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Research and recommendations for the serious fund investor
SM
Where to Invest in 2017 but I wouldnt make the mistake of equating foreign
with high risk and domestic with low risk. Diversifying
and Beyond by country and, to a lesser degree, currency will
reduce your risk. Russel Kinnel, Director of
Manager Research and Editor
In fact, investment management firm GMO forecasts
emerging markets will be the highest-returning Fund Reports 5
More than in past years, the future looks opaque markets over the next seven years. Its forecasts are Causeway International Value
and what is not opaque looks rather grim. On the plus after subtracting inflation, so the figures are not PIMCO Foreign Bond
T. Rowe Price Tax-Free Shrt-Interm
side, investors have enjoyed tremendous gains in quite as bad as they might first sound. However, it
recent years as equities have had one of their all-time doesnt adjust for risk. It forecasts a 4.4% real Morningstar Research 8
great runs, especially in the United States. In addition, return for emerging-markets stocks and a 1.8% real How Past Fed Rate Hikes
Affected Bond Funds
unemployment and inflation are low. return for emerging-markets debt. Emerging markets
have been some of the worst-performing regions The Contrarian 10
But given the cyclical nature of markets, the chances in recent years because of slowing growth from China Buy the Unloved
for a bear market grow the longer a rally lasts. and a decline in commodity prices. Emerging
Red Flags 11
There are signs that inflation is on the rise, and the markets might actually be cheap in a world in which
Funds Facing Succession
Federal Reserve has acted accordingly. It raised not much looks cheap. GMOs worst return fore- Challenges
rates in December and signaled it expects to raise casts are for U.S. large-cap stocks (negative 3.0%), U.S.
them three more times in 2017. That doesnt mean small caps (negative 2.3%), international bonds Market Overview 12
that markets or the economy will hit the brakes, but hedged back to the dollar (negative 3.0%), and U.S. Leaders & Laggards 13
it could signal more sobriety in the markets. bonds (negative 0.8%). Its just one forecast, of course,
but its certainly sobering. Manager Changes and News 14
The bond market has noticed the potential for even
Portfolio Matters 16
more inflation as we have an incoming government The ideas shared here are ones that are particularly Portfolio Makeover for a Couple
that seems set to cut taxes and boost spending. appealing at this time, but they are still meant to Delaying Retirement
That may make a greater headwind for stocks than be long-term investments rather than one-year bets.
Tracking Morningstar 18
the Feds hikes. Be sure to read the analysis for any fund you consider
Analyst Ratings
so that you can figure out if it suits your needs.
And there are other worries. Will we have a trade Income Strategist 20
spat or a full-blown trade war? Will OPEC succeed in So, how should you diversify? Glad you asked. Inflation Expectations in the
Bond Market
driving oil prices higher? Beats me.
Short-Term Bond Funds Changes to the 500 22
To me, the best response to uncertainty is diversifica- Short-term bond funds are all about playing
FundInvestor 500 Spotlight 23
tion. If its unclear where we are headed, I want defense. Its good to have some protection against
my eggs in a lot of baskets. I also want to be sure that rising interest rates and falling stock prices. Follow Russ on Twitter
@RussKinnel
I err on the side of caution rather than aggression, Continued on Page 2
2 Where to Invest in 2017 and Beyond
Continued From Cover
American Funds Cap World Gr&Inc CWGIX World Stock QQQQ 10.01 34 4.39 33 0.77 >$1M
Artisan Global Value ARTGX World Stock QQQQQ 11.73 11 1.26 >$1M
Baird Short-Term Bond BSBIX Short-Term Bond QQQQ 2.02 22 2.87 36 0.30 >$1M
Causeway International Value CIVVX Foreign Large Value QQQQ 6.90 18 1.39 11 1.16 >$1M
Fidelity Contrafund FCNTX Large Growth QQQQ 13.46 40 7.88 23 0.70 >$1M
Fidelity Mortgage Securities FMSFX Intermediate-Term Bond QQQ 2.39 62 3.57 78 0.45 >$1M
Fidelity New Markets Income FNMIX Emerging Markets Bond QQQQQ 6.14 7 7.26 9 0.84 $100k$500k
FMI International FMIJX Foreign Large Blend QQQQQ 11.84 1 0.94 >$1M
Matthews Asian Growth & Inc MACSX Pacific/Asia ex-Japan Stk QQQQ 5.05 50 4.75 53 1.09 $100k$500k
PRIMECAP Odyssey Growth POGRX Large Growth QQQQQ 16.36 3 8.87 8 0.65 >$1M
T. Rowe Price Intl Discovery PRIDX Foreign Sm/Mid Grwth QQQQQ 11.60 11 4.99 12 1.20 $500k$1M
T. Rowe Price Tax-Free Income Inv PRTAX Muni National Long QQQQ 3.70 52 4.16 30 0.52 $100k$500k
T. Rowe Price Tax-Free Shrt-Interm PRFSX Muni National Short QQQQ 1.06 29 2.59 21 0.49 $1$10,000
Templeton Global Bond TPINX World Bond QQQQ 4.11 13 6.54 2 0.90 >$1M
Vanguard Short-Term Invst-Grade VFSTX Short-Term Bond QQQQ 2.20 17 3.23 21 0.20 0
Vanguard Shrt-Term Infl-Prot Sec Idx VTIPX Inflation-Protected Bnd QQ 0.16 NA
Vanguard Target Retirement 2025 VTTVX Target-Date 2025 QQQQ 8.86 19 5.00 7 0.00 0
Vanguard Total Intl Stock Index VTIAX Foreign Large Blend QQQ 5.50 59 0.91 32 0.11 0
Data as of Dec. 31, 2016
Baird Short-Term Bond BSBIX (or BSBSX for the sure to put this in a tax-sheltered account as TIPS
investor share class) is a well-run cautious fund are not tax-friendly.
with a Morningstar Analyst Rating of Silver. Mary
Ellen Stanek leads a team of six managers who That leads me to Gold-rated T. Rowe Price Tax-Free
have produced consistently solid returns here with- Short-Intermediate PRFSX , which is tax-friendly.
out much risk. The fund owns a mix of corporates, Maybe the most predictable outcome from Washington
Treasuries, and mortgages. in 2017 is a tax cut for the wealthy, and that prediction
has spurred a sell-off in muni bonds, as they are priced
Silver-rated Vanguard Short-Term Investment-Grade on an aftertax basis. I am hoping thats been priced in,
VFSTX focuses on corporate bonds, which means and that would mean this fund would deliver steady, if
it is a bit more vulnerable to a credit meltdown than modest, returns.
a government fund but a little less vulnerable to
a spike in interest rates. And of course it is cheap. Foreign Equities and Bonds
If you have 80% or more of your portfolio in U.S.
Gold-rated Vanguard Short-Term Inflation-Protected securities, you probably could do with some
Securities Index VTIPX is a good way to get some foreign exposure. Foreign developed markets are no
inflation protection without much interest-rate risk. As riskier than the U.S. market, and they should
Christine Benz points out, most Treasury Inflation- reduce the overall risk of a portfolio that is heavily
Protection Securities funds have longer duration than skewed to the U.S.
this one and thus are quite vulnerable to rising
rates even though they protect against rising inflation. Foreign markets have the added appeal of having
(The two are related but not identical, and there are mostly lagged the U.S. in recent years and so may be a
times when one occurs and the other doesnt.) Just be bit cheaper. Here are four good ways to play them.
Morningstar FundInvestor January 2017 3
Smaller-cap stocks have less correlation with U.S. We recently highlighted top funds at American in
large caps because their fates are more closely tied light of their move to join No Transaction Fee
to their local economies. So, the small-cap-focused networks, and Gold-rated American Funds Capital
T. Rowe Price International Discovery PRIDX is a World Growth & Income CWGIX (or CWGFX in
good place to start even though its the most volatile NTF platforms) is one of my favorites. The strategy
of the funds in this bunch. Justin Thomson seeks is to find good values with decent yields, and it
out small companies with strong growth potential, and has done a fine job of it. As Morningstar analyst Alec
hes done a fine job of it in 18 years here. The fund Lucas points out, the least experienced of the nine
has beaten the MSCI World ex USA Small Cap bench- managers on this fund has been in the investment
mark by more than 500 basis points annualized over industry for two decades.
that time period. We give the fund a Silver rating.
Artisan Global Value ARTGX reopened to new inves-
Causeway International Value CIVVX is on the other tors in October 2015 after a down year led to outflows.
end of the Morningstar Style Box, plying a tested In the first 11 months of 2016, the fund took in $425
large-cap value strategy. The contrarian in me likes the million, so I wouldnt be surprised if it closes again in
fact that it has been out of favor the past three years 2017. Im a big fan of how well David Samra and
but still boasts a great long-term record. Usually such Dan OKeefe have executed a focused value strategy
funds come back with robust returns, and I have similar to the ones run by Oakmark (their former
faith in Sarah Ketterer and Harry Hartford to guide the home). The strategy tends to create lumpy perfor-
fund to better results. mance but strong long-term results. This fund has only
endured two years of modest underperformance
Templeton Global Bond TPINX recently joined thanks to strong stock selection and wariness of debt.
the No Transaction Fee club, and it merits a close look.
Michael Hasenstab is an aggressive investor who Emerging Markets
isnt afraid of controversy, as evidenced by bets on My emerging-markets shopping list always starts with
Brazil and Hungary. In fact, you get quite a bit of the Asian specialists at Matthews funds. They go
emerging-markets exposure here because Hasenstab deeper down the market-cap spectrum, yet tend to
thinks they have better finances and stronger run with less risk than their peers. Matthews Asian
growth potential. I wouldnt take a huge position in this Growth & Income MACSX is one of our favorites.
Gold-rated fund for that reason, but it does provide Robert Horrocks and Kenneth Lowes pursuit of
diversification and the potential for strong returns. income serves to damp risk quite nicely. They look for
dividend-paying stocks, convertibles, preferreds, and
Vanguard Total International Stock Index VTIAX is bonds. Although they cast a wide net, they typically
for the investor who likes to keep things simple. own only 50 -60 securities. The result has been market-
Low costs, broad exposure, and little change make like returns with much less volatility.
this an easy fund to hold. The fund charges only
0.11%, and its tough to beat. Fidelity New Markets Income FNMIX is a steady
hand in the rather dicey emerging-markets bond
World Stock Morningstar Category. John Carlson and his team
World-stock funds may raise your foreign exposure have delivered outstanding results through a mix
only slightly, but they are a sensible way to invest. of caution and aggression. They stick mostly to hard-
Why limit a managers investment universe? Here are currency bonds yet make contrarian moves into
two of the best funds, and they happen to have places like Brazil and Venezuela. The fund is also
recently become more accessible. attractively priced at 0.84%.
4
Data through December 31, 2016 FINRA members: For internal or institutional use only.
