UNITED STATES Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Filed by the Registrant x | |||
| |||
Filed by a Party other than the Registrant o | |||
| |||
Check the appropriate box: | |||
o | Preliminary Proxy Statement | ||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
x | Definitive Proxy Statement | ||
o | Definitive Additional Materials | ||
o | Soliciting Material under §240.14a-12 | ||
| |||
The Hartford Mutual Funds, Inc. The Hartford Mutual Funds II, Inc. | |||
(Name of Registrant as Specified In Its Charter) | |||
| |||
| |||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | |||
| |||
Payment of Filing Fee (Check the appropriate box): | |||
x | No fee required. | ||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||
| (1) | Title of each class of securities to which transaction applies: | |
|
|
| |
| (2) | Aggregate number of securities to which transaction applies: | |
|
|
| |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
|
|
| |
| (4) | Proposed maximum aggregate value of transaction: | |
|
|
| |
| (5) | Total fee paid: | |
|
|
| |
o | Fee paid previously with preliminary materials. | ||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||
| (1) | Amount Previously Paid: | |
|
|
| |
| (2) | Form, Schedule or Registration Statement No.: | |
|
|
| |
| (3) | Filing Party: | |
|
|
| |
| (4) | Date Filed: | |
|
|
| |
THE HARTFORD MUTUAL FUNDS, INC.,
on behalf of
The Hartford Balanced Fund,
The Hartford Balanced AllocationIncome Fund,
The Hartford Capital Appreciation Fund,
The Hartford Checks and Balances Fund,
The Hartford Conservative Allocation Fund,
Hartford Core Equity Fund,
The Hartford Dividend and Growth Fund,
Hartford Duration-Hedged Strategic Income Fund,
Hartford Emerging Markets Equity Fund,
The Hartford Emerging Markets Local Debt Fund,
The Hartford Equity Income Fund,
The Hartford Floating Rate Fund,
The Hartford Floating Rate High Income Fund,
The Hartford Global All-Asset Fund,
The Hartford Global Alpha Fund,
Hartford Global Capital Appreciation Fund,
Hartford Global Equity Income Fund,
The Hartford Global Real Asset Fund,
The Hartford Growth Allocation Fund,
The Hartford Healthcare Fund,
The Hartford High Yield Fund,
The Hartford Inflation Plus Fund,
Hartford International Equity Fund,
The Hartford International Growth Fund,
The Hartford International Opportunities Fund,
The Hartford International Small Company Fund,
The Hartford International Value Fund,
Hartford Long/Short Global Equity Fund,
The Hartford MidCap Fund,
The Hartford MidCap Value Fund,
Hartford Moderate Allocation Fund,
Hartford Multi-Asset Income Fund,
Hartford Municipal Income Fund,
The Hartford Municipal Opportunities Fund,
Hartford Municipal Short Duration Fund,
The Hartford Quality Bond Fund,
Hartford Real Total Return Fund,
The Hartford Short Duration Fund,
Hartford Small Cap Core Fund,
The Hartford Small Company Fund,
The Hartford Strategic Income Fund,
The Hartford Total Return Bond Fund,
The Hartford Unconstrained Bond Fund, and
The Hartford World Bond Fund
THE HARTFORD MUTUAL FUNDS II, INC.,
on behalf of
The Hartford Growth Opportunities Fund,
The Hartford Municipal Real Return Fund,
The Hartford SmallCap Growth Fund, and
The Hartford Value Opportunities Fund
January 31, 20146, 2016
Dear Shareholders:
You are cordially invited to attend a SpecialJoint Annual Meeting of Shareholders (the "Meeting") of The Hartford Balanced Allocation Fund, The Hartford Conservative Allocation Fund, and The Hartford Growth Allocation Fundthe series listed above (each a "Fund" and collectively, the "Funds"), each a series of The Hartford Mutual Funds, Inc. (the("HMF") and The Hartford Mutual Funds II, Inc. ("HMF II"), each a Maryland corporation (each a "Company" and together, the "Companies"). The Meeting will take place on April 4, 2014March 14, 2016 at 10:00 a.m. Eastern Time at the offices of Hartford Funds Management Company, LLC ("HFMC"), 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087.
At the Meeting, shareholders will be asked to vote on the matters listed in the attached Notice of SpecialJoint Annual Meeting of Shareholders. As explained in the enclosed Joint Proxy Statement, the purpose of the Meeting is for the shareholders of each affected Fund to consider and vote on:
Proposal No. | Description of Proposal | ||||||
1. | The | ||||||
2. | The approval of | ||||||
3. | The | ||||||
4. | The approval of a change to each Fund's fundamental investment restriction on the purchase or sale of real estate. | ||||||
5. | The approval of a change to each Fund's fundamental investment restriction on concentration of investments in a particular industry or group of industries. | ||||||
6. | The approval, prospectively, of a modification to the current "manager of managers" policy to permit HFMC, subject to | ||||||
| To transact such other business as may properly come before the Meeting, or any adjournment(s) or postponement(s) thereof. |
The Company's Board of Directors hasBoards have reviewed the proposals and recommendsrecommend that you vote FOR each proposal. The Joint Proxy Statement provides more information on the proposals. Please read it carefully, complete the enclosed proxy card, and return your completed proxy card in the enclosed, addressed, postage-paid envelope; or take advantage of the telephonic or internet voting procedures described in the Joint Proxy Statement. YOUR VOTE IS IMPORTANT. If we do not hear from you after a reasonable period of time, you may receive a telephone call from a representative of Hartford Funds Management Group, Inc.HFMC, any of its affiliates, or from our proxy solicitor, BroadridgeBoston Financial Solutions,Data Services, Inc., reminding you to vote your shares.
Very truly yours,
Edward P. Macdonald
Secretary and Chief Legal Officer
IMPORTANT INFORMATION
We encourage you to read the enclosed Joint Proxy Statement. However, we thought it would be helpful to provide brief answers to some questions.
Q. 11. What Proposals are shareholders being asked to consider at the upcoming specialshareholder meeting?
A. 11. Shareholders are being asked to consider threesix separate matters. First, Proposal 1 seeks the ratification and approvalelection by shareholders of The Hartford Balanced Allocation Fund, The Hartford Conservative Allocation Fund, and The Hartford Growth Allocation Fundthe series (each a "Fund" and collectively, the "Funds"), each a series of The Hartford Mutual Funds, Inc. (the("HMF") and The Hartford Mutual Funds II, Inc. ("HMF II") (each a "Company" and together, the "Companies"), of nine individuals to each Company's Board of Directors (each a "Board" and together, the sub-advisory agreement (the "Agreement""Boards"). Proposal 2 seeks approval of a new Investment Management Agreement between Hartford Funds Management Company, LLC ("HFMC"), and the Companies, on behalf of the Funds. Proposals 3, 4 and 5 seek approval of certain changes to each Fund's fundamental investment manager,restrictions with respect to: (i) the purchase or sale of commodities, (ii) the purchase or sale of real estate and Wellington Management Company, LLP ("Wellington Management") pursuant to which Wellington Management serves as(iii) concentration of investments in a particular industry or group of industries, respectively. Finally, Proposal 6 seeks the sub-adviser to each Fund and manages each Fund's assets. Second, Proposal 2 seeks approval, prospectively, of the retention of fees paid and the payment of fees payable by Hartford Investment Financial Services, LLC ("HIFSCO"), the Funds' former investment manager and an affiliate of HFMC, and HFMC (as applicable) to Wellington Management for its sub-advisory servicesa modification to the Funds. Third, Proposal 3 seeks authorizationcurrent "manager of managers" policy previously approved by shareholders to permit HFMC, subject to selectprior approval by the relevant Board and contractunder certain circumstances, to enter into and materially amend agreements with affiliated sub-advisers without the necessity of obtaining shareholder approval. Under the current SEC order, HFMC may, for certain Funds, enter into and amend agreements with sub-advisers that are not affiliates of HFMC, subject to prior Board approval and under certain circumstances.
Q. 2. Who is being nominated to serve as Directors?
A. 2. Shareholders are being asked to consider the election of Hilary E. Ackermann, Lynn S. Birdsong, James E. Davey, Christine Detrick, Duane E. Hill, Sandra S. Jaffee, William P. Johnston, Phillip O. Peterson and Lemma W. Senbet (each a "Nominee" and together, the "Nominees") as Directors. With the exception of Ms. Detrick, the Nominees are current members of each Board. If each of the Nominees is elected to each Board, the Boards will be composed of the same nine directors.
Q. 3. How were the Nominees chosen?
A. 3. Each Company's Nominating and Governance Committee is responsible for screening and recommending candidates to the Board. The Nominating and Governance Committees are comprised of all of the Directors who are not affiliated with HFMC or"interested persons" of the Funds (other thanCompanies, as that term is defined in the Investment Company Act of 1940, as amended (the "1940 Act"). The Nominating and Governance Committees recommended each Nominee and, at a meeting on November 4-5, 2015, the Nominees were unanimously nominated by reasonthe Boards to stand for election.
Q. 4. Why am I being asked to approve a new Investment Management Agreement?
A. 4. Section 15(a) of servingthe 1940 Act provides that no person may serve as an investment adviser to a sub-adviserfund except pursuant to one or more Hartford-sponsored mutual funds (the "Hartford Funds") anda written contract that, among other things, has been approved by a vote of a majority of the fund's outstanding voting securities, as defined in the 1940 Act. Material changes to materially amend investment sub-advisory agreements without obtainingexisting advisory contracts are deemed to effectively create new advisory contracts that require shareholder approval.
The proposed new Investment Management Agreement between HFMC and the Companies (the "New Agreement") would enhance and clarify the description of services currently provided by HFMC under the Investment Management Agreements between HMF and HFMC and HMF II and HFMC (the "Current Agreements"). While the Boards do not view the differences between the Current Agreements and the New Agreement to be material, the Boards are asking shareholders to approve the New Agreement.
Q. 2 How will approving Wellington Management as5. Why am I being asked to approve changes to each Fund's fundamental investment restriction on the sub-adviser benefit each Fund and its respective shareholders?purchase or sale of commodities?
A. 25. Wellington ManagementThe 1940 Act requires mutual funds to establish and disclose in their registration statements certain "fundamental" investment policies that can only be changed by shareholder vote, including a policy that restricts a fund's ability to purchase or sell commodities. The current restriction states that the Funds will continuenot purchase or sell commodities or commodities contracts, except that the Funds may purchase or sell financial futures contracts, options on financial futures contracts and futures contracts, forward contracts, and options with respect to performforeign currencies, and may enter into swap transactions or other financial transactions of any kind. Certain Funds have adopted a more flexible policy, which allows these Funds to purchase or sell commodities or commodities contracts to the same sub-advisory servicesextent permitted by applicable law and as set forth in each Fund's registration statement. Proposal 3 would permit each Fund to purchase and sell commodities to the extent permitted under the Agreement that it has performed since it began serving as sub-adviser to the Funds in 2012. In addition, HFMC, as the Funds' investment manager, will continue to be responsible for overseeing the sub-advisory services provided by Wellington Management. The portfolio managers managing your Fund are expected to continue to do so following the same investment goal1940 Act and strategies currently in place. See the Proxy Statement for more information about the Agreement, including the discussions under "Board of Directors' Considerations."other applicable laws, rules and regulations, and interpretations.
Q. 36. Why are shareholdersam I being asked to ratify and approve changes to each Fund's fundamental investment restriction on the sub-advisory agreement with Wellington Management?purchase or sale of real estate?
A. 36. The laws governing1940 Act requires mutual funds requireto establish and disclose in their registration statements a fundfundamental policy that restricts a fund's ability to obtain shareholder approval before entering into a new advisorypurchase or sub-advisory agreement unless an exemption is available. At the time the Funds' Board of Directors (the "Board") approved the Agreement, HFMC believed, and informed the Board,sell real estate. The current restriction states that the Agreement didFunds will not require shareholder approval duepurchase or sell real estate unless acquired as a result of ownership of securities or other instruments, although each Fund may purchase securities secured by real estate or interests therein, or securities issued by companies which invest in real estate or interests therein. Proposal 4 would permit each Fund to reliancepurchase or sell real estate to the extent permitted under the 1940 Act and the rules and regulations and interpretations thereunder.
Q. 7. Why am I being asked to approve changes to each Fund's fundamental investment restriction on an exemptive order (the "Order") fromconcentration?
A. 7. The 1940 Act requires mutual funds to establish and disclose in their registration statements a fundamental policy that restricts a fund's ability to "concentrate" its investments in a particular industry or group of industries. The current policy for the Funds refers to the U.S. Securities and Exchange CommissionCommission's ("SEC") permitting the Funds' investment manager to select and contract with sub-advisers without shareholder approval. HFMC recently conducted a review of compliance with the conditionsinterpretation of the Order. The review raisedmeaning of the term "concentrate," which generally involves investments of more than 25% of a question whether the Funds' sole initial shareholder consented to reliance on the Order, and indicatedfund's assets. It is proposed that the Funds' reliance onterm "concentrate" be described with a reference to the Order had not been consistently disclosed1940 Act and the rules thereunder, as they may be interpreted or modified from time to time by regulatory authorities having appropriate jurisdiction. Proposal 5 would allow the Funds to take advantage of any future changes in the Funds' prospectuses.law or interpretations of what it means for a Fund to concentrate its investments in an industry or group of industries. In lightaddition, approval of this, shareholdersProposal 5 would clarify that a Fund's conversion to a fund of funds or master-feeder structure would be permissible in the Funds are now being asked to ratify and approve the Agreement, as well as to approve the retention of fees paidfuture if HFMC and the payment of fees payable to Wellington Management for its sub-advisory services to the Funds, as discussed in the Proxy Statement.Board believe such a change would be appropriate.
Q. 48. Why are shareholders being asked to approve a proposal to permit HFMC to select and contract with sub-advisers without shareholder approval?
A. 48. Under Section 15(a) of the 1940 Act, an investment manager to a mutual fund cannot enter into or materially amend a sub-advisory agreement without obtaining shareholder approval. With the exception of The Hartford Growth Allocation Fund and The Hartford Checks and Balances Fund, shareholders have previously approved the Funds' reliance on a "manager of managers" exemptive order (the "Existing Order") from that requirement and certain other requirements under the 1940 Act and the rules thereunder. Therefore, many Hartford Funds operate usinghistorically have operated under a "manager of managers" structure, whereby each Fundutilizing both affiliated and unaffiliated sub-advisers as part of both single and multiple sub-adviser arrangements. HFMC has ansignificant experience in overseeing sub-advisers under such arrangements. The Existing Order, among other things, allows HFMC, with the relevant Board's approval and without shareholder approval, to enter into and materially amend sub-advisory agreements with sub-advisers that are not affiliated with the investment manager or those funds. Other than The Hartford Growth Allocation Fund and a sub-adviser. The investment manager supervises the activitiesHartford Checks and Balances Fund, shareholders of the Funds have previously approved the Funds' operation under this structure.
HFMC and the Companies have requested exemptive relief from the SEC that would extend the Existing Order to also cover sub-advisers that are indirect or direct "wholly-owned subsidiaries" of HFMC, as defined in the 1940 Act, or sister companies of HFMC that are wholly-owned subsidiaries of a company that, indirectly or directly, wholly owns HFMC (the "New Order"). Although HFMC does not currently utilize a sub-adviser which in turn performs the day-to-day investmentits management of the Funds. For other seriesall of the Company,Funds, and does not utilize a wholly-owned subsidiary sub-adviser for any Fund, the Boards believe that it is in orderthe Funds' best interests for HFMC to have the flexibility to do so in the future, with the relevant Board's approval. The Boards believe that permitting HFMC to select and contract with an unaffiliated sub-adviser it is not necessary to obtainsub-advisers, without incurring the delay and
expense involved with obtaining shareholder approval and thus incur the expense of a shareholder meeting. The Order permits the Hartford-sponsored funds to select and contract with unaffiliated sub-advisers and to materially amend investmentnew sub-advisory agreements without a shareholder vote, subjector material amendments to existing sub-advisory agreements, is appropriate and in the shareholders' prior approvalbest interest of each Fund's shareholders and will allow each Fund to operate more efficiently. There is no guarantee that the SEC will grant the New Order.
By prospectively approving this Proposal, shareholders are approving the operation of the respective fundFunds in this manner. To afforda "manager of managers" structure under any such terms or conditions necessary to satisfy the flexibilityconditions of any relief provided by the OrderSEC, including potential future relief that may apply to the Funds, HFMC is seeking shareholders' approval of such an arrangement for the Funds. The Funds are expected to benefit from the Order by being able to act quickly and with less expense if the need arises to replace or hire aany affiliated sub-adviser.
Q. 5 Will any Fund's investment goal and principal investment strategies change if the Proposals are approved?
A. 5 No. Each Fund's respective investment goal and principal investment strategies will not change as a result of the approval of the Proposals.
Q. 69. Will the Proposals result in higher Fund expenses?total annual fund operating expenses after fee waiver and/or expense reimbursement for any Fund?
