Download Simplicity Is the Ultimate Sophistication

ADVISOR SEMINAR MATERIALS
ADVISOR SEMINAR MATERIALS
MARCH 31, 2017
Simplicity Is the
Ultimate Sophistication
Hartford Balanced Income Fund
“Simplicity Is the Ultimate Sophistication.”
— Leonardo da Vinci
T
he Golden Ratio is a special number that speaks to beauty,
symmetry, and proportionality in art, architecture, and nature.
Originally discovered by mathematicians, the Golden Ratio can be
observed in objects as simple as a flower and as enduring as the
Great Pyramids in Egypt. Its dimensions provide a sense of balance,
beauty, and order, and it’s a timeless example of the power of using
simple solutions to tackle complex challenges.
Investing today can feel like a complex challenge. But it doesn’t have
to be. Let’s explore some concepts that can help make you a better
investor, and a simple strategy that has historically provided a positive
experience for investors: Hartford Balanced Income Fund.
The Golden Ratio in art
Leonardo da Vinci wrote about the Golden Ratio extensively and
featured it in his paintings to achieve simple beauty. Michelangelo
applied it in “The Creation of Adam” on the ceiling of the Sistine
Chapel. When you view a work of art in its frame, the Golden Ratio is
often apparent.
1
3 Things to Know as You Invest
1 Stocks have historically offered the best long-term growth
Stocks have provided significantly more growth than bonds, but are riskier than bonds and more
susceptible to short-term market fluctuations.
Stocks Have Outperformed Bonds by a Wide Margin Over the Past 30 Years
Growth of $10,000 investment: 12/31/86–12/31/16
$200,000
n Stocks1
n Bonds2
$182,260
$150,000
$100,000
$63,175
$50,000
$0
12/86
12/90
12/04
12/08
12/12
12/16
Source: Thomson Reuters, 1/17.
-2.92%
-3.10%
-0.82%
-2.02%
-9.10%
-3.10
-9.10
-11.89%
-11.89
-22.10
-22.10%
-37.00%
1
Stocks are represented by the S&P 500 Index which is a market capitalization-weighted price index composed of 500 widely held common stocks.
2
Bonds are represented by the Bloomberg Barclays U.S. Aggregate Bond Index which is composed of securities from the Bloomberg Barclays Government/Credit Bond Index,
Mortgage-Backed Securities Index, Asset-Backed Securities Index, and Commercial Mortgage-Backed Securities Index.
-37.00
Past performance is not a guarantee of future results. The performance shown above is index performance and is not representative of any
Hartford Fund’s performance. Indices are unmanaged and not available for direct investment. For illustrative purposes only.
10%
8%
2
2 Bonds can help balance risk
Bonds
have historically been a good complement to stocks and can help reduce the risk of an
$200,000
$182,260
all-equity portfolio.
$150,000
Negative Calendar Years for Stocks Since 1977
n Stocks1
$100,000
n Bonds2
Total Return
30%
$63,175
20%
$50,000
10%
0%
-10%
$0
12/86
12/90
12/04
12/08
12/12
12/16
-20%
-30%
-40%
-3.10%
-2.92%
1977
1981
1990
-0.82%Source: Thomson Reuters, 1/15.
-9.10%
2000
2001
2002
2008
-3.10
-2.02%
-9.10
-11.89%
-11.89
-22.10
-22.10%
3
30%
Income is becoming harder
to find
-37.00%
-37.00
20% rates are lower than they have been at any point in the last 30 years so you may need to
Interest
think beyond the income your bonds generate (i.e., bond yields) for the income you need.
10%
Bond
0%Yields Are at Historic Lows
10%
-20%
8%
-30%
6%
Yield
-10%
-40%
4%
1977
1981
1990
1994
1999
2000
2001
2002
2%
0%
12/86
12/91
12/96
12/01
12/06
12/01
12/16
Source: Morningstar, 1/17. Bonds are represented by the Bloomberg Barclays U.S. Aggregate Bond Index.
Past performance is not a guarantee of future results. The performance shown above is index performance and is not representative of any
Hartford Fund’s performance. Indices are unmanaged and not available for direct investment. For illustrative purposes only.
3
2008
A Strategy With Synergy and Simplicity
The Hartford Balanced Income Fund is a simple strategy that offers the growth potential you need
without taking excessive risk. The Fund offers investors:
A mix of stocks and bonds
In simple proportions reminiscent of the Golden Ratio, the Fund has a balanced
target allocation of 55% bonds and 45% stocks, with fluctuations of no more than
+/-5%. The bonds can provide income and help reduce volatility, while the stocks
can provide growth potential.
Companies you know and trust
Invests primarily in dividend-paying stocks and investment-grade corporate bonds
that you can feel confident investing in for the long term.
Strong performance with lower volatility
The Fund’s performance has been similar to stocks but with less risk.