Morningstar Category's bottom quartile. Some of the picks even as the inevitable hiccups arise. This patience 35.84 0.60
Large 19.7 r BasicMat 7.89 0.97
issues are stock-specific; the fund's turn toward value is critical to investing in turnaround stories and has been Mid 5.9 t CnsmrCyc 9.69 0.97
fare the past few years has also hurt results, although it a big part of the fund's long-term success. Even with its Small 0.0 y FinanSvcs 17.38 0.45
should have helped in 2016. The fund has always struggles the past two years, the fund's 6.65% annualized Micro 0.0 u Real Est 0.88 0.24
straddled the value/blend border, but its overweightings return since its 2001 inception still easily eclipses the Avg $mil:
j Sensitive 43.52 1.43
in energy, materials, telecom, and banking stocks have MSCI EAFE Index's by 1.5 percentage points. 42,607
i CommSrvs 10.40 1.74
pushed it into value territory. This fund is only appropriate for those who share the Value Measures Rel Category o Energy 8.32 0.79
The fund's contrarian instincts have also created team's contrarian instincts and are comfortable with the Price/Earnings 13.91 1.02 p Industrl 14.45 1.54
some of this year's pain. Perhaps none of its contrarian attendant volatility. Price/Book 1.23 0.97 a Technlgy 10.35 2.25
bets sticks out more than tainted automaker Volkswagen Price/Sales 0.92 1.06 k Defensive 20.65 2.17
VOW. Although the team bought the position well before Price/Cash Flow 4.15 0.91
s CnsmrDef 8.12 5.17
the current emissions scandal erupted, it hasn't blinked Dividend Yield % 3.66 0.93
d Hlthcare 8.86 2.62
amid the turmoil. The team believes the market priced in Growth Measures % Rel Category f Utilities 3.67 0.80
a worse scenario than its own bear case, and the Long-Term Erngs 7.76 0.92
company owns premium brands such as Porsche and Book Value 3.98 1.58 Regional Exposure % Stock
Sales -3.98 0.96 UK/W. Europe 68 N. America 1
Address: Causeway Capital Management Trust Minimum Purchase: $5000 Add: IRA: $4000 Cash Flow 1.97 1.64 Japan 17 Latn America 0
Los Angeles CA 90025 Min Auto Inv Plan: $5000 Add: $100 Historical Erngs -7.07 4.05 Asia X Japan 15 Other 0
866-947-7000 Sales Fees: No-load, 2.00%R
Web Address: www.causewayfunds.com Management Fee: 0.80%, 0.06%A Composition - Net Country Exposure % Stock
Inception: 10-26-01 Actual Fees: Mgt:0.80% Dist: Cash 3.7 Bonds 0.0 UK 25 France 13
Advisor: Causeway Capital Management LLC Expense Projections: 3Yr:$365 5Yr:$633 10Yr:$1398
Stocks 94.4 Other 1.8 Japan 17 Germany 8
Subadvisor: None Income Distribution: Annually Switzerland 14
Foreign (% of Stock) 99.2
2017 Morningstar. All Rights Reserved. The data and analyses herein does not constitute investment advice; is provided solely for informational
purposes; is not an offer to buy/sell a security; and is not warranted to be correct, complete or accurate. Morningstar is not responsible for any trading
Mutual Funds A
decisions, damages or losses resulting from, or related to, the data and analyses or their use.
6
Data through December 31, 2016 FINRA members: For internal or institutional use only.
Corporate 5
bond peers thus far, and it gets a perennial edge on the short, the fund's performance has been solid compared
Agency MBS 0
competition from its low fees. Given the fund's underlying with similar world-bond funds that are hedged back to
1 figure provided by Non-Agency Residential MBS 1
strengths, its Morningstar Analyst Rating has been the U.S. dollar, as well as its hedged Bloomberg Barclays Commercial MBS 9
fund
upgraded to Silver from Bronze. Global Aggregate ex-U.S. Index benchmark. Sticking with 7.9 Yrs Covered Bond 0
Avg Eff Duration1
When Balls took over, two new comanagers, both stakes in poorer-performing global inflation-linked, high- Avg Eff Maturity 10.5 Yrs Asset Backed 2
longtime members of PIMCO's global fixed-income team, yield corporate, and emerging-markets bonds in 2015 Avg Credit Quality Municipal 2
were added to this fund: Sachin Gupta, a credit and helped the fund outpace all funds in this category subset Avg Wtd Coupon 3.41% Cash & Equivalents 14
interest-rate derivatives specialist, and Lorenzo Pagani, for the year to date through November 2016, as did the Avg Wtd Price Other 10
who heads up the European government-bond and rates team's solid yield-curve positioning in the U.K. and Japan.
team. The skilled trio takes cues from PIMCO's top-down Coupon Range % of Bonds Composition - Net
views in constructing the portfolio and scrutinizes relative 0% PIK 5.7 Cash -36.7 Bonds 126.5
0% to 4% 56.1 Stocks 0.4 Other 9.9
valuations to determine sector, country, and yield-curve
4% to 6% 36.7
positioning. The lion's share of the fund is typically Special Securities
6% to 8% 0.9
devoted to government debt from the eurozone, United 8% to 10% 0.5 Restricted/Illiquid Secs 7
More than 10% 0.0 Emerging-Markets Secs 0
Address: PIMCO Investments LLC distributor Minimum Purchase: $1000 Add: $50 IRA: Options/Futures/Warrants 22
New York NY 10019 Min Auto Inv Plan: Add: Credit Analysis % bonds
888-877-4626 Sales Fees: No-load AAA BB
Web Address: www.pimco.com Management Fee: 0.25%, 0.40%A AA B
Inception: 04-08-98 Actual Fees: Mgt:0.65% Dist:0.25% A Below B
Advisor: Pacific Investment Management Co LLC Expense Projections: 3Yr:$290 5Yr:$504 10Yr:$1120
BBB Not Rated
Subadvisor: None Income Distribution: Monthly
2017 Morningstar. All Rights Reserved. The data and analyses herein does not constitute investment advice; is provided solely for informational
purposes; is not an offer to buy/sell a security; and is not warranted to be correct, complete or accurate. Morningstar is not responsible for any trading
Mutual Funds D
decisions, damages or losses resulting from, or related to, the data and analyses or their use.
Morningstar FundInvestor January 2017 7
Data through December 31, 2016 FINRA members: For internal or institutional use only.
Above Avg
13.0
Growth of $10,000
Investment Values of
12.0 Fund
Morningstar Pillars Investment Values of
Process Positive 11.0 Benchmark 1
Performance Positive
10.0
People Positive
Parent Positive Performance Quartile
Price Positive * * * & * * * & & * ( (within Category)
below average price tag, earning it a Morningstar Analyst analysts to edge ahead of the pack. They consistently
Avg Credit Quality A
Rating of Gold. favor revenue bonds, such as healthcare and
Avg Wtd Coupon 4.72%
This fund's duration profile sets it apart from its peers transportation debt, over general obligations, and focus Avg Wtd Price 111.47% of par
in the muni national short Morningstar Category. Lead on finding undervalued credits among mid-quality fare. 1 figure provided by fund
manager Charlie Hill doesnt make huge interest rate bets Although the portfolios overall credit quality has
relative to the Bloomberg Barclays 1-5 Year Blend (1-6 increased since 2012, bonds rated A or BBB still made up
Credit Analysis % bonds 09-30-16 Special Securities
Year Maturity) Index benchmark. But keeping average 32% of the fund in September 2016 (compared with 24%
AAA 17 BB 1 Restricted/Illiquid Secs 0
duration within 10% of this index means that this funds of its bogy). The team largely avoids riskier parts of the AA 50 B 0 Emerging-Markets Secs 0
duration is typically at least half a year to a year longer muni market such as troubled Puerto Rico fare. A 24 Below B 0 Options/Futures/Warrants 0
than the average short muni fund. In the falling rate Hills straightforward approach usually shines in BBB 8 Not Rated 1
environment of the past two decades, thats helped boost rocky muni markets. In 2008's credit-driven bear market Sector Weightings % of Bonds
the funds returns and land it near the top echelons of its and 2013's bond market turmoil, the funds returns bested General Obligation 34.2
Top 5 States % bonds
category. The funds 2.8% annualized return over the past three fourths of its peers. At the same time, solid research Advance Refunded 5.7
NY 15.8 TX 9.7 Tobacco 1.3
15 years through October 2016 tops two thirds of its allows the team to take advantage of downturns by CA 11.2 MD 8.9
category rivals. On the other hand, the fund has offered scooping up solid credits trading at steep discounts, Education 14.5
FL 11.0 Health 11.1
a bumpier ride than most: volatility, as measured by which has helped the fund keep up with more aggressive
Housing 0.3
standard deviation, is slightly above the category average rivals in healthier markets. Composition - Net
Industrial 2.6
over the same period. Cash 3.2 Bonds 96.8 Transportation 16.0
There's more to this fund's story than its sensitivity Stocks 0.0 Other 0.0 Utilities 7.0
to interest rates, however. Hill, who has run the fund since Water & Sewer 3.9
Miscellaneous Revenue 0.0
Address: T Rowe Price Tax-free Short-Interm Fund Minimum Purchase: $2500 Add: $100 IRA: $1000
Baltimore MD 21202 Min Auto Inv Plan: $2500 Add: $100
800-638-5660 Sales Fees: No-load
Web Address: www.troweprice.com Management Fee: 0.10%
Inception: 12-23-83 Actual Fees: Mgt:0.39% Dist:0.00%
Advisor: T. Rowe Price Associates, Inc. Expense Projections: 3Yr:$157 5Yr:$274 10Yr:$616
Subadvisor: None Income Distribution: Monthly
2017 Morningstar. All Rights Reserved. The data and analyses herein does not constitute investment advice; is provided solely for informational
purposes; is not an offer to buy/sell a security; and is not warranted to be correct, complete or accurate. Morningstar is not responsible for any trading
Mutual Funds D
decisions, damages or losses resulting from, or related to, the data and analyses or their use.
8
How Bond Funds Responded to Past some of Morningstars favorite core bond funds with
Morningstar Analyst Ratings of Bronze, Silver, or Gold
Fed Rate Hikes have fared during past rising federal-funds rate cycles.
Morningstar Research | Eric Jacobson
Things actually played out better than you might think.
Take the Fed rate hikes that began in early 1994. The
Effective Fed Funds Rate (Exhibit 1) is an empirical
The Federal Reserves Federal Open Market Committee measure of the federal-funds rate, so the amounts
met on Dec. 13 and 14, with bond markets fully and timing differ a bit from the Feds so-called targeted
expecting the group to raise short-term interest rates rates, but there were a total of seven hikes of different
by 0.25% to a targeted range of 0.50% to 0.75%, amounts that brought the target federal-funds rate up
and thats exactly what it did. by a total of 300 basis points over 12 months.