A. 69. No. The Proposals willare not expected to result in an increase in total annual fund operating expenses after fee waiver and/or expense reimbursement for any Fund, as shown in the respective Fund's expenses. Each Fund pays an advisory fee to HFMC, and HFMC is responsible for paying the sub-advisory fee to Wellington Management.prospectus.
Q. 710. Who will pay the costs incurred in connection with the Meeting?
A. 710. HFMCEach Fund will pay allits proportionate share of the expenses relating to the enclosed Notice and Joint Proxy Statement and the Meeting, including the printing, mailing, solicitation, and vote tabulation, expenseslegal fees and out-of-pocket expenses. These costs are considered "extraordinary expenses" and are therefore expected to be excluded from any expense limitations currently in effect for any of the Funds.
Q. 8 Does11. Do the Board of DirectorsBoards recommend that shareholders approve the Proposals?
A. 811. Yes. The Board recommendsBoards recommend that you vote FOR the Proposals.
Q. 912. How can I vote?
A. 912. You can vote:
• By mail: complete and return your proxy card in the pre-addressed postage-paid envelope.
• By telephone: call the toll-free number listed on your proxy card and follow the recorded instructions.
• By internet: log on the website listed on your proxy card and follow the on-screen instructions.
• In person: attend the meeting on March 14, 2016 at 10:00 a.m. Eastern Time at the offices of HFMC, 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087.
Whichever method you choose, please take the time to read the Joint Proxy Statement before you vote.
If you hold your shares through a broker or other nominee, your broker or nominee will not vote your shares unless you provide instructions to your broker or nominee on how to vote your shares. You should instruct your broker or nominee how to vote your shares by following the voting instructions provided by your broker or nominee.
Q. 1013. When should I vote?
A. 1013. Please vote as soon as possible. You may submit your vote at any time before the date of the shareholder meeting. Representatives of Hartford Funds Management Group,HFMC, any of its affiliates
and Boston Financial Data Services, Inc. ("Hartford") and Broadridge Financial Solutions, Inc. ("Broadridge"Boston Financial"), a firm authorized by HartfordHFMC to assist in the solicitation of proxies, may be contacting you to urge you to vote on thisthese important matter.matters.
Q. 1114. Where can I obtain additional information about this Joint Proxy Statement?
A. 1114. For information about the proxy statement, please call toll-free 1-855-976-3324.1-855-520-7708.
To view or obtain a copy of the most recent annual or semi-annual report of the Funds, please go to www.hartfordfunds.com. To view the Joint Proxy Statement, please go to www.proxyvote.comwww.2voteproxy.com/hmf or www.hartfordfunds.com/HMFproxy on or after January 31, 2014.6, 2016.
THE ATTACHED JOINT PROXY STATEMENT CONTAINS
MORE DETAILED INFORMATION ABOUT THE
PROPOSALS.
PLEASE READ IT CAREFULLY.
THE HARTFORD MUTUAL FUNDS, INC.,
on behalf of
The Hartford Balanced Fund,
The Hartford Balanced Income Fund,
The Hartford Capital Appreciation Fund,
The Hartford Checks and Balances Fund,
The Hartford Conservative Allocation Fund,
Hartford Core Equity Fund,
The Hartford Dividend and Growth Fund,
Hartford Duration-Hedged Strategic Income Fund,
Hartford Emerging Markets Equity Fund,
The Hartford Emerging Markets Local Debt Fund,
The Hartford Equity Income Fund,
The Hartford Floating Rate Fund,
The Hartford Floating Rate High Income Fund,
The Hartford Global All-Asset Fund,
The Hartford Global Alpha Fund,
Hartford Global Capital Appreciation Fund,
Hartford Global Equity Income Fund,
The Hartford Global Real Asset Fund,
The Hartford Growth Allocation Fund,
The Hartford Healthcare Fund,
The Hartford High Yield Fund,
The Hartford Inflation Plus Fund,
Hartford International Equity Fund,
The Hartford International Growth Fund,
The Hartford International Opportunities Fund,
The Hartford International Small Company Fund,
The Hartford International Value Fund,
Hartford Long/Short Global Equity Fund,
The Hartford MidCap Fund,
The Hartford MidCap Value Fund,
Hartford Moderate Allocation Fund,
Hartford Multi-Asset Income Fund,
Hartford Municipal Income Fund,
The Hartford Municipal Opportunities Fund,
Hartford Municipal Short Duration Fund,
The Hartford Quality Bond Fund,
Hartford Real Total Return Fund,
The Hartford Short Duration Fund,
Hartford Small Cap Core Fund,
The Hartford Small Company Fund,
The Hartford Strategic Income Fund,
The Hartford Total Return Bond Fund,
The Hartford Unconstrained Bond Fund, and
The Hartford World Bond Fund
THE HARTFORD MUTUAL FUNDS II, INC.,
on behalf of
The Hartford Growth Opportunities Fund,
The Hartford Municipal Real Return Fund,
The Hartford SmallCap Growth Fund, and
The Hartford Value Opportunities Fund
NOTICE OF SPECIALJOINT ANNUAL MEETING OF SHAREHOLDERS
A SpecialJoint Annual Meeting of Shareholders (the "Meeting") of The Hartford Balanced Allocation Fund, The Hartford Conservative Allocation Fund, and The Hartford Growth Allocation Fundthe series listed above (each a "Fund" and collectively, the "Funds"), each a series of The Hartford Mutual Funds, Inc. (the("HMF") and The Hartford Mutual Funds II, Inc. ("HMF II"), each a Maryland corporation (each a "Company" and together, the "Companies"), will take place on April 4, 2014March 14, 2016 at 10:00 a.m. Eastern Time at the offices of Hartford Funds Management Company, LLC ("HFMC"), 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087 for the following purposes:
Proposal | Page | Proposal | Page | |||||||||||||||||||
1. | 1. | The ratification and approval of the sub-advisory agreement between HFMC, the investment manager of the Funds, and Wellington Management Company, LLP ("Wellington Management") pursuant to which Wellington Management serves as the sub-adviser to the Funds and manages each Fund's assets. | 12 | 1. | The election of nominees to the Boards of Directors of each of HMF and HMF II (each a "Board" and together, the "Boards"). | 7 | ||||||||||||||||
2. | 2. | The approval of the retention of fees paid and the payment of fees payable by Hartford Investment Financial Services, LLC, the Funds' former investment manager, and HFMC (as applicable) to Wellington Management for its sub-advisory services to the Funds. | 24 | 2. | The approval of a new Investment Management Agreement between HFMC and the Companies, on behalf of the Funds. | 19 | ||||||||||||||||
3. | 3. | The authorization of HFMC to select and contract with investment sub-advisers that are not affiliated with HFMC or the Funds (other than by reason of serving as a sub-adviser to one or more Hartford-sponsored mutual funds (the "Hartford Funds")) and to materially amend investment sub-advisory agreements without obtaining shareholder approval. | 26 | 3. | The approval of a change to each Fund's fundamental investment restriction on the purchase or sale of commodities. | 26 | ||||||||||||||||
4. | 4. | To transact such other business as may properly come before the Meeting, or any adjournment(s) or postponement(s) thereof. | 4. | The approval of a change to each Fund's fundamental investment restriction on the purchase or sale of real estate. | 29 | |||||||||||||||||
5. | 5. | The approval of a change to each Fund's fundamental investment restriction on concentration of investments in a particular industry or group of industries. | 31 | |||||||||||||||||||
6. | 6. | The approval, prospectively, of a modification to the current "manager of managers" policy to permit HFMC, subject to prior approval by the relevant Board and under certain circumstances, to enter into and materially amend agreements with affiliated and unaffiliated sub-advisers without the necessity of obtaining shareholder approval. | 34 | |||||||||||||||||||
7. | 7. | To transact such other business as may properly come before the Meeting, or any adjournment(s) or postponement(s) thereof. |
The Board of Directors of the Company recommendsBoards recommend that you vote FOR the proposals listed in this notice. Shareholders of record at the close of business on January 10, 2014December 23, 2015 are entitled to notice of and to vote at the Meeting.
Please read the enclosed Joint Proxy Statement carefully for information concerning the Proposals to be placed before the Meeting or any adjournments or postponements thereof. Additional matters would include only matters that were not anticipated as of the date of the enclosed Joint Proxy Statement.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, SIGN, DATE, AND MAIL THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE, OR TAKE ADVANTAGE OF THE TELEPHONIC OR INTERNET VOTING PROCEDURES DESCRIBED IN THE JOINT PROXY STATEMENT, IN ORDER TO SAVE ANY FURTHER SOLICITATION EXPENSE. AN ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED.
On behalf of the Board of Directors,Boards,
Edward P. Macdonald
Secretary and Chief Legal Officer
Dated: January 31, 20146, 2016
THE HARTFORD MUTUAL FUNDS, INC.,
on behalf of
The Hartford Balanced Fund,
The Hartford Balanced Income Fund,
The Hartford Capital Appreciation Fund,
The Hartford Checks and Balances Fund,
The Hartford Conservative Allocation Fund,
Hartford Core Equity Fund,
The Hartford Dividend and Growth Fund,
Hartford Duration-Hedged Strategic Income Fund,
Hartford Emerging Markets Equity Fund,
The Hartford Emerging Markets Local Debt Fund,
The Hartford Equity Income Fund,
The Hartford Floating Rate Fund,
The Hartford Floating Rate High Income Fund,
The Hartford Global All-Asset Fund,
The Hartford Global Alpha Fund,
Hartford Global Capital Appreciation Fund,
Hartford Global Equity Income Fund,
The Hartford Global Real Asset Fund,
The Hartford Growth Allocation Fund,
The Hartford Healthcare Fund,
The Hartford High Yield Fund,
The Hartford Inflation Plus Fund,
Hartford International Equity Fund,
The Hartford International Growth Fund,
The Hartford International Opportunities Fund,
The Hartford International Small Company Fund,
The Hartford International Value Fund,
Hartford Long/Short Global Equity Fund,
The Hartford MidCap Fund,
The Hartford MidCap Value Fund,
Hartford Moderate Allocation Fund,
Hartford Multi-Asset Income Fund,
Hartford Municipal Income Fund,
The Hartford Municipal Opportunities Fund,
Hartford Municipal Short Duration Fund,
The Hartford Quality Bond Fund,
Hartford Real Total Return Fund,
The Hartford Short Duration Fund,
Hartford Small Cap Core Fund,
The Hartford Small Company Fund,
The Hartford Strategic Income Fund,
The Hartford Total Return Bond Fund,
The Hartford Unconstrained Bond Fund, and
The Hartford World Bond Fund
THE HARTFORD MUTUAL FUNDS II, INC.,
on behalf of
The Hartford Growth Opportunities Fund,
The Hartford Municipal Real Return Fund,
The Hartford SmallCap Growth Fund, and
The Hartford Value Opportunities Fund
5 Radnor Corporate Center, Suite 300
100 Matsonford Road
Radnor, Pennsylvania 19087
THE HARTFORD BALANCED ALLOCATION FUND,THE HARTFORD CONSERVATIVE ALLOCATION FUND, ANDTHE HARTFORD GROWTH ALLOCATION FUNDJOINT PROXY STATEMENT
January 6, 2016
PROXY STATEMENTJanuary 31, 2014Information about Voting and the Meeting
The enclosed proxy card is solicited by the BoardBoards of Directors (the(each a "Board" and together, the "Boards") of The Hartford Mutual Funds, Inc. (the("HMF") and The Hartford Mutual Funds II, Inc. ("HMF II"), each a Maryland corporation (each a "Company" and together, the "Companies"), in connection with the SpecialJoint Annual Meeting of Shareholders (the "Meeting") of The Hartford Balanced Allocation Fund, The Hartford Conservative Allocation Fund, and The Hartford Growth Allocation Fundthe series listed above (each, a "Fund" and collectively, the "Funds"), to be held April 4, 2014,March 14, 2016, at 10:00 a.m., Eastern Time, at the offices of Hartford Funds Management Company, LLC ("HFMC"), 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087, and at any adjournment(s) or postponement(s) of the Meeting.
Proxy Solicitor and Payment of Related Expenses
The costs of solicitation, including the cost of preparing and mailing the Notice of the SpecialJoint Annual Meeting of Shareholders and this Joint Proxy Statement, will be paid by HFMC, each Fund's investment manager.the Funds. The approximate mailing date of this Proxy Statement is January 31, 2014.6, 2016. Representatives of Hartford Funds Management Group,HFMC, any of its affiliates, or Boston Financial Data Services, Inc. ("Hartford") or Broadridge Financial Solutions, Inc. ("Broadridge"Boston Financial"), a firm authorized by HartfordHFMC to assist in the solicitation of proxies, may contact you to solicit your proxy by mail or by telephone. The estimated cost of retaining Broadridge for mailingcosts associated with the proxy statements,statement, including printing, mailing, solicitation, vote tabulation and solicitation is $325,345, whichlegal fees, will be paid by HFMC.the Funds. These costs are estimated to be approximately $8,446,450, approximately $8 million of which relate to the solicitation of proxies. These costs are considered "extraordinary expenses" and are therefore expected to be excluded from any expense limitations currently in effect for any of the Funds. As the meeting date approaches, shareholders of the Funds may receive a telephone call from a representative of BroadridgeBoston Financial if their votes have not yet been received. Proxies that are obtained telephonically will be recorded in accordance with the procedures described below. These procedures are reasonably designed to ensure that both the identity of the shareholder casting the vote and the voting instructions of the shareholder are accurately determined.
HFMC, the Funds' investment manager,Voting and Hartford Funds Distributors, LLC ("HFD"), the Funds' principal underwriter, are principally located at 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087.Methods of Tabulation
Shareholders may revoke authority to vote their shares by (i) giving written notice of revocation to the Secretary of the Company.Companies; (ii) properly submitting, either by Internet, mail, or telephone, a proxy bearing a later date; or (iii) appearing at the meeting and voting in person. Attendance at the meeting will not by itself constitute revocation of a proxy. As beneficial owners of shares held through a broker or other nominee, shareholders must contact the organization that holds their shares to receive instructions as to how to revoke voting instructions. Unless revoked, properly executed proxy cards that have been returned by shareholders without instructions will be voted "FOR" (1) the proposal to ratify and approveelection of each of the sub-advisory agreement between HFMC and Wellingtonnominees for Director of each Company; (2) the approval of a new Investment Management Company, LLP ("Wellington Management") pursuant to which Wellington Management serves as the sub-adviser
Agreement between HFMC and the Companies, on behalf of the Funds; (3) the approval of a change to each Fund and managesFund's fundamental investment restriction on the purchase or sale of commodities; (4) the approval of a change to each Fund's assets; (2)fundamental investment restriction on the proposalpurchase or sale of real estate; (5) the approval of a change to approveeach Fund's fundamental investment restriction on concentration of investments in a particular industry or group of industries; and (6) the retentionapproval, prospectively, of fees paid and the payment of fees payable by Hartford Investment Financial Services, LLC ("HIFSCO"), the Funds' former investment manager and an affiliate of HFMC, and HFMC (as applicable) to Wellington Management for its sub-advisory servicesa modification to the Funds; and (3)current "manager of managers" policy to permit HFMC, subject to prior approval by the proposal to authorize therelevant Board and HFMC to select or change investment sub-advisers andunder certain circumstances, to enter into orand materially amend investment sub-advisory agreements with affiliated and unaffiliated sub-advisers without the necessity of obtaining the approval of shareholders (collectively, the "Proposals").shareholder approval. In instances where choices are specified by the shareholders in the proxy card, those shareholders' votes will be voted or the votes will be withheld in accordance with the shareholders' choices. Votes can be cast to approve"FOR" or disapprove"AGAINST" each Proposal. Abstentions and broker non-votes (proxy cards received by theeach Company, as applicable, from brokers or nominees when the broker or nominee has not received instructions from the beneficial owner or other persons entitled to vote and has no discretion to vote on a particular matter) will be counted as present for purposes of determining whether a quorum of shares is present at the Meeting, and will have no effect on the vote on Proposal 1 and the same effect as a vote "AGAINST" the other Proposals. As far as the Board isBoards are aware, no matters other than those described in this Joint Proxy Statement will be acted upon at the Meeting. Should any other matters properly come before the Meeting calling for a vote of shareholders, the persons named as proxies intend to vote upon such matters accordingin their discretion.