A Balance of Strong Returns with Lower Relative Risk
Risk/Return Comparison (7/31/06-3/31/17)
9.1%
Return
Hartford Balanced
Income Fund
Stocks
5.6%
Morningstar Allocation
30-50% Equity Category
Average
2.1%
0%
15%
30%
Risk (Standard Deviation)
Source: Morningstar, 4/17. Start date of 7/31/06 is the Hartford Balanced Income Fund’s inception date.
Risk is measured by standard deviation. Standard deviation is a measure of how returns over time have varied from the mean; a lower number signifies lower volatility. Stocks
are represented by the S&P 5009.0%
Index which is a market capitalization-weighted price index composed of 500 widely held common stocks.
Performance data quoted represents past performance and does not guarantee future results. Indices are unmanaged and not available for
direct investment. Please see page 11 for important performance information including standardized performance. The investment return
and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their
original cost. Current performance may be lower or higher than the performance data quoted. For more current performance information
to the most recent month ended, please see hartfordfunds.com.
4
THE STRATEGY
Dividend-Paying Stocks for Growth Potential
Hartford Balanced Income Fund emphasizes stocks of companies that pay above-average dividends and/or companies that
are expected to increase their dividends. The portfolio managers believe companies that initiate or consistently grow their
dividends display confidence in the future health of their companies and demonstrate commitment to their shareholders.
Dividend Growers & Initiators Have Outperformed...
...While Experiencing Less Volatility
Return of stocks by dividend policy* (1/1/72–12/31/16)
Volatility of stocks by dividend policy*
(1/1/72-12/31/16, as measured by beta**)
9.89%
1.5%
9.09%
7.52%
1.2%
7.37%
0.9%
0.87
0.94
1.00
Dividend
Growers &
Initiators
Dividend
Payers
EqualWeighted
S&P 500
1.00
No Change
in Dividend
Policy
1.23
1.29
Dividend
Cutters &
Eliminators
Dividend
NonPayers
0.6%
2.39%
0.3%
0.0%
-0.44%
Dividend
Growers &
Initiators
Dividend
Payers
EqualWeighted
S&P 500
No Change
in Dividend
Policy
Dividend
Non-Payers
Dividend
Cutters &
Eliminators
**Beta is a measure of volatility relative to a benchmark. The benchmark has a beta of 1.0, so if the beta of an investment is 1.1, this means it has historically been 10% more volatile than
the benchmark, and a beta of 0.9 would mean the investment has historically been 10% less volatile than the benchmark.
The graphs and tables shown are for illustrative purposes only. Returns are based on the monthly, equal-weighted geometric average of total returns of S&P 500 component stocks, with
components reconstituted monthly. Dividend-paying stocks are not guaranteed to outperform non-dividend paying stocks in a declining, flat, or rising market. The data does not represent
the performance of Hartford Funds and does not take into account fees and charges associated with actual investments. Past performance is not indicative of future results.
Source: Ned Davis Research, 1/17.
Hartford Balanced Income Fund
Top 10 Equity Holdings (as of 3/31/17)
JP Morgan Chase & Co
Wells Fargo & Company
Philip Morris International, Inc.
Cisco Systems, Inc.
Johnson & Johnson
Microsoft Corp.
Pfizer, Inc.
Chevron Corp.
Merck & Co., Inc.
General Electric Co.
Percentage of the Portfolio
Percentage
Allocation
Dividend Growth
30 Year Dividend Increase History
2.04
1.95
1.66
1.55
1.50
1.37
1.35
1.10
1.09
1.06
14.67
9%
3%
2%
18%
7%
16%
7%
0%
2%
1%
19 out of 30
27 out of 30
8 out of 11
5 out of 6
30 out of 30
12 out of 14
27 out of 30
29 out of 30
25 out of 30
28 out of 30
(1 year)
(increases out of dividends paid)
Total number of equity holdings in Fund: 65
Holdings are subject to change. Percentages may be rounded.
*The “dividend payers” have been divided into three groups based on their dividend payout behavior during the previous 12 months. Companies that kept their dividends per share at
the same level were classified as “no change.” Companies that raised their dividends were classified as “dividend growers and initiators.” Companies that lowered or eliminated their
dividends were classified as “dividend cutters or eliminators.” Companies that were classified as either “dividend growers and initiators” or“dividend cutters and eliminators” remained in
these same categories for the next 12 months, or until there was another dividend change.
5
Quality Bonds Help Reduce Volatility
If you want to build a diversified portfolio that you can
feel confident in for the long term, you should consider an
investment that incorporates quality bonds (like investmentgrade corporate bonds) because they have historically been
a complement to “risk assets,” such as stocks and high-yield
bonds.
Quality Bonds Have Historically Behaved Differently
Correlation of quality bonds to risk assets (4/1/02-3/31/17)
1.00
0.57
0.24
Correlation is a statistical measure of how two investments move in relation to each
other. A correlation of 1.0 indicates the investments have historically moved in the same
direction; a correlation of -1.0 means the investments have historically moved in opposite
directions; and a correlation of 0 indicates no historical relationship in the movement of
the investments.