The committee also signaled, however, that it antici- For those who remember the period, it likely conjures
pated raising that target three times in 2017, a recollections of disasters such as the implosion of
more aggressive pace than many observers had been Orange County, Californias investment portfolio or the
expecting. The bond market reacted by driving up 28% losses incurred by individual investors in Piper
near-term Treasury yieldsthe widely followed two- Jaffrays Institutional Government Income Portfolio.
year maturity spiked to its highest yield in several Those were outliers, though, driven by the portfolios
yearsbut, while longer-dated yields bumped around reckless use of extremely rate-sensitive mortgage
a bit, they ultimately moved little. derivatives. On the whole, though, the intermediate-
term government-bond Morningstar Category was
Although there have been times when the Feds next much more plain-vanilla. As such, it didnt experience
moves seemed pretty obvious, the past couple of anything nearly as bad: Of the five Morningstar Medal-
years have shown that, with the complexity of todays ists that were in the category at the time, four lost
global markets, its impossible to know for sure between 0.95% and 3.35%. The one exception, Fidelity
how they will react if the December rate hike is fol- Government Income FGOVX , lost 4.21% because of a
lowed by more over the next months and years, misplaced interest-rate bet, a tactic that Fidelity elimi-
which appears likely. The latter no doubt worries many nated after revamping its entire fixed-income opera-
investors, along with how core bond funds in their tion the following year. And even that fund lost just 18
portfolios will react. basis points annualized over the period.
Were Not Flying Entirely Blind Exhibit 2 Morningstar Medalist Government Funds
We have the advantage of some historical examples Return
Name 12/01/9303/31/95
to look at, though, making it possible to examine how
JPMorgan Government Bond Select 3.01
Vanguard Interm-Term Treasury Inv 1.18
Exhibit 1 Effective Federal Funds Rate 19932008
Fidelity Government Income -0.18
7 7
Fidelity GNMA 3.94
6 6
Vanguard GNMA Inv 4.87
5 5 US OE Intermediate Govt Category 1.11
4 4
destined to be the disaster for longer-maturity bonds all spell trouble. Meanwhile, in coming off of deeper
that they might appear to be. lows in yields than we generally saw during those
years, some securities will see their income over-
Exhibit 3 Morningstar Medalist Intermediate-Term Bond Funds whelmed by losses more quickly. One way to estimate
Return
Name 06/01/0406/30/06
that impact is via duration, and the Bloomberg
TCW Total Return Bond I 8.27
Barclays U.S. Aggregate Bond Index carried one of
Fidelity Investment Grade Bond 7.49
5.9 years at the end of 2016 (though some of that
Harbor Bond Institutional 7.33
actually built up as the market sold off during the
PIMCO Total Return Instl 7.31
years second half as mortgage durations doubled).
Loomis Sayles Core Plus Bond A 7.22
By contrast, the indexs duration was a more mild
Western Asset Core Bond I 7.13
4.8 years at the end of 1993, right before yields began
T. Rowe Price New Income 6.96
their upward march. In theory then, for a 1% yield
Fidelity Spartan US Bond Idx Investor 6.54
shock, the index would now be expected to lose
Dodge & Cox Income 6.47
roughly 5.9% versus an expected 4.8% loss back then.
JPMorgan Core Bond Select 6.31
Vanguard Total Bond Market Index Inv 6.16
But there are additional reasons for optimism: the
American Century Diversified Bond Instl 5.94
relatively muted expectationsof the Treasury market
Janus Flexible Bond D 5.67
and many fund managersfor future levels of
Fidelity Intermediate Bond 5.52
inflation and for the pacing and magnitude of rate
Approximate Fed Funds Rate Increase 4.25
hikes that might follow in the footsteps of the
December shift. The most common expectation is for
A More Complex World gradual hikes, perhaps 25 basis points at a time,
As the table above suggests, funds in the interme- most likely stretched over many months between
diate-term bond category survived the most recent, hikes. Based on the markets signals right now,
fairly severe wave of interest-rate hikes without its hard to envision anything much more than that.
knuckling under, and Morningstar Medalists did
particularly well. In fact, from June 2004 through For one, prices for Treasury Inflation-Protected Securi-
June 2006, the FOMC raised the federal-funds rate ties suggested expectations for a modest 1.8%-per-year
17 times, for a total of 425 basis points, and the level of inflation over the next five years as of mid-
average intermediate-term bond fund still managed December (when their yields are compared with those
a total return of more than 5.6%. of conventional Treasuries) and only a slightly higher
1.9% over the next 10. Even if those numbers turn out
A look at the maximum drawdown data for the inter- to be lowas some fund managers expectit is
mediate-term bond category demonstrates that the difficult to envision them coming close to the 3.1%
financial crisis was a much bigger problem for most of pace of inflation (as measured by the Consumer
these funds than were the major rising rate cycles. Price Index) observed, on average, from 2004 through
That was the case even for many Morningstar Medal- 2006. The markets expectations for increases in
ists. Fidelity Investment Grade Bond FBNDX , 10 -year Treasury yields are muted as well, with forward
for example, lost 10.8% from February 2008 through Treasury bond curves predicting the 10 -year note
March 2009. to yield roughly 30 basis points more a year from now
than in mid-December, 50 basis points more in two
Is the Past Really Prologue? years, and 60 basis points more in three years.
An easy criticism of focusing too much on a funds
performance during the prior cycle might be that the Those numbers arent negligible, but, spread over
next hiking cycle could well be different. In particular, enough time, that level of change in the yield
a nasty spike in inflation; rapid, large federal-funds for a 10 -year Treasury bond implies a much less
hikes; or a sharper sell-off in long-dated bonds could bumpy ride than many investors seem to fear. K
10
Buy the Unloved Were nearly eight years into a bull market, and its
fair to ask if the next big move is down. For some
The Contrarian | Dan Culloton protection in that inevitability, consider Silver-rated
Jensen Quality Growth JENSX . Its seasoned
managers focus on a handful of profitable businesses
has weathered a lot of storms over 25 years.
Our Contrarian Approach For more than 20 years, Morningstar has recommended European Stock
I go against the grain to buying funds that others dont want as part of its Last year European equity funds were among the
find overlooked funds that may
Buy the Unloved strategy. This involves buying one loved categories. This year, Brexit spooked investors
be ready to rally.
fund from each of the three equity Morningstar but also created opportunities for veteran managers
Categories with the most calendar-year outflows and with deep resources, such as Dean Tenerelli of Bronze-
avoiding those with the most inflows. rated T. Rowe Price European Stock PRESX . For
cheap, no-nonsense exposure, Gold-rated Vanguard
This contrarian approach asks you to put money to European Stock Index VEUSX , which charges a mere
work in out-of-favor areas and to hang on for three to 0.12% for its Admiral and ETF shares, is hard to beat.
five years. Over the long term, going against the
crowd has improved results. Since 1994, the unloved Mid-Growth
groups have beaten the loved categories in most In mid-cap growth, Chuck Akre is an uncompromising,
three-year periods. Overall, the unloved have beaten bottom-up, buy-and-hold investor who invests in a
the loved by more than 5 percentage points annual- handful of stocks trading at discounts to his estimate
ized from 1993 through the end of November 2016. It of their owner earnings, or profits left over after
works because investors often chase performance, investments for upkeep and growth. Silver-rated Akre
thus signaling which areas may be overvalued or Focus AKREX is pricey, but Akre has a terrific record
undervalued. here and at his former fund, Hennessy Focus HFCSX .
Scott Brayman is a small-cap specialist who moved
This years unloved categories, based on flows for up-cap with some of his favorite holdings at Silver-
open-end and exchange-traded fundsexcluding rated Champlain Mid Cap CIPMX ; he also has a
funds of fundsare large growth, European stock, great track record dating to his time running Sentinel
and mid-growth. The categories to avoid in 2017 Small Company SAGWX .
include large blend, foreign large blend, and diversi-
fied emerging markets. Here are some suggestions Vanguard Mid-Cap Growth VMGRX recently replaced
from the unloved: one of its two subadvisors, but RS Investments growth
teams more-systematic risk control is an improvement
Large Growth over Chartwell Investment Partners. The steady
Vanguard Growth Index VIGAX offers cheap, diversi- William Blair still runs the other half and can take a lot
fied, pure exposure to this style and has been hard for of credit for the funds competitive long-term record.
active managers to beat over the long term.
Buy the Unloved can be a good guide to contrarian
Primecap Managements experienced managers and ideas, but the strategy is best reserved for a small
contrarian, bottom-up brand of growth stock-picking portion of your portfolio. Use it on the periphery of
has been a winning formula. The cheap Vanguard your long-term asset-allocation plan. It can help
Primecap VPMCX , which has a Morningstar Analyst you exercise the urge to do something when the
Rating of Gold, is closed to new investors, but Gold- market makes big moves and remind you of the
rated Primecap Odyssey Growth POGRX can still be power of rebalancing away from the most-popular
had for a reasonable 65 basis points. categories and toward the unpopular ones. K
Contact Dan Culloton at daniel.culloton@morningstar.com
Morningstar FundInvestor January 2017 11
Funds Facing Succession Challenges Baron Growth BGRFX and Baron Partners BPTRX
When Ron Baron founded Baron Capital in 1982, he
Red Flags | Janet Yang performed much of the research himself; early and
continued investment success since then has allowed
him to build his namesake firm into a team that
includes 10 portfolio managers and 25 analysts. With
that deep bench, 73 -year-old Baron has indicated
What is Red Flags? Investors benefit from using portfolio managers who who will follow him at a number of funds. For the
Red Flags is designed to alert have witnessed and successfully managed assets firms $5.7 billion flagship fund, Bronze-rated Baron
you to funds hidden risks. Such
through multiple market cycles. The flip side to that Growth, that includes analyst and assistant portfolio
risks can take many forms,
including asset bloat, the hard-won experience, though, is that those same manager Neal Rosenberg. On the $1.6 billion,
departure of a solid manager, or managers may be at later stages of their careers and Neutral-rated Baron Partners, though, a successor
a focus on an overhyped asset
looking to taper off involvement with their funds. Here has yet to be named.
class. Not every fund featured
in Red Flags is a sell, and in fact,
are a few funds that have benefited from decades-
some are good long-term long manager continuity but that are also facing Royce Pennsylvania Mutual PENNX
holdings. But investors should succession questions; some of these managers are The 74 -year-old Chuck Royce has led Neutral-rated,
be prepared for a potentially
well past standard retirement age (most have no plans small-blend Pennsylvania Mutual since 1972 ,
bumpier ride in the near future.
to retire in the near future). In some cases, firms have producing a long-term performance record that tops
been prepping for the inevitable by building out deep that of the Russell 2000 Index (which was only
benches. In others, though, the next leader has yet launched in 1978). Succession planning here is rela-
to emerge. Below, weve ordered the funds from most tively clear, with comanagers Jay Kaplan and
to least risky when it comes to succession and risk. Lauren Romeo added to the roster in 2003 and 2006,
respectively. Still, each manager independently
Gabelli Small Cap Growth GABSX and Gabelli manages sleeves of the portfolio, with Royce in charge
ABC GADVX of approximately 60% of assets. Royces outsize
Mario Gabellis eponymous firm turned 40 in 2016, share of the portfolio plus his history with the fund
while Gabelli himself turned 74. Succession is a give him the lions share of credit when it comes
huge issue on a number of the firms funds: Gabelli is to its strong long-term record. He has already stepped
listed as the sole portfolio manager on 10 of his down as CEO at Royce & Associates.
firms open- and closed-end funds, and hes a listed
portfolio manager on 20 funds in total. The two Sound Shore SSHFX
Gabelli funds with Morningstar Analyst Ratings Portfolio managers Harry Burn and Gibbs Kane
Gabelli Small Cap Growth and market-neutral strategy (72 and 69 years old, respectively) have led Silver-
Gabelli ABC, both Neutralface notable key-man rated large-value fund Sound Shore since its 1985
risk. As the lone manager on Small Cap Growth, Gabelli inception; they also cofounded advisor Sound Shore
has used his relatively staid, valuation-conscious Management in 1978. Succession is less of an issue
approach to amass an impressive track record that here, as longtime analyst John DeGulis became a
spans more than 25 years. Despite the mid-2015 comanager on the fund in 2003; the next generation
promotion of two investment personnel to co-CIOs of of leadership has already had a long runway of
the firms value strategies, Gabellis departure would preparation. Even the firms analysts are relatively
leave a notable hole at Small Cap Growth. Thats also long-tenured, having joined the firm between 2003
true of Gabelli ABC, where Gabelli relies heavily on and 2008, and the team generally sees little turnover
intuition rather than a well-defined investment process of its investment personnel. K
to manage the fund. While Gabellis approach at Contact Janet Yang at janet.yang@morningstar.com
ABC has benefited from his deep experience, its not
a process that encourages autonomy among his
merger-arbitrage analyst team.
