap Growth and Voya Large Cap Value. The biggest detractors in the quarter were Voya Multi- Manager Emerging Markets Equity, Voya Multi-Manager Mid Cap Value and VY T. Rowe Price Capital Appreciation. You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options; or mutual funds offered through a retirement plan, carefully before investing. The prospectuses / prospectus summaries / information booklets contain this and other information, which can be obtained by contacting your local representative or by calling (800) 992-0180. Please read the information carefully before investing. Principal Risks: There is no guarantee that any investment option will achieve its stated objective. Principal value fluctuates and there is no guarantee of value at any time, including the target date. The target date is the approximate date when an investor plans to start withdrawing his or her money. When their target date is achieved they may have more or less than the original amount invested. For each target-date portfolio, until the day prior to its target date, the Portfolio will seek to provide total return consistent with an asset allocation targeted at retirement in approximately each Portfolio's designated target year. On the target date, the Portfolio's investment objective will be to seek to provide a combination of total return and stability of principal consistent with an asset allocation targeted to retirement. Stocks are more volatile than bonds, and portfolios with a higher concentration of stocks are more likely to experience greater fluctuations in value than portfolios with a higher concentration in bonds. Foreign stocks and small and mid cap stocks may be more volatile than large cap stocks. Investing in bonds also entails credit risk and interest rate risk. Generally, investors with longer timeframes can consider assuming more risk in their investment portfolios. The Voya Solution Portfolios are actively managed and the asset allocation is adjusted over time. The Portfolios may merge with or change to other portfolios over time. Refer to the prospectus for more information about the specific risks of investing in the various assets classes included in the Voya Solution Portfolios. As with any portfolio, you could lose money on your investment in the Voya Solution Portfolios. Although asset allocation seeks to optimize returns given various levels of risk tolerance, you still may lose money and experience volatility. Market and asset class performance may differ in the future from historical performance and the assumptions used to form the asset allocations for the Voya Target Solution Trust. There is risk that you could achieve better returns in an underlying portfolio or other portfolios representing a single asset class than in the Voya Solution Portfolios. Important factors to consider when planning for retirement include your expected expenses, sources of income and available assets. Before investing in the Voya Solution Portfolios, weigh your objectives, time horizon and risk tolerance. The Voya Solution Portfolios invest in many underlying portfolios, which are exposed to the risks of different areas of the market. The higher a portfolio's allocation to stocks the greater the portfolio's overall risk. Diversification cannot assure a profit or protect against loss in a declining market. The share price of the Portfolios normally changes daily based on changes in the value of the securities that the Portfolios hold. The investment strategies used may not produce the intended results. The principal risks of investing in the Portfolios and the circumstances reasonably likely to cause the value of your investment in the Portfolios to decline include: asset allocation risk, credit risk, debt securities risk, equity securities risk, foreign investment risk, growth investing risk, inflation-indexed bonds risk, interest rate risk, market and company risk, real estate risk, REITs risk, U.S. Government securities and obligations risk, derivatives risk and value investing risk. If you would like additional information regarding the risks of the Portfolios' underlying funds, please see "Description of the Investment Objectives, Main Investments and Risks of the Underlying Funds" and the "More Information on Risks" sections of the Prospectus. The strategy employs a quantitative model to execute the strategy. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect performance. Furthermore, there can be no assurance that the quantitative models used in managing the strategy will perform as anticipated or enable the strategy to achieve its objective. Variable annuities and group annuities are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59½, an IRS 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more or less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective. All guarantees are based on the financial strength and claims paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies. Insurance products, annuities and funding agreements issued by Voya Retirement Insurance and Annuity Company ("VRIAC"), One Orange Way, Windsor, CT 06095, which is solely responsible for meeting its obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan Services, LLC ("VIPS"). Securities distributed by or offered through Voya Financial Partners, LLC ("VFP") (member SIPC)or other broker-dealers with which it has a selling agreement. Only Voya Retirement Insurance and Annuity Company is admitted and can issue products in the state of New York. All companies are members of Voya Financial. Past performance is no guarantee of future returns. All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investing. All security transactions involve substantial risk of loss. Please reference your client statement for a complete review of recent transactions and performance. This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an otter to sell or solicitation of an otter to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors. The Fund discussed may be available to you as part of your employer sponsored retirement plan. There may be additional plan level fees resulting in personal performance to vary from stated performance. Please call your benefits office for more information ©2024 Voya Investments Distributor, LLC * 230 Park Ave, New York, NY 10169 * All rights reserved. Not FDIC Insured | May Lose Value | No Bank Guarantee Voya IM Home - Access Key Insights and Solutions | Voya Investment Management Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. We help investors push what's possible through differentiated solutions across our fixed income, equity and multi-asset platforms, including private markets and alternatives.

Voya Securitized Credit Fund Q2 2024 Commentary

On balance, we added risk to the portfolio over the quarter as high levels of new issuance resulted in pockets of inefficiency. Tap into Voya's Flexible "Through-the-Cycle" Approach Key takeaways The disinflationary narrative, which came into question in 1Q24 following a series of upside surprises, regained credibility in 2Q24 as the data came in mostly in line with expectations. For the quarter, the Fund outperformed the benchmark, the Bloomberg US Securitized Index (the Index) on a net asset value (NAV) basis and posted solid excess returns. On balance, we added risk to the portfolio over the quarter as high levels of new issuance resulted in pockets of inefficiency. Portfolio review The second quarter of 2024 was marked by a series of evolving and, at times, conflicting economic signals. The interplay between labor market dynamics, inflation and consumer behavior painted a mixed picture for investors and policymakers alike. The quarter began with a significant upside surprise in the March Non-Farm Payroll ('NFP') report, contradicting other employment indicators such as Institute for Supply Management ('ISM') Employment and National Federation of Independent Business ('NFIB') hiring intentions. Notably, job growth was primarily concentrated in part-time employment, potentially masking broader weakness that was evidenced by a decline in full-time employment that had been ongoing since peaking in May 2023. One month later, NFP missed to the downside, which helped to quell reflation fears but was still strong enough to avoid igniting concerns of a recession. Altogether, the trend over the quarter signaled a return to a more "balanced" labor market, with the pace of wage gains slowing, the quit rate declining and the unemployment rate ticking up modestly off extreme lows. Similarly, consumer spending, which has led growth over the last several quarters, showed signs of softening, with modest growth numbers reported in both personal spending and retail sales data. Rising credit card delinquencies and a low savings rate further underscored the financial challenges facing some consumers. The disinflationary narrative, which came into question in 1Q24 following a series of upside surprises, regained credibility in 2Q24 as the data came in mostly in line with expectations. That said, U.S. Federal Reserve officials maintained a cautious stance, and emphasized that no immediate rate cuts were necessary. The Fed's updated dot plot in mid-June revealed a relatively hawkish stance, projecting only one rate cut through the end of the year, compared to three in the March projection. Markets, like the Fed, were very data dependent. With better growth data reported at the beginning of the quarter credit sectors posted solid excess returns. Interest rates also responding by continuing the selloff that was sparked by the hot inflation data in 1Q24, but ultimately finished the quarter only slightly higher. Securitized credit sectors broadly benefited from the positive macro backdrop. For example, commercial mortgage-backed securities ('CMBS') managed to outperform as easier financial conditions and improved primary market activity has allowed for an easier path to refinance existing loans. Meanwhile on the residential side, primary activity remains subdued, however so did delinquencies and defaults as the employment picture still remains favorable along with borrowers having locked-in low mortgage rates during the Covid era. Asset backed securities ('ABS') spreads also managed to tighten, despite the continued increase in delinquencies across subprime borrowers. Collateralized loan obligations ('CLO') represented one of the best sources of excess returns on the quarter, likely due to the sectors floating rate attribute in an environment of still elevated rates. For the quarter, the Fund outperformed the Index on NAV basis and posted solid excess returns. CMBS was the top contributing sector to excess returns, with conduit as the leading contributor followed by agency real estate mortgage investment conduits (ReREMIC). Non-agency residential mortgage-backed securities ('RMBS') was a close second, with