Dodge & Cox Stock Portfolio - Voya Financial

[Pages:2]Stock Portfolio

Fact Sheet Q2 2022 June 30, 2022

Objectives Dodge & Cox seeks long-term growth of principal and income.

Strategy Dodge & Cox invests primarily in a diversified portfolio of U.S. equity securities. In selecting investments, the portfolio typically invests in companies that, in Dodge &

Cox's opinion, appear to be temporarily undervalued by the stock market but have a favorable outlook for long-term growth. Dodge & Cox focuses on the underlying financial condition and prospects of individual companies, including future earnings, cash flow, and dividends. Various other factors, including financial strength, economic condition, competitive advantage, quality of the business franchise, and the reputation, experience, and competence of a company's management are weighed against valuation in selecting individual securities.

Investment Manager Dodge & Cox, San Francisco. Managed by the U.S. Equity Investment Committee, whose eight members' average tenure at Dodge & Cox is 22 years.

Benchmark S&P 500 Index (a) Russell 1000 Value Index(b)

Advisory Fee 0.40% (c)

State of Michigan Account Performance Summary (d)

For periods ended June 30, 2022

Gross of Advisory Fee Net of Advisory Fee S&P 500 Index Russell 1000 Value Index

2Q22

-12.36% -12.45% -16.10% -12.21%

YTD

-11.31% -11.48% -19.96% -12.86%

1 Year

-7.00% -7.38% -10.62% -6.82%

3 Years

11.44% 10.99% 10.60%

6.87%

5 Years

10.23% 9.78%

11.31% 7.17%

10 Years

N/A N/A 12.96% 10.50%

Since Inception 1/31/2014

10.55%

10.11%

11.49%

8.35%

Portfolio Characteristics

Number of Companies Median Market Capitalization (billions) Weighted Average Market Capitalization (billions) Price-to-Earnings Ratio (forward) (e) Price-to-Book Ratio (forward) Dividend Yield (trailing) Portfolio Turnover Rate (7/1/21 to 6/30/22)

Ten Largest Holdings (% Equity)(f)

Occidental Petroleum Corp. Charles Schwab Corp. Alphabet, Inc. Wells Fargo & Co. Cigna Corp. Sanofi MetLife, Inc. FedEx Corp. Raytheon Technologies Corp. Capital One Financial Corp.

73 51 175 10.6x 1.8x 2.5% 15.0%

Asset Allocation Equity Securities: 98.2%

4.6 4.0 Sector Diversifiction (% Equity) 3.8 Health Care 3.7 Financials 3.4 Information Technology 3.2 Communication Services 2.9 Industrials 2.8 Energy 2.8 Consumer Staples 2.7 Consumer Discretionary

Materials Real Estate Utilities

Cash Equivalents: 1.8%

22.2 21.9 18.2 13.6

9.7 9.1 2.3 2.1 0.7 0.3 0.0

(a) The S&P 500 Index is a market capitalization-weighted index of 500 large capitalization stocks commonly used to represent the U.S. equity market. The S&P 500 ("Index") is a product of S&P Dow Jones Indices LLC, a division of S&P Global and/or its affiliates and has been licensed for use by Dodge & Cox. Copyright? 2021 S&P Dow Jones Indices LLC, its affiliates and/or their third party licensors ("S&P DJI"). All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. S&P? is a registered trademark of Standard & Poor's Financial Services LLC, a division of S&P Global and Dow Jones? is a registered trademark of Dow Jones Trademark Holdings LLC. S&P DJI makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and S&P DJI shall have no liability for any errors, omissions, or interruptions of any index or the data included therein.

(b) The Russell 1000 Value Index is a broad-based, unmanaged equity market index composed of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. Russell 1000? is a trademark of Frank Russell Company. London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). ?LSE Group 2021. FTSE Russell is a trading name of certain of the LSE Group companies. "Russell?" is a trade mark of the relevant LSE Group companies and is used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

(c) The Advisory Fee is comprised only of the annual management fee applied to the value of the State of Michigan account managed by Dodge & Cox. It may differ over time as it is calculated based on the total level of certain State of Michigan assets invested with Dodge & Cox.

(d) Returns represent past performance and do not guarantee future results. Gross of fee performance figures do not reflect the deduction of investment advisory fees and other expenses. The net of fee performance information provided is net of the Dodge & Cox advisory fee and does not take into account any other operating expenses of the account, which may further reduce returns. Returns for periods longer than one year are annualized. Contact your plan administrator for further information regarding the total expense of investing in the portfolio. Investment return will fluctuate with market conditions.

(e) Price-to-earnings (P/E) ratio is calculated using 12-month forward earnings estimates from third-party sources as of the reporting period. Estimates reflect a consensus of sell-side analyst estimates which may lag as market conditions change.

(f) Portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation to buy, sell, or hold any particular security and is not indicative of Dodge & Cox's current or future trading activity.

Risks of Investing

Investing in securities presents risks that cannot be avoided. There is no assurance that the investment objectives of the portfolio will be achieved. The portfolio may lose money and could underperform other investments. The following is not a complete list of every risk involved in investing in the portfolio. For example, investments in equity securities create indirect exposure to a variety of risks to which the issuers of those securities are exposed. The portfolio's performance could be hurt by:

Equity Risk

Equity securities represent an ownership interest in an issuer rather than a right to receive a specified future payment. This makes equity securities more sensitive than debt securities to changes in an issuer's earnings and overall financial conditions; as a result, equity securities are generally more volatile than debt securities. Equity securities may lose value as a result of changes relating to the issuers of those securities, such as management performance, financial leverage or changes in the actual or anticipated earnings of a company or as a result of actual or perceived market conditions that are not specific to an issuer. Even when the securities markets are generally performing strongly, there can be no assurance that equity securities held by the portfolio will increase in value. Because the rights of all of a company's creditors are senior to those of equity securities, holders of equities are least likely to receive any value if an issuer files for bankruptcy.

