Daisy Maxey devotes Fund Track space in the Tuesday issue of the Wall Street Journal to the reopening of the Hartford MidCap Fund (see the Hartford press release below). The Wellington Management-subadvised fund shut its doors to new investors in 2004 and then reopened on Monday.

Maxey notes that the fund is down about 40.2 percent this year, faring better than most of its peers. The average midcap growth fund is down 47.3 percent.

Phil Perelmuter, senior vice president with Wellington, said the reopening is aimed at replacing some of the outflows while also taking advantage of the opportunities popping up in the market.

"We're finding more companies than usual that meet our criteria -- market-leading, blue-chip midcap companies at good valuations," Perelmuter told Maxey. "Our cash is relatively low [between 1% to 2%], an indication that we're finding good opportunities; so it seems like an ideal time to open the fund."

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Company Press Release

SIMSBURY, Conn.--(BUSINESS WIRE)--The Hartford Mutual Funds today announced that it will reopen the Five-Star Rated1 Hartford MidCap Fund to new investors effective Monday, December 15, 2008.

As a result of the Fund being closed since 2004, it has experienced normal outflows without the offsetting benefit of new cash flows. This has opened up capacity for new investors. In addition, the current market environment has created attractive new investment opportunities for the portfolio management team.

Portfolio Manager Phil Perelmuter, who has managed The Hartford MidCap Fund since its inception in 1997, believes the Fund is well positioned to accept new assets. “There are a lot of attractively priced mid-cap companies,” said Perelmuter. “Opening the Fund to new investors will help allow us to take advantage of these opportunities.”

Perelmuter, one of just 15 portfolio managers with a 10-year track record managing mid-cap portfolios, has garnered many industry accolades, including:

Winner of the U.S. Lipper Fund Award2 in the MidCap Core Category for funds with a 10-year track record (2008)
Named in Barron’s Top 100 Manager List3 five times (2001, 2002, 2003, 2006, 2008)
An overall 5-Star Morningstar® Rating (the Fund is rated 4 Stars over three years, and 5 Stars over five years and 10 years—all ratings are as of 11/30/08)

The Fund, sub-advised by Wellington Management Company, LLP, boasts an impressive historical performance record, having outpaced its benchmark (the S&P MidCap 400 Index) in 10 of the last 11 calendar years, and year-to-date through 11/30/08. The Fund has also outperformed its Lipper peer group (Lipper MidCap Core) in nine of the last 11 calendar years, and year-to-date through 11/30/08. (Data Sources: Morningstar and Lipper, 12/08)

According to Morningstar percentile rankings (based on total return), the Fund is one of the top-performing funds in the Mid-Cap Growth category over all time periods (ended 9/30/08):

Top 10% of its category for 1-year performance (#94 out of 932 funds)
Top 6% for 3-year performance (#51 out of 819 funds)
Top 5% for 5-year performance (#36 out of 679 funds)
Top 3% for 10-year performance (#10 out of 332 funds)
Top 2% for performance since inception on 12/31/97 (#5 out of 288 funds)
In addition to the 5-Star overall rating from Morningstar in the MidCap Growth Category, the Fund is also rated:
4 Stars over three years (out of 833 funds in the category);
5 Stars over five years (out of 633 funds in the category);
5 Stars over 10 years (out of 339 funds in the category);
All ratings are as of 11/30/08, and are based on risk-adjusted return.
Data from Morningstar show that mid-cap stocks have historically performed well following periods of recession. Over the last 30 years, mid-cap stocks have rebounded more strongly than large-cap stocks in the 12 months following the end of the last three official recessions, as determined by the National Bureau of Economic Research (official recession dates were: 7/81-11/82, 7/90-3/91, and 3/01-11/01).

“Historically, mid-cap companies generally have greater growth potential than comparable large-caps, and also offer more seasoned management, greater liquidity and stronger operating histories than many small-cap companies,” said Perelmuter.

“We think there is tremendous value for both current shareholders and new investors in reopening the MidCap Fund at this time,” said Keith Sloane, senior vice president, The Hartford Mutual Funds. “We are very pleased to be able to offer this unique opportunity to get into a highly-sought-after mid-cap fund.” He added, “Investing in mid-cap companies is considered by many financial advisors as a core foundation of strategic asset allocation, and the reopening of the Fund further strengthens our already formidable lineup of style-focused and broad mandate equity funds.”

The Hartford MidCap Fund (symbols – Class A:HFMCX, Class B:HAMBX, Class C:HMDCX) seeks to outperform the S&P MidCap 400 Index by investing in high-quality, established mid-cap companies with good balance sheets, strong management teams, and market leadership in their industry. The investment approach focuses on meeting three imperatives:

Quality – a focus on industry leaders with high market share
Diversification – attempt to be invested in all 10 sectors of the market
Purity – consistent investment in mid-cap companies

 

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