12
stocks shrugged off the rate increase announcement S&P 500 2.1 12.2 8.9 14.7 6.9
S&P MidCap 400 2.2 20.7 9.0 15.3 9.2
to post solid gains of 6% and 5%, respectively. Commu-
Russell 2000 2.9 21.6 6.9 14.6 7.1
nication service providers such as AT&T T and Inter-
Digital IDCC as well as regulated utilities Exelon EXC
Diversified Pacific/Asia -0.9 3.8 1.2 7.1 2.6
and Eversource Energy ES all gained more than 7%. Diversified Emerging Mkts 0.0 8.5 -3.2 1.6 1.3
Europe Stock 4.6 -1.7 -2.5 7.2 1.0
Healthcare continued to lag in December, rising just 0.6%. Foreign Large Blend 2.2 0.8 -2.1 5.8 0.5
Foreign Large Growth 1.0 -2.1 -1.8 6.1 1.4
Biotech and drug manufacturer stocks struggled in
Foreign Large Value 2.9 3.3 -2.4 5.4 -0.3
2016 as the government stepped up scrutiny over drug- Foreign Small/Mid Growth 0.8 -3.0 -0.6 8.9 3.1
pricing practices. Biotechs such as Agios Pharma- Foreign Small/Mid Value 2.4 4.2 -0.7 7.9 1.6
World Stock 1.5 5.5 2.1 9.2 3.7
ceuticals AGIO and Puma Biotechnology PBYI fell more
MSCI World 2.4 7.5 3.8 10.4 3.8
than 25% in December after releasing disappointing
MSCI Emerging Markets -0.2 10.9 -3.7 0.5 1.1
clinical data. Consumer cyclicals stocks posted weak MSCI EAFE 2.7 1.4 -2.0 6.3 0.6
results during the month; ad firm Quotient Technology MSCI Europe 5.2 -0.4 -3.2 6.3 0.4
QUOT and casino firms Wynn Resorts WYNN and Las MSCI Latin America 0.5 27.9 -9.9 -8.3 -2.4
MSCI Pacific 0.5 4.2 1.4 7.1 1.6
Vegas Sands LVS fell double-digits.
stocks gained 8% and 7%, respectively. Emerging BBgBarc US Agg Bond TR USD 0.3 2.4 2.9 2.1 4.2
BofAML US HY Master II TR 2.0 17.5 4.7 7.4 7.3
markets ended the month flat, however, in part because
BBgBarc Municipal TR USD 1.2 0.2 4.1 3.3 4.2
of the Feds decision to raise rates, which may lead
to elevated borrowing costs. Chinese and Taiwanese
stocks both fell more than 1% in December. K
Morningstar FundInvestor January 2017 13
Fidelity Leveraged Company Stock FLVCX Impact: Neutral Date: 12/31/2016 Two Janus Funds to Be Merged Away
Tom Soviero will step down at the end of the year. Mark Notkin will take Sovieros place. Notkin runs Fidelity
Two of Janus former standard-bearers are being
Capital & Income FAGIX, which has a Morningstar Analyst Rating of Silver. Our Take: Notkin has a strong
record in his high-yield fund, which includes an equity sleeve. Like Soviero, he has tended to be an aggressive
merged away. In advance of the merger of Janus Cap-
manager. At this fund he plans to tone down the weightings in individual stocks and tilt a bit more to growth. ital Group and U.K.-based asset manager Henderson
We have maintained our rating. Group (which is expected to close in the second quarter
of 2017), Janus announced that Janus Fund JANSX
Mainstay MAP MUBFX Impact: Negative Date: 10/01/2016
will merge into Janus Research JAMRX and Janus
This fund is run by two subadvisors, and managers from both teams have recently retired. Institutional Capital
manager Jerry Senser retired at the same time as Roger Lob from Markston International. No new managers
Twenty JAVLX will merge into Janus Forty JACTX .
were added to the existing four-manager team from ICAP nor the two-manager team from Markston. Our Take: (Both mergers must first be approved by fundholders.)
Losing two senior portfolio managers at a time of a performance slump underscores the challenges this fund These mergers are not expected to have an impact
faces, and we have downgraded the fund to from Bronze.
on the Morningstar Analyst Ratings of any of the four
Marsico Focus MFOCX Impact: Negative Date: 12/01/2016 funds; all are rated Neutral.
Comanager Coralie Witter is leaving the firm. Tom Marsico, who has managed the fund since its 1997 inception,
will be the funds sole manager. Our Take: The news is disappointing because Witters departure continues a long- Janus analyst team will continue to manage Janus
running pattern of personnel turnover at the firm. A portfolio manager and two analysts left in 2015, for example, Research, while it is not yet clear if Barney Wilson and
and four other portfolio managers have departed in the past five years. Meanwhile, the firms assets under
management continue to shrink amid poor performance. We are maintaining our Neutral rating on the fund.
Jean Barnard of Janus Fund will remain with the
firm. Doug Rao will continue to manage Janus Forty.
MFS Global Equity MWEFX Impact: Negative Date: 2017 Marc Pinto, who has managed Janus Twenty since
MFS announced that longtime lead manager David Mannheim will retire in one to two years. Ryan McAllister May 2013, will continue to comanage Janus Growth
will join the fund as a comanager in September 2016. Roger Morley, who has been a comanager since 2009, and Income JAGIX and Janus Balanced JABAX .
will remain on board. Our Take: Mannheim has done a great job and will be missed. While Morley is a seasoned
MFS veteran who has a successful record running a fund on his own, McAllister doesnt have as much
experience, though he has been at the firm since 2007. Also, Morley and McAllister will continue to draw on the Janus Fund and Janus Twenty both thrived in the late-
work of a strong group of analysts. We still have faith in the fund but have cut our rating one notch to . 1990s technology boom, and their assets peaked at
$51.0 billion and $31.5 billion, respectively, in 2000 as
Oakmark Global OAKGX Impact: Negative Date: 11/30/2016
Oakmark International OAKIX the bear market began. It has largely been all down-
Rob Taylor surprised us by announcing he will retire at age 44. At Oakmark Global, David Herro will take Taylors hill since. Janus Fund had periods of outperformance
spot alongside Clyde McGregor. At Oakmark International, lead manager Herro will be the sole manager, though but has generally struggledits trailing five-, 10 -, and
he still has the help of senior analysts at the firm. At the end of November, Oakmark promoted senior analysts
15 -year returns are all subpar within the large-growth
to serve as comanagers on the funds. Michael Manelli, who has been with Oakmark for 11 years, was named
comanager on Oakmark International. Jason Long, who joined the international team and the firm as an analyst
Morningstar Categoryand the fund has seen net
in 2011, and Anthony Coniaris, a comanager on U.S.-focused Oakmark Select OAKLX since 2013, who joined outflows in every calendar year after 2000. (It now has
the firm in 1999 and also serves as its co-chair, were named comanagers on Oakmark Global. Our Take: We are $7.4 billion in assets.) Janus Twenty largely performed
maintaining our ratings on the funds as we have faith in Herro. The new additions provide some clarity
well until former skipper Scott Schoelzel retired in late
for who might run the funds when Herro retires. Herro is 55, so we dont expect him to retire in the near term.
2007, then it produced more-mixed results. Investors
Vanguard Mid-Cap Growth VMGRX Impact: Neutral Date: 12/05/2016 pulled money out in every calendar year after 1999. (It
Vanguard dismissed Chartwell Investment Partners as a subadvisor and replaced it with RS Investments now has $8.1 billion in assets.)
growth team. RS is running half the fund, and the other half remains in the hands of William Blair Investment
Management. Our Take: RS is a qualified replacement for Chartwell. The fund will be more of a fundamental
growth fund, as Chartwell followed a momentum strategy whereas RS emphasizes returns on invested capital
We expect these mergers to result in lower fees for
and earnings-growth rates. We are maintaining our Bronze rating. the surviving funds (Janus Research currently earns a
Neutral rating for Price, while Janus Twenty earns
a Positive), but pro forma expense ratios havent been
disclosed yet.
Morningstar FundInvestor January 2017 15
Vanguard Mid-Cap Growth Changes Subadvisors working with Roeder since he joined the team on tran-
On Dec. 5, 2016, Vanguard Mid-Cap Growth VMGRX sitioning first his consumer sector coverage and
dismissed subadvisor Chartwell Investment Partners, more recently Roeders industrials coverage. Never-
which had managed 50% of assets since 2006, and theless, this team has seen quite a bit of turnover
replaced it with RS Investments growth team. the past few years. Roeders retirement will follow Mary
Jayne Malys in March 2016 and Mark Laskins
The fund retains its Morningstar Analyst Rating of departure in 2013. Bastian will be the longest-tenured
Bronze after the change. William Blair Investment manager, having been named in 2003 and promoted
Management, which has subadvised this fund since to lead in 2009. The final comanager, Brian Jurkash,
June 2006, remains in place. Both current sub- joined the team in 2013 and was promoted to co-
advisor teams are experienced and stable, and this manager in December 2015. It will take some time to
is the cheapest actively managed fund in the mid- see how this team jells. Both funds retain their
growth category. Neutral ratings.
At the same time, Calvin is a realist. He knows A Roth IRA rounds out the portfolio. In keeping with the
that even the best-laid plans can go awry, and a health usually long holding period that makes sense for
problem or other issue could force him or Nancy out Roth assets (because of their fine tax-saving features),
of work sooner than would be ideal. And in any case, this portion of the portfolio is sensibly equity-heavy,
retirement is just five or so years away. He wrote featuring fine stock funds from Dodge & Cox, T. Rowe
seeking a check on his portfolios viability and position- Price, and Vanguard.
ing for what he and Nancy hope will be a long and
fruitful retirement featuring ample travel and a comfor- The After Portfolio
table lifestyle in the cosmopolitan city where they live. Job one for Calvin is to assess the viability of the port-
folio given his and Nancys anticipated yearly income
The Before Portfolio needs of roughly $75,000 in retirement.