DIVERSIFICATION DOES NOT ENSURE A PROFIT OR PROTECT AGAINST
A LOSS.
Stocks1
High Yield Bonds3
Investment-Grade
Corporate Bonds4
1.00
Source: Morningstar, 4/17.0.69
0.21
Stocks are represented by the S&P 500 Index which is a market capitalization-weighted price index composed of 500 widely held common stocks.
High Yield Bonds are represented by the Bloomberg Barclays Corporate High Yield Index, which covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond
market.
4
Investment Grade Corporates are represented by the Bloomberg Barclays U.S. Corporate Investment Grade Index, which measures the performance of investment grade corporate bonds.
1
3
Hartford Balanced Income Fund uses quality bonds (i.e., investment-grade corporate bonds) as its foundation, then adds
additional types of bonds for additional income and diversification.
-3.32
Top 10 Fixed-Income Issuers (as of 3/31/17) (%)
Fixed-Income Allocation (as of 3/31/17)
Emerging
Markets
High
Yield
9%
Goldman Sachs Group, Inc.
-15.81
Bank of America Corp.
Citigroup, Inc.
High
10% Morgan Stanley
Yield
Wells Fargo & Co.
10%
Verizon Communications, Inc.
Anheuser-Busch InBev Finance, Inc.
JP Morgan Chase & Co.
80% Inc.
AT&T,
Investment
HSBC
GradeHoldings plc
Percentage of the Portfolio
Emerging
Markets
Other
4%
10%
77%
InvestmentGrade
Corporates
-33.53
1.50
1.22
1.21
1.17
1.09
0.94
0.91
0.82
0.64
0.64
10.14
Total number of issuers in Fund: 527
Holdings are subject to change. Percentages may be rounded.
Investments in foreign securities may be riskier than investments in U.S. securities. Potential risks include the risks of illiquidity, increased price volatility, less government regulation,
less extensive and less frequent accounting and other reporting requirements, unfavorable changes in currency exchange rates, and economic and political disruptions. These risks are
generally greater for investments in emerging markets. Investments in high-yield bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities.
The Golden Ratio in architecture
Many celebrated buildings reflect the
Golden Ratio in their proportions.
Architects believed simple rectangular
facades and dimensions were most
pleasing to the eye.
6
GROWTH/VOLATILITY
Strong, Steady Long-Term Growth
What would make you feel comfortable owning an investment for the long term? Strong long-term performance with less
volatility? Hartford Balanced Income Fund provided nearly as much growth as stocks with less volatility.
Long-Term Growth...
Hartford Balanced Income Fund’s growth of $10,000 (7/31/06–3/31/17) and outperformed during volatile market events
Financial Crisis
10/10/07-3/9/09
/11/16
U.S. Debt
Ceiling Crisis
7/22/11-10/3/11
Eurozone
September
Debt Crisis
2014 Slump
4/2/12-6/1/12 9/19/14-10/15/14
Crude Oil
Selloff
7/21/15-2/11/16
$25,000
$21,931
$20,476
$23,261
$20,978
Outperformed
+6.07%
$20,000
$15,000
ms
Outperformed
+8.36%
$10,000
$5,000
$0
2/31/16
Outperformed
+11.45%
Outperformed
+19.80%
7/31/06
Outperformed
+4.65%
3/31/17
■ Hartford Balanced Income Fund A
■ Stocks1
Source: Morningstar, 4/17.
Performance data quoted represents past performance and does not guarantee future results. Indices are unmanaged and not available
for direct investment. Please see page 11 for important performance information including standardized performance. The investment
$22000
return and
principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their
original cost. Current performance may be lower or higher than the performance data quoted. For more current performance information to
the most recent month ended, please see hartfordfunds.com.
$16500
...With$11000
Only Half the Volatility of Stocks
Hartford Balanced Income
1.00 Fund and
the S&P 500 Index provided investors
with similar long-term returns,
0.50
but with very different investor
experiences: the Fund had only half
the volatility of the S&P 500.
1.00
0.50
n Hartford Balanced Income Fund A
n Stocks1
Source: Morningstar, 4/17.
Beta (7/31/06-3/31/17)
1
Stocks are represented by the S&P 500 Index which is a market capitalization-weighted price index composed of 500 widely held common stocks.
1.00
7
0.50
-37.00%
A Simple Solution for Challenging Markets
Steady past peformance in a variety of markets
Not only did the Fund lose half as much as the S&P 500 Index in the down market of 2008, it also captured upside in the rising
market of 2009 and in the flat market of 2011.
Down Market: 2008
Up Market: 2009
22.42%
Flat Market: 2011
26.46%
8.70%
2.11%
-18.53%
-37.00%
n Hartford Balanced Income Fund A n Stocks1
Source: Morningstar, 1/15.
Past performance is not indicative of future results. See page 11 for important performance information including standardized
performance. Indices are unmanaged and not available for direct investment. Please see back page for index definitions.