Jumbo 2.0 as the main contributor followed by credit risk transfer ('CRT') and investor collateral. ABS and CLOs also contributed, but to a smaller degree. CLOs posted strong excess returns on a per dollar basis, but our allocation to the space is relatively small. Meanwhile, ABS maintained it's role as "Steady Eddy", posting respectable outperformance with very little volatility. Current strategy and outlook From a fundamental perspective, the outlook has undoubtedly improved. Inflation has managed to decline without significantly impacting growth, and labor markets have managed to rebalance without a meaningful uptick in unemployment. We believe inflation will continue to trend lower, as the lagged impact of declining rent prices will take hold in the coming months, and overcapacity in China will keep goods prices in deflation. We expect growth to remain positive but will continue at a more measured pace. Consumption growth will likely slow due to slowing wage gains and higher prices but will remain positive as the wealth effect (stock prices and home values at all-time highs) continues to be supportive. Similarly, high financing costs will likely curb private investment, however this will be at least partially offset by investment in artificial intelligence technology. Stress on lower income consumers is, unfortunately, a key outlier in this otherwise positive dynamic. While not a systemic risk, we do think this will allow the Fed to cut rates prior to the election. That said, with the labor market still intact and consumer spending still supportive in aggregate, along with inflation still above 2%, we believe the extent to which the Fed will cut will be limited and the pace will be slow. During the quarter, we reduced our holdings of CRT and agency ReREMICs as spreads came in. For CRT specifically, part of the reduction was the result of our participation in Freddie's tender offer for some of their higher quality tranches. On balance however, we added risk to the portfolio as high levels of new issuance resulted in pockets of inefficiency specialized managers like ourselves are well positioned to take advantage of. This was most notable in Prime Jumbo where, despite remaining low from a longer term perspective, new issue picked up in June resulting in wider spreads. This dynamic was also in play in CMBS, and we added a few single asset single borrower ('SASB') deals as well as investment grade conduit. Lastly, while fundamental factors remain strong, we remain defensive in the most vulnerable areas of securitized, such as subprime consumer ABS, non-qualified mortgage RMBS and subordinated CLOs. An investor should consider the investment objectives, risks, charges and expenses of the Fund(s) carefully before investing. For a free copy of the Funds' prospectus, or summary prospectus, which contains this and other information, visit us at www.voyainvestments.com or call(800) 992-0180. Please read the prospectus carefully before investing. The Bloomberg U.S. Securitized MBS/ABS/CMBS and Covered Index includes the MBS, ABS, and CMBS sectors. Indexes do not reflect fees, brokerage commissions, taxes or other expenses of investing, and investors cannot directly invest in an index. All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investing. High-Yield Securities, or "junk bonds", are rated lower than investment-grade bonds because there is a greater possibility that the issuer may be unable to make interest and principal payments on those securities. To the extent that the Fund invests in Mortgage-Related Securities, its exposure to prepayment and extension risks may be greater than investments in other fixed-income securities. The Fund may use Derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance. Foreign Investing does pose special risks including currency fluctuation, economic and political risks not found in investments that are solely domestic. As Interest Rates rise, bond prices fall, reducing the value of the Fund's share price. Other risks of the Fund include but are not limited to: Credit Risks; Credit Default Swaps; Currency; Interest in Loans; Liquidity; Other Investment Companies' Risks; Prepayment and Extension; Price Volatility Risks; U.S. Government Securities and Obligations; Sovereign Debt; and Securities Lending Risks. Investors should consult the Fund's Prospectus and Statement of Additional Information. This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an otter to sell or solicitation of an otter to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors. The Fund discussed may be available to you as part of your employer sponsored retirement plan. There may be additional plan level fees resulting in personal performance to vary from stated performance. Please call your benefits office for more information. Past performance is no guarantee of future results. ©2024 Voya Investments Distributor, LLC * 230 Park Ave, New York, NY 10169 * All rights reserved. Not FDIC Insured | May Lose Value | No Bank Guarantee Voya IM Home - Access Key Insights and Solutions | Voya Investment Management Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. We help investors push what's possible through differentiated solutions across our fixed income, equity and multi-asset platforms, including private markets and alternatives.

Voya Core Plus Fixed Income SMA Q2 2024 Commentary

While the macro backdrop looks favorable, valuations are rich however all-in yields remain historically attractive, allowing investors to capture high quality yield without overstretching into risk. Seeks total return through security selection, sector allocation and risk management Key takeaways Spreads widened and rates moved higher, but the magnitude was small enough to allow for modestly positive results across fixed income. The Strategy outperformed its benchmark, the Bloomberg U.S. Aggregate Bond Index (the Index) on a net asset value (NAV) basis. Security selection and sector allocation decisions contributed while duration and yield curve decisions had minimal impact. While the macro backdrop looks favorable, valuations are rich however all-in yields remain historically attractive, allowing investors to capture high quality yield without overstretching into risk. Portfolio review The second quarter of 2024 was marked by a series of evolving and, at times, conflicting economic signals. The interplay between labor market dynamics, inflation and consumer behavior painted a mixed picture for investors and policymakers alike. The quarter began with a significant upside surprise in the March Non-Farm Payroll ('NFP') report, contradicting other employment indicators such as Institute for Supply Management ('ISM') Employment and National Federation of Independent Business ('NFIB') hiring intentions. Notably, job growth was primarily concentrated in part-time employment, potentially masking broader weakness that was evidenced by a decline in full-time employment that had been ongoing since peaking in May 2023. One month later, NFP missed to the downside, which helped to quell reflation fears but was still strong enough to avoid igniting concerns of a recession. Altogether, the trend over the quarter signaled a return to a more "balanced" labor market, with the pace of wage gains slowing, the quit rate declining and the unemployment rate ticking up modestly off extreme lows. Similarly, consumer spending, which has led growth over the last several quarters, showed signs of softening, with modest growth numbers reported in both personal spending and retail sales data. Rising credit card delinquencies and a low savings rate further underscored the financial challenges facing some consumers. The disinflationary narrative, which came into question in 1Q24 following a series of upside surprises, regained credibility in 2Q24 as the data came in mostly in line with expectations. That said, U.S. Federal Reserve officials maintained a cautious stance, and emphasized that no immediate rate cuts were necessary. The Fed's updated dot plot in mid-June revealed a relatively hawkish stance, projecting only one rate cut through the end of the year, compared to three in the March projection. Markets, like the Fed, were very data dependent. With better growth data reported at the beginning of the quarter, spreads continued to trade at tight levels and credit sectors posted solid excess returns. Interest rates also responding by continuing the selloff that was sparked by the hot inflation data in 1Q24, but ultimately finished the quarter only slightly higher. Corporate credit sectors were further supported by 1Q24 earnings, which again exceeded analyst expectations. While leverage and coverage ratios continued to slowly deteriorate, aggregate fundamental factors remained acceptable, and ratings trends continued to be positive overall. From a technical standpoint, both investment grade ('IG') and high yield ('HY') sectors were well bid due to higher all-in yields, despite tight spread levels. Securitized credit sectors also benefited from the positive macro backdrop. For example, commercial mortgage-backed securities ('CMBS') managed to outperform as easier financial conditions and improved primary market activity has allowed for an easier path to refinance existing loans. Meanwhile on the residential side, primary activity remains subdued, however so did delinquencies and defaults as the employment picture still remains favorable along with borrowers having locked-in low mortgage rates during the Covid era. Asset-backed securities ('ABS') spreads also managed to tighten, despite the continued increase in delinquencies across subprime borrowers. Collateralized loan obligations (CLO) represented one of the best sources of excess returns on the quarter, likely due to the sectors floating rate attribute in an environment of still elevated rates. Security selection was the largest contributor to relative performance for the quarter. The largest gain was sourced within CMBS. Selection results within ABS were also positive, driven by off-benchmark subsectors such as CLOs and whole business. Sector allocation decisions also added, but to a lesser extent. Our off-benchmark allocation to non-agency residential mortgage- backed securities ('RMBS') was the top individual contributor, while overweights to CMBS, ABS and agency mortgages also contributed. Duration and yield curve decisions had minimal impact on relative performance as we remained close to benchmark throughout the quarter. Outlook From a fundamental perspective, the outlook has undoubtedly improved. Inflation has managed to decline without significantly impacting growth, and labor markets have managed to rebalance without a meaningful uptick in unemployment. We believe inflation will continue to trend lower, as the lagged impact of declining rent prices will take hold in the coming months, and overcapacity in China will