Market Risk

The market price of a security or other investment may increase or decrease, sometimes suddenly and unpredictably. Investments may decline in value because of factors affecting markets generally, such as real or perceived challenges to the economy, national or international political events, public health emergencies, such as the spread of infectious illness or disease, natural disasters, changes in interest or currency rates, adverse changes to credit markets, or general adverse investment sentiment. The U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, has in the past resulted, and may in the future result, in a government shutdown, which could have an adverse effect on a portfolio's investments and operations. Additional and/or prolonged government shutdowns may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The prices of investments may reflect factors affecting one or more industries, such as the price of specific commodities or consumer trends, or factors affecting particular issuers. During a general downturn in the markets, multiple asset classes may decline in value simultaneously. Market disruptions may prevent Dodge & Cox from implementing investment decisions in a timely manner. Fluctuations in the value of the portfolio's investments will cause the portfolio's value to fluctuate, therefore, may be more suitable for long-term investors who can bear the risk of short- and longterm fluctuations. Although it is not a principal investment strategy of the portfolio to focus on a specific sector, Dodge & Cox's research-oriented, bottom-up approach towards security selection may at times result in significant exposure to one or more sectors, such as financials or health care, potentially in excess of 25% of the portfolio's total assets. To the extent that a portfolio has significant exposure to a particular sector, its value may fluctuate in response to events disproportionately affecting that sector. Examples of such events include, but are not limited to, changes in economic or business conditions, new government regulations, and the availability of basic resources or supplies. Many countries have experienced outbreaks of infectious illnesses in recent decades, including swine flu, avian influenza, SARS and, more recently, COVID-19. The global outbreak of COVID-19 in early 2020 has resulted in various disruptions, including travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, financial markets and the economies of certain nations and individual issuers, any of which may negatively impact a portfolio and its holdings. The extent and duration of such effects are difficult to determine. Similar consequences could arise as a result of the spread of other infectious diseases.

Manager Risk

Dodge & Cox's opinion about the intrinsic worth or creditworthiness of a company or security may be incorrect, or the market may continue to undervalue the company or security. Dodge & Cox uses financial and other models as part of its investment research, portfolio management, and trading processes. An incorrect assumption or error in a model could adversely affect a portfolio. Also, depending on market conditions, Dodge & Cox's investing style may perform better or worse than portfolios with a different investment style. Dodge & Cox may not make timely purchases or sales of securities for the portfolio and the portfolio's investment objective may not be achieved. A portfolio's performance could differ significantly from its comparative index, or other portfolios with similar objectives and investment strategies. Dodge & Cox applies investment ideas, including target allocations, to all eligible client portfolios within a particular strategy, including funds and separately managed account clients. This means Dodge & Cox may seek to buy or sell very large amounts of particular securities. As a result, certain investment opportunities that might be available to a smaller investor may not be available to the portfolio. Dodge & Cox may not be able to take significant positions in limited investment opportunities or add significantly to existing positions. In addition, Dodge & Cox may not be able to quickly dispose of certain securities holdings.

Non-U.S. Investment Risk

Non-U.S. securities (including ADRs) involve some special risks such as exposure to potentially adverse foreign political and economic developments; market instability; nationalization and exchange controls; potentially lower liquidity and higher volatility; possible problems arising from accounting, disclosure, settlement, and regulatory practices that differ from U.S. standards; foreign taxes that could reduce returns; higher transaction costs and foreign brokerage and custodian fees; inability to vote proxies, exercise shareholder or bondholder rights, pursue legal remedies, and obtain judgments with respect to foreign investments in foreign courts; possible insolvency of a sub-custodian or securities depository; and fluctuations in foreign exchange rates that decrease the investment's value (although favorable changes can increase its value). Governments in certain foreign countries participate to a significant degree, through ownership or regulation, in their respective economies. Action by such a government could have a significant effect on the market price of securities issued in its country. Certain of these risks may also apply to securities of U.S. issuers with significant non-U.S. operations.

Liquidity Risk

Liquidity risk exists when particular investments are difficult to purchase or sell, which could result in Dodge & Cox being unable to buy or sell an investment at an advantageous time or price. As a result, the portfolio could be forced to hold a security that is declining in value or forego other investment opportunities. An illiquid instrument is harder to value because there may be little or no market data available based on purchases or sales of the instrument.

Non-U.S. Currency Risk

Non-U.S. currencies may decline relative to the U.S. dollar and affect the portfolio's investments in ADRs backed by securities that are denominated in non-U.S. currencies or in securities of issuers that are exposed to non-U.S. currencies. When a given currency depreciates against the U.S. dollar, the value of securities denominated in or otherwise exposed to that currency typically declines. Currency depreciation may affect the value of U.S. securities if their issuers have exposure to non-U.S. currencies. Dodge & Cox may not be able to accurately estimate an issuer's non-U.S. currency exposure. Dodge & Cox will not hedge the portfolio's currency exposure.

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