Our investors stay the course
Investor returns more accurately reflect an investor’s experience in a fund than total returns because they factor in dollar
outflows and inflows. Investors in Hartford Balanced Income Fund bought and held instead of selling during volatile periods, and
this is reflected in investor returns that are significantly higher than its peer group average. The Fund returns below represent the
average investor experience as calculated by Morningstar; please see page 11 for the Fund’s actual performance.
Investor Returns as of 3/31/17
Hartford Balanced Income Average Investor
Morningstar Allocation 30-50% Equity Category Avg. Investor
1 Year
3 Year
5 Year
9.525.50 6.96
7.362.66 4.28
Source: Morningstar, 4/17.
Investor return is a dollar-weighted return calculated by Morningstar and measures the experience of the average investor in a fund. It is not one specific investor’s experience, but rather a measure
of the return earned collectively by all the investors in the fund. Investor return incorporates the impact of cash inflows and outflows from purchases and sales and the growth in fund assets.
Past performance is not indicative of future results. See page 11 for important performance information including standardized
performance.
The Golden Ratio in nature
The shapes of flowers often follow the
Golden Ratio. Simple spiral patterns allow
older petals to get sunlight, even as new
ones appear. Their offsetting surfaces
allow for the maximum flow of water to
the roots.
8
$6,000
$6,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,709
$4,000
$3,247
$1,764
$3,774
$1,835
$4,000
$5,000
$5,098
$4,634
$5,295
$5,210
A Simple Strategy for Income in a Low-Yield World
$4,000
$8,000
$4,000
$8,000
$4,000
INCOME
$21
$10
$29
$26
$762
$42
$501
$904
Market
volatility could cause you to favor bonds over stocks for income.
Unfortunately, bonds don’t offer much income in today’s
$2,000
$2,000
low-yield world, and stocks may be too volatile for your risk tolerance. If you were fortunate enough to create an income stream
using$0
CDs and bonds prior to the start of the financial crisis (10/31/07) when
$0 they paid attractive income, Hartford Balanced
2008 2009 2010 2011 2012 2013 2014 2015 2016
0
0
0
0
0
4
Income Fund still would
have
provided
more
income than
both these options while significantly outperforming the S&P 500 Index.
$8,000
Unpredictable Income From CDs
$8,000
$0
Bonds 10-Year U.S. Treasury Bond
$502
$359
$565
$2,000
Source: Morningstar, 4/17. CDs are insured by the FDIC.
$267
8
00
02 0 04 0 06 0 08 0 $100,000
0
Value of Investment
on 03/31/17: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000
$450
$0
$334
Total Income Received: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,546
$6,000
$418
$240
$401
$2,000
Initial
Investment on 10/31/07: . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
$2,418
$1,977
$3,825
$5,315
$4,844
$2,959
$1,318
$2,130
$1,348
$5,252
$5,138
$5,672
$5,637
CDs create income that fluctuates with interest rates.
The
income on a $100,000 investment fell from a high
$4,000
of $4,233/year in 2008 to a low of $267 in 2013.
$4,233
$6,331
CDs
6-Month CD
$6,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
Flat Income, No Growth From Bonds
$8,000
$21
$10
$26
$29
$42
Value of Investment on 3/31/17: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
$0
0
0
0
0
0
4
$0
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$2,000
$4,000
Total Income Received: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36,000
$4,000
$4,000
$762
$3,247
$501
$2,000
$904
Initial Investment on 10/31/07: . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
$6,000
$4,000
$4,709
$3,774
$1,764
$1,835
$5,000
$5,098
$4,634
$5,295
$5,210
8
82
6
6 86
02
82
4
0
8
6
4
8
8 8
442
422
4 8
While this income stream is predictable, it doesn’t offer much
protection
against inflation. Government bonds and Treasury
$8,000
bills are guaranteed by the U.S. government. Treasury bonds
provide
$6,000 a stable source of income over a fixed number of
years. If you bought a 10-year treasury bond in 2007, the rate
would
have been about 4%.
$4,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
Based on a 4% coupon and assumes the bond is held until maturity. U.S. Treasury Bond interest rates and principal fluctuate and results may differ from the example above.
Annual Withdrawal after 12 months: . . . . . . . . . . . . . . . . . . . . . . $5,000
$2,000
(4% increase in withdrawal amount
each year thereafter)
$0
2009 2010
2011 2012 2013 2014 2015 2016 $52,914
Total2008
Withdrawals
Received: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $502
$6,843
$359
$6,580
$565
$6,327
$267
$6,083
$2,000
$4,000
$450
$5,849
$4,000
$6,000
$8,000
$334
$5,624
$240
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
Initial Investment on 10/31/07: . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
$6,000
$8,000
$418
$5,408
$401
$2,959
than bonds. When income was taken during a challenging
environment, it left the client with an ending value that was
$6,000
$0
00 investment.