keep goods prices in deflation. We expect growth to remain positive but will continue at a more measured pace. Consumption growth will likely slow due to slowing wage gains and higher prices but will remain positive as the wealth effect (stock prices and home values at all-time highs) continues to be supportive. Similarly, high financing costs will likely curb private investment, however this will be at least partially offset by investment in artificial intelligence technology. Stress on lower income consumers is, unfortunately, a key outlier in this otherwise positive dynamic. While not a systemic risk, we do think this will allow the Fed to cut rates prior to the election. That said, with the labor market still intact and consumer spending still supportive in aggregate, along with inflation still above 2%, we believe the extent to which the Fed will cut will be limited and the pace will be slow. While the macro backdrop looks favorable, valuations are rich, for example, the IG corporate index carried a spread of less the 100 basis points ('bp') and HY was slightly above 300 bp. Securitized credit sectors appear more attractive from a relative value perspective, as such, we continue to favor an allocation to these sectors, however we are still avoiding the most vulnerable areas (subprime consumer ABS, non-qualified mortgage RMBS, subordinated CLOs). Meanwhile, duration-oriented risks are poised to benefit from the implementation of central bank policy and the resulting decrease in rate volatility. Over the quarter, we reduced allocations to more volatile areas of the market, particularly those trading at tight spread levels, and added to areas with better relative value. The most notable change occurred across our IG allocation, where we shifted our exposure from long dated bonds into shorter dated bonds. While strong fundamental factors will continue to support tight spreads, periods of volatility spurred by expectations of lower growth and post-election policy changes will provide opportunities to episodically add risk. Disclaimers The Bloomberg US Aggregate Index is composed of US securities in Treasury, government-related, corporate, and securitized sectors that are of investment-grade quality or better, have at least one year to maturity and have an outstanding par value of at least $250 million. Indexes do not reflect fees, brokerage commissions, taxes or other expenses of investing. Investors cannot directly invest in an index. Source: Bloomberg Index Services Limited. Bloomberg® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively "Bloomberg"). Bloomberg or Bloomberg's licensors own all proprietary rights in the Bloomberg Indices. Bloomberg does not approve or endorse this material, nor guarantee the accuracy or completeness of any information herein, nor make any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, shall not have any liability or responsibility for injury or damages arising in connection therewith. Past performance is not indicative of future results. All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investing. All security transactions involve substantial risk of loss. Please refer to your client statement for a complete review of recent transactions and performance. The principal risks are generally those attributable to bond investing. Holdings are subject to market, issuer, credit, prepayment, extension and other risks, and their values may fluctuate. Market risk is the risk that securities may decline in value due to factors affecting the securities markets or particular industries. Issuer risk is the risk that the value of a security may decline for reasons specific to the issuer, such as changes in its financial condition. The strategy may invest in mortgage-related securities, which can be paid off early if the borrowers on the underlying mortgages pay off their mortgages sooner than scheduled. If interest rates are falling, the strategy will be forced to reinvest this money at lower yields. Conversely, if interest rates are rising, the expected principal payments will slow, thereby locking in the coupon rate at below market levels and extending the security's life and duration while reducing its market value. High yield bonds carry particular market risks and may experience greater volatility in market value than investment grade bonds. Foreign investments could be riskier than US investments because of exchange rate, political, economic, liquidity and regulatory risks. Additionally, investments in emerging market countries are riskier than other foreign investments because the political and economic systems in emerging market countries are less stable. The strategy employs a quantitative model to execute the strategy. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect performance. Furthermore, there can be no assurance that the quantitative models used in managing the strategy will perform as anticipated or enable the strategy to achieve its objective. This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an otter to sell or solicitation of an otter to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Fund holdings are fluid and are subject to daily change based on market conditions and other factors. Disclosure for Morgan Stanley Wealth Management clients only: The content is to report on the investment strategies as reports by Voya Investment Management and is for illustrative purposes only. The information contained herein is obtained from multiple sources and believed to be reliable. Information has not been verified by Morgan Stanley Wealth Management, and may differ from documents created by Morgan Stanley Wealth Management. The client should refer to the Profile. This must be preceded or accompanied by the Morgan Stanley Wealth Management Profile, which you can obtain from your Financial Advisor. For additional information on other programs, please speak to your Financial Advisor. ©2024 Voya Investments Distributor, LLC * 230 Park Ave, New York, NY 10169 * All rights reserved. (800) 992-0180 Individual Investors | (800) 334-3444 Investment Professionals Not FDIC Insured | May Lose Value | No Bank Guarantee Voya IM Home - Access Key Insights and Solutions | Voya Investment Management Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. We help investors push what's possible through differentiated solutions across our fixed income, equity and multi-asset platforms, including private markets and alternatives.

Voya Target Solution Trust Series Q2 2024 Commentary

We continue hold a balanced posture between stocks and bonds and favor higher quality U.S. assets. The Trusts posted positive absolute returns for the period, but underperformed their strategic allocation benchmarks on a net asset value (NAV) basis. U.S. stock and bond markets faced challenges at the beginning of the second quarter, as hot inflation readings dampened expectations for Fed rate cuts. Towards the end of the quarter, however, the outlook improved as favorable May inflation data increased investor confidence in potential Fed rate reductions by September. This, along with continued strength in the labor market and rising earnings optimism helped broad equity markets post gains for the period. Large-cap stocks outperformed small caps and growth beat value. Within the S&P 500 Index (SP500,SPX), technology, communication services and utilities sectors led, while materials, industrials and energy lagged. International stocks also moved higher, with emerging markets ('EM') outperforming developed. China and India, the two largest countries within the EM equity Index, both performed well. Chinese equities were helped by government support for the real estate sector and improving industrial production, while Indian equities saw strong performance continue after general elections concluded and Prime Minister Modi secured his third term in office. Japanese stocks underperformed in the period primarily due to uncertainty surrounding the Bank of Japan's monetary policy normalization and the expected appreciation of the yen, which raise concerns about the competitiveness of Japanese exports. Fixed income markets had mixed performance but declined in aggregate as the U.S. Treasury yield curve rose slightly. High-yield bonds performed well due to strong corporate earnings pulling spreads tighter. Like international equities, emerging market bonds outperformed developed market issues, as French government bonds dropped on political uncertainty. The impact of high interest rates is evident as growth trends below normal, putting downward pressure on prices. Recent data shows a quarterly gross domestic product (GDP) growth slowdown to 1.4% and a slight increase in unemployment to 4.1%. While employment indicators suggest a softening job market, a rise in job openings to 8.1 million indicates a gradual cooling. Disinflationary trends are resuming, which should support real incomes aligned with 2% inflation. While higher rates counteract some easing financial conditions, we expect inflation to continue decreasing without spiking unemployment, thus averting a recession. Equity markets may not see significant gains soon, especially with expected volatility as U.S. elections approach. In this late-cycle environment, we maintain a neutral stance between stocks and bonds, balancing the risks associated with both asset types. The current global economic landscape and market dynamics favor U.S. assets, particularly large cap stocks. Despite macroeconomic challenges, the U.S. is better positioned than most regions. U.S. capital markets, a global destination for investor flows, benefit from stable economic conditions, technological innovation and robust financial markets. Consequently, the U.S. is our preferred region, with large cap stocks appealing for their earnings quality, growth potential and momentum. Technology- driven sectors offer unrivaled pricing power, promising positive real returns regardless of inflation levels. However, earnings expectations have outpaced actual earnings, and with nominal GDP growth declining, sales growth will be challenging. While high profit margins and returns on equity may support valuations, they are too high to expect further expansion. Much depends on the earnings growth of U.S. technology megacaps, which have driven recent gains but face scrutiny over their artificial intelligence investments. These firms must eventually demonstrate revenue and earnings from these investments, but immediate results are not necessary as AI infrastructure providers are generating significant cash flows. Companies need time to transition from training to production models before making accurate assessments. We also value the stability of large companies to buffer against global economic and geopolitical uncertainties, offering a compelling risk-reward opportunity. For as long as we've favored U.S. large caps, we