Hartford Disciplined US Equity ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Microsoft

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Hartford Disciplined US Equity ETF earns an Above Average Process Pillar rating. 

The most substantial contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 82% also supports the process. Lastly, the process is limited by the experience of the management team, which averages five years at this fund.

 This strategy tends to hold smaller, more value-oriented companies than its average peer in the Large Blend Morningstar Category. Examining additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these years. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This orientation tends to pay off most prominently when markets are hot. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in real estate by 3.3 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared to category peers are financial services and industrials, with financial services underweighting the average portfolio by 3.0 percentage points of assets and industrials similar to the average. The portfolio is positioned across 275 holdings and is less top-heavy than peers. Specifically, 28.2% of the strategy's assets are concentrated within the top 10 fund holdings, as opposed to the category average's 49.5%. And in closing, in terms of portfolio turnover, this fund trades more frequently than its average peer, potentially racking up additional expenses for investors and creating a drag on performance.

Above Average

Process

Hartford Funds’s team is valuable but does not stand out as one of the industry's best, warranting an Average People Pillar rating. There’s a deep bench of five managers listed on the fund. Together, they manage a total of 114 strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Average

People

Hartford Funds’ investors benefit from access to strong subadvisors at a reasonable cost. The firm earns an Above Average Parent Pillar rating.

Hartford’s industry relationships are key to its success. It maintains a long-standing partnership with standout investment manager Wellington Management Company, which has run the firm's equity and fixed-income funds since 1996 and 2012, respectively. Wellington now subadvises more than half of Hartford’s $124.1 billion in fund assets. In 2016, Hartford launched strategic-beta exchange-traded funds with its acquisition of Lattice Strategies and partnered with Schroders to expand its investment platform’s offerings, especially in non-U.S. strategies.

Hartford leaves most investment decisions to its subadvisors but collaborates with them on product development, risk oversight, and distribution. The firm reorganized its sales efforts and grew its product-management capabilities in 2013. Firm leadership has since added further resources to its distribution and oversight teams, while merging and liquidating subpar offerings, and has introduced new strategies. 

Hartford has sought to provide more-competitive fees. The firm has launched share classes without embedded distribution charges and reduced fees on other share classes. Still, as most shares remain in average or costlier fee groups, there is room for improvement.

Parent

Hartford Disciplined US Equity ETF

HDUS is passively managed to invest in a broad portfolio of US large-cap stocks that target balanced exposures across value, momentum, and quality factors at lower volatility level, while controlling overall active risk factors.

Hartford Multifactor US Equity ETF

Evidence has shown that many investors miss out on returns by trying to time the market. It's particularly hard to predict which factors will win, making it important for portfolios to get balanced exposure across multiple diversified return drivers.

Why Multifactor ETFs Deserve a Core Equity Allocation

Hartford Funds' disciplined U.S. equity ETF offers attractive dividends while serving as a style-pure core ETF. Dividend stocks can help enhance total returns, particularly in down or volatile markets.

Under the Hood of Hartford Funds' Style-Pure Core ETF

Contrary to what many prestidigitators had predicted, the U.S. has not yet fallen into recession. But that doesn't mean investors think the economy is out of the woods just yet.

Worried About a Recession But Still Want Equities? Consider HDUS

Many investors want dividends but don't want to make a style bet on value. Particularly in down or choppy markets, investors can boost total returns by investing in dividend stocks.

HDUS: A Style Pure Core ETF with an Attractive Yield

On the surface, the Hartford Multifactor US Equity ETF (ROUS) and the Hartford Disciplined US Equity ETF (HDUS) may sound very similar. While both funds provide exposure to the U.S. equity market, the funds have two unique use cases.

The Different Use Cases for U.S. Equity Funds ROUS and HDUS

Hartford Funds announced today the launch of the Hartford Disciplined US Equity ETF (NYSE Arca: HDUS), a U.S. large-cap, style-pure product that trades on the New York Stock Exchange.

News for Hartford Disciplined US Equity ETF ETF (HDUS)