0 02 0 04 0 06 0 08 0
0
less than the 8original
$2,418
$5,200
$3,825
$1,318
$1,348
Investing in stocks has historically provided rising income
that
typically outpaces inflation, but with greater volatility
$8,000
$2,000
Rising Income with Volatility From Stocks
$4,233
$5,000
$1,977
$8,000
$5,315
$4,844
$5,252
$5,138
$5,637
Stocks
S&P 500 Index
$4,000
$2,130
$5,672
$6,000
$6,331
$8,000
$0
$2,0002008 2009 2010 2011 2012 2013 2014 2015 2016
$0
$6,000
$4,000
$2,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
8
Source: Thomson Reuters, 4/17.
82
6
6 86
02
82
4
0
8
6
4
8
8 8
442
422
4 8
Value of Investment on 3/31/17
after taking income withdrawals: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $91,670
3
Hypothetical example and the results for other time periods could differ substantially from that shown above. The CD and Bond illustrations assume no additional contributions are made after
the initial investment. The equity illustration uses periods of rising equity prices and assumes the continued reinvestment of dividends and capital gains. Mutual funds are subject to risk and
$8,000
you could lose money. Taxes and transaction costs were not taken into account. If they were, the performance shown would have been lower. There are other material differences between the
products which must be considered prior to investing.
$6,000
Past performance is not a guarantee of future results. The performance shown above is index performance and is not representative of any
9
Hartford fund’s performance. Indices are unmanaged and not available for direct investment. For illustrative purposes only.
$4,000
$0
20
Rising Income Stream and More Growth
Hartford Balanced Income Fund
$2,000
Chart assumes reinvestment of dividends and capital gains, and is for illustrative purposes
only. Taxes and transaction
$0 costs were not taken into account. Note that performance would
2008taken
2009
2010 2011
2013 the
2014
2016
have been lower if taxes were
into account.
There is2012
no guarantee
Fund2015
will be able
to generate an income stream.
Data Source: Thomson Reuters, 4/17.
$0
$6,843
$6,580
$6,327
$6,083
$5,849
$5,624
$5,408
$4,000
$5,200
$6,000
$5,000
$5,624
$5,000
$5,200
$5,408
Total Withdrawals Received: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,914
$4,000
Value of Investment
on 3/31/17
$106,238
after taking income withdrawals: . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,000
$8,000
$6,843
$6,580
$6,327
$5,849
$6,083
Initial Investment on 10/31/07: . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
$8,000
Annual Withdrawal after 12 months: . . . . . . . . . . . . . . . . . . . . . $5,000
(4% increase in withdrawal amount
each year thereafter)
$6,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
Value of a $100,000 Investment After Total Withdrawals
Hartford Balanced Income Fund vs. the S&P 500 Index (10/31/07–3/31/17)
$120,000
$106,238
$91,670
$8,658
$8,325
$7,697
$7,401
$7,117
$6,843
$6,327
$5,849
$5,624
$4,000
$60,000
$5,408
$6,000
$6,083
$80,000
$6,580
$8,000
$8,005
$100,000
$5,200
16
What type of income stream are you looking for? Would you like an income stream that factors in future inflation? You may be
able to engineer an income stream to help meet your specific needs. The example below is hypothetical; actual results may vary
and are not guaranteed.
$5,000
16
Hartford Balanced Income Fund has historically provided similar rising income as stocks (as measured by the S&P 500 Index), but
with less volatility due to its bond allocation.
$2,000
$40,000
$0
8
00 0
02 0
04 0
06 0
08 0
n Hartford Balanced Income Fund A
n Stocks1
0
$20,000
$0
10/07
2008
2009
2010
2011
2012
2013
2014
2015
2016 3/17
Performance data quoted represents past performance and does not guarantee future results. The S&P 500 Index is unmanaged and
not available for direct investment. Please see page 11 for important performance information including standardized performance.
The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth
more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For more current
performance information to the most recent month ended, please see hartfordfunds.com.
10
Hartford Balanced Income Fund Has Served Investors Well
Morningstar Overall Ratings (A-Share)*
HHHHH
Out of 408 products in the Allocation 30-50% Equity Category Based on Risk-Adjusted Returns as of 3/31/17
*Hartford Balanced Income Fund’s A-Share 3-year rating was 5 stars out of 408 products, the 5-year rating was 5 stars out of 350 products, and the 10-year rating was 5 stars out of 243
products for the period herein. Other share classes may have different ratings. Past performance is no guarantee of future results. (Please see back page for additional information on
Morningstar ratings).
Average Annual Total Returns
Performance (%) as of 3/31/17
YTD
1 Year
3 Year
5 Year
10 Year
Since Inception (7/31/06)
Hartford Balanced Income Fund A
2.4510.065.93 7.91 6.74
With Max Sales Charge (5.5%)
4.003.95 6.70 6.14
Blended Index5
2.3711.286.21 8.38 6.15
Morningstar Allocation 30-50% Equity Category
2.958.033.05 4.40 3.92
Morningstar Percentile Ranking
16%3% 2% 4%
Fund Rank within Category
82/53011/450 9/408 12/332
7.19
6.63
----3%
8/320
Expenses** (Class A) Net 0.96% Gross 0.96%
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value
of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance data quoted. For more current performance information to the most recent
month ended, please see hartfordfunds.com.