With respect to their best judgment.the funds of funds for which HFMC does not currently retain a sub-adviser (The Hartford Checks and Balances Fund, The Hartford Conservative Allocation Fund, The Hartford Growth Allocation Fund and Hartford Moderate Allocation Fund), the Funds' Policy Related to Proxy Voting, as approved by the Boards, provides that HFMC will vote any proxies of such Funds in the same proportion as the vote of the shareholders of such underlying Hartford Funds. If you hold your Fund shares through a Coverdell Education Savings Account, Individual Retirement Account, or 403(b) Account for which State Street Bank and Trust Company serves as custodian, you must instruct the financial intermediary how to vote your shares. Fund shares held in these types of accounts on the Record Date (defined below) for which no timely instructions are received will be voted in the same proportion as voted by all Fund shareholders. Please consult your financial intermediary for more information about its practices with respect to voting beneficial owners' shares. In addition, certain Hartford Separate Accounts invested in the Funds will be voted by an HFMC affiliate in the same proportion as such Fund's other shareholders. Proprietary assets of HFMC or its affiliates invested in the Funds will be voted FOR the Proposals or voted in the same proportion as voted by such Fund's other shareholders, depending on the account through which the shares are held. As of the Record Date (as defined below), proprietary assets of HFMC or its affiliates amounted to 50% or more of the outstanding shares in the Hartford Multi-Asset Income Fund, Hartford Global Equity Income Fund and The
Hartford Global Alpha Fund. As a result, in the case of these three Funds the Proposals may be approved by the vote FOR the Proposals by HFMC and its affiliates, without additional votes FOR the Proposals by other shareholders of the Funds. In addition, shares held by a Fund's sub-adviser will be voted in accordance with the sub-adviser's proxy voting policies and procedures.
Shareholder Voting
Shareholders may authorize their proxy to vote by completing and returning the enclosed proxy card. Shareholders may also authorize their proxy to vote by touchtone telephone or by internet by following the instructions on the proxy card. To authorize their proxy to vote by internet or by telephone, shareholders will need the "control number" that appears on the proxy card. After inputting this number, shareholders will be prompted to provide their voting instructions on the Proposals. Shareholders will have an opportunity to review the voting instructions and make any necessary changes before submitting the voting instructions and terminating the telephone call or internet link.
The principal solicitation of proxies will be by the mailing of this Joint Proxy Statement beginning on or about January 31, 2014,6, 2016, but proxies may also be solicited from a representative of HartfordHFMC, any affiliate or from our proxy solicitor, Broadridge. HFMCBoston Financial. The Funds will pay all expenses relating to this Notice and Joint Proxy Statement and the Meeting, including the printing, mailing, solicitation, and vote tabulation, expenseslegal fees and out-of-pocket expenses. If we have not received your vote as the date of the Meeting approaches, you may receive a call from these parties to ask for your vote. Arrangements will be made with brokerage houses and other custodians, nominees, and fiduciaries to forward proxies and proxy materials to their principals.shareholders.
In all cases where a telephonic proxy is solicited by Broadridge,Boston Financial, the BroadridgeBoston Financial representative is required to ask for each shareholder's full name and address, or the zip code, or employer identification number, and to confirm that the shareholder has received the proxy materials in the mail. If the shareholder is a corporation or other entity, the BroadridgeBoston Financial representative is required to ask for the person's title and for confirmation that the person is authorized to direct the voting of the shares. If the information solicited agrees with the information previously provided to the
Broadridge Boston Financial representative, then the BroadridgeBoston Financial representative will explain the proxy voting process, read the Proposal listed on the proxy card and ask for the shareholder's instructions on the applicable Proposals. Although the BroadridgeBoston Financial representative is permitted to answer questions about the process, he or she is not permitted to recommend to the shareholder how to vote, other than to read any recommendation set forth in this Joint Proxy Statement. The BroadridgeBoston Financial representative will record the shareholder's instructions on the card.
Within 72 hours, the shareholder will be sent a letter or e-mail to confirm his or her vote and asking the shareholder to call BroadridgeBoston Financial immediately if his or her instructions are not correctly reflected in the confirmation.
Although a shareholder's vote may be solicited and taken by telephone, each shareholder will also receive a copy of this Joint Proxy Statement and may vote by mail using the enclosed proxy card or by touchtone telephone or the internet as set forth on the proxy card. The last proxy vote received in time to be voted, whether by proxy card, touchtone telephone or internet, will be the vote that is counted and will revoke all previous votes by the shareholder.
Only those shareholders owning shares as of the close of business on January 10, 2014December 23, 2015 (the "Record Date") may vote at the Meeting or any adjournment(s) or postponement(s) of the Meeting. Appendix A sets forth the issued and outstanding shares of each Fund as of the Record Date. Each full share outstanding is entitled to one vote, and each fractional share outstanding is entitled to a proportionate share of one vote. As a shareholder, you will not have appraisal rights in connection with the Proposals described in this Joint Proxy Statement.
Quorum and Adjournment
The presence, either in person or by proxy, of shareholders entitled to cast one-third of all the votes entitled to be cast at the Meeting shall constitute a quorum. If a quorum is not present or if a quorum is present but sufficient votes to approve any proposalProposal are not received, the chairman of the Meeting may adjourn the Meeting to a date not more than 120 days after the original record date without notice other than announcement at the Meeting. A shareholder vote may be taken for each Proposal in this Joint Proxy Statement prior to any adjournment provided that there is a quorum. If thea Proposal is considered and receives a sufficient number of votes for approval prior to any adjournment, the Proposal shall be deemed adopted and shall not require any further shareholder approval at any adjournment or otherwise. At any subsequent reconvening of the Meeting, proxies will (unless previously revoked) be voted in the same manner as they would have been voted at the Meeting. The approval of any individual Proposal does not impact the approval of the other Proposals in this Joint Proxy Statement, and any adjournment of the Meeting may relate to one or more of the Proposals.
Important Notice Regarding the Availability of Proxy Materials
For the SpecialJoint Annual Meeting of Shareholders to be Held on April 4, 2014March 14, 2016
Copies of the Funds' most recent annual and semi-annual reports, including financial statements, are available at no charge by visiting www.hartfordfunds.com; by sending a written request to Hartford Funds, P.O. Box 64387, St. Paul, Minnesota 55164-0387 (for requests sent prior to March 1, 2014) or Hartford Funds, P.O. Box 55022, Boston, Massachusetts 02205-5022 (effective March 1, 2014);02205-5022; or by calling 1-888-843-7824.
To view the Joint Proxy Statement and obtain voting information, please go to www.proxyvote.comwww.2voteproxy.com/hmf on or after January 31, 20146, 2016 and enter the 12-digit Control Number located on your proxy card. You may also obtain a copy of the Joint Proxy Statement at www.hartfordfunds.com/HMFproxy. For information about the proxy statement, please call toll-free 1-855-976-3324.1-855-520-7708.
DESCRIPTIONTABLE OF PROPOSALSCONTENTS
BACKGROUND
The Hartford Balanced Allocation Fund, The Hartford Conservative Allocation Fund, and The Hartford Growth Allocation Fund (each, a "Fund" and collectively, the "Funds") operate using a "manager of managers" structure whereby each Fund has an investment manager and a sub-adviser. The investment manager supervises the activities of the sub-adviser, which in turn performs the day-to-day investment management of the Funds.
Exemptive relief granted by an order (the "Order") issued by the U.S. Securities and Exchange Commission ("SEC") permits the Hartford-sponsored mutual funds (the "Hartford Funds") to select and contract with unaffiliated sub-advisers without a shareholder vote.(1) The Hartford Funds' ability to rely on the Order is contingent on compliance with conditions set forth in the Order, including that each Hartford Fund (i) receive shareholder approval to operate using a "manager of managers" structure in reliance on the Order; (ii) hold itself out to the public as employing the "manager of managers" structure; and (iii) disclose in its prospectus the existence, substance and effect of the Order.
HFMC recently conducted a review of the Hartford Funds' compliance with the conditions of the Order (the "Review"). The Review identified inconsistencies and administrative oversights with respect to the Funds' compliance with certain conditions of the Order. In particular, the Review raised a question whether the Funds' sole initial shareholder consented to reliance on the Order, and indicated that the Funds' reliance on the Order had not been consistently disclosed in the Funds' prospectuses. In light of the results of the Review, HFMC and the Board are requesting that shareholders approve each of the Proposals discussed below.
PROPOSAL 1 — ELECTION OF DIRECTORS | 7 | ||||||
elected by shareholders) | 7 | ||||||
elected by shareholders) | 9 | ||||||
Nominee for Election as Interested Director (not previously elected by shareholders) | 13 | ||||||
|
| ||||||
|
| ||||||
|
| ||||||
PROPOSAL 2 — APPROVAL OF NEW INVESTMENT MANAGEMENT AGREEMENT | 19 | ||||||
|
| ||||||
Description of Current and New Agreements | 19 | ||||||
Board Considerations in Approving the | 22 | ||||||
Additional Information | 25 | ||||||
Required Vote | 25 | ||||||
PROPOSAL 3 — APPROVAL OF A CHANGE TO EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION ON THE PURCHASE OR SALE OF COMMODITIES | 26 | ||||||
Required Vote | 28 | ||||||
PROPOSAL 4 — APPROVAL OF A CHANGE TO EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION ON THE PURCHASE OR SALE OF REAL ESTATE | 29 | ||||||
Required Vote | 30 | ||||||
PROPOSAL 5 — APPROVAL OF A CHANGE TO EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION ON CONCENTRATION | 31 | ||||||
Required Vote | 33 | ||||||
PROPOSAL 6 — APPROVAL TO PERMIT HFMC TO ENTER INTO AND/OR MATERIALLY AMEND AGREEMENTS WITH AFFILIATED AND UNAFFILIATED SUB-ADVISERS ON BEHALF OF EACH OF THE FUNDS WITHOUT OBTAINING SHAREHOLDER APPROVAL | 34 | ||||||
Background | 34 | ||||||
The Current Manager of Managers Arrangement | 34 | ||||||
The Proposed Manager of Managers Arrangement | 35 | ||||||
Implications of Approving Proposal 6 | 35 | ||||||
Board Considerations in Approving Reliance on the New Order | 36 | ||||||
Required Vote | 37 |
(1) Fortis Series Fund, Inc. and Fortis Advisers, Inc., Investment Company Act Rel. Nos. 24158 (Nov. 23, 1999) (notice) and 24211 (Dec. 21, 1999) (order).
OTHER MATTERS | 38 | ||||||
OTHER SERVICE PROVIDERS | 38 | ||||||
PORTFOLIO TRANSACTIONS AND BROKERAGE | 38 | ||||||
SHAREHOLDER MAILINGS | 38 | ||||||
SHAREHOLDER PROPOSALS | 39 | ||||||
INDEX OF APPENDICES | 40 | ||||||
Appendix A Fund Shares Outstanding | A-1 | ||||||
Appendix B Additional Information About the Companies and Independent Registered Public Accounting Firm | B-1 | ||||||
Appendix C Nominating and Governance Committee Charter | C-1 | ||||||
Appendix D Form of Proposed New Investment Management Agreement | D-1 | ||||||
Appendix E Additional Information About HFMC and the New Agreement | E-1 | ||||||
Appendix F Beneficial Owners | F-1 |
PROPOSAL 1
RATIFICATION AND APPROVALELECTION OF THE SUB-ADVISORY AGREEMENT WITH WELLINGTON MANAGEMENTDIRECTORS
The Board is proposing thatAt the Meeting, shareholders ratify and approve, with respectwill be asked to each Fund, the sub-advisory agreement between HFMC and Wellington Management. The Funds are managed by HFMC using a "manager of managers" structure. Wellington Management has continuously served as sub-adviser to each Fund since June 4, 2012, and has provided investment sub-advisory services to the each Fund with respect to the each Fund's assets.
HFMC serves as each Fund's investment manager pursuant to an investment management agreement between HFMC and the Company with respect to each Fund. Pursuant to the investment management agreement, HFMC establishes each Fund's investment program, subject to the oversight of the Funds' Board of Directors (the "Board"). HFMC may also choose to select, supervise and evaluate a sub-adviser or sub-advisers who will, in turn, make each Fund's investment decisions, subject to the oversight of the Board. HFMC recommends sub-advisers it believes will provide each Fund with high quality investment services consistent with each Fund's investment strategy in order to achieve its respective investment objective. HFMC is also responsible for the monitoringelect members of each Fund's sub-adviser(s).Board, each to serve an indefinite term. Each Board has nominated each of Hilary E. Ackermann, Lynn S. Birdsong, James E. Davey, Christine Detrick, Duane E. Hill, Sandra S. Jaffee, William P. Johnston, Phillip O. Peterson and Lemma W. Senbet (each a "Nominee" and together, the "Nominees") as Directors.
The Board, includingWith the exception of Ms. Detrick, the Nominees are the current members of each Board. With the exception of Ms. Ackermann, Mr. Davey, Ms. Detrick and Dr. Senbet, the Nominees have previously been elected by shareholders. Ms. Detrick is not currently a majoritymember of those Directors whoeither Board. Each Nominee, with the exception of Mr. Davey, is an independent or disinterested person, which means they are not "interested persons" of the Funds (as that term isCompanies, as defined in the Investment Company Act of 1940 ("1940 Act"). Such individuals are commonly referred to as amended, (the "1940 Act")) (""Independent Directors."
Pertinent information regarding each Nominee's principal occupation and business experience during at least the past five years, number of portfolios overseen or to be overseen and other directorships held is set forth below. Shareholders wishing to send communications to the Nominees may submit written correspondence, directed to the Nominees, in care of the applicable Company's Secretary, Edward P. Macdonald, c/o Hartford Funds, 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087.
Nominees for Election as Independent Directors"), initiallyDirector (not previously elected by shareholders):
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | Number of Portfolios in Fund Complex Overseen or to be Overseen by Nominee for Director | Other Directorships Held by Nominee for Director | ||||||||||||||||||
Hilary E. Ackermann (1956) | Director | Since 2014 | Ms. Ackermann served as Chief Risk Officer at Goldman Sachs Bank USA from October 2008 to November 2011 and has served as a Director of Dynegy, Inc. (an independent power company) from October 2012 to present. | 67 | Ms. Ackermann serves as a Director of Dynegy, Inc. (a power company) (October 2012 to present). |
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | Number of Portfolios in Fund Complex Overseen or to be Overseen by Nominee for Director | Other Directorships Held by Nominee for Director | ||||||||||||||||||
Christine Detrick (1958) | None | N/A | Ms. Detrick has served as a Director of Reinsurance Group of America since January 2014 and Forest City Enterprises (a real estate company) since November 2014. Previously, she was a Director of Forethought Financial Group, Inc. (a financial services company) from January 2012 to January 2014 and a Partner/Senior Advisor at Bain & Company (a management consulting firm) from September 2002 to December 2012. | 67 | Ms. Detrick serves as a Director of Reinsurance Group of America (January 2014 to present) and Forest City Enterprises (a real estate company) (November 2014 to present). | ||||||||||||||||||
Lemma W. Senbet (1946) | Director | Since 2005 | Dr. Senbet is the William E. Mayer Chair Professor of Finance and Founding Director, Center for Financial Policy, at the University of Maryland, Robert H. Smith School of Business. He was chair of the Finance Department of the University of Maryland, Robert H. Smith School of Business from 1998 to 2006. Since June 2013, he has been on leave from the University to serve as Executive Director of the African Economic Research Consortium, which focuses on economic policy research and training. Previously, he was a chaired professor of finance at the University of Wisconsin-Madison. Also, he was a Director of the Fortis Funds from March 2000 to July 2002. Dr. Senbet served as Director of the American Finance Association and President of the Western Finance Association. In 2006, Dr. Senbet was inducted as a Fellow of Financial Management Association International for his career-long distinguished scholarship and professional service. | 67 | None |
* Each Director holds an indefinite term until the earlier of (i) the election and qualification of his or her successor or (ii) when the Director turns 75 years of age.