have been underweight in real estate investment trusts (REITs) due to rising interest rates increasing borrowing costs and pressuring their performance. The significant amount of commercial real estate debt needing refinancing at higher rates poses financial risks, especially for office and retail sectors facing structural challenges. Additionally, the volatility and potential overvaluation of publicly traded REITs relative to their net asset values raise concerns about their return potential. Given these factors, we see more attractive investment opportunities elsewhere. International stocks present mixed prospects. Japan struggles with a weak currency and challenges in normalizing monetary policy, despite potential rate hikes influenced by easing U.S. inflation and European Central Bank cuts. Europe faces sluggish growth due to high labor costs, persistent core inflation, and geopolitical tensions, exacerbated by domestic political instability, particularly in France. In contrast, the U.K. appears more stable and attractive to investors, buoyed by political shifts towards Labour under Sir Kier Starmer, anticipated Bank of England rate cuts, and favorable macroeconomic data. Meanwhile, China's stock market has rallied, driven by strong GDP growth and robust sectors like electric vehicles and industrial robotics. However, significant risks linger due to its ongoing property crisis and sensitive international relations, especially with the U.S. We maintain a preference for higher quality within fixed income. Despite limited upside from tight spreads, the supportive macroeconomic environment and solid corporate fundamental factors make the yield from investment grade bonds appealing. Securitized credit products, particularly consumer-oriented asset-backed securities (ABS) and residential mortgage-backed securities are attractive. The CMBS sector, though beaten down, offers value opportunities for astute investors. Although higher interest costs impact high yield credit quality, defaults remain limited, keeping us neutral due to increasing tail-risks. We lack a strong conviction on the near-term direction of rates but maintain a modest long duration in aggressive, equity-heavy portfolios for added stability. We prefer nominal over real bonds to hedge against equity downturns. With some foreign central banks cutting rates, certain international bond markets are appealing. However, due to a strong U.S. dollar and potential negative currency impacts, we remain underweight on non-U.S. bonds. At the beginning of the period, there were no open tactical positions. At the end of February, Trusts enacted their glide downs, leading to lower strategic equity weights in the 2050-2025 vintages. At the same time, the Trusts' strategic asset allocations were reset, with all tactical positions at the beginning of the period being subsumed into the revised strategic asset allocation, thereby becoming longer-term views. In early April, U.S. large cap equites were reduced in favor of U.S. mid cap equities. This shift was made to decrease concentration risk in U.S. large cap stocks after significant outperformance, with large stocks producing their best one-year stretch in versus U.S. mid caps since the 1990s. From a factor perspective, diversifying away from momentum and loading higher on value and size was also a motivation. Trusts continue to favor U.S. assets and maintain modestly defensive posture overall with a preference for U.S. large cap equities and core IG fixed income. The Voya Target Solution Trusts' primary performance objective is to outperform its strategic allocation composite benchmark over the long-term through tactical asset allocation, i.e., deviating from the composite benchmark over the short and medium-term and active manager selection. The benchmark return is the weighted average return of indices that represent asset classes included in the strategic allocation benchmark. Index returns are gross-of-all fees. The Trusts are generally rebalanced monthly and the strategic asset allocations are updated annually to reflect changes to our capital market assumptions. In the first quarter of 2024, Trusts' underperformed their strategic allocation benchmarks. Tactical asset allocation detracted while manager selection contributed. Tactical asset allocation had a negative impact on performance during the period. Portfolios' tactical overweight to U.S. mid cap and underweight in U.S. large cap equities was a detractor. A broadening rally into other sectors and down capitalization size did not materialize, as megacap technology stocks continued to drive market gains. Despite the robust performance of large-cap stocks, the second quarter saw a significant divergence in the U.S. equity market, with most stocks experiencing declines. In fact, gains were primarily seen in the largest and most growth-oriented stocks. Themes of size, quality and momentum continued to dominate, as riskier trades fell behind against a backdrop of underwhelming earnings for most equities. Underlying managers' relative results were positive across the Trusts. Strategies that contributed most to excess returns in the quarter were Voya Large Cap Value Strategy, Voya Core Plus Fixed Income Trust and Voya Small Cap Growth. The biggest detractors in the quarter were Sands Capital Select Growth Fund, Voya VACS Series EME Fund and MFS Growth Equity Trust. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Voya Multi-Manager International Small Cap Fund Q2 2024 Commentary

The Fund's largest sector exposures were industrials and information technology sectors. Multi-Asset Strategies and Solutions Key takeaways For the quarter, the Fund outperformed the S&P Developed ex-U.S. Small Cap Index and the MSCI EAFE Small Cap Index on a net asset value (NAV) basis. As of quarter end, the Fund's largest country exposures were Japan and United Kingdom. The Fund's largest sector exposures were industrials and information technology sectors. Market review U.S. stock and bond markets faced challenges at the beginning of the second quarter, as hot inflation readings dampened expectations for U.S. Federal Reserve rate cuts. Towards the end of the quarter, however, the outlook improved as favorable May inflation data increased investor confidence in potential Fed rate reductions by September. This, along with continued strength in the labor market and rising earnings optimism helped broad equity markets post gains for the period. Large-cap stocks outperformed small caps and growth beat value. Within the S&P 500 Index (SP500, SPX), technology, communication services and utilities sectors led, while materials, industrials and energy lagged. International stocks also moved higher, with emerging markets ('EM') outperforming developed. China and India, the two largest countries within the EM equity Index, both performed well. Chinese equities were helped by government support for the real estate sector and improving industrial production, while Indian equities saw strong performance continue after general elections concluded and Prime Minister Modi secured his third term in office. Japanese stocks underperformed in the period primarily due to uncertainty surrounding the Bank of Japan's monetary policy normalization and the expected appreciation of the yen, which raise concerns about the competitiveness of Japanese exports. Fixed income markets had mixed performance but declined in aggregate as the U.S. Treasury yield curve rose slightly. High-yield bonds performed well due to strong corporate earnings pulling spreads tighter. Like international equities, EM bonds outperformed developed market issues, as French government bonds dropped on political uncertainty. Portfolio review The Fund's manager target allocations as of June 30th, 2024, were 50% to Victory Capital Management, LLC and 50% to Acadian Asset Management, LLC. Sub-adviser details Acadian Asset Management, LLC For the quarter, the Fund's Acadian Asset Management, LLC sleeve outperformed the S&P Developed ex-U.S. Small Cap Index. Stock selection and country allocations contributed to returns. Key sources of positive active return included a combination of stock selection and an overweight position in Norway, a combination of stock selection and an underweight position in France, as well as a combination of stock selection and an underweight position in Australia. Leading advances within these markets respectively included a position in Hoegh Autoliners ASA (OTCPK:HOEGF), a lack of exposure to Eiffage (OTCPK:EFGSY) and an investment in Perseus Mining Ltd. (OTCPK:PMNXF) Detractors included a combination of stock selection and an underweight position in Canada, stock selection in Japan and a combination of stock selection as well as an underweight position in Sweden. Leading declines within these markets in turn included a position in Russel Metals, Inc. (OTCPK:RUSMF), a holding in Micronics Japan Co. (OTC:MJPNF) and an investment in Arjo AB (OTCPK:ARRJF). From a sector perspective, key sources of positive active return included stock selection in industrials, a combination of stock selection and an underweight position in consumer discretionary as well as a combination of stock selection and an underweight position in real estate. Leading advances within these sectors respectively included a position in Rockwool A/S (OTCPK:RKWBF), a holding in Brilliance China Automotive Holdings Ltd. (OTCPK:BCAUF) and an investment in Kindom Development. Detractors included a combination of stock selection and an underweight position in materials and stock selection in communication services. Leading declines within these sectors in turn included a lack of exposure to Kinross Gold (KGC) and a holding in Taboola.com Ord Shs. (TBLA) Bottom-up stock selection continued to drive the portfolio. Victory Capital Management, LLC For the quarter, the Fund's Victory Capital Management, LLC sleeve underperformed the S&P Developed ex-U.S. Small Cap Index. Security selection was modestly negative as excess returns were generated in two of five regions and five of the eleven economic sectors. From a style perspective, the Fund's overall exposure to value, business momentum and quality factors all slightly contributed to relative performance with quality generating the strongest signal. At the sector level, selection was weakest in materials, consumer discretionary and energy. Materials holding Daido Co. (OTCPK:DAIDF) was the top detractor during the quarter. The Japanese specialty steel producer declined after reporting results short of expectations and lower guidance on weaker demand in automotive and semiconductor production equipment. Within consumer discretionary, Japanese department store operator J. Front Retailing (OTCPK:JFROF) declined on lower profit guidance for next fiscal year as investments to improve its stores will take longer to realize earnings growth. In