The people behind the strategy
Scott I. St. John, CFA
Senior Managing Director
Fixed-Income Portfolio Manager
Professional Experience Since 1994
BS, Cornell University
MBA, University of Rochester
W. Michael Reckmeyer, III, CFA
Senior Managing Director
Equity Portfolio Manager
Professional Experience Since 1984
BS, University of Wisconsin
MBA, University of Wisconsin
Karen H. Grimes, CFA
Senior Managing Director
Equity Portfolio Manager
Professional Experience Since 1983
BBA, Georgia State University
Ian R. Link, CFA
Senior Managing Director
Equity Portfolio Manager
Professional Experience Since 1989
BA, University of California, Davis
MBA, University of California, Berkeley
Experienced money management from
Wellington Management
1928
Wellington Management creates the first
balanced fund
$1,019
Billion in Assets Under
Management as of 3/31/17
$420B
in Equities
$411B
in Fixed Income
$188B
in Multi-Strategy
Wellington Management is a trusted
global manager
12 Offices worldwide
2,100+ Clients based in 50+ countries
200+ Investment approaches
210,000+ Securities in global
securities universe
Morningstar ratings reflect historical risk-adjusted performance as of March 31, 2017 and are subject to change every month. The Morningstar RatingTM for funds, or “star rating”, is
calculated for funds and separate accounts with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative
purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis
on downward variations and rewarding consistent performance. (Please see back page for additional information on Morningstar ratings).
**Expenses stated as of the fund’s most recent prospectus. Net expenses reflect contractual expense reimbursements in instances when these reductions reduce the
fund’s gross expenses. Contractual reimbursements remain in effect until 2/28/18 and automatically renew for one-year terms unless terminated.
11
Hartford Balanced Income Fund
May Be Suitable for Investors Seeking:
An emphasis on quality investments
Primarily invests in dividend-paying stocks from companies
that have the potential to increase their dividends and
investment-grade bonds from strong companies.
Less volatility than an all-equity fund
A generous allocation to bonds may help
manage downside risk better than an all-equity
fund.
Rising income stream potential
The Fund’s emphasis on income-producing stocks
and bonds allows investors to take dividend
distributions in cash or engineer an income stream.
12
A Simple Solution for Complex Challenges
T
he Hartford Balanced Income Fund invests in quality companies—names you
know and trust. It’s a simple strategy that offers the growth potential you need
without taking excessive risk. Just as the Golden Ratio provides the perfect balance in art,
architecture, and nature, the Fund takes a balanced approach to solve for your greatest
challenges: growth, income, and volatility.
13
Hartford Funds
Hartford Mutual Funds
Equity
Hartford Capital Appreciation
Hartford Core Equity
Hartford Dividend and Growth Hartford Emerging Markets Equity
Hartford Schroders Emerging Markets Equity
Hartford Environmental Opportunities
Hartford Equity Income Hartford Global Capital Appreciation Hartford Global Equity Income
Hartford Global Impact
Hartford Growth Opportunities
Hartford Healthcare Hartford International Equity
Hartford International Growth
Hartford Schroders International Multi-Cap Value
Hartford International Opportunities Hartford Schroders International Stock
Hartford MidCap
Hartford MidCap Value Hartford Small Cap Core
Hartford Small Company
Hartford Schroders US Small Cap Opportunities
Hartford Schroders US Small/Mid Cap Opportunities
Hartford Value Opportunities A
C
F
I
R3
R4
R5
R6
SDR
ITHAX HCACX HCAFX ITHIX
ITHRX ITHSX ITHTX ITHVX
HAIAX HGICX
HGIFX HGIIX