Nominees for Election as Independent Director (previously elected by shareholders):
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | Number of Portfolios in Fund Complex Overseen by Nominee for Director | Other Directorships Held by Nominee for Director | ||||||||||||||||||
Lynn S. Birdsong (1946) | Director | Since 2003 | Mr. Birdsong currently serves as a Director of Aberdeen Global and Aberdeen Global II (investment funds) (September 2014 to present). Mr. Birdsong served as an Independent Director of Nomura Partners Funds, Inc. (formerly, The Japan Fund) (April 2003 to February 2015) and as a Director of the Sovereign High Yield Investment Company (April 2010 to June 2014). From 2003 to March 2005, Mr. Birdsong was an Independent Director of the Atlantic Whitehall Funds. From 1979 to 2002, Mr. Birdsong was a Managing Director of Zurich Scudder Investments, an investment management firm. During his employment with Scudder, Mr. Birdsong was an Interested Director of The Japan Fund. From January 1981 to December 2013, Mr. Birdsong was a partner in Birdsong Company, an advertising specialty firm. | 67 | Mr. Birdsong is a Director of Aberdeen Global and Aberdeen Global II (September 2014 to present). | ||||||||||||||||||
Duane E. Hill (1945) | Director | Since 2001(1) Since 2002(2) | Mr. Hill is a Partner of TSG Ventures L.P., a private equity investment company. Mr. Hill is a former partner of TSG Capital Group, a private equity investment firm that serves as sponsor and lead investor in leveraged buyouts of middle market companies. | 67 | None |
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | Number of Portfolios in Fund Complex Overseen by Nominee for Director | Other Directorships Held by Nominee for Director | ||||||||||||||||||
Sandra S. Jaffee (1941) | Director | Since 2005 | Ms. Jaffee is the founder and Chief Executive Officer of a private company, Homeworks Concierge, LLC, which provides residential property management services in Westchester County, New York (January 2012 to present). Ms. Jaffee served as Chair (2008 to 2009) and Chief Executive Officer of Fortent (formerly Searchspace Group), a leading provider of compliance/regulatory technology to financial institutions, from August 2005 to August 2009. From August 2004 to August 2005, Ms. Jaffee served as an Entrepreneur in Residence with Warburg Pincus, a private equity firm. Prior to joining Warburg Pincus, Ms. Jaffee served as Executive Vice President at Citigroup, from September 1995 to July 2004, where she was President and Chief Executive Officer of Citibank's Global Securities Services (1995 to 2003). Ms. Jaffee served as a member of the Board of Directors of Broadridge Financial Solutions (November 2010 to November 2014). Ms. Jaffee currently serves as a member of the Board of Directors of Global Corps Africa (a non-profit organization) (January 2015 to present) as well as a Trustee of Muhlenberg College (September 2007 to present). | 67 | None |
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | Number of Portfolios in Fund Complex Overseen by Nominee for Director | Other Directorships Held by Nominee for Director | ||||||||||||||||||
William P. Johnston (1944) | Director and Chairman of the Boards | Director since 2005; Chairman of the Board for each Company since 2015 | In June 2006, Mr. Johnston was appointed as Senior Advisor to The Carlyle Group, a global private equity and alternative asset investment firm and currently serves as an Operating Executive. In July 2006, Mr. Johnston was elected to the Board of Directors of MultiPlan, Inc. (a healthcare preferred provider organization) and served as a Director (July 2006 to August 2010). In August 2007, Mr. Johnston was elected to the Board of Directors of LifeCare Holdings, Inc. (an acute care hospital operator) and served as a Director (August 2007 to June 2013). In February 2008, Mr. Johnston was elected to the Board of Directors of HCR-ManorCare, Inc. (a healthcare provider). In May 2006, Mr. Johnston was elected to the Supervisory Board of Fresenius Medical Care AG & Co. KGaA (a producer of medical supplies), after its acquisition of Renal Care Group, Inc. in March 2006. Mr. Johnston joined Renal Care Group (a dialysis provider) in November 2002 as a member of the Board of Directors and served as Chairman of the Board from March 2003 through March 2006. From 2002 through 2013, Mr. Johnston served as a Board member of the Georgia O'Keefe Museum. From September 1987 to December 2002, Mr. Johnston was with Equitable Securities Corporation (and its successors, SunTrust Equitable Securities and SunTrust Robinson Humphrey) serving in various investment banking and managerial positions, including Managing Director and Head of Investment Banking, Chief Executive Officer and Vice Chairman. | 67 | None |
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | Number of Portfolios in Fund Complex Overseen by Nominee for Director | Other Directorships Held by Nominee for Director | ||||||||||||||||||
Phillip O. Peterson (1944) | Director | Since 2002(1) Since 2000(2) | Mr. Peterson is a mutual fund industry consultant. He was a partner of KPMG LLP (an accounting firm) until July 1999. Mr. Peterson joined William Blair Funds in February 2007 as a member of the Board of Trustees. From February 2012 to February 2014, Mr. Peterson served as a Trustee of Symetra Variable Mutual Funds. From January 2004 to April 2005, Mr. Peterson served as Independent President of the Strong Mutual Funds. | 67 | Mr. Peterson is a Trustee of the William Blair Funds (February 2007 to present) (26 funds overseen). |
* Each Director holds an indefinite term until the earlier of (i) the election and qualification of his or her successor or (ii) when the Director turns 75 years of age.
(1) For HMF
(2) For HMF II
Nominee for Election as Interested Director (not previously elected by shareholders):
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | Number of Portfolios in Fund Complex Overseen by Nominee for Director | Other Directorships Held by Nominee for Director | ||||||||||||||||||
James E. Davey** (1964) | Director, President and Chief Executive Officer | President and Chief Executive Officer since 2010; Director since 2012. | Mr. Davey serves as Executive Vice President of Hartford Life Insurance Company ("HLIC") and The Hartford Financial Services Group, Inc. ("The Hartford"). Additionally, Mr. Davey serves as Chairman of the Board, Manager and Senior Managing Director of Hartford Funds Distributors, LLC ("HFD"). He also currently serves as Director, Chairman of the Board, President and Senior Managing Director of Hartford Administrative Services Company ("HASCO"). Mr. Davey also serves as Manager, Chairman of the Board and Senior Managing Director for HFMC and Director, Chairman of the Board and Senior Managing Director for Hartford Funds Management Group, Inc. ("HFMG"). Mr. Davey has served in various positions within The Hartford and its subsidiaries in connection with the operation of the Hartford Funds. Mr. Davey joined The Hartford in 2002. | 67 | N/A |
* Each Director holds an indefinite term until the earlier of (i) the election and qualification of his or her successor or (ii) when the Director turns 75 years of age.
** "Interested person," as defined in the 1940 Act, of the Companies because of the person's affiliation with, or equity ownership of, HFMC, HFD or affiliated companies.
Director Qualifications
The governing documents for the Companies do not set forth any specific qualifications to serve as a Director. The Charter for the Nominating and Governance Committee sets forth criteria that the Committee should consider as a minimum requirement for consideration as an Independent Director, including: 15 years of business or academic experience in a management, administrative or other oversight capacity; a college degree or business experience equivalent to a
college degree; an ability to invest in the Funds; a person of high ethical standards; and a person able to think through and discuss complicated regulatory and financial issues and arrive at reasonable decisions on these issues on behalf of shareholders.
Each Board has concluded, based on each Nominee's experience, qualifications, attributes and/or skills, on an individual basis and in combination with those of other Nominees, that each Nominee is qualified to serve as a Director for the Funds. Among the attributes and skills common to all Nominees are the ability to review, evaluate and discuss information and proposals provided to them regarding the Funds, the ability to interact effectively with management and service providers, and the ability to exercise independent business judgment. Where applicable, the Boards have considered the actual service of the Nominee in concluding that the Nominee should continue to serve as a Director. Each Nominee's ability to perform his or her duties effectively has been attained through the Nominee's education and work experience, as well as service as a director for the Funds and/or other entities. Set forth below is a brief description of the specific experience of each Nominee. Additional details regarding the background of each Nominee is included in the chart earlier in this section.
Hilary E. Ackermann. Ms. Ackermann has served as a director of the Funds since September 2014. Ms. Ackermann has over twenty-five years of credit, financial and risk management experience, including serving as Chief Risk Officer at Goldman Sachs Bank USA.
James E. Davey. Mr. Davey has served as a director of the Funds since 2012 and President and Chief Executive Officer of the Funds since 2010. Mr. Davey serves as Executive Vice President of HLIC and The Hartford. Additionally, Mr. Davey serves as Senior Managing Director, Manager and Chairman of the Board of HFD. Mr. Davey also serves as Senior Managing Director, Chairman of the Board and Manager for HFMC. Mr. Davey joined The Hartford in 2002.
Christine Detrick. Ms. Detrick has over thirty years of experience leading and advising financial services companies and investors. She previously served as a director, head of the Americas financial services practice and senior advisor at a management consulting firm, and as a director of a private mid-sized financial services company.
Lemma W. Senbet. Dr. Senbet has served as a director of the Funds (and their predecessors) since 2000. For more than thirty years, Dr. Senbet has served as a professor of finance, including serving as the Director of Center for Financial Policy and as the chair of the finance department at a major university. He has served the finance profession in various capacities, including as a director or officer of finance associations.
Lynn S. Birdsong. Mr. Birdsong has served as a director of the Funds since 2003. He has served as Co-Chairman of the Investment Committee since 2005 and Chairman of the Investment Committee since September 2014. Mr. Birdsong served in senior executive and portfolio management positions for investment management
firms for more than twenty-five years. He has served as a director of other mutual funds for more than ten years.
Duane E. Hill. Mr. Hill has served as a director of the Funds since 2001. He has served as the Chairman of the Nominating and Governance Committee since 2003. Mr. Hill has more than thirty-five years' experience in senior executive positions in the banking, venture capital and private equity industries.
Sandra S. Jaffee. Ms. Jaffee has served as a director of the Funds since 2005. She has served as Chair of the Compliance Committee since 2015. Ms. Jaffee has more than thirty-five years of experience as a senior executive in the financial services and technology area, including serving as chair and CEO of a leading provider of compliance/regulatory technology to financial institutions and as president and CEO of the global securities services division of a major financial services company.
William P. Johnston. Mr. Johnston has served as a director of the Funds since 2005. He has served as Chairman of the Board of Directors of the Funds and Chairman of the Contracts Committee since 2015. He served as Chairman of the Compliance Committee from 2005 to 2015. Mr. Johnston has more than forty years of experience in senior leadership positions in the health care, investment banking and legal professions. He currently serves as an operating executive to a global private equity and other alternative asset investment firm and serves on other boards. He previously served as managing director and head of investment banking, CEO and vice chairman for an investment bank.
Phillip O. Peterson. Mr. Peterson has served as a director of the Funds (and their predecessors) since 2000. He has served as the Chairman of the Audit Committee since 2002. Mr. Peterson was a partner of a major accounting firm, providing services to the investment management industry. He has served as an independent president of a mutual fund complex, and he serves on another mutual fund board.
Pertinent information regarding each officer's principal occupation and business experience during at least the past five years is set forth below. The address for each officer is c/o Hartford Funds, 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087.
Current Officers
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | ||||||||||||
Andrew S. Decker (1963) | AML Compliance Officer | Since 2015 | Mr. Decker currently serves as Chief Compliance Officer and AML Compliance Officer of HASCO and as AML Officer of HFD. Prior to joining The Hartford, Mr. Decker served as Vice President and AML Officer at Janney Montgomery Scott (a broker dealer) from April 2011 to January 2015. Mr. Decker served as AML Compliance and Sanctions Enforcement Officer at SEI Investments from December 2007 to April 2011. | ||||||||||||
Michael Flook (1965) | Vice President, Treasurer and Controller | Since 2015 | Mr. Flook currently serves as an employee of HFMC. Mr. Flook served as Assistant Treasurer for each Company, The Hartford Alternative Strategies Fund and the Hartford HLS Funds from February 2015 to March 2015. Mr. Flook joined The Hartford in 2014. Prior to joining The Hartford, Mr. Flook served as Director, Vice President and Assistant Treasurer at UBS Global Asset Management from May 2006 to November 2014. | ||||||||||||
Edward P. Macdonald (1967) | Vice President, Secretary and Chief Legal Officer | Since 2005 | Mr. Macdonald currently serves as Assistant Secretary, Executive Vice President and Deputy General Counsel of HFD, HASCO, HFMC and HFMG. He also serves as Vice President of HLIC. Mr. Macdonald has served in various positions within The Hartford and its subsidiaries in connection with the operation of the Hartford Funds. Mr. Macdonald joined The Hartford in 2005. |
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | ||||||||||||
Joseph G. Melcher (1973) | Vice President and Chief Compliance Officer | Since 2013 | Mr. Melcher currently serves as Executive Vice President of HFD, HFMG and HASCO. Mr. Melcher also currently serves as Executive Vice President and Chief Compliance Officer of HFMC. Mr. Melcher has served in various positions within The Hartford and its subsidiaries in connection with the operation of the Hartford Funds since joining The Hartford in 2012. Prior to joining The Hartford, Mr. Melcher worked at Touchstone Investments, a member of the Western & Southern Financial Group, where he held the position of Vice President and Chief Compliance Officer from 2010 through 2012 and Assistant Vice President, Compliance from 2005 to 2010. | ||||||||||||
Vernon J. Meyer (1964) | Vice President | Since 2006 | Mr. Meyer currently serves as Senior Vice President of HLIC. He also currently serves as Managing Director and Chief Investment Officer of HFMC and Managing Director of HFMG. Mr. Meyer has served in various positions within The Hartford and its subsidiaries in connection with the operation of the Hartford Funds. Mr. Meyer joined The Hartford in 2004. |
Name and Year of Birth | Position Held with the Companies | Term of Office* and Length of Time Served | Principal Occupation(s) During Last 5 Years | ||||||||||||
Laura S. Quade (1969) | Vice President | Since 2012 | Ms. Quade currently serves as Vice President of HASCO, HFD and HFMG. She is the Head of Operations of HASCO and formerly served as Director, Enterprise Operations of HLIC. Ms. Quade has served in various positions within The Hartford and its subsidiaries in connection with the operation of the Hartford Funds. Ms. Quade joined The Hartford in 2001. |
* Each officer may serve until his or her successor is elected and qualifies.
Additional information about the Companies and the independent registered public accounting firm of the Companies is provided in Appendix B.
REQUIRED VOTE
A plurality of the votes properly cast in person or by proxy at the Meeting is required for the election of directors. Because each Fund is a series of its respective Company, each shareholder vote will be counted together with the votes of shareholders of the other series of the applicable Company, voting as a single class in the election of directors. Unless otherwise instructed, the proxies will vote all properly executed proxy cards and voting instruction cards "FOR" the Nominees. Each of the Nominees has consented to serve as a Director if elected.
The Boards unanimously recommend that you vote "FOR" Proposal 1.
PROPOSAL 2
APPROVAL OF NEW INVESTMENT MANAGEMENT AGREEMENT
At a meeting on November 4-5, 2015, the Boards, including all of the Independent Directors, approved a sub-advisory agreement between HIFSCO and Wellingtonnew Investment Management (the "Original Agreement"), with respect to each Fund, at an in-person meeting held on March 27, 2012. Subsequently, in connection with a corporate restructuring plan, at its meeting held on November 8, 2012, the Board voted to terminate the Original Agreement between HIFSCOHFMC and Wellingtoneach of HMF and HMF II, on behalf of the Funds (the "New Agreement"). If approved by shareholders, the New Agreement will replace the current Investment Management Agreements between HMF and approve a newHFMC and between HMF II and HFMC, each dated January 1, 2013 (together, the "Current Agreements"). For more information on the Current Agreements, please see Appendix E. The two Current Agreements have been consolidated into the New Agreement for administrative efficiency.
As described further below, the Boards approved the New Agreement for the purpose of clarifying the description of the management and administrative services provided to the Funds by HFMC, and to make other enhancements. If approved by shareholders, the New Agreement will not result in an increase in the overall fees paid by the Funds.
Description of the Changes in the New Agreement
The New Agreement differs from the Current Agreements in that it includes, among other things:
• expanded descriptions of the advisory, management and administrative services provided by HFMC, as the Funds' investment sub-advisory agreement betweenmanager, to reflect in additional detail the nature and scope of services currently provided by HFMC to the Funds;
• an affiliateupdated discussion of HIFSCO,HFMC's and Wellington Managementsub-advisers' obligations to seek best execution with respect to the Funds (the "Agreement"). The replacementFunds' portfolio transactions to better reflect industry best practices; and
• general enhancements to clarify existing obligations and responsibilities.
Description of HIFSCO with HFMC did not result in any change to the contractual terms of the Funds' investment management agreements or the day-to-day management of the Funds,Current and no shareholder vote was required. The Board most recently approved the continuation of the Agreement at an in-person meeting held on August 6-7, 2013. Information about the Board's considerations relating to the approval of the Original Agreement and the Agreement is set forth below under "Board of Directors' Considerations."
At a special meeting held on December 13, 2013, the Board determined to recommend that shareholders approve the Proposal relating to the Agreement. The Board considered that, at the time it approved the Original Agreement and the Agreement, HFMC believed, and informed the Board, that the Original Agreement and the Agreement did not require shareholder approval due to the Funds' ability to rely on the Order. The Board noted that it had undertaken a full review of Wellington
Management in connection with the renewal of the Agreement at its August 6-7, 2013 meeting, and that the Board reviews the performance of the Funds at its regular quarterly meetings. The Board determined that it was appropriate for Wellington Management to continue to serve as sub-adviser to the Funds, and concluded that the ratification and approval of the Agreement by shareholders would be in the best interests of each Fund and its shareholders.
DESCRIPTION OF THE AGREEMENTNew Agreements
The following discussionis a summary of the terms of the Current Agreements and the New Agreement, as described in this Proposal. Except for the changes discussed above, the terms of the Current Agreement and the New Agreement are virtually identical. The description below is qualified in its entirety by reference to the Agreement, a form of the New Agreement, which is attached heretoincluded as Appendix B.D to this Joint Proxy Statement.
Duties of the Investment Manager.Under the Agreement, Wellington Management would continueCurrent and New Agreements, HFMC administers the business and affairs of the Companies and the Funds and may retain and compensate sub-advisers that invest and reinvest the assets of the Funds pursuant to serve as sub-advisersub-advisory agreements with HFMC. In this regard, HFMC will, whether directly or through engagement of sub-advisers, regularly provide each Fund with research, advice and providesupervision, and will furnish continuously an investment sub-advisory services to each Fund. Except in certain circumstances, HFMC would not be responsible for making day-to-day investment decisionsprogram for each Fund. HFMC will be responsible, however, for overseeing and reviewing the performance of Wellington Management.