energy, Paladin Energy Ltd. (OTCQX:PALAF) fell on a weaker uranium spot price and the decision to acquire Canadian uranium miner, Fission Uranium (OTCQX:FCUUF) in an all- stock transaction. Notable outperformance was generated within the Industrials sector and was boosted by two holdings. South Korean electric power equipment manufacturer, HD Hyundai Electric Co. rose as earnings continue to benefit from high global demand from electric grid infrastructure investment. Japanese power and telecommunication systems manufacturer Fujikura (OTC:FKURF) gained on expected benefits from increased growth in broadband related business as well as exposure to AI data center investments. Relative performance was also strong in health care with the largest impact coming from a position in Classys. The Korean medical equipment manufacturer rose after its flagship Volnewmar product was granted Food and Drug Administration (FDA) approval earlier than expected. Overseas sales of consumables were also well above expectation. We continue to be guided by our bottom-up analysis and remain focused on stock selection while adhering to our disciplined country and sector risk exposures. Holdings detail Companies mentioned in this report -- percentage of portfolio investments, as of 6/30/2024: Hoegh Autoliners ASA 0.29%, Eiffage 0.00%, Perseus Mining Ltd. 0.23%. Russel Metals, Inc. 0.29%, Micronics Japan Co. 0.15%, Arjo AB 0.09%. Rockwool A/S 1.06%, Brilliance China Automotive Holdings Ltd. 0.07%, Kindom Development 0.00%, Kinross Gold 0.00%, Taboola.com Ord Shs 0.18%, Daido Co. 0.31%, HD Hyundai Electric Co. 0.43%, Paladin Energy Ltd. 0.15%, J. Front Retailing 0.00%. 0.00% indicates that the security was not or is no longer in the portfolio. Portfolio holdings are subject to daily change. An investor should consider the investment objectives, risks, charges and expenses of the Fund(s) carefully before investing. For a free copy of the Funds' prospectus, or summary prospectus, which contains this and other information, visit us at www.voyainvestments.com or call (800) 992-0180. Please read the prospectus carefully before investing. The S&P Developed Ex-U.S. SmallCap Index is an unmanaged index of small-cap stocks from developed countries, excluding the United States. The Index does not reflect fees, brokerage commissions, taxes or other expenses of investing. Investors cannot invest directly in an index. The MSCI Europe, Australasia and Far East (EAFE) Small Cap Index is an unmanaged index which measures the performance of small capitalization equities among developed markets around the world, excluding the United States and Canada. The Index does not reflect fees, brokerage commissions, taxes or other expenses of investing. Investors cannot invest directly in an index. Principal Risks: All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield. Investments in Small-Capitalization Companies involve greater risk than is customarily associated with larger, more established companies due to the greater business risks of small size, limited markets and financial resources, narrow product lines and the frequent lack of depth of management. Foreign Investments/Developing and Emerging Markets Investing in foreign (non-U.S.) securities may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, and nationalization, expropriation or confiscatory taxation, foreign currency fluctuations, currency blockage, political changes or diplomatic developments. Foreign investment risks typically are greater in developing and emerging markets than in developed markets. Convertible Securities Convertible securities are securities that are convertible into or exercisable for common stock at a stated price or rate. Convertible securities are subject to the usual risks associated with debt securities, such as interest rate and credit risk. In addition, because convertible securities react to changes in the value of the stocks into which they convert, they are subject to market risk. Currency To the extent that the Fund invests directly in foreign currencies or in securities denominated in or that trade in foreign (non-U.S.) currencies, it is subject to the risk that those currencies will decline in value relative to the U.S. dollar or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged. Derivative Instruments are subject to a number of risks, including the risk of changes in the market price of the underlying securities, credit risk with respect to the counterparty, risk of loss due to changes in interest rates and liquidity risk. The use of certain derivatives may also have a leveraging effect which may increase the volatility of the Fund and reduce its returns. Growth Investing Prices of growth stocks typically reflect high expectations for future company growth, and may fall quickly and significantly if investors suspect that actual growth may be less than expected. Growth companies typically lack any dividends that might cushion price declines. Growth stocks tend to be more volatile than value stocks, and may underperform the market as a whole over any given time period. Value Investing Securities that appear to be undervalued may never appreciate to the extent expected. Further, because the prices of value-oriented securities tend to correlate more closely with economic cycles than growth-oriented securities, they generally are more sensitive to changing economic conditions, such as changes in interest rates, corporate earnings and industrial production. Other risks of the Fund include, but are not limited to: Investment by Other Funds, Investment Model Risk, Market Risk, Stock Risk, Other Investment Companies and Securities Lending. Investors should consult the Fund's prospectus and statement of additional information for a more detailed discussion of the Fund's risks. An investment in the Fund is not a bank deposit and is not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an otter to sell or solicitation of an otter to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. Past performance is no guarantee of future results. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors. The Fund discussed may be available to you as part of your employer sponsored retirement plan. There may be additional plan level fees resulting in personal performance to vary from stated performance. Please call your benefits office for more information. ©2024 Voya Investments Distributor, LLC * 230 Park Ave, New York, NY 10169 * All rights reserved. Not FDIC Insured | May Lose Value | No Bank Guarantee Voya IM Home - Access Key Insights and Solutions | Voya Investment Management Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. We help investors push what's possible through differentiated solutions across our fixed income, equity and multi-asset platforms, including private markets and alternatives.

Voya Target Retirement Funds Q2 2024 Commentary

The Funds posted positive absolute returns. Returns relative to their strategic composite benchmarks were mixed on a net asset value (NAV) basis. U.S. stock and bond markets faced challenges at the beginning of the second quarter, as hot inflation readings dampened expectations for Fed rate cuts. Towards the end of the quarter, however, the outlook improved as favorable May inflation data increased investor confidence in potential Fed rate reductions by September. This, along with continued strength in the labor market and rising earnings optimism helped broad equity markets post gains for the period. Large-cap stocks outperformed small caps and growth beat value. Within the S&P 500 Index (SP500, SPX) , technology, communication services and utilities sectors led, while materials, industrials and energy lagged. International stocks also moved higher, with emerging markets ('EM') outperforming developed. China and India, the two largest countries within the EM equity Index, both performed well. Chinese equities were helped by government support for the real estate sector and improving industrial production, while Indian equities saw strong performance continue after general elections concluded and Prime Minister Modi secured his third term in office. Japanese stocks underperformed in the period primarily due to uncertainty surrounding the Bank of Japan's monetary policy normalization and the expected appreciation of the yen, which raise concerns about the competitiveness of Japanese exports. Fixed income markets had mixed performance but declined in aggregate as the U.S. Treasury yield curve rose slightly. High-yield bonds performed well due to strong corporate earnings pulling spreads tighter. Like international equities, emerging market bonds outperformed developed market issues, as French government bonds dropped on political uncertainty. The impact of high interest rates is evident as growth trends below normal, putting downward pressure on prices. Recent data shows a quarterly gross domestic product (GDP) growth slowdown to 1.4% and a slight increase in unemployment to 4.1%. While employment indicators suggest a softening job market, a rise in job openings to 8.1 million indicates a gradual cooling. Disinflationary trends are resuming, which should support real incomes aligned with 2% inflation. While higher rates counteract some easing financial conditions, we expect inflation to continue decreasing without spiking unemployment, thus averting a recession. Equity markets may not see significant gains soon, especially with expected volatility as U.S. elections approach. In this late-cycle environment, we maintain a neutral stance between stocks and bonds, balancing the risks associated with both asset types. The current global economic landscape and market dynamics favor U.S. assets, particularly large cap stocks. Despite macroeconomic challenges, the U.S. is better positioned than most regions. U.S. capital markets, a global destination for investor flows, benefit from stable economic conditions, technological innovation and robust financial markets. Consequently, the U.S. is our preferred region, with large cap stocks appealing for their earnings quality, growth potential and momentum. Technology- driven sectors offer unrivaled pricing power, promising positive real returns regardless of inflation levels. However, earnings expectations have outpaced actual earnings, and with nominal GDP growth declining, sales growth will be challenging. While high profit margins and returns on equity may support valuations, they are too high to expect further expansion. Much depends on the earnings growth of U.S. technology megacaps, which have driven recent gains but face scrutiny over their artificial intelligence investments. These firms must eventually demonstrate revenue and earnings from these investments, but immediate results are not necessary as AI infrastructure providers are generating significant cash flows. Companies need time to transition from training