Voya Small-Cap Fund’s Q3 Performance Influenced by Not Holding Bloom Energy (BE)

Voya MI Dynamic Small Cap Fund’s third-quarter results were noticeably shaped by its decision not to hold Bloom Energy Corp. (BE). The omission of this fuel-cell technology company — which drew market attention in the quarter — highlights how active-stock selection can materially affect relative fund performance in a concentrated small-cap portfolio.

Active managers running small-cap strategies must balance conviction, risk control and sector exposure. By excluding Bloom Energy, Voya’s portfolio managers avoided company-specific risk tied to BE’s operational announcements and sector volatility. At the same time, the fund missed any upside that Bloom Energy generated for investors who were positioned in the stock during the quarter. That trade-off is a common dynamic for actively managed small-cap funds where a single mid-sized position can move relative returns.

Beyond the single-name omission, the episode underscores broader themes for investors watching Voya’s small-cap approach. Small-cap universes can be more fragmented and less efficiently priced than large-cap markets, which increases both opportunity and dispersion. An active manager’s conviction to omit or underweight a headline name may reflect risk management, valuation discipline or a longer-term view that differs from short-term market sentiment.

For current and prospective shareholders, the key takeaway is to align expectations around active management and potential tracking differentials. When a portfolio diverges from headline winners or losers, short-term performance gaps can widen even if the manager’s process remains consistent with stated objectives.

Looking ahead, fund performance will hinge on how the manager deploys capital across other small-cap opportunities, sector positioning, and the broader market backdrop for technology and alternative energy names. Investors should review the fund’s holdings, watch for commentary from management about portfolio construction, and consider whether the fund’s active-tilt and risk approach match their objectives and time horizon.

While the absence of Bloom Energy in Q3 was not the sole determinant of the fund’s returns, it served as a clear example of how active decisions shape outcomes in small-cap strategies.