If Proposal 1 is approved, and as set forth in the Agreement, Wellington Management will continue to perform investment management services in conformity with the Company's Articles of Incorporation and By-Laws, each as amended from time to time, the 1940 Act and other applicable laws. The Agreement requires Wellington Management to provide advisory services in accordanceFund consistent with the investment objectives and
policies of the Fund. HFMC shall also monitor, supervise and restrictions of each Fundoversee any sub-adviser. In addition, HFMC shall regularly provide such administrative and management services as set forth in such Fund's prospectus and statement of additional information ("SAI"), and in accordance with any investment guidelines or other instructions received in writing from HFMC, and subject further to such policies and instructions as the Board or HFMC may from time to time establishbe requested by the Companies or Funds as necessary for the operation of the Funds. The New Agreement clarifies these services and deliverduties and enumerates certain existing obligations and responsibilities, including, among others, the investment management and administrative and management services outlined below:
Investment Management Services
• Providing and, as necessary, re-evaluating and updating the investment objectives and parameters, asset classes, and risk profiles of the Funds.
• Determining, as permitted through the engagement of sub-advisers as the case may be, what securities and other financial instruments should be purchased for the Funds and the portion of the Funds' portfolios to Wellington Management.be held in cash.
The Agreement provides that Wellington Management, in consultation• Monitoring the Funds' performance and examining and recommending ways to improve performance.
• Meeting with HFMC, as appropriate, will make all determinationsand monitoring sub-advisers to confirm their compliance with respectthe Funds' investment strategies and policies and for their adherence to legal and compliance procedures.
• Researching and recommending sub-advisers or portfolio managers for the Funds.
• Reporting to the investmentBoards on the performance of each Fund's assetsFund and recommending action as appropriate.
Administrative and Management Services
• Assisting in all aspects of the Company's operations, including the supervision and coordination of service providers (e.g., the custodian, transfer agent or other shareholder servicing agents, accountants, and attorneys), and serving as the liaison between such service providers and the purchase or saleBoard.
• Drafting and negotiating agreements between service providers and the Company.
• Preparing meeting materials for the Company's Board and producing such other materials as the Board may request.
• Coordinating and overseeing filings with the SEC.
• Developing and implementing compliance programs for the Funds.
• Providing day-to-day legal and regulatory support for the Funds.
• Assisting the Funds in the handling of portfolio securities, and will take such steps as may be necessary to implement such determinations. The Agreement requires Wellington Management to reportregulatory examinations.
• Making reports to the Board at its regular periodic meetings. These reports cover Wellington Management's economic outlook and investment strategy and a discussion of the portfolio activity andregarding the performance of the Funds. Copies of all such reports are furnished to HFMC for examination and review within a reasonable time prior to the presentation of such reports to the Company's Board.
Consistent with the terms of the Agreement, Wellington Management is permitted, in its discretion, to select brokers or dealers that execute the purchases and sales of portfolio securities for each Fund. In selecting broker-dealers, Wellington Management is required to use its best efforts to obtain the best net security price available for each Fund. Additionally, subject to and in accordance with any directions that the Board or HFMC may issue from time to time, Wellington Management may also be authorized to effect individual securitiesFunds' investment adviser.
transactions at commission rates in excess of the minimum commission rates available, if Wellington Management determines in good faith that such amount of commission is reasonable in relation• Maintaining and preserving records relating to the value ofFunds.
• Performing due diligence on third-party service providers and negotiating service agreements with those third-parties.
Compensation. Under the brokerage or research services provided by such broker or dealer, viewed in terms of either that particular transaction or Wellington Management's overall responsibilities with respect to the applicable Fund(s)Current and Wellington Management's other advisory clients. Wellington Management will promptly communicate to the Board such information relating to portfolio transactions as they may reasonably request.
The Agreement does not prevent Wellington Management from acting as investment manager or manager for any other investment companies or other clients, whether or not the investment objectives or policies of any such other clients are similar to those of any Fund, provided that the provision of such services to those other clients does not impair Wellington Management's ability to provide services to each Fund under the Agreement.
In addition, pursuant to the Agreement, Wellington Management will cause the Funds to comply with the requirements of (i) Section 851(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code") regarding derivation of income from specified investment activities; and (ii) Section 851(b)(3) of the Code regarding diversification of the Funds' assets.
The Agreement provides that,New Agreements, HFMC receives, as compensation for its services, a fee from the performanceapplicable Company computed separately for each Fund. The amount of the servicesinvestment management fee for each Fund is determined by Wellington Management, HFMC shall pay Wellington Management a sub-advisoryapplying the daily equivalent of an annual fee accrued daily and paid quarterly, as set forth inrate to the Agreement. This will be Wellington Management's sole compensation for sub-advisory services provided tonet assets of each Fund. Wellington Management's compensation isThe New Agreement, if approved by shareholders of each Fund, will not paidresult in an increase in fees to shareholders.
Expenses Paid by the Funds. The Agreement also provides that Wellington Management will bearCompanies. Under the Current and New Agreements, each Company is responsible for the payment of all expenses of its organization, operations and business. Expenses borne by each Company include:
• interest and taxes;
• brokerage commissions;
• premiums for fidelity and other insurance coverage;
• fees and expenses of its Independent Directors;
• legal, audit and fund accounting expenses;
• custodian and transfer agent fees and expenses;
• expenses incident to the redemption of its shares;
• fees and expenses related to the federal and state registration of its shares;
• expenses of printing and mailing prospectuses, financial reports, notices and proxy materials;
• all other expenses incidental to Company shareholder meetings; and
• certain other extraordinary non-recurring expenses.
The New Agreement clarifies that HFMC will pay all of the costs it incurs in connection with the performance of its servicesduties under the New Agreement and that HFMC will not be required to bear any expenses of a Fund other than those specifically allocated to it under the New Agreement. The New Agreement additionally clarifies that the chief compliance officer of the relevant Company may be compensated by that Company for services provided to it, regardless of whether that officer is also an officer or employee of HFMC or of any entity controlling, controlled by or under common control with HFMC.
Pursuant to the Agreement, Wellington ManagementLiability of HFMC. The Current and New Agreements provide that HFMC will not be liable for any loss or losses suffered by any Fundsustained by reason of any investment made by Wellington Management inincluding the performancepurchase, holding or sale of its duties underany security, or with respect to the Agreementadministration of either Company, as long as Wellington Management hasHFMC shall have acted in good faith and with due care; provided,care. HFMC is not protected from liability to either Company or its shareholders to the
extent that Wellington Management shall indemnify HFMC for any and all loss, damage, judgment, fine or award paid in settlement and attorney's fees relatedthe liability is due to Wellington Management's (i)its willful misfeasance, bad faith or gross negligence on Wellington Management's part in the performance of its duties or (ii)by reason of its reckless disregard by Wellington Management of its obligationsduties and dutiesobligations under the Agreement.Current and New Agreements.
Term of the Investment Management Agreement.The Agreement provides that itterm of the Current and New Agreements will continue in effect as to a Fund for a period no more than two years from yearthe date of its execution (or the execution of an amendment making the Agreement applicable to year,that Fund) and thereafter if such continuance is specifically approved at least annually either by the Board or by a "vote of a majority of the outstanding voting securities" of that Fund, as defined under the 1940 Act. In either event, such continuance must also be approved by the vote of the majority of the Independent Directors.
Termination of the Investment Management Agreement. The Current and New Agreements may be terminated at any time without the payment of any penalty on 60 days' written notice to the other party or parties to such agreement. The following parties may terminate the agreement:
• the applicable Board of the Company;
• a majority of the outstanding voting securities of a Fund with respect to that Fund; and
• HFMC.
The Current and New Agreements each will automatically terminate in the event of its "assignment," as that term is defined under the 1940 Act.
Amendments to the Investment Management Agreement. The Current and New Agreements may be amended by the parties thereto (which include HFMC and each Company) provided that the amendment is approved by the vote of a majority of the outstanding voting securities of each relevant Fund in either case withor by the approvalvote of a majority of the Independent Directors, specifically approves its continuance at least annually. The Agreement provides that it can be terminated with respect to any Fund at any time, without the payment of any penalty, by the Board by a majority of such Fund's outstanding voting securities, or by HFMC, on written notice to Wellington Management. The Agreement would also be terminable by Wellington Management on ninety days' written notice to HFMC, but such
termination would not be effective until (i) HFMC shall have contracted with one or more persons to serve as a successor for each Fund (or HFMC or an affiliate of HFMC agrees to manage the Fund(s)) and (ii) those person(s) have assumed that position. The Agreement will terminate automatically in the event of its assignment or in the event of an assignment or termination, for any reason, of the investment management agreement between HFMC and the Company.
The form of the Agreement is attached as Appendix B to this Proxy Statement. The above description of the terms of the Agreement is qualified in its entirety by reference to Appendix B.
INFORMATION ABOUT WELLINGTONMANAGEMENT COMPANY, LLP
Wellington Management, a Massachusetts limited liability partnership with its main offices located at 280 Congress Street, Boston, MA 02210, is a professional investment counseling firm which provides investment services to investment companies, employee benefit plans, endowments, foundations and other institutions. Wellington Management and its predecessor organizations have provided investment advisory services for over 80 years. As of November 30, 2013, Wellington Management had investment management authority with respect to approximately $825 billion in assets.
Richard P. Meagher, CFA and Wendy M. Cromwell, CFA currently manage the Funds and will continue to serve as portfolio managers of each Fund. Mr. Meagher, Vice President, Asset Allocation Strategist and Portfolio Manager of Wellington Management, has served as portfolio manager of the Funds since 2012. Mr. Meagher joined Wellington Management in 1996 and has been an investment professional since 2002. Ms. Cromwell, Senior Vice President, Director of Strategic Asset Allocation, Asset Allocation Strategies Group, and Portfolio Manager of Wellington Management, has served as portfolio manager of the Funds since 2012. Ms. Cromwell joined Wellington Management in 1996 and has been an investment professional since 1999.
Wellington Management has assembled a team of research analysts and other investment personnel to support Wellington Management's asset allocation management function. Pursuant to the Agreement, Wellington Management will continue to implement an investment program appropriate for each Fund.
During the Funds' last fiscal year, Wellington Management did not receive any fees, commissions or other payments from any Fund. Sub-advisory fees received by Wellington Management are paid by HFMC out of its management fee. Appendix C to this Proxy Statement sets forth information regarding the principal executive officers and directors of Wellington Management, HFMC, and the Company.
Wellington Management does not currently sub-advise any investment companies that have investment objectives similar to the investment objectives of the Funds.
No officer or director of the Funds is currently an officer, employee, director or shareholder of Wellington Management. Furthermore, no officer or director of the Funds has any other material direct or indirect interest in Wellington Management or any person controlling, controlled by, or under common control with Wellington Management.
BOARD OF DIRECTORS' CONSIDERATIONS
Section 15(c) of 1940 Act requires that the Board,applicable Company, including a majority of the Independent Directors, initiallyDirectors.
Any required shareholder approval of any amendment will be effective with respect to any Fund if a majority of the outstanding voting securities of that Fund votes to approve and annually review and consider the continuationamendment, even if the amendment may not have been approved by a majority of each Fund's investment sub-advisory agreement(s).the outstanding voting securities of (a) any other Fund affected by the amendment; or (b) all the Funds of the applicable Company.
Approval ofBoard Considerations in Approving the OriginalNew Agreement
At itsa meeting held on March 27, 2012,November 4-5, 2015, the Board,Boards, including each of the Independent Directors, unanimously voted to approve the OriginalNew Agreement between HIFSCO, the Funds' former investment manager and an affiliate of HFMC, and Wellington Management. The Original Agreement went into effect on June 4, 2012.
Prior to approving the Original Agreement, the Board requested, received, and reviewed written responses from HIFSCO and Wellington Management to questions posed to them on behalf of each Fund.
The Boards, including the Independent Directors, are responsible for selecting the Funds' investment manager, approving the investment manager's selection of Fund sub-advisers and supportingapproving each Company's investment management and sub-advisory agreements, their periodic continuation and any amendments. The
Boards considered such information as they deemed reasonably necessary to evaluate the New Agreement, which included information furnished to the Boards at their meetings throughout the year, as well as information specifically prepared in connection with the approval of the New Agreement. Information provided to the Boards at their meetings throughout the year included, among other things, reports on Fund performance, legal and compliance matters, sales and marketing activity, shareholder services, and the other services provided to each Fund by HFMC and its affiliates. The Boards also considered the materials relating to those questions and responses. In addition, the Board received an in-person presentation frompresentations by Fund officers and representatives of HIFSCO aboutHFMC received at the proposal to replace Hartford Investment Management Company ("Hartford Investment Management"), the Funds' former sub-adviser, with Wellington Management. The Board's Investment Committee also met in person with members of the proposed portfolio management teams for the Funds regarding the capabilities of Wellington ManagementBoards' meetings on June 16-17, 2015 and the associated benefits to the Funds and their shareholders. In addition, the Board had previously received information with respect to Wellington ManagementAugust 4-5, 2015 in connection with Wellington Management's re-approval on August 2-3, 2011 as the sub-adviser to certain other Hartford Funds and in connection with the Board'stheir annual approval of Wellington Management as the sub-adviser to certain additional Hartford Funds at other recent meetings.continuation of the Current Agreements.
In determining whether to approve the OriginalNew Agreement for the Funds, the members of the BoardBoards reviewed and evaluated information and factors they believed to be relevant and appropriate in light of the information that the BoardBoards deemed necessary and appropriate through the exercise of itstheir reasonable business judgment. While individual members of the BoardBoards may have weighed certain factors differently, the Board'sBoards' determination to approve the OriginalNew Agreement was based on a comprehensive consideration of all information provided to the BoardBoards throughout the year and specifically with respect to the approval of the OriginalNew Agreement. A more detailed discussion of the factors the Board considered with respect to its approval of the OriginalNew Agreement is provided below. The Boards are furnished with an analysis of their fiduciary obligations in connection with their evaluation and, throughout the evaluation process, the Boards are assisted by counsel for the Funds, and the Independent Directors are also separately assisted by independent legal counsel. A discussion of the factors considered by the Boards is provided below.
Nature, Extent and Quality of Services to be Provided by Wellington ManagementHFMC
The Board requested andBoards considered information concerning the nature, extent and quality of the services that the investment manager would continue to be providedprovide to each Fund by Wellington Management. The BoardFund. In this regard, the Boards considered, among other things, the terms of the OriginalNew Agreement and the range of services to be provided, and Wellington Management's organizational structure, systems and personnel. The Board also considered Wellington Management's reputation and overall financial strength, and the Board's past experience with Wellington Management as sub-adviser for other Hartford-sponsored funds. The Board considered the terms of the "preferred partnership" arrangement pursuant to which Wellington Management would serve as the preferred sub-adviser to the Hartford Funds, including the benefits of the arrangement for the Funds and other Hartford Funds.
With respect to Wellington Management's asset allocation capabilities, the Board considered that HIFSCO believed that Wellington Management is a high quality manager with greater depth and breadth relative to Hartford Investment Management and other peer advisory firms and that Wellington Management has strong investment capabilities with expertise across various investment disciplines. The Board also considered Wellington Management's global capabilities across various asset classes, including the number and geographic locations of Wellington Management's investment personnel. The Board noted that Wellington Management is focused entirely on third-party asset management, and that Wellington Management has experience managing assets for a diverse set of clients, including asset allocation portfolios, with different objectives and guidelines. In addition, the Board considered Wellington Management's risk-balanced approach to construction of target risk asset allocation funds that are designed to provide diversification across different market environments.
With respect to the day-to-day portfolio management services to be provided by Wellington Management, the Board considered the Investment Committee's meeting with membersHFMC thereunder, including HFMC's oversight of the proposed portfolio management teams,fund operations and Wellington Management'sservice providers, and provision of administrative and investment philosophy and process, investment research capabilities and resources, performance record, trade execution capabilities and experience. The Board also considered the experience of the proposed portfolio management teams. The Board considered that,advisory services in connection with the sub-adviser change, HIFSCOselecting, monitoring and Wellington Management proposed certain changes tosupervising the Funds' principal investment strategies, to take effect on the date that Wellington Management began sub-advising the Fund.
sub-adviser. The Board also considered information previously provided by HIFSCO and Wellington Management regarding Wellington Management's compliance policies and procedures and compliance history, and received a representation from HIFSCO that the written compliance policies and procedures of Wellington Management are reasonably designed to prevent violations of the federal securities laws.
In considering this information, the Board evaluated not only the information presented to the Board and the Investment Committee in connection with its
consideration of each Original Agreement, but also the Board's experience through past interactions with Wellington Management. Based on these considerations, the BoardBoards concluded that it wasthey were satisfied with the nature, extent and quality of the services that HFMC would continue to be providedprovide to the Funds by Wellington Management.each Fund.