Calvins portfolio, at just over $1 million in total, is
stored in three major silos: a Roth IRA , his workplace Calvin will also need to decide what to do with his TIAA
retirement plan, and a taxable portfolio. His total accounts once he retires. Because these are annui-
before portfolio features 16% in cash (he and Nancy ties, the options are complex and the right answer is
have been sitting on $160,000 in cash following the individual-specific.
sale of a home a few years ago), 29% in bonds, 41% in
U.S. stocks, and 14% in non-U.S. stocks. In Calvin and Nancys case, the guaranteed lifetime
payout offered by TIAA Traditional is a very attractive
His largest pool of assets is his workplace account, a option. Because Nancy is considerably younger
403(b), from the university where hes employed. and because she has a pension and would receive a
He holds roughly $100,000 in Vanguard Target Retire- greatly reduced Social Security survivor benefit
ment 2025 VRIVX in his employers supplemental if Calvin predeceases herselecting the joint-and-
retirement plan, but the bulk of his workplace assets survivor option at the time of annuitization will help
Morningstar FundInvestor January 2017 17
Before Portfolio: Top 10 Holdings Market Value % of Assets Analyst Rating a higher allocation to foreign stocksroughly 20% of
Calvin's 403(b): TIAA-CREF Stock 172,500 16.5% N/A assetsthan was the case with the Before port-
Calvin's Taxable: Cash 160,000 15.3% N/A folio. Within their taxable account, Calvin and Nancy
Calvin's 403(b: TIAA-CREF Traditional 159,800 15.3% N/A should also target getting some of their cash invested.
Calvin's 403(b): Vanguard Target 2025 VRIVX 105,500 10.1% Of course, they need some cash: Not only do they
Calvin's Roth: Dodge & Cox Stock DODGX 105,433 10.1%
need an emergency fund, but in case of an earlier-
Calvin's Taxable: Vanguard Target Retirement 2020 VTWNX 52,791 5.1%
than-anticipated retirement, having liquid reserves to
Calvin's Roth: T. Rowe Price Equity Income PRFDX 38,788 3.7%
draw upon would help them avoid tapping Social
Calvin's Taxable: Vanguard Total Stock Mkt Idx VTSAX 28,303 2.7%
Security or Nancys pension, thereby enlarging their
Calvin's Taxable: Vanguard Dividend Growth VDIGX 27,420 2.6%
long-term benefits. But at $160,000, their cash posi-
Calvin's Roth: Dodge & Cox International Stock DODFX 26,299 2.5%
tion seems too high given meager cash yields today.
Total Portfolio 1,043,961 100.0%
I swapped out a municipal-bond fund for their fine
After Portfolio Market Value % of Assets Analyst Rating taxable-bond funds. While munis arent a slam-dunk
Calvin's Roth: Dodge & Cox International Stock DODFX 75,000 7.2% given Calvin and Nancys tax bracket, the recent
Calvin's Roth: Dodge & Cox Stock DODGX 50,000 4.8% sell-off in munis means that muni yields are currently
Calvin's Roth: Vanguard Dividend Growth VDIGX 59,118 5.7% higher than the pretax yields of taxable bonds of
Calvin's Roth: T. Rowe Price New Horizons PRNHX 50,000 4.8% comparable maturities. I also removed stock/bond
Calvin's 403(b): CREF Stock 82,700 7.9% N/A funds from this portion of the portfolio; I prefer
Calvin's 403(b: TIAA Traditional 159,800 15.3% N/A discrete stock and bond funds to help shake cash
Calvin's 403(b): CREF Real Estate 25,000 2.4% N/A flows from rebalancing in retirement.
Calvin's 403(b): CREF Bond Market 50,000 4.8% N/A
Calvin's 403(b): CREF Inflation-Linked Bond 25,000 2.4% N/A The stock-heavy posture of Calvins Roth account
Calvin's 403(b): Vanguard Target 2025 VRIVX 105,500 10.1% makes sense, given that these assets would be way
Calvin's Taxable: Fidelity Intermediate-Term Muni Inc FLTMX 50,000 4.8%
down in this couples distribution queue and may
Calvin's Taxable: Vanguard Total Stock Mkt Idx VTSAX 150,000 14.4%
eventually pass to their children. While the Roth was
Calvin's Taxable: Vanguard Total Int'l Stck Mrkt Indx VGTSX 75,000 7.2%
chock-full of fine funds, I made some adjustments
Calvin's Taxable: Cash 86,843 8.3% N/A
in the name of streamlining.
Total Portfolio 1,043,961 100.0%
ensure that those annuity payments continue flowing What to do with the investment positioning of Calvins
through the oldest surviving spouses lifetime. 403(b) accounts was a tougher call. But because these
assets are subject to required minimum distributions
The payout rates when one annuitizes TIAA Traditional and would likely be toward the front of the distribution
are determined by when the contributions were queue in Calvins retirement, and because weve had
made; because Calvins contributions were made over a tremendous stock market rally, I think it makes sense
a period of years (including some when interest rates to take some equity risk out of this portion of the
were higher than they are today), his payout from TIAA portfolio. I added positions in CREF Bond Market and
Traditional is likely going to be much higher than Inflation-Linked Bond. Having more liquidity in
what he could obtain by buying a fixed annuity. his 403(b) also gives Calvin the option of tapping this
account prior to when RMDs commence, should he
Its time to look at its positioning. Because their need the extra cash. Doing so would reduce the amount
spending from their portfolio will be modest, their of his total portfolio that will eventually be subject to
guaranteed income sources are high, and Nancys RMDs. Of course, bonds could be in for tough sledding
in-retirement time horizon, in particular, is long, that in the months and years ahead, so as with bumping
argues for a somewhat more aggressive portfolio mix up the equity holdings, it makes sense to dollar-cost-
than their current 55% in stocks and 45% in bonds, average into an enlarged fixed-income position in
cash, and fixed-rate investments. My After portfolio this portion of the portfolio. K
brings their equity allocation up to 60% and includes Contact Christine Benz at christine.benz@morningstar.com
18
American Funds New World NEWFX DFA Emerging Markets Value DFEVX
22000 12000
Fund Return % Category Return % Fund Return % Category Return %
16500
80.74 26.34 9000
-11.56 -8.20
16,500 9,000
11000
QQQQQ 6000
QQQ
11,000 6,000
Process Positive Process Positive
5500 Performance Positive 3000 Performance Neutral
5,500 3,000
People Positive People Positive
0
Parent Positive 0
Parent Positive
2007 2009 2011 2013 2015 16 Price Positive 2012 2013 2014 2015 2016 Price Positive
Oppenheimer Developing Markets ODMAX Vanguard Emerging Markets Stock Index VEMAX
14000 14000
Fund Return % Category Return % Fund Return % Category Return %
10500
5.05 -3.01 10500
3.86 2.75
10,500 10,500
7000
QQQQ 7000
QQQ
7,000 7,000
Process Positive Process Neutral
3500 Performance Positive 3500 Performance Neutral
3,500 3,500
People Positive People Positive
0
Parent Neutral 0
Parent Positive
2012 2013 2014 2015 2016 Price Positive 2012 2013 2014 2015 2016 Price Positive
The Bond Markets rates and for longer-term yields to also ratchet up. As
of right now, though, that translates to expectations
Inflation Expectations that three years from now, for example, five-year Trea-
sury yields will be approximately 2.9%, up from
Income Strategist | Eric Jacobson
a recent 1.9%. Likewise, expectations are for 10 -year
Treasury yields to hit roughly 3.2% three years from
now, up from the latest 2.5% level. Meaningful changes,
Equity markets hit a few bumps in 2016, but the to be sure, but not the stuff of a crisis and certainly
S&P 500 was still up nearly 13% for the year as of mid- not when spread over three years.
Decembera chunk coming during the years
second half. By contrast, bond markets have suffered. Against that backdrop, keeping money in the bond mar-
Yields on 10 -year U.S. Treasuries spiked in the years ket doesnt seem as foolhardy as it might if one were
second half, losing nearly 10% from their July 8 trough otherwise anticipating Armageddon. Meanwhile, the
through mid-December. sell-off of the past several months has left a number
of bond market sectors priced meaningfully lower than
There are a few things of note that surface. One is that they were six months ago. Thats not true for the
yields actually arent that far from where they were most credit-sensitive areas of U.S. corporate high-yield
at the beginning of 2016. The 10 -year Treasury, for bonds and leveraged loans, but nearly every other
example, began the year with a 2.28% yield, and it corner of the bond market has felt some degree of pain.
registered at a modestly higher 2.6% at mid-December.
A few caveats. One is that its important to note that
In fact, despite all of the noise thats been made forward rates have a relatively weak record of
about that shift and the stock market exuberance that accuracy. That said, they do offer a window onto
has followed the U.S. presidential election, bond expectations in the marketplace.
markets are still not signaling expectations of runaway
inflation or soaring yields. Theres also a difference between saying something
has been beaten down and that its cheap. Government-
Inflation expectations embedded in the Treasury agency-backed mortgages, for example, have lost
market, for example, are tame. The table below shows around 2.5% of their value since Treasuries bottomed
yields for both Treasuries subtracted from those of in July, and their yields have widened to 3% from
Treasury Inflation-Protected Securities. The differences 2%. The sectors so-called option-adjusted spread has
between them approximate the bond markets shrunk by two thirds, making them look less attractive
expectation for inflation across the time of each matu- compared with Treasuries.
rity. Despite chatter suggesting that economic
growth could be turbocharged under the new presi- In other words, none of this should be construed
dential administration, for example, five-year maturity as a buy signal for bonds; they could be blindsided
conventional Treasuries and TIPS yields belie very by any number of developments. Investors have
modest inflation expectations well below 2% on actually been signaling less fear than conventional
average for the next five years. Theyre a little higher wisdom suggests. K
for the seven- and 10 -year periods, but not by much. Contact Eric Jacobson at eric.jacobson@morningstar.com
Bond-Market Snapshot
Treasury Yield Curve (%)
Yield to maturity of current bills, notes, and bonds p Current (12-31-16) p One Year Ago (12-31-15) Interest-Rate Review
3.50 The Bloomberg Barclays Aggregate Index eked out a 0.1% return for
December, weighed down by modest losses for Treasuries and flat
3.00
performance for mortgages. After the Federal Reserves announce-
2.50 ment of a rate hike, the yields at the longer end of the maturity
spectrum continued to rise, a trend that was anticipated and priced
2.00 in by the markets over the last few months. Riskier sectors still
managed gains, with the Bloomberg Barclays U.S. Corporate High
1.50
Yield Index returning 1.9% and the local-currency JPM GBI-EM
1.00 Global Composite TR Index generating 2.4% for December.
0.5
Maturity
1 mo 3 6 1 yr 2 3 5 7 10 20 30
3.00
12-31-16 Last Month (11-30-16) -0.35
1.50 A Year Ago (12-31-15) -0.04
0.00 Attractive
-1.83
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
0.00
12-31-16 Unattractive
2.01
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Data as of Dec. 31, 2016. Yield Spread: The difference between yields on differing debt instruments, calculated by deducting the
yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by
each instrument. For municipal bonds, a smaller spread is attractive because munis typically pay smaller yields than Treasuries.