to production models before making accurate assessments. We also value the stability of large companies to buffer against global economic and geopolitical uncertainties, offering a compelling risk-reward opportunity. For as long as we have favored U.S. large caps, we have been underweight in real estate investment trusts (REITs) due to rising interest rates increasing borrowing costs and pressuring their performance. The significant amount of commercial real estate debt needing refinancing at higher rates poses financial risks, especially for office and retail sectors facing structural challenges. Additionally, the volatility and potential overvaluation of publicly traded REITs relative to their net asset values raise concerns about their return potential. Given these factors, we see more attractive investment opportunities elsewhere. International stocks present mixed prospects. Japan struggles with a weak currency and challenges in normalizing monetary policy, despite potential rate hikes influenced by easing U.S. inflation and European Central Bank cuts. Europe faces sluggish growth due to high labor costs, persistent core inflation, and geopolitical tensions, exacerbated by domestic political instability, particularly in France. In contrast, the U.K. appears more stable and attractive to investors, buoyed by political shifts towards Labour under Sir Kier Starmer, anticipated Bank of England rate cuts, and favorable macroeconomic data. Meanwhile, China's stock market has rallied, driven by strong GDP growth and robust sectors like electric vehicles and industrial robotics. However, significant risks linger due to its ongoing property crisis and sensitive international relations, especially with the U.S. We maintain a preference for higher quality within fixed income. Despite limited upside from tight spreads, the supportive macroeconomic environment and solid corporate fundamental factors make the yield from investment grade ('IG') bonds appealing. Securitized credit products, particularly consumer-oriented asset-backed securities ('ABS') and residential mortgage-backed securities ('RMBS'), are attractive. The CMBS sector, though beaten down, offers value opportunities for astute investors. Although higher interest costs impact high yield credit quality, defaults remain limited, keeping us neutral due to increasing tail-risks. We lack a strong conviction on the near-term direction of rates but maintain a modest long duration in aggressive, equity-heavy portfolios for added stability. We prefer nominal over real bonds to hedge against equity downturns. With some foreign central banks cutting rates, certain international bond markets are appealing. However, due to a strong U.S. dollar and potential negative currency impacts, we remain underweight on non-U.S. bonds. At the beginning of the period there were no open tactical positions. At the end of February, Funds enacted their glide downs, leading to lower strategic equity weights in the 2050-2025 vintages. At the same time, the Funds' strategic asset allocations were reset, with all tactical positions at the beginning of the period being subsumed into the revised strategic asset allocation, thereby becoming longer-term views. In early April, U.S. large cap equites were reduced in favor of U.S. mid cap equities. This shift was made to decrease concentration risk in U.S. large cap stocks after significant outperformance, with large stocks producing their best one-year stretch in versus U.S. mid caps since the 1990s. From a factor perspective, diversifying away from momentum and loading higher on value and size was also a motivation. Funds continue to favor U.S. assets and maintain a modestly defensive posture overall with a preference for U.S. large cap equities and core investment grade ('IG') fixed income. The Voya Target Retirement Fund's primary performance objective is to outperform its strategic allocation composite benchmark over the long-term through tactical asset allocation, i.e., deviating from the composite benchmark over the short and medium-term and active manager selection. The benchmark return is the weighted average return of indices that represent asset classes included in the strategic allocation benchmark. Index returns are gross of all fees. The Funds are generally rebalanced monthly and the strategic asset allocations are updated annually to reflect changes to our capital market assumptions. The Funds posted positive absolute returns, but returns relative to their strategic composite benchmarks were mixed, with most Funds lagging. Tactical asset allocation detracted, but manager selection contributed. Tactical asset allocation had a negative impact on performance during the period. Funds' tactical overweight to U.S. mid cap and underweight in U.S. large cap equities was a detractor. A broadening rally into other sectors and down capitalization size did not materialize, as megacap technology stocks continued to drive market gains. Despite the robust performance of large-cap stocks, the second quarter saw a significant divergence in the U.S. equity market, with most stocks experiencing declines. In fact, gains were primarily seen in the largest and most growth-oriented stocks. Themes of size, quality and momentum continued to dominate, as riskier trades fell behind against a backdrop of underwhelming earnings for most equities. Underlying managers' relative results were positive across the Funds. Active strategies that contributed most to excess returns in the quarter were Voya Intermediate Bond, Voya Multi-Manager International Equity and Voya Multi-Manager International Factors. The biggest detractor in the quarter was Voya VACS Series EME. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Voya Target Retirement Trust Quarterly Q2 2024 Commentary

The Target Date Choice to Help Keep Retirement Goals on Track This suite of Target Date Collective Trusts diversifies across asset classes and managers, and automatically adjusts the portfolio over time to help participants reach their retirement goals. U.S. stock and bond markets faced challenges at the beginning of the second quarter, as hot inflation readings dampened expectations for Fed rate cuts. Towards the end of the quarter, however, the outlook improved as favorable May inflation data increased investor confidence in potential Fed rate reductions by September. This, along with continued strength in the labor market and rising earnings optimism helped broad equity markets post gains for the period. Large-cap stocks outperformed small caps and growth beat value. Within the S&P 500 Index, technology, communication services and utilities sectors led, while materials, industrials and energy lagged. International stocks also moved higher, with emerging markets (EM) outperforming developed. China and India, the two largest countries within the EM equity Index, both performed well. Chinese equities were helped by government support for the real estate sector and improving industrial production, while Indian equities saw strong performance continue after general elections concluded and Prime Minister Modi secured his third term in office. Japanese stocks underperformed in the period primarily due to uncertainty surrounding the Bank of Japan's monetary policy normalization and the expected appreciation of the yen, which raise concerns about the competitiveness of Japanese exports. Fixed income markets had mixed performance but declined in aggregate as the U.S. Treasury yield curve rose slightly. High-yield bonds performed well due to strong corporate earnings pulling spreads tighter. Like international equities, EM bonds outperformed developed market issues, as French government bonds dropped on political uncertainty. The impact of high interest rates is evident as growth trends below normal, putting downward pressure on prices. Recent data shows a quarterly gross domestic product (GDP) growth slowdown to 1.4% and a slight increase in unemployment to 4.1%. While employment indicators suggest a softening job market, a rise in job openings to 8.1 million indicates a gradual cooling. Disinflationary trends are resuming, which should support real incomes aligned with 2% inflation. While higher rates counteract some easing financial conditions, we expect inflation to continue decreasing without spiking unemployment, thus averting a recession. Equity markets may not see significant gains soon, especially with expected volatility as U.S. elections approach. In this late-cycle environment, we maintain a neutral stance between stocks and bonds, balancing the risks associated with both asset types. The current global economic landscape and market dynamics favor U.S. assets, particularly large cap stocks. Despite macroeconomic challenges, the U.S. is better positioned than most regions. U.S. capital markets, a global destination for investor flows, benefit from stable economic conditions, technological innovation and robust financial markets. Consequently, the U.S. is our preferred region, with large cap stocks appealing for their earnings quality, growth potential and momentum. Technology-driven sectors offer unrivaled pricing power, promising positive real returns regardless of inflation levels. However, earnings expectations have outpaced actual earnings, and with nominal GDP growth declining, sales growth will be challenging. While high profit margins and returns on equity may support valuations, they are too high to expect further expansion. Much depends on the earnings growth of U.S. technology megacaps, which have driven recent gains but face scrutiny over their artificial intelligence investments. These firms must eventually demonstrate revenue and earnings from these investments, but immediate results are not necessary as AI infrastructure providers are generating significant cash flows. Companies need time to transition from training to production models before making accurate assessments. We also value the stability of large companies to buffer against global economic and geopolitical uncertainties, offering a compelling risk-reward opportunity. For as long as we have favored U.S. large caps, we have been underweight in real estate investment trusts (REITs) due to rising interest rates increasing borrowing costs and pressuring their performance. The significant amount of commercial real estate debt needing refinancing at higher rates poses financial risks, especially for office and retail sectors facing structural challenges. Additionally, the volatility and potential overvaluation of publicly traded REITs relative to their net asset values raise concerns about their return potential. Given these factors, we see more attractive investment opportunities elsewhere. International stocks present mixed prospects. Japan struggles with a weak currency and challenges in normalizing monetary policy, despite potential rate hikes