Performance of Wellington Managementeach Fund and HFMC
The BoardBoards considered the investment performance of Wellington Management, including, for purposes of consideringeach Fund and its investment manager and sub-adviser, if applicable. They considered the detailed investment skill and experience ofanalytics reports provided by Hartford Funds' Investment Advisory Group throughout the proposed portfolio management teams, the performance of the Wellington Management composite for accounts with investment objectives, policies and principal investment strategies comparable to one or more components ofyear. These reports include, among other things, information on each Fund's principalgross and net returns, the Fund's investment strategy. HIFSCOperformance relative to an appropriate benchmark and Wellington Management also provided additional information aboutpeer group, various statistics concerning the broad rangeFund's
portfolio, and a narrative summary of the portfolio management teams' investment experience and their investment philosophies and processes.
Based on these considerations, the Boardvarious factors affecting Fund performance. The Boards concluded that it was satisfied that Wellington Management has the capability of providing satisfactory investment performance forthey had continued confidence in HFMC's overall capabilities to manage the Funds.
Costs of the Services and Profitability of HIFSCO and Wellington ManagementHFMC
The Board reviewedBoards considered the information that had been provided at meetings on June 16-17, 2015 and August 4-5, 2015 regarding HIFSCO's cost to provide investment management and relatedthe costs of the services to the Fundsprovided and the estimated profitability to HIFSCOprofits realized by the investment manager and its affiliates from all servicesthe investment manager's relationship with the Companies. They also considered the updated information provided toat the November 4-5, 2015 meeting. They noted that the New Agreement would not result in an increase in the overall fees paid by the Funds, and all aspects of their relationships with the Funds both under the sub-advisory arrangement with Hartford Investment Management and assuming implementation of the Original Agreement with Wellington Management. The Board also requested and received information relating to the operations and profitability of Wellington Management.
Based on these considerations, the Board concluded that the profits anticipated to be realized by HIFSCO, Wellington ManagementHFMC and theirits affiliates from their relationships with the Funds would not be excessive.
Comparison of Fees and Services Provided by HFMC
In consideringThe Boards considered the sub-advisory fee schedule to be paid to Wellington Management by HIFSCO in respect of the Funds, the Board considered comparative information regardingthat had been provided at meetings on June 16-17, 2015 and August 4-5, 2015 with respect to the sub-advisoryservices rendered to and the management fees to be paid by HIFSCOeach Fund to Wellington Management. The Board also considered information provided by Wellington Management toHFMC and the Investment Committeetotal expense ratios of the Board about the quality of services to be performed for the Funds and Wellington Management's investment philosophy. In addition, the Board considered HIFSCO's representation that it had negotiated Wellington Management's fees at arm's length.
Fund. The Board considered that, in connection with the sub-adviser change, HIFSCO proposed to add additional breakpoints to The Hartford Conservative Allocation Fund's contractual management fee schedule with HIFSCO that would result in management fee reductions at certain asset levels. The Board noted that HIFSCO, not the Funds, would pay the sub-advisory fees to Wellington Management.
Based on these considerations, the BoardBoards concluded that each Fund's proposed sub-advisory fees and total operating expenses, in conjunction with the information about quality of services, profitability, economies of scale, and other matters discussed at the meetings on June 16-17, 2015, August 4-5, 2015 and November 4-5, 2015, were reasonable in light of the services provided under the Current Agreements and to be provided.provided under the New Agreement.
Economies of Scale
The BoardBoards considered information that had been provided at meetings on June 16-17, 2015 and August 4-5, 2015 regarding the extent to which economies of scale would be realized as eacha Fund grows and whether the fee levels reflect these economies of scale for the benefit of each Fund's shareholders.shareholders of the Fund. The Board reviewedBoards noted that the breakpointsNew Agreement would not result in any change in the management fee scheduleschedules for each Fund, which reduce fee rates as Fund assets grow over time. The Board considered that, in connection with the sub-adviser change, HIFSCO proposed to add additional breakpoints to The Hartford Conservative Allocation Fund's contractual management fee schedule with HIFSCO that would result in management fee reductions at certain asset levels.
Based on these considerations, the BoardFunds, and they concluded that it wasthey were satisfied with the extent to which economies of scale would be shared for the benefit of each Fund's shareholders based on currently available information and the effective advisory fees and expense ratios for eachthe Fund at its current and reasonably anticipated asset levels. The Board noted, however, that it would review future growth in Fund assets and the appropriateness of the breakpoints as part of its future annual review of the Original Agreement and the investment management agreement between the Funds and HIFSCO.
Other Benefits
The BoardBoards considered information that had been provided at meetings on June 16-17, 2015 and August 4-5, 2015 with respect to the other benefits to Wellington ManagementHFMC and its affiliates from their relationships with the Funds. The Board also considered the benefits, if any,Funds, including fees for fund accounting services performed by HFMC, fees for transfer agency services performed by HASCO, and distribution fees paid to Wellington Management from any use of the Funds' brokerage commissions to obtain soft dollar research, and representations from HIFSCO and Wellington Management that Wellington Management would not make any revenue-sharing payments or any other type of distribution payments to HIFSCO or its affiliates.HFD.
Based upon itstheir review of these various factors, among others, the BoardBoards unanimously approved the New Agreement at a meeting held on November 4-5, 2015,
and the Boards concluded that it waswould be in the best interests of each Fund and its shareholders for the Boardshareholders to approve the OriginalNew Agreement. In reaching this decision,
As described further below in Proposal 6, the Board did not assign relative weightsCompanies have received an order from the U.S. Securities and Exchange Commission ("SEC") that permits HFMC, for certain Funds and from time to time, without the factors discussed above or deem any one or group of them to be controlling inexpense and of themselves. In connection with its deliberations, the Independent Directors met separately in executive session, with independent legal counsel, to review the relevant materials and consider their responsibilities under relevant laws and regulations.
Approval of the Agreement
In connectiondelays associated with a corporate restructuring plan (the "Restructuring"Company's obtaining shareholder approval, to enter into and change the terms (including sub-advisory fees) of sub-advisory agreements with sub-advisers that are not affiliates of HFMC. HFMC currently employs Wellington Management Company LLP ("Wellington Management"), at its meeting held on November 8, 2012, the Board voted to terminate the Original Agreement between HIFSCOa registered investment adviser, as sub-adviser for each Fund other than The Hartford Growth Allocation Fund, The Hartford Checks and Balances Fund, The Hartford Conservative Allocation Fund and Hartford Moderate Allocation Fund, and Wellington Management and approve the Agreement between HFMC, an affiliate of HIFSCO, and Wellington Management
with respectManagement's service as sub-adviser to the Funds. The replacement of HIFSCO with HFMC did not result in any changethese Funds is expected to the contractual terms of the Funds' investment management agreements or the day-to-day management of the Funds, and no shareholder vote was required.
Prior to the November 8, 2012 meeting, the Board received and reviewed written materials regarding the Restructuring, which contemplated that HFMC replace HIFSCO as investment manager to the Funds. The Board considered information furnished to the Board at its meetings throughout the year, as well as information specifically prepared in connection with the Restructuring and thecontinue following approval of the Agreement atNew Agreement.
Additional Information
For additional information about HFMC, the Board's meeting held on November 8, 2012. In addition, the Board received in-person presentations by the Funds' officers and representatives of HIFSCO and HFMC at the Board's meeting on November 8, 2012 concerning the Restructuring and the Agreement.
In determining to approve the Agreement for each Fund, the members of the Board reviewed and evaluated information and factors they believed to be relevant and appropriate in light of the information that the Board deemed necessary and appropriate through the exercise of its reasonable business judgment. While individual members of the Board may have weighed certain factors differently, the Board's determination to approve the Agreement was based on a comprehensive consideration of all information provided to the Board throughout the year and specifically with respect to the Restructuring and the approval of the Agreement.
Specifically, the Board considered that the Restructuring was solely organizational in nature and was unrelated to the actual management of the Funds and the performanceamounts of investment management personnelfees paid to the Funds. The Board also considered that the Restructuring and the Agreement would involve no changes to (i) the contractual terms of, including the sub-advisory fees payable under, each Fund's investment sub-advisory agreement; (ii) the investment processes and strategies employed in the management of each Fund's assets; (iii) the nature and level of services provided under each Fund's investment sub-advisory agreement; and (iv) the day-to-day management of each Fund and the individuals primarily responsible for that management.
Based upon its review of these various factors, among others, the Board concluded that it is in the best interests of each Fund and its shareholders for the Board to approve the Agreement. In reaching this decision, the Board did not assign relative weights to the factors discussed above or deem any one or group of them to be controlling in and of themselves. In connection with their deliberations, the Independent Directors met separately in executive session, with independent legal counsel, to review the relevant materials and consider their responsibilities under relevant laws and regulations.
Approval of the Continuation of the Agreement
At its meeting held on August 6-7, 2013, the Board, including each of the Independent Directors, unanimously voted to approve the continuation of the
Agreement on behalf of each of the Funds, between HFMC and Wellington Management.
In the months preceding the August 6-7, 2013 meeting, the Board requested, received, and reviewed written responses from HFMC and Wellington Management to questions posed to them on behalf of the Independent Directors and supporting materials relating to those questions and responses. The Board considered information furnished to the Board at its meetings throughout the year, as well as information specifically prepared in connection with the annual approval of the Agreement at the Board's meetings held on June 18-19, 2013 and August 6-7, 2013. Information provided to the Board at its meetings throughout the year included, among other things, reports on Fund performance, legal and compliance matters, sales and marketing activity, shareholder services, and the other services provided to each Fund by HFMC and Wellington Management and their affiliates. The Board also received in-person presentations by Fund officers and representatives of HFMC at the Board's meetings on June 18-19, 2013 and August 6-7, 2013 concerning the Agreement.
The Independent Directors, advised by independent legal counsel, engaged two service providers to assist them with evaluating the Agreement with respect to each Fund. Lipper Inc.Fund for the fiscal year ended October 31, 2015, and "Other Fee Payments," see Appendix E hereto ("Lipper"), an independent provider of investment company data, was retained to provide the Board with reports on how each Fund's non-management fees, overall expense ratios and investment performance compared to those of mutual funds with similar investment objectives. The Independent Directors also engaged an independent financial services consulting firm (the "Consultant") to assist them in evaluating each Fund's non-management fees, overall expense ratios and investment performance.
In determining whether to continue the Agreement, the members of the Board reviewed and evaluated information and factors they believed to be relevant and appropriate in light of the information that the Board deemed necessary and appropriate through the exercise of its reasonable business judgment. While individual members of the Board may have weighed certain factors differently, the Board's determination to continue the Agreement was based on a comprehensive consideration of all information provided to the Board throughout the year and specifically with respect to the continuation of the Agreement. A more detailed discussion of the factors the Board considered with respect to its approval of the Agreement is provided below.
Nature, Extent, and Quality of Services Provided by Wellington Management
The Board requested and considered information concerning the nature, extent, and quality of the services provided to each Fund by Wellington Management. The Board considered, among other things, the terms of the AgreementAdditional Information about HFMC and the range of services provided by Wellington Management. The Board considered Wellington Management's professional personnel who provide services to each Fund, including Wellington Management's ability and experience in attracting and retaining qualified personnel to service the Funds. The Board considered Wellington
Management's reputation and overall financial strength, as well as its willingness to consider and implement organizational and operational changes designed to improve services to each Fund. In addition, the Board considered the quality of Wellington Management's communications with the Board and responsiveness to Board inquiries.
The Board also requested and evaluated information concerning Wellington Management's regulatory and compliance environment. In this regard, the Board requested and reviewed information on Wellington Management's compliance policies and procedures, compliance history, and a report from the Funds' Chief Compliance Officer on Wellington Management's compliance with applicable laws and regulations, including responses to regulatory developments and compliance issues raised by regulators. The Board also noted Wellington Management's support of each Fund's compliance control structure, particularly the resources devoted by Wellington Management in support of the Funds' obligations pursuant to Rule 38a-1 under the 1940 Act.
With respect to the day-to-day portfolio management services provided by Wellington Management, the Board considered the quality of each Fund's portfolio managers, Wellington Management's other investment personnel, its investment philosophy and process, investment research capabilities and resources, performance record, trade execution capabilities and experience. The Board considered the experience of each Fund's portfolio managers, the number of accounts managed by the portfolio managers, and Wellington Management's method for compensating the portfolio managers.
Based on these considerations, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Funds by Wellington Management.
Performance of the Funds and Wellington Management
The Board considered the investment performance of each Fund. In this regard, the Board reviewed the performance of each Fund over different time periods presented in the materials and evaluated HFMC's analysis of each Fund's performance for these time periods. The Board considered information and materials provided to the Board by HFMC and Wellington Management concerning Fund performance, as well as information from Lipper comparing the investment performance of each Fund to an appropriate benchmark and universe of peer funds.
The Board considered the detailed investment analytics reports provided by Hartford Funds' Investment Advisory Group throughout the year. These reports include, among other things, information on each Fund's gross and net returns, each Fund's investment performance relative to an appropriate benchmark and peer group, various statistics concerning each Fund's portfolio, and a narrative summary of various factors affecting Fund performance. The Board considered Wellington Management's cooperation with the Investment Committee, which assists the Board in evaluating the performance of the Funds at periodic meetings throughout the year.
The Board also considered the analysis provided by the Consultant relating to each Fund's performance track record.
In light of all the considerations noted above, the Board concluded that it had continued confidence in Wellington Management's overall capabilities to manage each Fund.
Costs of the Services and Profitability
The Board requested and received information relating to the operations and profitability of Wellington Management. The Board concluded that the profits anticipated to be realized by Wellington Management from its relationship with the Funds would not be excessive.
Comparison of Fees and Services Provided by Wellington Management
The Board considered comparative information with respect to the sub-advisory fees to be paid by HFMC to Wellington Management. In this regard, the Board requested and reviewed information from HFMC and Wellington Management relating to the sub-advisory fees, including the sub-advisory fee schedule for each Fund. With respect to the sub-advisory fee schedule, the Board considered representations from HFMC and Wellington Management that Wellington Management's fees were negotiated at arm's length.
Based on these considerations, the Board concluded that Wellington Management's fees, in conjunction with the information about quality of services, profitability, and other matters discussed, were reasonable in light of the services provided.
Economies of Scale
After considering all of the information available to it, the Board concluded that it was satisfied with the extent to which economies of scale would be shared for the benefit of each Fund's shareholders.
Other Benefits
The Board considered the benefits, if any, to Wellington Management from any use of the Funds' brokerage commissions to obtain soft dollar research, and representations from HFMC and Wellington Management that Wellington Management would not make any revenue-sharing payments or any other type of distribution payments to HFMC or its affiliates.
Based upon its review of these various factors, among others, the Board concluded that it is in the best interests of each Fund and its shareholders for the Board to approve the Agreement for an additional year. In reaching this decision, the Board did not assign relative weights to the factors discussed above or deem any one or group of them to be controlling in and of themselves. In connection with their deliberations, the Independent Directors met separately in executive session on several occasions, with independent legal counsel and the Consultant, to review the
relevant materials and consider their responsibilities under relevant laws and regulations.
At the special meeting held on December 13, 2013, the Board determined that it was appropriate for Wellington Management to continue to serve as sub-adviser to the Funds, and concluded that the ratification and approval of the Agreement by shareholders would be in the best interests of each Fund and its shareholders.
In the event that shareholders do not approve Proposal 1, the Board will determine the appropriate course of action with respect to the management of the Funds.New Agreement").
REQUIRED VOTE
ApprovalFor each Fund, approval of the Agreement by each Fund's shareholdersthis Proposal requires an affirmative vote of the lesser ofof: (i) 67% or more of suchthe Fund's shares present at the Meeting, if the holders of more than 50% of the outstanding shares of the Fund are present or represented by proxy; or (ii) more than 50% of the outstanding shares of the Fund. If the shareholders of a particular Fund do not approve this Proposal, the New Agreement will not take effect, and the Current Agreement will continue in effect as to that Fund.
The Boards unanimously recommend that you vote "FOR" Proposal 2.
PROPOSAL 3
APPROVAL OF A CHANGE TO EACH FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION ON THE PURCHASE OR SALE OF
COMMODITIES
At the Meeting, shareholders will be asked to approve a change to each Fund's fundamental investment restriction on the purchase or sale of commodities.
The 1940 Act requires mutual funds, such as the Funds, to establish and disclose in their registration statements certain "fundamental" investment policies that can only be changed by shareholder vote, including a policy that restricts a fund's ability to purchase or sell commodities.
The current restriction states that the Funds will not purchase or sell commodities or commodities contracts, except that the Funds may purchase or sell financial futures contracts, options on financial futures contracts and futures contracts, forward contracts, and options with respect to foreign currencies, and may enter into swap transactions or other financial transactions of any kind. Certain Funds (Hartford Duration-Hedged Strategic Income Fund, The Hartford Emerging Markets Local Debt Fund, Hartford Emerging Markets Equity Fund, The Hartford Global All-Asset Fund, The Hartford Global Alpha Fund, The Hartford Global Real Asset Fund, Hartford Long/Short Global Equity Fund, Hartford Multi-Asset Income Fund, The Hartford Quality Bond Fund, Hartford Real Total Return Fund, and The Hartford World Bond Fund) have adopted a more flexible restriction, which allows these Funds to purchase or sell commodities or commodities contracts to the extent permitted by applicable law and as set forth in each Fund's registration statement.