For high-yield bonds, a wider spread is more attractive because junk bonds typically pay higher yields than Treasuries.
22
Boston Partners All-Cap Value JPMorgan U.S. Equity JUEAX is a reliable core
holding that has been upgraded from Neutral
Joins the 500 to Bronze to Silver since we first rated it in 2012. It
demonstrates that even a constrained benchmark-
Changes to the 500 | Laura Lallos
aware strategy can beat its index when skillfully
applied by an experienced team. The strategy is
designed to outperform incrementally without taking
What is Morningstar Morningstars analysts have expanded their list of undue risk. Its experienced comanagers draw
FundInvestor 500? Morningstar Analyst Ratings, prompting new ideas on the research of J.P. Morgan's strong core analyst
The Morningstar FundInvestor
for the M500. This month, we add two funds team using the firm's proprietary dividend-discount
500 features the industrys
best and most notable funds. that have recently come back under coverage and model. (The analysts themselves run a sector-neutral
Use the list to get new in- one old favorite. sleeve worth about 30% of the fund.)
vestment ideas and track the
funds you already own.
FundInvestor subscribers have
Boston Partners All-Cap Value BPAVX recently To make room for these promising picks, three funds
access to one-page monthly earned a Silver rating, owing to stable and experi- moved off the list. Manning & Napier Equity EXEYX
reports on all 500 funds on enced management and a strong fundamental saw personnel and fund management changes
mfi.morningstar.com. Just
process. Duilio Ramallo, who has been with Robeco in early 2015, prompting a downgrade in its Analyst
type in the name or ticker of
the fund in the search box. Boston Partners since its founding in 1995, has Rating to Bronze at that time. Since then, the fund
run this fund since 2005, drawing on the expertise has seen tremendous outflows. With less than $100
of nearly 40 other managers and analysts. The all- million in assets today, it is no longer covered by
cap strategy is based on bottom-up equity analysis, our analysts.
with a focus on valuation, fundamental factors,
and catalysts for change. The objective is to limit Janus Fund JANSX and Janus Twenty JAVLX are
losses in economic downturns and to keep pace being removed in advance of their demise. Pending
with market rallies. Under Ramallo's management, shareholder approval, the former will be merged
the fund has done this well, with three-year into Janus Research JAMRX (an M500 member) and
rolling returns that have consistently beat the cate- the latter into Janus Forty JACTX . (See Manager
gory average. Performance versus the benchmark Changes and News on Page 14 for more detail.) K
(Russell 3000 Value) is also positive, although by a
smaller margin. Summary of Changes
Add Drop
Dreyfus Strategic Value DAGVX was recently Boston Partners All Cap Value Janus
awarded an Analyst Rating of Bronze. Lead manager Dreyfus Strategic Value Janus Twenty
Brian Ferguson has run this strategy since mid-2001, JPMorgan U.S. Equity Manning & Napier Equity
following a strategy he sums up as "value with a cata-
Name Change (From) To
lyst." Benchmarked against the Russell 1000 Value
T. Rowe Price International Gr & Inc T. Rowe Price Intl Value Eq
Index, the process starts with regular quantitative and
Scotia Dynamic U.S. Growth Summit Global Invsmts Glbl Low Vol
fundamental screens to identify stocks with attractive
valuations, strong fundamentals, and demonstrated Rating Change (Upgrades) From To
business improvement. Ferguson and team then use
PIMCO Foreign Bond (USD-Hedged)
proprietary research to home in on 65 -100 stocks.
Vanguard Energy
Under Ferguson, the fund has outperformed its bench-
mark and large-value peers. One caveat is that the Rating Change (Downgrades) From To
Data through December 31, 2016 FINRA members: For internal or institutional use only.
Performance Positive
People Positive
Parent Positive Performance Quartile
Price Neutral * ( & & ( ( * & * & * (within Category)
The process is based on fundamental bottom-up fund faced some headwinds, mainly due to the markets 37.63 0.98
Large 32.7 r BasicMat 0.97 0.34
equity analysis. The analysts focus on three pillars: preference for more defensive sectors. Mid 31.9 t CnsmrCyc 8.68 1.90
valuation, fundamental factors, and catalysts for change Boston Partners is raising the price tag on this fund. Small 3.3 y FinanSvcs 27.98 1.06
(momentum). The process is clearly structured, and is a The firm plans to gradually erase the expense cap Micro 0.2 u Real Est 0.00 0.00
good combination of quantitative and qualitative instituted in 2010, which lowered the institutional shares Avg $mil:
j Sensitive 39.13 1.05
analyses. Financials, technology, and healthcare form the cost to 0.70% from 0.95%. Boston Partners says the initial 32,233
i CommSrvs 0.55 0.13
portfolio's core sectors. The manager is less keen on reduction was envisioned as a three-year plan to help the Value Measures Rel Category o Energy 8.93 0.65
sectors that have been favored recently by dividend fund achieve scale. Fund assets have grown eightfold Price/Earnings 15.91 0.94 p Industrl 8.55 0.86
investors, such as utilities, REITs, and telecoms, which since, but the economies of scale will not be shared with Price/Book 1.83 0.90 a Technlgy 21.10 2.21
he considers overvalued. The strategy is all-cap and the fund shareholders. Investors should be disappointed that Price/Sales 1.12 0.75 k Defensive 23.24 0.96
portfolios exposure to mid-caps and small caps is above the funds board of directors approved the hike. Price/Cash Flow 6.76 0.82
s CnsmrDef 2.13 0.25
average for its peer group. It tends to hold more Dividend Yield % 1.86 0.64
d Hlthcare 21.11 2.13
attractively valued stocks than the average value- Growth Measures % Rel Category f Utilities 0.00 0.00
oriented peer, though it stacks up less well on measures Long-Term Erngs 8.10 1.04
of profitability like return on equity or return on assets. Book Value 3.37 2.57 Composition - Net
Sales 2.45 -1.64
Address: RBB Fund Inc (Robeco) Minimum Purchase: $2500 Add: $100 IRA: Cash 1.8
Cash Flow 2.70 -1.14
New York, NY 10022 Min Auto Inv Plan: Add: $100 Stocks 97.8
Historical Erngs 7.04 1.84
888-261-4073 Sales Fees: No-load Bonds 0.0
Web Address: www.robecoinvest.com Management Fee: 0.80% Profitability %
Other 0.4
Inception: 07-01-02 Actual Fees: Mgt:0.80% Dist:0.25% Foreign 5.5
Advisor: Boston Partners Global Investors, Inc Expense Projections: 3Yr:$368 5Yr:$650 10Yr:$1452 Return on Equity 14.27 (% of Stock)
Subadvisor: None Income Distribution: Annually Return on Assets 3.96
Net Margin 10.39
2017 Morningstar. All Rights Reserved. The data and analyses herein does not constitute investment advice; is provided solely for informational
purposes; is not an offer to buy/sell a security; and is not warranted to be correct, complete or accurate. Morningstar is not responsible for any trading
Mutual Funds A
decisions, damages or losses resulting from, or related to, the data and analyses or their use.
24
Historical Performance Historical Risk
Large Growth (contd) 3.2 3.2 5.7 12.9 6.9 12.12 (83)
Weitz Value Investor WVALX
QQ 2.9 2.9 2.5 9.9 3.3 52 52 91 95 98 0.0 9.39 (79) Low
Large Blend 10.4 10.4 6.8 13.2 6.1 11.12 (93)
Amana Income Investor AMANX
QQQQ 9.3 9.3 5.0 10.5 7.4 66 66 83 90 10 1.4 10.81 (91) -Avg
American Funds Fundamental Invs A ANCFX
QQQQ 12.5 12.5 8.2 14.3 7.2 21 21 23 27 15 1.5 11.03 (97) Avg
American Funds Invmt Co of Amer A AIVSX
QQQQ 14.6 14.6 8.2 14.1 6.4 8 8 24 33 41 1.8 10.71 (94) -Avg
AMG Yacktman Focused S YAFFX
QQQQ 11.3 11.3 5.3 10.4 9.8 41 41 81 91 1 1.4 10.02 (81) Low
AMG Yacktman I YACKX
QQQQ 11.2 11.2 5.3 10.7 9.4 42 42 81 89 1 1.8 8.97 (86) Low
BBH Core Select N BBTEX
QQQQ 8.0 8.0 4.4 11.3 8.3 80 80 87 84 3 0.6 9.36 (92) Low
Bridgeway Blue Chip 35 Index BRLIX
QQQQQ 13.2 13.2 8.8 14.4 7.2 15 15 6 26 14 2.4 10.79 (95) Avg
Clipper CFIMX
QQQ 15.6 15.6 9.9 14.9 5.0 4 4 2 11 84 1.0 12.66 (84) High
Davis NY Venture A NYVTX
QQQ 12.2 12.2 7.2 13.3 5.2 23 23 52 58 80 0.7 13.16 (85) High
