Navigating Mid-Cap Waters: A Deep Dive into Voya's Q3 2025 Strategy

Well, hello there! Let's pull back the curtain on something pretty interesting from the third quarter of 2025: how the Voya MidCap Opportunities strategy managed to not just stay afloat, but actually thrive, in what was undeniably a rather tricky market. You know, sometimes it feels like navigating these financial waters requires a special kind of compass, and this quarter, it seems Voya had just the right one.

Q3 2025 wasn't exactly a smooth sailing journey for investors. We saw a really mixed bag out there, with the broader market seeing large-cap stocks generally outperforming their mid-cap counterparts. Interestingly, growth stocks, for the most part, continued to edge out value plays. On the economic front, those familiar worries about persistent inflation and the potential for higher-for-longer interest rates continued to cast a shadow, making investors understandably a bit cautious. Yet, despite these headwinds, certain sectors like Energy and Utilities showed resilience, while others, like Technology and Consumer Discretionary, faced a bit more pressure.

But here's the good news: amidst these choppy waters, the Voya MidCap Opportunities strategy truly stood out. It didn't just beat its primary benchmark, the Russell Midcap Growth Index, it also impressively outperformed the broader Russell Midcap Index. Now, that's not an easy feat, and it speaks volumes about the careful selection and active management behind the portfolio. It's always encouraging to see a strategy deliver when the market isn't making it easy.

So, who were the shining lights in this quarter's portfolio? You might be wondering what stocks really pushed things forward. Leading the pack was ON Semiconductor (ON), which absolutely soared thanks to robust demand from the automotive and industrial sectors, coupled with some truly strong earnings reports. Then there's Vertiv Holdings (VRT), a company riding high on the massive demand for data centers and, let's be honest, the AI boom – everyone needs the infrastructure for that! Copart (CPRT) also delivered, showcasing its remarkable resilience in the auto claims market and just generally proving its strong fundamental footing. And we can't forget Quanta Services (PWR), a real beneficiary of all that infrastructure spending we're seeing, especially when it comes to modernizing our electric grids.

Of course, not every stock can be a superstar every quarter, right? On the flip side, a few positions experienced some temporary setbacks. Expedia (EXPE), for instance, faced a bit of turbulence as concerns about increasing competition and the overall travel outlook weighed on investor sentiment. Similarly, Monolithic Power Systems (MPWR) saw some softness, caught up in the broader semiconductor cyclicality and facing a competitive landscape. And in the more cyclical areas, both Pool Corp (POOL) and Encore Wire (WIRE) felt the squeeze from a cooling housing market and a general slowdown in discretionary consumer spending. It's a reminder that even great companies can hit a temporary snag.

Now, let's talk strategy – because great returns don't just happen by accident. The team at Voya was busy making some thoughtful adjustments to the portfolio. They were really focused on adding companies poised to benefit from long-term secular trends, particularly those showing strong growth and competitive advantages. They brought in names like Vertiv (VRT) (doubling down on that data center story!), Cadence Design Systems (CDNS), Aspen Technology (AZPN), and SPS Commerce (SPSC) – all leaders in their respective tech and software niches. They also added Waste Connections (WCN) for its stable growth, along with First Solar (FSLR) and Carlisle Companies (CSL), tapping into broader industrial and sustainable trends.

Naturally, to make room for these exciting new prospects, some existing positions were either trimmed or exited entirely. This included reducing exposure to companies like Fortive (FTV), Ingersoll Rand (IR), and Trane Technologies (TT), among others. The team also exited several positions, particularly in areas sensitive to the residential housing and discretionary spending slowdown, such as Masco (MAS), Builders FirstSource (BLDR), Regal Rexnord (RRX), SiteOne Landscape Supply (SITE), and Floor & Decor (FND). It's a clear demonstration of active management, constantly refining the portfolio to align with their evolving market outlook and conviction.

As we peer into the horizon, what's the team at Voya thinking? They're maintaining a cautious yet opportunistic stance. The focus remains squarely on identifying high-quality growth companies – those with solid balance sheets, sustainable competitive advantages, and products or services benefiting from those powerful, long-term secular tailwinds. They understand that the environment of higher interest rates and persistent inflation could still pose challenges, but by concentrating on resilient businesses with innovative solutions, they believe the strategy is well-positioned to continue uncovering those mid-cap gems. It's all about finding those hidden leaders that can truly deliver in the years to come.