influenced by easing U.S. inflation and European Central Bank cuts. Europe faces sluggish growth due to high labor costs, persistent core inflation, and geopolitical tensions, exacerbated by domestic political instability, particularly in France. In contrast, the U.K. appears more stable and attractive to investors, buoyed by political shifts towards Labour under Sir Kier Starmer, anticipated Bank of England rate cuts, and favorable macroeconomic data. Meanwhile, China's stock market has rallied, driven by strong GDP growth and robust sectors like electric vehicles and industrial robotics. However, significant risks linger due to its ongoing property crisis and sensitive international relations, especially with the U.S. We maintain a preference for higher quality within fixed income. Despite limited upside from tight spreads, the supportive macroeconomic environment and solid corporate fundamental factors make the yield from investment grade (IG) bonds appealing. Securitized credit products, particularly consumer-oriented asset-backed securities (ABS) and residential mortgage-backed securities (RMBS), are attractive. The CMBS sector, though beaten down, offers value opportunities for astute investors. Although higher interest costs impact high yield credit quality, defaults remain limited, keeping us neutral due to increasing tail-risks. We lack a strong conviction on the near-term direction of rates but maintain a modest long duration in aggressive, equity-heavy portfolios for added stability. We prefer nominal over real bonds to hedge against equity downturns. With some foreign central banks cutting rates, certain international bond markets are appealing. However, due to a strong U.S. dollar and potential negative currency impacts, we remain underweight on non-U.S. bonds. At the beginning of the period, there were no open tactical positions. At the end of February, Trusts enacted their glide downs, leading to lower strategic equity weights in the 2050-2025 vintages. At the same time, the Trusts' strategic asset allocations were reset, with all tactical positions at the beginning of the period being subsumed into the revised strategic asset allocation, thereby becoming longer-term views. In early April, U.S. large cap equites were reduced in favor of U.S. mid cap equities. This shift was made to decrease concentration risk in U.S. large cap stocks after significant outperformance, with large stocks producing their best one-year stretch in versus U.S. mid caps since the 1990s. From a factor perspective, diversifying away from momentum and loading higher on value and size was also a motivation. Trusts continue to favor U.S. assets and maintain balanced posture overall with a preference for U.S. large cap equities and core IG fixed income. The Voya Target Retirement Trusts' primary performance objective is to outperform its strategic allocation composite benchmark over the long-term through tactical asset allocation, i.e., deviating from the composite benchmark over the short and medium-term and active manager selection. The benchmark return is the weighted average return of indices that represent asset classes included in the strategic allocation benchmark. Index returns are gross of all fees. The Trusts are generally rebalanced monthly and the strategic asset allocations are updated annually to reflect changes to our capital market assumptions. Trusts posted positive absolute returns, but returns relative to their strategic composite benchmarks were mixed, with most Funds lagging. Tactical asset allocation detracted, but manager selection contributed. Tactical asset allocation had a negative impact on performance during the period. Funds' tactical overweight to U.S. mid cap and underweight in U.S. large cap equities was a detractor. A broadening rally into other sectors and down capitalization size did not materialize, as megacap technology stocks continued to drive market gains. Despite the robust performance of large-cap stocks, the second quarter saw a significant divergence in the U.S. equity market, with most stocks experiencing declines. In fact, gains were primarily seen in the largest and most growth-oriented stocks. Themes of size, quality and momentum continued to dominate, as riskier trades fell behind against a backdrop of underwhelming earnings for most equities. Underlying managers' relative results were positive across the Trusts. Strategies that contributed most to excess returns in the quarter were Voya Core Plus Fixed Income, Wellington International Opportunities Fund and Polaris Capital International Value. The biggest detractors in the quarter were Voya VACS Series EME, Brandywine U.S. Fixed Income and Lazard International Quality Growth.

Voya Global Diversified Payment Fund Q2 2024 Commentary

Alternative strategies detracted, while manager selection contributed. U.S. stock and bond markets faced challenges at the beginning of the second quarter, as hot inflation readings dampened expectations for Fed rate cuts. Towards the end of the quarter, however, the outlook improved as favorable May inflation data increased investor confidence in potential Fed rate reductions by September. This, along with continued strength in the labor market and rising earnings optimism helped broad equity markets post gains for the period. Large-cap stocks outperformed small caps and growth beat value. Within the S&P 500 Index (SP500,SPX), technology, communication services and utilities sectors led, while materials, industrials and energy lagged. International stocks also moved higher, with emerging markets ('EM') outperforming developed. China and India, the two largest countries within the EM equity Index, both performed well. Chinese equities were helped by government support for the real estate sector and improving industrial production, while Indian equities saw strong performance continue after general elections concluded and Prime Minister Modi secured his third term in office. Japanese stocks underperformed in the period primarily due to uncertainty surrounding the Bank of Japan's monetary policy normalization and the expected appreciation of the yen, which raise concerns about the competitiveness of Japanese exports. Fixed income markets had mixed performance but declined in aggregate as the U.S. Treasury yield curve rose slightly. High-yield ('HY') bonds performed well due to strong corporate earnings pulling spreads tighter. Like international equities, EM bonds outperformed developed market issues, as French government bonds dropped on political uncertainty. The impact of high interest rates is evident as growth trends below normal, putting downward pressure on prices. Recent data shows a quarterly gross domestic product (GDP) growth slowdown to 1.4% and a slight increase in unemployment to 4.1%. While employment indicators suggest a softening job market, a rise in job openings to 8.1 million indicates a gradual cooling. Disinflationary trends are resuming, which should support real incomes aligned with 2% inflation. While higher rates counteract some easing financial conditions, we expect inflation to continue decreasing without spiking unemployment, thus averting a recession. Equity markets may not see significant gains soon, especially with expected volatility as U.S. elections approach. In this late-cycle environment, we maintain a neutral stance between stocks and bonds, balancing the risks associated with both asset types. The current global economic landscape and market dynamics favor U.S. assets, particularly large cap stocks. Despite macroeconomic challenges, the United States is better positioned than most regions. U.S. capital markets, a global destination for investor flows, benefit from stable economic conditions, technological innovation and robust financial markets. Consequently, the U.S. is our preferred region, with large cap stocks appealing for their earnings quality, growth potential, and momentum. Technology-driven sectors offer unrivaled pricing power, promising positive real returns regardless of inflation levels. However, earnings expectations have outpaced actual earnings, and with nominal GDP growth declining, sales growth will be challenging. While high profit margins and returns on equity may support valuations, they are too high to expect further expansion. Much depends on the earnings growth of U.S. technology megacaps, which have driven recent gains but face scrutiny over their artificial intelligence investments. These firms must eventually demonstrate revenue and earnings from these investments, but immediate results are not necessary as AI infrastructure providers are generating significant cash flows. Companies need time to transition from training to production models before making accurate assessments. We also value the stability of large companies to buffer against global economic and geopolitical uncertainties, offering a compelling risk-reward opportunity. For as long as we have favored U.S. large caps, we have been underweight in real estate investment trusts (REITs) due to rising interest rates increasing borrowing costs and pressuring their performance. The significant amount of commercial real estate debt needing refinancing at higher rates poses financial risks, especially for office and retail sectors facing structural challenges. Additionally, the volatility and potential overvaluation of publicly traded REITs relative to their NAV raise concerns about their return potential. Given these factors, we see more attractive investment opportunities elsewhere. International stocks present mixed prospects. Japan struggles with a weak currency and challenges in normalizing monetary policy, despite potential rate hikes influenced by easing U.S. inflation and European Central Bank cuts. Europe faces sluggish growth due to high labor costs, persistent core inflation and geopolitical tensions, exacerbated by domestic political instability, particularly in France. In contrast, the United Kingdom appears more stable and attractive to investors, buoyed by political shifts towards Labour under Sir Kier Starmer, anticipated Bank of England rate cuts, and favorable macroeconomic data. Meanwhile, China's stock market has rallied, driven by strong GDP growth and robust sectors like electric vehicles and industrial robotics. However, significant risks linger due to its ongoing property crisis and sensitive international relations, especially with the U.S. We maintain a preference for higher quality within fixed income. Despite limited upside from tight spreads, the supportive macroeconomic environment and solid corporate fundamental factors make the yield from investment grade ('IG') bonds appealing. Securitized credit products, particularly consumer- oriented asset-backed securities ('ABS') and residential mortgage- backed securities ('RMBS'), are attractive. The commercial mortgage-backed securities ('CMBS') sector, though beaten down, offers value opportunities for astute investors. Although higher interest costs impact HY credit quality, defaults remain limited, keeping us neutral due to increasing tail-risks. We lack a strong conviction on the near-term direction of rates but maintain a modest long duration in aggressive, equity-heavy portfolios for added stability. We prefer nominal over real bonds to hedge against equity downturns. With some foreign central banks cutting rates, certain international bond markets are appealing. However, due to a strong U.S. dollar and potential negative currency impacts, we remain underweight on non-U.S. bonds. At the beginning of the period, there were no open tactical positions. At the end of February, the Fund's strategic asset allocation was reset, with all tactical positions at the beginning of the period being subsumed into the revised strategic asset allocation, thereby becoming longer-term views. The Fund continues to favor U.S. assets and maintain a balanced posture overall with a preference for U.S. large cap equities and core IG fixed income. The Fund achieved its primary investment objective: to meet its managed payment policy by delivering level monthly payments. In addition, the Fund attempts to outperform its strategic allocation benchmark through tactical asset allocation, i.e. deviating from the composite benchmark over the short and medium-term, alternative strategies and active manager selection. For the second quarter of 2024, the Fund underperformed the S&P Target Risk Moderate Index and its strategic allocation benchmark on a NAV basis. Alternative strategies detracted, while manager selection contributed. Tactical asset allocation was neutral during the period. Alternative strategies were a detractor. Both cross-asset relative value ('CARV') and tactical currency ('TC') delivered negative returns for the quarter. The Fund also attempts to outperform its strategic allocation benchmark through the selection of managers to run the underlying funds, which represent the various asset classes within the composite. Manager selection was a contributor during quarter. Strategies that contributed most to excess returns in the quarter were Voya Intermediate Bond, Voya Multi-Manager International Equity and Voya Large Cap Value were the biggest contributors. The biggest detractors in the quarter were Voya Large-Cap Growth, Voya Multi-Manager Emerging Markets Equity and Voya Multi-Manager Mid Cap Value. The Fund's option overlay strategy is designed to support the monthly payment through premium generation and provide some downside protection if an underlying asset sells off substantially. This strategy seeks to accomplish these objectives through two sub-strategies. The first piece involves earning the volatility risk premium by selling options while hedging the delta exposure, in effect removing negative equity beta. The second leg provides downside protection. This involves buying puts and put spreads or selling calls and call spreads. These positions should add to performance when equities fall. Over the quarter, the option overlay was a contributor, with volatility premium capture delivering strong returns and the hedge leg modestly detracting. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Voya Strategic Income Opportunities Fund Q2 2024 Commentary

From a fundamental perspective, the outlook has undoubtedly improved. The second quarter of 2024 was marked by a series of evolving and, at times, conflicting economic signals. The interplay between labor market dynamics, inflation and consumer behavior painted a mixed picture for investors and policymakers alike. The quarter began with a significant upside surprise in the March Non-Farm Payroll ('NFP') report, contradicting other employment indicators such as Institute for Supply Management ('ISM') Employment and National Federation of Independent Business ('NFIB') hiring intentions. Notably, job growth was primarily concentrated in part-time employment, potentially masking broader weakness that was evidenced by a decline in full-time employment that had been ongoing since peaking in May 2023. One month later, NFP missed to the downside, which helped to quell reflation fears but was still strong enough to avoid igniting concerns of a recession. Altogether, the trend over the quarter signaled a return to a more "balanced" labor market, with the pace of wage gains slowing, the quit rate declining and the unemployment rate ticking up modestly off extreme lows. Similarly, consumer spending, which has led growth over the last several quarters, showed signs of softening, with modest growth numbers reported in both personal spending and retail sales data. Rising credit card delinquencies and a low savings rate further underscored the financial challenges facing some consumers. The disinflationary narrative, which came into question in 1Q24 following a series of upside surprises, regained credibility in 2Q24 as the data came in mostly in line with expectations. That said, Fed officials maintained a cautious stance, and emphasized that no immediate rate cuts were necessary. The Fed's updated dot plot in mid-June revealed a relatively hawkish stance, projecting only one rate cut through the end of the year, compared to three in the March projection. Markets, like the Fed, were very data dependent. With better growth data reported at the beginning of the quarter, spreads continued to trade at tight levels and credit sectors posted solid excess returns. Interest rates also responding by continuing the selloff that was sparked by the hot inflation data in 1Q24, but ultimately finished the quarter only slightly higher. Corporate credit sectors were further supported by 1Q24 earnings, which again exceeded analyst expectations. While leverage and coverage ratios continued to slowly deteriorate, aggregate fundamentals remained acceptable, and ratings trends continued to be positive overall. From a technical standpoint, both investment grade ('IG') and high yield ('HY') sectors were well bid due to higher all-in yields, despite tight spread levels. Securitized credit sectors also benefited from the positive macro backdrop. For example, commercial mortgage-backed securities ('CMBS') managed to outperform as easier financial conditions and improved primary market activity has allowed for an easier path to refinance existing loans. Meanwhile on the residential side, primary activity remains subdued, however so did delinquencies and defaults as the employment picture still remains favorable along with borrowers having locked-in low mortgage rates during the Covid era. Asset backed securities (ABS) spreads also managed to tighten, despite the continued increase in delinquencies across subprime borrowers. Collateralized loan obligations (CLO) represented one of the best sources of excess returns on the quarter, likely due to the sectors floating rate attribute in an environment of still elevated rates. Sector allocation and security selection drove performance, while duration and yield curve positioning detracted as rates retraced amid tempered Fed policy expectations. Sector allocation across securitized markets contributed to performance, with agency mortgages being the exception. The largest contribution came from non-agency residential mortgage- backed securities ('RMBS') and credit risk transfer ('CRT') markets, where the sectors benefitted from a tighter technical backdrop and strong home prices. In agency mortgages, rate volatility and uncertainty around Fed policy weighed on the sector and modestly detracted from performance. Corporate allocations to bank loans, HY and CLO also contributed while IG corporates detracted modestly. Security selection added to performance over the period. The largest contribution was from agency mortgages, specifically through collateralized mortgage obligations ('CMO'), including interest-only tranches faring well in a low prepayment environment. Within securitized markets, CMBS security selection in conduit deals meaningfully added to performance. During the period, the most notable change in allocation was an increase in IG corporates, given attractive relative value in banking deals. Another change in allocation was an increase in CLO, where the front-end yield advantage remains attractive. Other changes include a modest addition to agency mortgages and reduction to emerging markets corporates. Overall, duration positioning was unchanged. However, duration was increased as uncertainty around Fed policy led to rising treasury rates in April, offering an attractive entry point. Though, as weaker economic data in June supported the case for rate cuts, duration was reduced. From a fundamental perspective, the outlook has undoubtedly improved. Inflation has managed to decline without significantly impacting growth, and labor markets have managed to rebalance without a meaningful uptick in unemployment. We believe inflation will continue to trend lower, as the lagged impact of declining rent prices will take hold in the coming months, and overcapacity in China will keep goods prices in deflation. We expect growth to remain positive but will continue at a more measured pace. Consumption growth will likely slow due to slowing wage gains and higher prices but will remain positive as the wealth effect (stock prices and home values at all-time highs) continues to be supportive. Similarly, high financing costs will likely curb private investment, however this will be at least partially offset by investment in artificial intelligence technology. Stress on lower income consumers is, unfortunately, a key outlier in this otherwise positive dynamic. While not a systemic risk, we do think this will allow the Fed to cut rates prior to the election. That said, with the labor market still intact and consumer spending still supportive in aggregate, along with inflation still above 2%, we believe the extent to which the Fed will cut will be limited and the pace will be slow. While the macro backdrop looks favorable, valuations are rich, for example, the IG corporate index carried a spread of less the 100 basis points (bp) and HY was slightly above 300 bp. Securitized credit sectors appear more attractive from a relative value perspective, as such, we continue to favor an allocation to these sectors, however we are still avoiding the most vulnerable areas (subprime consumer ABS, non- qualified mortgage RMBS, subordinated CLOs). Meanwhile, duration-oriented risks are poised to benefit from the implementation of central bank policy and the resulting decrease in rate volatility. While strong fundamentals will continue to support tight spreads, periods of volatility spurred by expectations of lower growth and post-election policies changes will provide opportunities to episodically add risk. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.