HGIRX HGISX HGITX HAITX
IHGIX HDGCX HDGFX HDGIX HDGRX HDGSX HDGTX HDGVX
HERAX HERCX
HERFX HERIX HERRX
HERSX
HERTX
SEMVX HHHCX HHHFX SEMNX HHHRX
HHHSX HHHTX
SEMTX
HEOMX HEONX HEOFX HEOIX HEORX
HEOSX HEOTX HEOVX
HQIAX HQICX
HQIFX HQIIX
HQIRX HQISX HQITX HQIVX
HCTAX HFCCX
HCTFX HCTIX HCTRX HCTSX HCTTX HLEAX HLECX
HLEFX HLEJX HLERX
HLESX
HLETX
HGXAX HGXCX HGXFX HGXIX HGXRX
HGXSX HGXTX HGXVX
HGOAX HGOCX HGOFX HGOIX HGORX HGOSX HGOTX HGOVX
HGHAX HGHCX HGHFX HGHIX HGHRX HGHSX HGHTX HDVAX HDVCX HDVFX HDVIX HDVRX
HDVSX HDVTX
HNCAX HNCCX HNCFX HNCJX HNCRX HNCSX HNCTX SIDVX HFYCX
HFYFX SIDNX HFYRX
HFYSX
HFYTX
SIDRX
IHOAX HIOCX
IHOFX IHOIX
IHORX
IHOSX
IHOTX IHOVX
SCVEX HSWCX HSWFX SCIEX HSWRX HSWSX HSWTX
SCIJX
HFMCXHMDCXHMDFXHFMIXHFMRX HFMSX HFMTXHFMVX
HMVAX HMVCX HMVFX HMVJX HMVRX HMVSX HMVTX
HSMAX HTSCX HSMFX HSEIX HSMRX HSMSX HSMTX
IHSAX HSMCX
IHSFX IHSIX
IHSRX IHSSX IHSUX IHSVX
SCUVX HOOCX HOOFX SCUIX HOORX
HOOSX HOOTX
SCURX
SMDVX HFDCX
HFDFX SMDIX HFDRX
HFDSX
HFDTX
SMDRX
HVOAX HVOCX HVOFX HVOIX HVORX HVOSX HVOTX HCAYX
HGIYX
HDGYX
HERYX
HHHYX
HEOYX
HQIYX
HCTYX
HLEYX
HGXYX
HGOYX
HGHYX
HDVYX
HNCYX
HFYYX
HAOYX
HSWYX
HMDYX
HMVYX
HSMYX
HSCYX
HOOYX
HFDYX
HVOYX
Fixed Income
Hartford Schroders Emerging Markets Debt and Currency
Hartford Emerging Markets Local Debt Hartford Schroders Emerging Markets Multi-Sector Bond
Hartford Floating Rate
Hartford Floating Rate High Income
Hartford Schroders Global Strategic Bond
Hartford High Yield Hartford Inflation Plus
Hartford Municipal Income
Hartford Municipal Opportunities
Hartford Municipal Real Return
Hartford Municipal Short Duration Hartford Quality Bond
Hartford Short Duration
Hartford Strategic Income
Hartford Schroders Tax-Aware Bond
Hartford Total Return Bond
Hartford Unconstrained Bond
Hartford World Bond
SARVX
HLDAX
SMSVX
HFLAX
HFHAX
SGBVX
HAHAX
HIPAX
HMKAX
HHMAX
HTNAX
HMJAX
HQBAX
HSDAX
HSNAX
STWVX
ITBAX
HTIAX
HWDAX
HFWCX
HLDCX
HFZCX
HFLCX
HFHCX
HSBCX
HAHCX
HIPCX
HMKCX
HHMCX
HTNCX
HMJCX
HQBCX
HSDCX
HSNCX
HFKCX
HABCX
HTICX
HWDCX
HFWFX
HLDFX
HFZFX
HFLFX
HFHFX
HSBFX
HAHFX
HIPFX
HMKFX
HHMFX
HTNFX
HMJFX
HQBFX
HSDFX
HSNFX
HFKFX
ITBFX
HTIFX
HWDFX
HFWYX
HLDYX
HFZYX
HFLYX
HFHYX
HSBYX
HAHYX
HIPYX
Multi-Strategy
Hartford Balanced
Hartford Balanced Income
Hartford Checks and Balances
Hartford Conservative Allocation
Hartford Global All-Asset Hartford Growth Allocation
Hartford Schroders Income Builder
Hartford Moderate Allocation Hartford Multi-Asset Income
ITTAX
HBLAX
HCKAX
HCVAX
HLAAX
HRAAX
SGMVX
HBAAX
HAFAX
HAFCX
HBLCX
HCKCX
HCVCX
HLACX
HRACX
HBBCX
HBACX
HAICX
ITTFX
ITTIX
ITTRX HBLFX HBLIX HBLRX
HCKFX HCKIX HCKRX HCVFX HCVIX HCVRX
HLAFX HLAIX HLARX HRAFX HRAIX HRARX HBBFX SGMNX HBBRX
HBADX HBAIX HBARX HAFDX HAFIX HAFRX Alternatives
Hartford Global Real Asset Hartford Long/Short Global Equity
Hartford Real Total Return HRLAX HRLCX
HLOAX HLOCX
HABMX HABNX
SARNX
SARRX
HLDIX HLDRX
HLDSX
HLDTX
SMSNX HFZRX
HFZSX
HFZTX
SMSRX
HFLIX
HFLRX HFLSX HFLTX HFHIX HFHRX HFHSX HFHTX SGBNX HSBRX
HSBSX
HSBTX
SGBJX
HAHIX HAHRX HAHSX HAHTX HIPIX
HIPRX
HIPSX HIPTX HMKIX
HHMIX
HTNIX
HMJIX
HQBIX HQBRX
HQBSX HQBTX
HSDIX HSDRX
HSDSX HSDTX
HSNIX HSNRX
HSNSX HSNTX HSNVX
STWTX
HFKVX
ITBIX
ITBRX
ITBUX ITBTX
ITBVX
HTIIX
HTIRX
HTISX
HTITX
HWDIX HWDRX HWDSX HWDTX HWDVX
ITTSX HBLSX
HCKSX HCVSX
HLASX HRASX HBBSX
HBASX HAFSX ITTTX HBLTX HBLVX
HCKTX HCVTX
HLATX HRATX HBBTX
SMGRX
HBATX HAFTX HRLFX HRLIX HRLRX
HRLSX
HRLTX
HLOFX HLOIX
HABAX HABOX HABFX
HABQX HABRX
Y
HTNYX
HQBYX
HSDYX
HSNYX
HFKYX
HABYX
HTIYX
HWDYX
IHAYX
HBLYX
HLAYX
HBBYX
HAFYX
HRLYX
HLOYX
HABPX
14
Hartford Balanced Income Fund
Fund Symbols:
A:
C: F: I: R3: R4: R5: R6:
Y: HBLAX
HBLCX
HBLFX
HBLIX
HBLRX
HBLSX
HBLTX
HBLVX
HBLYX
A mix of stocks and bonds: Takes a
balanced approach to help solve for your
greatest challenges: growth, income, and
volatility.