Dreyfus Appreciation Investor DGAGX
QQ 7.2 7.2 4.2 8.7 5.1 85 85 89 97 82 1.3 11.0 (91) Avg
Fidelity 500 Index Investor FUSEX QQQQ 11.9 11.9 8.8 14.6 6.9 28 28 7 18 23 1.9 10.75 (100) Avg
Fidelity Dividend Growth FDGFX ] QQQ 8.0 8.0 6.3 13.4 6.1 79 79 70 55 53 1.6 10.28 (98) -Avg
Fidelity Growth & Income FGRIX [ QQ 16.1 16.1 7.8 14.7 3.5 4 4 35 13 97 1.8 12.21 (93) +Avg
Fidelity Large Cap Stock FLCSX QQQQ 16.7 16.7 7.6 15.9 8.1 3 3 41 2 4 1.4 12.88 (89) High
Fidelity Total Market Index Investor FSTMX QQQQ 12.6 12.6 8.3 14.5 7.1 20 20 19 19 15 1.7 11.04 (99) Avg
First Eagle US Value A FEVAX QQQ 14.8 14.8 5.6 8.8 6.6 8 8 79 97 35 0.2 8.88 (80) Low
FMI Large Cap FMIHX QQQQ 13.8 13.8 7.6 13.3 7.6 12 12 40 58 8 1.1 10.69 (90) -Avg
FPA US Value FPPFX QQ -2.0 -2.0 3.2 10.5 6.7 99 99 95 90 31 0.0 14.2 (68) High
Gabelli Asset AAA GABAX QQ 11.6 11.6 3.3 11.1 6.6 34 34 94 86 33 0.7 11.62 (93) +Avg
Janus Growth and Income T JAGIX ] QQQQ 12.8 12.8 8.3 14.4 6.2 17 17 19 24 52 2.1 10.95 (96) Avg
EJPMorgan US Equity A JUEAX ] QQQQ 10.5 10.5 8.0 14.8 7.8 52 52 30 12 6 0.8 11.56 (96) +Avg
Longleaf Partners LLPFX Q 20.7 20.7 0.9 9.6 3.2 1 1 98 95 98 0.0 15.65 (72) High
MainStay ICAP Equity I ICAEX QQ 5.4 5.4 4.5 11.3 5.3 93 93 86 85 77 1.3 12.22 (95) +Avg
MainStay ICAP Select Equity I ICSLX QQ 3.7 3.7 2.6 10.1 4.9 97 97 96 93 85 1.2 12.74 (94) High
MainStay MAP I MUBFX QQ 8.5 8.5 4.8 11.9 5.6 75 75 84 79 67 1.5 12.03 (97) +Avg
Mairs & Power Growth Inv MPGFX
QQQQ 15.4 15.4 6.5 14.9 8.1 5 5 66 11 5 1.4 11.05 (88) Avg
MFS Research A MFRFX
QQQQ 8.7 8.7 6.5 13.3 7.2 73 73 66 58 14 1.0 10.47 (96) -Avg
Oakmark Investor OAKMX
QQQQQ 18.4 18.4 8.2 16.1 8.5 1 1 23 2 3 1.0 12.92 (90) High
Oakmark Select Investor OAKLX
QQQQ 15.3 15.3 8.7 16.4 7.5 6 6 9 1 8 0.9 13.88 (84) High
Parnassus Core Equity Investor PRBLX
QQQQQ 10.4 10.4 7.9 14.2 9.5 53 53 31 31 1 1.0 9.9 (91) Low
PRIMECAP Odyssey Stock POSKX
QQQQQ 12.8 12.8 9.7 15.0 8.2 18 18 2 9 4 1.2 11.78 (91) +Avg
Schwab S&P 500 Index SWPPX
QQQQ 11.8 11.8 8.8 14.5 6.9 29 29 7 19 23 2.0 10.72 (100) -Avg
Schwab Total Stock Market Index SWTSX
QQQQ 12.6 12.6 8.3 14.5 7.2 21 21 19 20 13 1.8 11.03 (99) Avg
Selected American Shares D SLADX
QQQ 12.8 12.8 7.5 13.5 5.6 17 17 43 54 68 0.9 12.97 (86) High
T. Rowe Price Dividend Growth PRDGX
QQQQQ 11.6 11.6 8.7 14.0 7.3 33 33 9 41 10 1.5 10.09 (97) -Avg
T. Rowe Price Growth & Income PRGIX QQQQ 7.2 7.2 8.0 14.0 6.8 86 86 29 39 27 1.2 10.09 (92) -Avg
Thornburg Value A TVAFX QQ 6.6 6.6 7.1 13.7 4.9 89 89 54 49 86 0.3 10.45 (90) -Avg
TIAA-CREF Social Choice Eq Retail TICRX QQQ 13.3 13.3 6.9 13.2 6.5 15 15 58 60 36 2.1 11.14 (98) Avg
Vanguard 500 Index Admiral VFIAX QQQQ 11.9 11.9 8.8 14.6 6.9 27 27 6 15 21 2.0 10.74 (100) Avg
Vanguard Dividend Appreciation Idx Inv VDAIX QQQQ 11.7 11.7 6.4 11.6 6.9 31 31 68 82 24 2.0 10.13 (90) -Avg
Vanguard Dividend Growth Inv VDIGX QQQQ 7.5 7.5 7.3 12.4 7.8 84 84 50 75 7 1.9 9.8 (91) Low
Vanguard FTSE Social Index Inv VFTSX [ QQQ 10.2 10.2 8.9 15.8 6.0 55 55 5 3 55 1.7 11.34 (97) +Avg
Vanguard Growth & Income Inv VQNPX QQQQ 12.0 12.0 9.2 15.1 6.4 26 26 4 8 42 2.0 10.58 (99) -Avg
Vanguard Tax-Managed Capital App Adm VTCLX QQQQ 12.0 12.0 8.6 14.8 7.2 25 25 10 12 14 1.8 10.99 (99) Avg
Vanguard Total Stock Mkt Idx Adm VTSAX QQQQ 12.7 12.7 8.4 14.6 7.2 20 20 17 15 13 1.9 11.02 (99) Avg
Weitz Partners Value Investor WPVLX
QQ 6.2 6.2 1.3 9.9 4.5 91 91 98 93 90 0.0 9.87 (80) Low
S&P 500 Index 12.2 12.2 8.9 14.7 6.9
Russell 1000 Growth Index 7.0 7.0 8.4 14.3 8.2
Legend
Red Lowest return in group E New this month
Green Highest return in group ][ Increase/decrease in rating
Italic Extended performance NR No Morningstar Rating; fund
less than three years old.
27
Current Portfolio Style Costs Operations
Mid-Cap Growth (contd) 6.0 6.0 4.0 11.8 6.8 13.3 (74)
Eventide Gilead N ETGLX QQQQ 0.9 0.9 5.2 16.0 85 85 32 3 0.0 17.55 (63) High
FAM Value Investor FAMVX [ QQQQ 15.6 15.6 8.8 13.8 6.8 5 5 3 19 56 0.0 11.44 (81) -Avg
Fidelity Mid-Cap Stock FMCSX QQQQ 14.9 14.9 6.1 13.8 7.3 6 6 20 19 38 0.7 11.25 (79) Low
Hennessy Focus Investor HFCSX [ QQQQ 7.2 7.2 6.7 13.9 8.5 34 34 15 17 17 0.0 12.18 (82) -Avg
Janus Enterprise T JAENX QQQQQ 11.9 11.9 9.0 14.7 9.3 12 12 3 8 9 0.1 10.96 (80) Low
Meridian Contrarian Legacy MVALX QQQQ 16.6 16.6 6.1 13.6 6.9 3 3 20 22 51 0.0 13.59 (78) +Avg
PRIMECAP Odyssey Aggressive Growth POAGX QQQQQ 11.7 11.7 10.8 20.7 11.8 13 13 1 1 1 0.0 16.04 (65) High
T. Rowe Price Mid-Cap Growth RPMGX QQQQQ 6.3 6.3 8.6 14.9 10.1 44 44 5 6 2 0.0 12.0 (78) -Avg
Vanguard Mid Cap Growth Inv VMGRX QQQQ 0.4 0.4 3.7 11.4 7.5 89 89 55 55 32 0.7 12.76 (80) Avg
Mid-Cap Blend 14.1 14.1 5.9 13.3 6.8 12.43 (77)
Ariel Appreciation Investor CAAPX [ QQ 12.7 12.7 4.5 14.8 7.7 66 66 72 24 35 0.6 14.86 (85) High
Ariel Fund Investor ARGFX QQQ 15.6 15.6 7.1 16.4 7.1 45 45 40 7 46 0.3 16.51 (81) High
ClearBridge Mid Cap A SBMAX QQQQ 8.4 8.4 6.1 14.1 7.7 83 83 55 44 33 0.1 12.98 (80) +Avg
Fidelity Extended Market Index Investor FSEMX ] QQQQ 16.1 16.1 6.5 14.5 8.0 40 40 47 35 26 1.3 13.81 (75) +Avg
First Eagle Fund of America Y FEAFX QQQ -2.0 -2.0 1.4 10.6 6.9 99 99 93 88 52 0.2 12.79 (78) +Avg
FMI Common Stock FMIMX QQQQ 20.2 20.2 6.0 11.6 8.7 11 11 56 82 10 0.0 12.2 (74) Avg
Longleaf Partners Small-Cap LLSCX [ QQQQ 20.5 20.5 8.4 15.4 8.2 7 7 19 11 24 0.3 12.25 (65) Avg
Lord Abbett Value Opportunities A LVOAX QQQQ 16.4 16.4 7.2 13.0 8.9 35 35 38 64 4 0.0 12.05 (77) -Avg
Osterweis OSTFX QQ 4.9 4.9 1.2 9.5 5.1 93 93 93 92 84 1.1 10.55 (82) Low
Vanguard Capital Value Inv VCVLX Q 11.8 11.8 2.0 13.3 5.2 70 70 91 58 83 1.7 15.92 (77) High
Vanguard Extended Market Idx Adm VEXAX QQQ 16.1 16.1 6.5 14.6 8.0 39 39 47 30 29 1.4 13.81 (75) +Avg
Vanguard Mid Cap Index Adm VIMAX [ QQQ 11.2 11.2 7.7 14.4 7.7 73 73 31 38 37 1.4 11.79 (89) -Avg
Vanguard Strategic Equity Inv VSEQX QQQQ 17.9 17.9 9.7 17.3 7.6 26 26 3 3 39 1.5 13.16 (77) +Avg
Weitz Hickory WEHIX QQ 10.2 10.2 1.3 9.6 4.4 77 77 93 91 91 0.0 11.46 (73) -Avg
Westwood SMidCap Institutional WHGMX QQQQ 12.0 12.0 4.4 11.4 8.6 70 70 74 83 15 0.4 13.0 (79) +Avg
Mid-Cap Value 18.1 18.1 6.8 13.8 6.8 12.46 (79)
American Century Mid Cap Value Inv ACMVX QQQQQ 22.8 22.8 12.0 16.3 9.3 15 15 2 5 5 1.2 10.5 (84) -Avg
AMG Managers Fairpointe Mid Cap N CHTTX [ QQQ 24.1 24.1 6.9 15.5 9.7 10 10 55 18 2 0.3 16.02 (70) High
Artisan Mid Cap Value Investor ARTQX QQQ 22.5 22.5 3.9 11.1 7.8 17 17 90 93 21 0.7 12.36 (74) Avg
Delafield Fund DEFIX QQ 22.9 22.9 -1.2 8.4 5.9 14 14 99 98 75 0.0 17.65 (68) High
Diamond Hill Small-Mid Cap A DHMAX QQQQQ 17.8 17.8 8.4 15.8 9.1 51 51 19 12 8 0.1 11.42 (73) Avg
Fidelity Leveraged Company Stock FLVCX Q 7.3 7.3 2.1 13.1 5.8 99 99 94 70 77 0.9 14.07 (78) +Avg
Fidelity Low-Priced Stock FLPSX QQQ 8.8 8.8 5.2 13.1 7.4 98 98 83 69 29 1.2 9.83 (85) Low
Fidelity Value FDVLX QQQ 16.1 16.1 6.6 15.2 6.2 64 64 60 25 67 1.2 12.42 (85) Avg
FPA Capital FPPTX QQ 22.9 22.9 0.1 6.2 5.4 14 14 97 99 86 0.2 14.2 (48) +Avg
GoodHaven GOODX Q 20.1 20.1 -3.7 4.9 37 37 100 100 0.0 13.28 (33) Avg
Harbor Mid Cap Value Investor HIMVX
QQQQ 18.5 18.5 8.2 16.6 7.3 47 47 23 4 32 1.2 12.6 (80) Avg
Hotchkis & Wiley Mid-Cap Value A HWMAX
QQQ 20.7 20.7 5.6 17.0 7.0 31 31 77 2 42 0.2 17.58 (66) High
Perkins Mid Cap Value T JMCVX
QQQ 18.8 18.8 7.6 11.6 7.0 45 45 34 91 40 0.7 10.43 (86) Low
T. Rowe Price Mid-Cap Value TRMCX
QQQQQ 24.3 24.3 9.9 15.9 8.4 8 8 8 10 15 0.9 11.42 (79) -Avg
Vanguard Selected Value Inv VASVX
QQQ 16.3 16.3 6.0 14.3 7.5 62 62 72 42 26 1.7 12.83 (79) Avg
Small Growth 11.2 11.2 3.6 12.3 7.1 15.96 (59)
Artisan Small Cap Investor ARTSX QQQ 5.5 5.5 1.7 12.1 6.6 85 85 73 56 65 0.0 17.33 (38) +Avg
Baron Small Cap Retail BSCFX QQQ 9.9 9.9 1.9 11.5 6.6 53 53 70 69 67 0.0 13.77 (74) -Avg
Brown Capital Mgmt Small Co Inv BCSIX QQQQQ 8.3 8.3 6.4 16.1 12.3 66 66 17 4 1 0.0 15.82 (56) Avg
Century Small Cap Select Inv CSMVX QQ 2.7 2.7 0.7 9.3 5.2 90 90 81 92 90 0.0 16.72 (60) Avg
Legend
Red Lowest return in group E New this month
Green Highest return in group ][ Increase/decrease in rating
Italic Extended performance NR No Morningstar Rating; fund
less than three years old.