The proposed investment restriction on the purchase or sale of commodities would permit each Fund to purchase and sell commodities to the extent permitted under the 1940 Act and other applicable laws, rules and regulations, and interpretations (which would include, among other things, any changes to the rules and regulations administered by the Commodity Futures Trading Commission and the National Futures Association).
The proposed investment restriction would not be materially different for those Funds described above that currently are able to purchase or sell commodities or commodities contracts to the extent permitted by applicable law and as set forth in each Fund's registration statement. Shareholders of those Funds are, nonetheless, being asked to approve Proposal 3 so that, if approved, the fundamental investment restrictions for all the Funds will have identical language. For the other Funds, the proposed investment restriction would grant the ability to invest in commodities other than those specifically outlined in their current investment restriction, to the extent consistent with applicable laws, rules and regulations, and interpretations.
The Boards propose the following revisions with respect to the fundamental investment restriction on the purchase or sale of commodities by each Fund:
Current Investment Restriction on the Purchase or Sale of Commodities | Proposed Investment Restriction on the Purchase or Sale of Commodities | ||||||
Each Fund (except for Duration-Hedged Strategic Income Fund, Emerging Markets Local Debt Fund, Emerging Markets Equity Fund, Global All-Asset Fund, Global Alpha Fund, Global Real Asset Fund, Long/Short Global Equity Fund, Multi-Asset Income Fund, Quality Bond Fund, Real Total Return Fund, and World Bond Fund) will not purchase or sell commodities or commodities contracts, except that the Fund may purchase or sell financial futures contracts, options on financial futures contracts and futures contracts, forward contracts, and options with respect to foreign currencies, and may enter into swap transactions or other financial transactions of any kind. Duration-Hedged Strategic Income Fund, Emerging Markets Local Debt Fund, Emerging Markets Equity Fund, Global All-Asset Fund, Global Alpha Fund, Global Real Asset Fund, Long/Short Global Equity Fund, Multi-Asset Income Fund, Quality Bond Fund, Real Total Return Fund, and World Bond Fund will not purchase or sell commodities or commodities contracts, except to the extent permitted by applicable law and as set forth in each Fund's prospectus and SAI. | Each Fund will not invest in physical commodities or contracts relating to physical commodities, except to the extent permitted under the 1940 Act and other applicable laws, rules and regulations, as such may be interpreted or modified by regulatory authorities having jurisdiction, from time to time and as set forth in each Fund's prospectus and SAI. |
REQUIRED VOTE
For each Fund, approval of this Proposal requires an affirmative vote of the lesser of: (i) 67% or more of the Fund's shares present at the Meeting, if the holders of more than 50% of the outstanding shares of such Fund are present or represented by proxy,proxy; or (ii) more than 50% of the outstanding shares of suchthe Fund. If the shareholders of a particular Fund do not approve this Proposal, the Proposal will not take effect with respect to that Fund, and it will retain its current fundamental investment restriction on the purchase or sale of commodities.
The BoardBoards unanimously recommendsrecommend that you vote "FOR" Proposal 1.3.
PROPOSAL 24
APPROVAL OF A CHANGE TO EACH FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION ON THE RETENTIONPURCHASE OR SALE OF FEES PAID AND THE PAYMENT OF FEES PAYABLE BY HFMC TO WELLINGTON MANAGEMENT FOR ITS SUB-ADVISORY SERVICES TO THE FUNDS
REAL ESTATE
At the Meeting, shareholders will be asked to approve a change to each Fund's fundamental investment restriction on the purchase or sale of real estate.
The Board is proposing that shareholders of1940 Act requires mutual funds, such as the Funds, approveto establish and disclose in their registration statements certain "fundamental" investment policies that can only be changed by shareholder vote, including a policy that restricts a fund's ability to purchase or sell real estate.
The current restriction states that the retentionFunds will not purchase or sell real estate unless acquired as a result of fees paidownership of securities or other instruments, although each Fund may purchase securities secured by real estate or interests therein, or securities issued by companies which invest in real estate or interests therein. The proposed investment restriction on the purchase or sale of real estate would permit each Fund to purchase or sell real estate to the extent permitted under the 1940 Act and the paymentrules and regulations and interpretations thereunder.
The purpose of fees payable by HIFSCO, the Funds' former investment manager and an affiliate of HFMC, and HFMC (as applicable) to Wellington Management for its sub-advisory services to the Funds for the period from JuneProposal 4 2012 through the date that shareholders approve the Agreement as contemplated in Proposal 1 (the "Engagement Period"). As discussed in Proposal 1, Wellington Management has continuedis to provide the Funds with uninterruptedgreater flexibility to take advantage of permissible investment sub-advisory services. These services include, but are not limited to, makingopportunities. HFMC and the daily decisions regarding buyingBoards believe that revising the investment restriction on the purchase and selling specific securities forsale of real estate is appropriate and in the best interest of each Fund and managing the investments held by each Fund accordingits shareholders. Approval of Proposal 4 will provide HFMC, subject to its investment goals and strategies. During the Engagement Period, HIFSCO and HFMC have each compensated Wellington Management for these services. Until recently,Board supervision, with greater flexibility to manage the Funds in a manner consistent with the Board, HFMC, and Wellington Management were unawarestated investment objectives of any questions relating toeach Fund.
The Boards propose the ability to enter into the Original Agreement and the Agreement without prior shareholder approval. As described abovefollowing revisions with respect to Proposal 1, however, the Review raised a question whether the Funds' sole initial shareholder consented to reliancefundamental investment restriction on the Order, and indicated that the Funds' reliance on the Order had not been consistently disclosed in the Funds' prospectuses.
For the period from the startpurchase or sale of the Engagement Period through September 30, 2013, HIFSCO and HFMC have paid Wellington Management $281,276.45 and $364,616.71, respectively. The fees paidreal estate by the Funds were not affected because HFMC pays sub-advisory fees to Wellington Management from its advisory fees.each Fund:
At a special meeting of the Board
Current Investment Restriction on
| Proposed Investment Restriction on the Purchase or Sale of Real Estate | ||||||
Each Fund will not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments, although it may purchase securities secured by real estate or interests therein, or securities issued by companies which invest in real estate or interests therein. | Each Fund will not purchase or sell real estate, except to the extent permitted under the 1940 Act and the rules and regulations thereunder, as such may be interpreted or modified from time to time by regulatory authorities having appropriate jurisdiction. |
nature and quality of the services Wellington Management has performed for the Funds since it began managing the Funds in 2012. The Board also considered that:
i. The 1940 Act permits a court to enforce a contract that otherwise violates the 1940 Act or the rules thereunder should the court determine that such enforcement would produce a more equitable result than non-enforcement and would not be inconsistent with the underlying purposes of the 1940 Act;
ii. Should Board or shareholder approval be withheld, Wellington Management could seek to retain some or all of these payments (and be paid some or all of the unpaid amounts) through legal action on the grounds that it would be unjust to withhold payments for services rendered under the Original Agreement or the Agreement;
iii. The Funds and their shareholders have experienced no economic harm during the Engagement Period, and the amounts that were paid were no more than what HIFSCO and HFMC contracted for with Wellington Management;
iv. HFMC has agreed to pay the costs of the Meeting as well as any legal fees that might arise; and,
v. The Board had intended to properly approve the Original Agreement and the Agreement and for Wellington Management to continue to provide services to the Funds.
In the event that shareholders do not approve Proposal 2, the Board will determine the appropriate course of action with respect to the treatment of fees paid by HIFSCO and HFMC to Wellington Management during the Engagement Period.
REQUIRED VOTE
ApprovalFor each Fund, approval of the retention of fees paid and the payment of fees payable by HFMC to Wellington for its sub-advisory services to the Funds by each Fund's shareholdersthis Proposal requires an affirmative vote of the lesser of (i) 67% or more of suchthe Fund's shares present at the Meeting, if the holders of more than 50% of the outstanding shares of such Fund are present or represented by proxy,proxy; or (ii) more than 50% of the outstanding shares of suchthe Fund. If the shareholders of a particular Fund do not approve this Proposal, the Proposal will not take effect with respect to that Fund, and it will retain its current fundamental investment restriction on the purchase or sale of real estate.
The BoardBoards unanimously recommendsrecommend that you vote "FOR" Proposal 2.4.
PROPOSAL 35
AUTHORIZATIONAPPROVAL OF A CHANGE TO EACH FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION ON CONCENTRATION
At the Meeting, shareholders will be asked to approve a change to each Fund's fundamental investment restriction on concentration of investments in a particular industry or group of industries.
The 1940 Act requires mutual funds, such as the Funds, to establish and disclose in their registration statements certain "fundamental" investment policies that can only be changed by shareholder vote, including a policy that restricts a fund's ability to "concentrate" its investments in a particular industry or group of industries. The current fundamental investment restriction for the Funds refers to the SEC's interpretation of the meaning of the term "concentrate," which generally involves investments of more than 25% of a fund's assets. It is proposed that the term "concentrate" be described with a reference to the 1940 Act and the rules thereunder, as they may be interpreted or modified from time to time by regulatory authorities having appropriate jurisdiction. This would allow the Funds to take advantage of any future changes in the law or interpretations of what it means for a Fund to concentrate its investments in an industry or group of industries. The proposed new restriction also would clarify that each Fund is permitted to invest more than 25% of its total assets in another fund, including a Hartford Fund (each an "Underlying Fund"), and that investment in excess of 25% in an Underlying Fund would not constitute "concentration" for purposes of the policy. This would permit a Fund's conversion to a fund of funds or master-feeder structure if HFMC and the Board believe such a change would be appropriate.
The Boards propose the following revisions with respect to the fundamental investment restriction on concentration of each Fund:
Current Investment Restriction on Concentration | Proposed Investment Restriction on Concentration | ||||||
Each Fund (except for Checks and Balances Fund, Conservative Allocation Fund, Duration-Hedged Strategic Income Fund, Global Real Asset Fund, Growth Allocation Fund, Healthcare Fund and Moderate Allocation Fund) will not purchase the securities or loans of any issuer or borrower (other than securities or loans issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, more than 25% of the Fund's total assets would be invested in the securities or | Each Fund will not "concentrate" its investments in a particular industry or group of industries, except as permitted under the 1940 Act, and the rules and regulations thereunder as such may be interpreted or modified from time to time by regulatory authorities having appropriate jurisdiction, except that: a) Global Real Asset Fund will normally invest at least 25% of its assets, in the aggregate, in the natural resources industry; and |
Current Investment Restriction on Concentration | Proposed Investment Restriction on Concentration | ||||||
loans of companies whose principal business activities are in the same industry. Each of Checks and Balances Fund, Conservative Allocation Fund, Duration-Hedged Strategic Income Fund, Growth Allocation Fund and Moderate Allocation Fund will not purchase the securities or loans of any issuer or borrower (other than securities or loans issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, more than 25% of the Fund's total assets would be invested in the securities or loans of companies whose principal business activities are in the same industry; except that each of such Funds may invest more than 25% of its assets in any one Underlying Fund. The Global Real Asset Fund will normally invest at least 25% of its assets, in the aggregate, in the natural resources industry. Healthcare Fund will normally invest at least 25% of its total assets, in the aggregate, in the following industries: pharmaceuticals and biotechnology, medical products and health services. With respect to Municipal Opportunities Fund, Municipal Real Return Fund, Municipal Income Fund and Municipal Short Duration Fund, (i) tax exempt securities are not subject to this limitation unless they are backed by the assets and revenues of non-governmental issuers and (ii) this limitation will not apply to tax exempt securities that have been refunded with U.S. government securities. | b) Healthcare Fund will normally invest at least 25% of its total assets, in the aggregate, in the following industries: pharmaceuticals and biotechnology, medical products and health services. |
REQUIRED VOTE
For each Fund, approval of this Proposal requires an affirmative vote of the lesser of (i) 67% or more of the Fund's shares present at the Meeting, if the holders of more than 50% of the outstanding shares of such Fund are present or represented by proxy; or (ii) more than 50% of the outstanding shares of the Fund. If the shareholders of a particular Fund do not approve this Proposal, the Proposal will not take effect with respect to that Fund, and it will retain its current fundamental investment restriction on concentration.
The Boards unanimously recommend that you vote "FOR" Proposal 5.
PROPOSAL 6
APPROVAL TO PERMIT HFMC TO SELECTENTER INTO AND/OR MATERIALLY AMEND AGREEMENTS WITH AFFILIATED AND CONTRACT WITH UNAFFILIATED
SUB-ADVISERS ON BEHALF OF EACH OF THE FUNDS WITHOUT OBTAINING SHAREHOLDER APPROVAL
The Board is proposingBackground
Under Section 15(a) of the 1940 Act, investment managers to mutual funds may not enter into a sub-advisory agreement without obtaining shareholder approval. Similarly, shareholders must approve any material amendments to an existing sub-advisory agreement between an investment manager and a sub-adviser. Mutual funds that shareholders approve the Funds' reliance on an exemptive order in connection with the Funds'operate under a "manager of managers" arrangement. The Fundsarrangement are structured differently from many other investment companies. Under a traditional investment company structure, the investment advisermanager is a single entity that employs one or more individuals internally as portfolio managers to make investment decisions. The investment manager is free to retain or terminate those portfolio managers without board or shareholder approval. InRelying on exemptive relief from the caseSEC and previous shareholder approval of the Funds, however, day-to-dayoperation of the investment decisions are not made by HFMC. Instead, HFMCcompany under this structure, the investment manager selects, supervises, evaluates and, if necessary, terminates sub-advisers that make those day-to-day investment decisions.
HFMC currently employs Wellington Management, a registered investment adviser, for each Fund. As sub-adviser, Wellington Management performs the daily managementdecisions on behalf of the assetsfunds.
The Current Manager of Managers Arrangement
With the Funds. HFMC monitors and supervises the activitiesexception of Wellington Management and any other sub-advisers, and may terminate the services of any sub-adviser at any time, subject to the notice periods set forth in the applicable sub-advisory agreement.
Under Section 15(a) of the 1940 Act, investment managers to mutual funds cannot enter into a sub-advisory agreement without obtaining shareholder approval. Similarly, shareholders must approve any material amendments to an existing sub-advisory agreement between an investment manager and a sub-adviser. The Hartford Growth Allocation Fund and The Hartford Checks and Balances Fund, the Funds have obtainedcurrently operate under a "manager of managers" structure in reliance on an exemptive order (the "Order""Existing Order") from thosegranted by the SEC and certain other requirements under the 1940 Act from the SEC.previously approved by shareholders. The Existing Order, among other things, allows HFMC to select and contract with sub-advisers that are not affiliated with the investment manager or those funds (other than by reason of serving as a sub-adviser to one or more of the funds) (each, an "Unaffiliated Sub-Adviser"), and to materially amend sub-advisory agreements with Unaffiliated Sub-Advisers, without shareholder approval. Therefore, many Hartford Funds historically have utilized both affiliated and unaffiliated sub-advisers as part of both single and multiple sub-adviser arrangements. HFMC has significant experience in overseeing sub-advisers under such arrangements, including through reliance on the Existing Order.
Pursuant to the Existing Order, HFMC currently employs Wellington Management as sub-adviser for each Fund other than The Hartford Growth Allocation Fund, The Hartford Conservative Allocation Fund, Hartford Moderate Allocation Fund and The Hartford Checks and Balances Fund. As sub-adviser, Wellington Management makes investment decisions regarding the assets of these Funds. HFMC evaluates, oversees and supervises the activities of Wellington Management and would do the same for any other sub-advisers, and may terminate the services of any sub-adviser at any time, subject to the notice periods set forth in the applicable sub-advisory agreement.
The Proposed Manager of Managers Arrangement
The Boards are proposing that shareholders approve, prospectively, a proposal to permit HFMC, in its capacity as the investment manager to a Fund and subject to Board oversight, to enter into and/or materially amend sub-advisory agreements with certain affiliated sub-advisers in addition to Unaffiliated Sub-Advisers without obtaining shareholder approval if the relevant Board concludes that it would be in the best interests of shareholders of the Fund. HFMC and the Companies have requested exemptive relief from the SEC (the "New Order") that would extend the Existing Order to allow HFMC, on behalf of the Funds (including The Hartford Growth Allocation Fund and The Hartford Checks and Balances Fund), to contract with a sub-adviser that is an indirect or direct "wholly-owned subsidiary" of HFMC, as defined in the 1940 Act, or a sister company of HFMC that is a wholly-owned subsidiary of a company that, indirectly or directly, wholly owns HFMC (each, a "Wholly-Owned Sub-Adviser").
With respect to those Funds that are currently able to rely on the Existing Order, it is anticipated that the New Order would supersede the Existing Order. If shareholders do not approve a Fund's reliance on the New Order, the Fund will continue to be required to obtain shareholder approval to enter into or materially amend sub-advisory agreements with Wholly-Owned Sub-Advisers, and the Fund would continue to rely on the Existing Order previously approved by shareholders with respect to Unaffiliated Sub-Advisers. With respect to The Hartford Growth Allocation Fund and The Hartford Checks and Balances Fund, it is anticipated that the Funds would be able to rely on the New Order. If shareholders of The Hartford Growth Allocation Fund or The Hartford Checks and Balances Fund do not approve the Fund's reliance on the New Order, the Fund will not be able to rely on any "manager of managers" exemptive relief, and will continue to be required to obtain shareholder approval to enter into or materially amend sub-advisory agreements with Unaffiliated Sub-Advisers and/or Wholly-Owned Sub-Advisers.