Companies you know and trust: Invests
primarily in dividend-paying stocks and
investment-grade corporate bonds that
you can feel confident investing in for the
long term.
Strong performance with lower volatility:
At Hartford Funds, your investment satisfaction is our measure of
success. That’s why we use an approach we call human-centric investing
that considers not only how the economy and stock market impact your
investments, but also how societal influences, generational differences,
and your stage of life shape you as an investor.
Instead of cookie-cutter recommendations and generic goals, we
think you deserve personalized advice from a financial advisor who
understands your financial situation and can build a financial plan
tailored to your needs.
Delivering strong performance is always our top priority. But the
numbers on the page are only half the story. The true test is whether or
not an investment is performing to your expectations.
The Fund’s performance has been similar
to stocks but with less risk.
Important Risks:
All investments are subject to risk, including the possible loss of principal. There is no guarantee the Fund will achieve its stated
objective. The Fund’s share price may fluctuate due to market risk and/or security selections that may underperform the market
or relevant benchmarks. If the Fund’s strategy for allocating assets among different asset classes and/or portfolio management
teams does not work as intended, the Fund may not achieve its objective or may underperform other funds with similar
investment strategies. Fixed income risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond
prices generally fall; these risks are currently heightened because interest rates are at, or near, historical lows. For dividend-paying
stocks, dividends are not guaranteed and may decrease without notice. Foreign investments can be riskier and more volatile than
U.S. investments due to the adverse effects of currency exchange rates, differences in market structure and liquidity, as well as
political and economic developments in foreign countries and regions (e.g., “Brexit”). Value investing may go out of favor, which
may cause the Fund to underperform the broader stock market.
1
Stocks are represented by the S&P 500 Index which is a market capitalization-weighted price index composed of 500 widely held common stocks.
2
Bonds are represented by the Bloomberg Barclays U.S. Aggregate Bond Index which is composed of securities from the Bloomberg Barclays Government/Credit Bond Index,
Mortgage-Backed Securities Index, Asset-Backed Securities Index, and Commercial Mortgage-Backed Securities Index.
3
High Yield Bonds are represented by the Bloomberg Barclays Corporate High Yield Index, which covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond
market.
4
Investment Grade Corporates are represented by the Bloomberg Barclays U.S. Corporate Investment Grade Index, which measures the performance of investment grade corporate bonds.
5
The blended index consists of 45% Russell 1000 Value Index, 44% Bloomberg Barclays Corporate Index, 5.5% JP Morgan Emerging Markets Bond Index Plus, and 5.5% Bloomberg Barclays
U.S. Corporate U.S. Corporate High-Yield Bond 2% Issuer Cap Index.
Morningstar ratings reflect historical risk-adjusted performance as of March 31, 2017 and are subject to change every month. The Morningstar RatingTM for funds, or “star rating”, is
calculated for funds and separate accounts with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative
purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis
on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3
stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures
associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about the Morningstar Rating for funds, including its methodology, please go to
global.morningstar.com/managerdisclosures. © 2017 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers;
(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses
arising from any use of this information.
Investors should carefully consider the investment objectives, risks, charges, and expenses of Hartford Funds before investing. This and other information can be found in the prospectus and summary prospectus, which can be obtained by calling
888-843-7824 (retail) or 800-279-1541 (institutional). Investors should read them carefully before they invest.
Mutual funds are distributed by Hartford Funds Distributors, LLC (HFD), Member FINRA. Hartford Funds Management Company, LLC (HFMC) is the mutual funds’ investment manager. The
fund referenced herein is sub-advised by Wellington Management Company LLP. HFD and HFMC are not affiliated with any fund sub-adviser.
201248 MF3101_0417
hartfordfunds.com888-843-7824 @hartfordfunds hartfordfunds.com/linkedin