Implications of Approving Proposal 6
As with the Existing Order, the Funds' ability to rely on the New Order iswould be contingent on compliance with conditions set forth in the New Order, including that each Hartford FundFund: (i) receive shareholder approval to operate using a "manager of managers" structure in reliance on the New Order; (ii) hold itself out to the public as employing the "manager of managers" structure; and (iii) disclose in its prospectus the existence, substance and effect of the New Order. As described in connection with Proposal 1 above, the Review raised a question whether the Funds' sole initial shareholder consented to reliance on the Order, and indicated that the Funds' reliance on the Order had not been consistently disclosed in the Funds' prospectuses. In light of the results of the Review, HFMC and the Board are requesting that shareholders approve Proposal 3.
If shareholders approve Proposal 36 with respect to the Funds and the SEC grants the New Order, when an existing sub-advisory agreement with an Unaffiliated Sub-Adviser or a Wholly-Owned Sub-Adviser (collectively, an "Eligible Sub-Adviser") is amended in any material respect, or when a new sub-adviserEligible Sub-Adviser for a Fund is retained by HFMC, shareholders willwould not be required to approve
the amendment or new sub-advisory agreement between HFMC and that sub-adviser.Eligible Sub-Adviser. The relevant Board (including theits Independent Directors) willwould continue to approve new contracts between HFMC and a sub-adviser,an Eligible Sub-Adviser, as well as changes to
existing contracts.contracts with Eligible Sub-Advisers. The relief willwould not apply to the advisory agreementagreements between HFMC and theeach Company, and material changes to that agreement willthose agreements would continue to require approval of shareholders. In addition, HFMC will not enter into a sub-advisory agreement with a sub-adviser that is an "affiliated person," as defined in the 1940 Act, of the Company or HFMC, other than by reason of serving as a sub-adviser to one or more of the Hartford Funds (an "Affiliated Sub-Adviser"), without that sub-advisory agreement being approved by the applicable Fund's shareholders. In accordance with the conditions of the New Order, within 90 days of the hiring of any new sub-adviser,an Eligible Sub-Adviser, shareholders willwould be furnished essentially all information about the new sub-adviserEligible Sub-Adviser or sub-advisory agreement that would be included in a proxy statement. HFMC willand the applicable Company would meet this condition by providing the shareholders with an information statement meeting the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Securities Exchange Act of 1934.
If Proposal 3 is approved,Under the New Order, a Fund willwould also be permitted to disclose in its prospectus, SAI,statement of additional information, financial statements and certain other documents only (i) the aggregate fees paid to HFMC and any Affiliated Sub-AdviserWholly-Owned Sub-Advisers by that Fund; (ii) the aggregate fees paid by HFMC to the sub-advisers of that Fund, other than AffiliatedUnaffiliated Sub-Advisers; and (iii) feesthe fee paid to each sub-adviser, other than a Wholly-Owned Sub-Adviser, who is an affiliated person (as defined in section 2(a)(3) of the 1940 Act) of the Fund, the Company or HFMC, other than by HFMCreason of serving as a sub-adviser to any Affiliated Sub-Adviser.one or more Funds. Therefore, the Fund would not necessarily have to disclose separately the fees paid by HFMC to a particular sub-adviser.
Proposal 6 would not affect the amount of management fees paid by any Fund to HFMC. HFMC would continue to negotiate fees paid to any sub-adviser other than an Affiliated Sub-Adviser.for its services and would continue to pay sub-advisory fees from its own assets. In anticipation of the issuance of the New Order by the SEC, Proposal 6 seeks prospective approval of the Funds' reliance on the New Order. Proposal 6 also seeks prospective approval of the operation of the Funds in any "manager of managers" structure under any terms or conditions necessary to satisfy the conditions of any future law, regulation, or exemptive relief provided by the SEC. This prospective approval may obviate the need to obtain shareholder approval in the future to rely on any further expanded relief or changes in law or regulation that may permit the use of a "manager of managers" structure for any sub-adviser, although there can be no guarantee that the prospective approval would be sufficient to satisfy the requirements of any future authority or relief.
Board Considerations in Approving Reliance on the New Order
The Boards believe that it is in the best interests of the Funds and their shareholders to provide HFMC and the Board believe that permitting HFMCBoards with increased flexibility to select and contract with sub-advisers without incurring the significant delay and expense involvedassociated with obtaining prior shareholder approvalapproval. The Boards believe that this "manager of newmanagers" arrangement would permit the Funds to operate more efficiently and cost-effectively. Under the Existing Order, shareholders of the Funds (other than The Hartford Growth Allocation Fund and The Hartford Checks and Balances Fund) are not required to approve sub-advisory agreements or material amendments thereto with respect to existingUnaffiliated Sub-Advisers. However, the applicable Company currently must call and hold a shareholder meeting of an
affected Fund before it appoints a new Wholly-Owned Sub-Adviser or materially amends a sub-advisory agreements,agreement with a Wholly-Owned Sub-Adviser. Each time a shareholder meeting is appropriatecalled, the Company must create and indistribute proxy materials and solicit proxy votes from the best interest of each Fund's shareholders,shareholders. This process is time-consuming and will allow eachcostly, and such costs are sometimes borne by the Fund, to operate more efficiently.thereby reducing shareholders' net investment returns. While HFMC expects its relationships with the sub-advisers to the Funds to be long-term and stable over time, approval of Proposal 3 will6 (coupled with the New Order, if granted) would permit HFMC to act quickly in situations where HFMC and the BoardBoards believe that a change in certain sub-advisers or to acertain sub-advisory agreement,agreements, including any feefees paid to a sub-adviser,sub-advisers, is warranted.
REQUIRED VOTE
Authorization of the Funds' Board and HFMC to select and contract with investment sub-advisers and to materially amend investment sub-advisory agreements without obtaining theFor each Fund, approval of shareholders by each Fund's shareholdersthis Proposal requires an affirmative vote of the lesser of (i) 67% or more of suchthe Fund's shares present at the Meeting, if the holders of more than 50% of the outstanding shares of such Fund are present or represented by proxy,proxy; or (ii) more than 50% of the outstanding shares of suchthe Fund.
The BoardBoards unanimously recommendsrecommend that you vote "FOR" Proposal 3.6.
OTHER MATTERS
Management does not intend to present any business to the Meeting not mentioned in this Proxy Statement and currently knows of no other business to be presented. If any other matters are brought before the Meeting, the persons named as proxies will vote on such matters in accordance with their judgment of the best interests of the Company.
BENEFICIAL OWNERS
As of the Record Date, all directors and officers as a group owned less than 1% of the outstanding shares of each class of each Fund's shares. As of the Record Date, to the knowledge of the Company, no person owned beneficially more than 5% of the outstanding shares of any class of shares of any Fund, except as listed in Appendix D.
As of October 31, 2013, none of the Independent Directors (or their immediate family members) had share ownership in securities of the Company's investment manager or principal underwriter or in an entity controlling, controlled by or under common control with the investment manager or principal underwriter (not including registered investment companies).
FEES AND EXPENSES
During the Engagement Period, HIFSCO and HFMC (as applicable) paid sub-advisory fees to Wellington Management from their respective advisory fees. HFMC pays Wellington Management a sub-advisory fee at the following annual rates (calculated as a percentage of each Fund's average daily net assets) for Wellington Management's sub-advisory services to each Fund:
|
| ||||||
|
|
| |||||
|
|
| |||||
|
|
| |||||
|
|
| |||||
|
|
| |||||
|
|
|
As of October 31, 2013, net assets in each Fund were as follows:
Fund | Net Assets | ||||||
The Hartford Balanced Allocation Fund | $ | 785,298,900.00 | |||||
The Hartford Conservative Allocation Fund | $ | 235,302,109.85 | |||||
The Hartford Growth Allocation Fund | $ | 935,177,099.25 |
For the fiscal year ended October 31, 2013, HIFSCO and HFMC, respectively, paid Wellington Management the following aggregate amounts for Wellington Management's sub-advisory services to each Fund:
Fund | Aggregate Amount Paid by HIFSCO/HFMC | ||||||
The Hartford Balanced Allocation Fund | $ | 195,238 | |||||
The Hartford Conservative Allocation Fund | $ | 77,082 | |||||
The Hartford Growth Allocation Fund | $ | 214,170 |
HFMC will pay all expenses relating to this Notice and Proxy Statement and the Meeting, including the printing, mailing, solicitation and vote tabulation expenses and out-of-pocket expenses.discretion.
OTHER SERVICE PROVIDERS
The following companies also provide services to the Funds and will continue to do so whether or not Fund shareholders approve the Proposals. HFMC serves as the Funds' investment manager and also provides fund accounting and administration services to each Fund. Prior to January 1, 2013, fund accounting services were provided by Hartford Life Insurance Company. Hartford Funds Distributors, LLC ("HFD"), formerly Hartford Investment Financial Services, LLC,HFD serves as the Funds' principal underwriter. As underwriter, HFD is responsible for the sale and distribution of fund shares. HASCO performs transfer agency services for each Fund. As transfer agent, HASCO, among other things, receives and processes purchase and redemption orders, effects transfers of shares, prepares and transmits payments for dividends and distributions, and maintains records of account. The principal business address for HFMC, HFD, and HFDHASCO is 5 Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087. Hartford Administrative Services Company ("HASCO") performs transfer agency services for each Fund. HASCO issues and redeems shares of each Fund and disburses any dividends declared by such Fund.
PORTFOLIO TRANSACTIONS AND BROKERAGE
For the fiscal year ended October 31, 2013,2015, the Funds did not pay brokerage commissions to any affiliate of HFMC or Wellington Management.
SHAREHOLDER MAILINGS
To help lower the impact of operating costs, each Fund attempts to eliminate mailing duplicate documents to the same address. When two or more Fund shareholders have the same last name and address, the applicable Fund may send only one prospectus, annual report, semi-annual report, general information statement or proxy to that address, rather than mailing separate documents to each shareholder. Shareholders may opt out of this single mailing at any time by calling the applicable Fund at 1-888-843-7824 or writing to the applicable Fund at Hartford Funds, P.O. Box 64387, St. Paul, Minnesota 55164-0387 (for requests sent prior to March 1, 2014) or Hartford Funds, P.O. Box 55022, Boston, Massachusetts 02205-5022, (effective March 1, 2014), and requesting additional
copies of Fund documents. Shareholders sharing a single mailing address who are currently receiving multiple copies of Fund documents can request delivery of a single copy instead by calling the same telephone number or writing to the same address.
A copy of the Company'sCompanies' most recent annual report,reports, or a copy of the prospectusprospectuses or proxy, is available upon request, and without charge.
If you would likePlease go to www.2voteproxy.com/hmf or www.hartfordfunds.com/HMFproxy to view a copythe proxy statement on the internet pleaseor call 1-855-520-7708 and a copy will be sent without charge. Please go to www.proxyvote.com. Alternatively, if you would likewww.hartfordfunds.com to receive a copy, pleaseview the Companies' annual reports or prospectuses on the internet or contact the applicable Fund at Hartford Funds, P.O. Box 64387, St. Paul, Minnesota 55164-0387 (for requests sent prior to March 1, 2014) or Hartford Funds, P.O. Box 55022, Boston, Massachusetts 02205-5022 (effective March 1, 2014) or
call 1-888-843-7824 and a copy will be sent without charge by first class mail within three business days of your request.
SHAREHOLDER PROPOSALS
No Fund isThe Funds are not required to hold annualshareholder meetings of shareholdersannually and none of the Funds currently intends to hold such meetings, unless shareholder action is required in accordance with the 1940 Act.Act or other applicable law. To be considered for inclusion in the proxy statement at any subsequent meeting of shareholders pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, a shareholder proposal must be submitted to the applicable Fund at the address above at a reasonable time before the proxy statement for that meeting is mailed. Whether a proposal is included in the proxy statement will be determined in accordance with applicable federal and state laws. The timely submission of a proposal does not guarantee its inclusion. As of the date of this Proxy Statement, no shareholder proposals had been submitted for this Shareholder Meeting.
Each Company's Bylaws currently provide that, in order for a shareholder to nominate a candidate for election as a director or a shareholder to propose other business to be presented at a Company's next annual meeting of shareholders, other than a stockholder proposal included in a Proxy Statement pursuant to Rule 14a-8, notice of such nomination or proposal must be delivered to the Company's Secretary at its principal executive office not earlier than 120 days prior to such annual meeting and no later than 5:00 p.m., Eastern Time, on the 90th day prior to such annual meeting, or the 10th day following the day on which public announcement is first made of the date of the annual meeting. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a shareholder's notice.
On behalf of the Board of Directors,
Edward P. Macdonald
Secretary and Chief Legal Officer
January 31, 20146, 2016
INDEX OF APPENDICES
Appendix A:A Fund Shares Outstanding
Appendix B:B Additional Information About the Companies and Independent Registered Public Accounting Firm
Beneficial Ownership of the Directors and Nominees
Management Compensation
Board Meetings, Committees and Other Related Matters
Independent Registered Public Accounting Firm
Appendix C Nominating and Governance Committee Charter
Appendix D Form of Proposed New Investment Sub-AdvisoryManagement Agreement
Appendix C: Principal Executive OfficersE Additional Information About HFMC and Directorsthe New Agreement
The Investment Manager
Management of the Investment Manager
Prior Approvals of Current Agreements
Management Fees under the Current Agreements
Other Fee Payments
Compensation Paid to HFMC by Investment Companies with Similar Investment Objectives
Appendix D:F Beneficial Owners
APPENDIX A
Fund Shares Outstanding on January 10, 2014FUND SHARES OUTSTANDING ON DECEMBER 23, 2015
The Hartford Balanced Allocation FundTHE HARTFORD MUTUAL FUNDS, INC.
Fund | Class | Shares Outstanding on Record Date | |||||||||
The Hartford Balanced Fund |
| 29,839,056.69 | |||||||||
The Hartford Balanced Fund |
| 220,264.63 | |||||||||
The Hartford Balanced Fund |
| 7,640,071.15 | |||||||||
The Hartford Balanced Fund |
| 551,356.72 | |||||||||
The Hartford Balanced Fund |
| 65,750.27 | |||||||||
The Hartford Balanced Fund |
| 28,939.77 | |||||||||
The Hartford Balanced Fund |
| 7,705.26 | |||||||||
The Hartford Balanced Fund |
| 376,592.02 | |||||||||
The Hartford Balanced Income Fund | A | 202,032,737.52 | |||||||||
The Hartford Balanced Income Fund | B | 919,159.20 | |||||||||
The Hartford Balanced Income Fund | C | 190,060,548.84 | |||||||||
The Hartford Balanced Income Fund | I | 101,300,874.61 | |||||||||
The Hartford Balanced Income Fund | R3 | 10,554,513.77 | |||||||||
The Hartford Balanced Income Fund | R4 | 5,137,613.98 | |||||||||
The Hartford Balanced Income Fund | R5 | 1,730,213.78 | |||||||||
The Hartford Balanced Income Fund | R6 | 459,330.01 | |||||||||
The Hartford Balanced Income Fund | Y | 2,529,617.98 | |||||||||
The Hartford Capital Appreciation Fund | A | 153,352,407.41 | |||||||||
The Hartford Capital Appreciation Fund | B | 5,173,518.35 | |||||||||
The Hartford Capital Appreciation Fund | C | 61,545,190.77 | |||||||||
The Hartford Capital Appreciation Fund | I | 46,313,195.45 | |||||||||
The Hartford Capital Appreciation Fund | R3 | 3,238,021.96 | |||||||||
The Hartford Capital Appreciation Fund | R4 | 4,472,107.96 | |||||||||
The Hartford Capital Appreciation Fund | R5 | 1,321,741.51 | |||||||||
The Hartford Capital Appreciation Fund | R6 | 261.57 | |||||||||
The Hartford Capital Appreciation Fund | Y | 26,907,998.84 | |||||||||
The Hartford Checks and Balances Fund | A | 147,102,413.17 | |||||||||
The Hartford Checks and Balances Fund | B | 8,245,176.84 | |||||||||
The Hartford Checks and Balances Fund | C | 35,908,565.41 | |||||||||
The Hartford Checks and Balances Fund | I | 3,785,293.51 | |||||||||
The Hartford Checks and Balances Fund | R3 | 1,366,148.89 | |||||||||
The Hartford Checks and Balances Fund | R4 | 461,603.78 | |||||||||
The Hartford Checks and Balances Fund | R5 | 546,466.30 | |||||||||
The Hartford Conservative Allocation Fund | A | 11,075,390.12 | |||||||||
The Hartford Conservative Allocation Fund | B | 312,351.55 |
|