31
Current Portfolio Style Costs Operations
Small Growth (cont'd) 11.2 11.2 3.6 12.3 7.1 15.96 (59)
Champlain Small Company Adv CIPSX QQQQQ 28.0 28.0 9.6 14.7 10.3 1 1 3 12 2 0.0 14.88 (59) Avg
Columbia Acorn USA Z AUSAX QQQ 13.0 13.0 4.9 12.8 6.6 34 34 36 41 65 0.0 15.67 (63) Avg
Conestoga Small Cap Investors CCASX QQQQ 14.1 14.1 4.3 13.4 9.3 27 27 44 29 4 0.0 16.54 (47) Avg
Janus Triton T JATTX QQQQQ 10.4 10.4 6.9 14.2 10.9 50 50 13 18 1 0.1 13.7 (75) -Avg
Janus Venture T JAVTX QQQQ 7.1 7.1 5.4 14.2 8.2 76 76 30 18 22 0.0 15.27 (71) Avg
LKCM Small Cap Equity Instl LKSCX QQ 9.3 9.3 0.0 8.2 5.1 57 57 88 97 90 0.0 15.57 (60) Avg
Loomis Sayles Small Cap Growth Retail LCGRX QQQ 5.5 5.5 2.3 11.7 8.7 85 85 66 66 11 0.0 16.7 (53) Avg
Meridian Growth Legacy MERDX QQQQ 16.3 16.3 6.4 11.7 8.7 23 23 17 65 10 0.0 13.8 (66) -Avg
Meridian Small Cap Growth Investor MISGX ] QQQQQ 20.4 20.4 10.5 10 10 1 0.0 14.96 (54) Avg
Neuberger Berman Genesis Inv NBGNX QQQQ 18.1 18.1 5.7 12.2 8.9 18 18 25 53 7 0.4 12.65 (69) Low
Royce Premier Invmt RYPRX QQQ 24.7 24.7 3.7 9.7 7.9 3 3 53 90 28 0.2 15.18 (71) -Avg
Royce Smaller-Companies Growth Svc RYVPX QQ 9.4 9.4 3.7 11.2 4.7 56 56 52 73 94 0.0 17.26 (61) +Avg
T. Rowe Price New Horizons PRNHX QQQQQ 7.8 7.8 6.1 15.7 10.8 71 71 19 6 1 0.0 14.37 (64) -Avg
T. Rowe Price QM US Small-Cap Gr Eq PRDSX QQQQQ 11.3 11.3 6.6 15.1 10.2 45 45 16 8 2 0.0 13.8 (71) -Avg
T. Rowe Price Small-Cap Stock OTCFX QQQQQ 18.6 18.6 7.1 14.8 9.1 17 17 12 11 5 0.1 14.43 (66) -Avg
Vanguard Explorer Inv VEXPX QQQ 12.3 12.3 3.7 13.1 7.0 39 39 51 34 57 0.3 14.64 (73) -Avg
Vanguard Small Cap Growth Index Admiral VSGAX QQQ 10.7 10.7 3.9 12.8 8.2 48 48 47 39 22 1.1 14.22 (68) -Avg
Wasatch Core Growth WGROX QQQQ 10.5 10.5 6.8 13.6 7.9 49 49 14 27 30 0.0 13.01 (63) Low
Wasatch Small Cap Growth Investor WAAEX QQQ 4.8 4.8 2.3 10.4 7.1 87 87 67 84 55 0.0 14.42 (59) -Avg
William Blair Small Cap Growth N WBSNX QQQ 18.9 18.9 5.2 16.0 6.4 15 15 32 5 71 0.0 14.72 (60) -Avg
Small Blend 20.8 20.8 5.9 13.5 6.8 15.02 (64)
AMG Managers Skyline Special Equities S SKSEX QQQ 21.3 21.3 5.8 16.5 8.1 43 43 59 5 21 0.0 16.13 (57) +Avg
AMG River Road Small Cap Value N ARSVX QQQ 27.0 27.0 7.6 13.1 5.5 9 9 29 65 81 0.0 12.58 (65) Low
Berwyn BERWX QQ 29.4 29.4 1.8 11.2 7.0 4 4 92 85 42 0.0 15.03 (46) Avg
Bogle Small Cap Growth Inv BOGLX QQ 19.6 19.6 4.1 15.8 6.2 61 61 81 14 64 0.0 17.64 (69) High
Bridgeway Ultra-Small Company Market BRSIX QQQ 21.5 21.5 5.2 16.1 5.7 42 42 68 11 76 1.0 15.43 (46) Avg
Broadview Opportunity BVAOX QQQ 18.0 18.0 3.9 12.7 8.7 73 73 83 70 10 0.0 13.75 (61) -Avg
DFA US Micro Cap I DFSCX ] QQQQ 25.6 25.6 7.6 16.4 7.6 16 16 29 7 29 0.7 15.6 (57) +Avg
DFA US Small Cap I DFSTX QQQQ 23.5 23.5 7.7 16.0 8.4 29 29 28 12 14 0.9 15.05 (64) Avg
Dreyfus Opportunistic Small Cap Inv DSCVX QQQ 16.5 16.5 4.6 15.4 10.5 81 81 77 24 2 0.0 19.14 (57) High
Fidelity Small Cap Discovery FSCRX QQQQ 20.3 20.3 6.5 15.7 11.3 55 55 48 17 1 0.4 14.44 (62) -Avg
Fidelity Small Cap Stock FSLCX QQ 12.9 12.9 7.4 12.7 6.6 93 93 32 70 54 0.0 12.96 (76) Low
Fidelity Stock Selector Small Cap FDSCX QQ 15.3 15.3 6.0 12.8 6.0 88 88 56 69 70 0.5 13.97 (68) -Avg
Harbor Small Cap Value Instl HASCX [ QQQ 23.5 23.5 8.7 14.7 7.2 30 30 14 35 37 0.4 15.01 (73) Avg
Mairs & Power Small Cap MSCFX QQQQQ 27.3 27.3 9.0 18.6 8 8 9 1 0.3 14.07 (62) -Avg
Perritt MicroCap Opportunities Investor PRCGX QQQ 26.2 26.2 5.9 15.2 6.5 12 12 57 26 57 0.0 13.8 (51) -Avg
Royce Pennsylvania Mutual Invmt PENNX QQQ 26.5 26.5 3.6 11.5 6.5 11 11 85 83 57 0.3 15.0 (66) Avg
Royce Total Return Invmt RYTRX QQQ 25.9 25.9 5.8 12.5 6.9 15 15 60 74 47 1.5 13.25 (68) Low
Sterling Capital Stratton SmCp Val Instl STSCX QQQQ 25.3 25.3 7.4 14.7 7.7 18 18 33 36 29 0.2 14.27 (62) -Avg
T. Rowe Price Small-Cap Value PRSVX QQQQ 29.0 29.0 7.2 14.0 8.0 5 5 36 51 22 0.9 14.11 (61) -Avg
Vanguard Explorer Value Inv VEVFX QQQQ 20.7 20.7 7.1 15.0 50 50 37 30 0.9 14.26 (71) -Avg
Vanguard Small Cap Index Adm VSMAX
QQQQ 18.3 18.3 7.0 14.8 8.2 71 71 39 33 19 1.5 13.85 (74) -Avg
Vanguard Tax-Managed Small Cap Adm VTMSX
QQQQQ 25.7 25.7 9.4 16.5 9.1 16 16 4 6 7 1.0 14.98 (63) Avg
Small Value 26.0 26.0 6.6 13.9 6.7 15.14 (60)
AllianzGI NFJ Small-Cap Value A PCVAX ] QQQQ 22.9 22.9 4.6 10.7 7.4 74 74 79 90 33 1.3 13.46 (68) -Avg
American Beacon Small Cp Val Inv AVPAX QQQ 26.4 26.4 7.7 15.1 7.6 46 46 43 31 27 0.5 15.3 (63) Avg
American Century Small Cap Value Inv ASVIX QQQQ 26.0 26.0 8.6 15.1 8.6 50 50 24 33 11 0.6 15.66 (64) +Avg
Dean Small Cap Value DASCX QQQQ 30.4 30.4 9.0 15.7 7.3 17 17 17 19 37 1.0 14.78 (59) Avg
Legend
Red Lowest return in group E New this month
Green Highest return in group ][ Increase/decrease in rating
Italic Extended performance NR No Morningstar Rating; fund
less than three years old.
33
Current Portfolio Style Costs Operations
Small Value (contd) 26.0 26.0 6.6 13.9 6.7 15.14 (60)
DFA US Small Cap Value I DFSVX
QQQ 28.3 28.3 7.0 16.2 6.8 33 33 55 11 51 0.8 16.62 (58) +Avg
DFA US Targeted Value I DFFVX
QQQ 26.9 26.9 7.2 16.0 7.4 40 40 51 14 36 1.0 15.69 (64) Avg
Diamond Hill Small Cap A DHSCX
QQQQ 14.1 14.1 4.7 12.6 6.6 98 98 79 80 56 0.0 10.79 (68) Low
Fidelity Small Cap Value FCPVX
QQQQQ 21.3 21.3 8.4 15.9 9.3 79 79 27 14 1 0.7 12.81 (62) -Avg
Perkins Small Cap Value T JSCVX
QQQQ 26.3 26.3 9.7 13.3 8.8 46 46 11 68 5 0.4 12.29 (69) Low
Royce Opportunity Invmt RYPNX QQ 29.9 29.9 3.8 14.5 7.0 22 22 86 45 46 0.0 17.85 (56) +Avg
Royce Small-Cap Value Service RYVFX QQ 21.1 21.1 2.3 8.4 5.5 80 80 90 97 81 0.5 14.58 (53) -Avg
Royce Special Equity Invmt RYSEX QQQQ 32.2 32.2 5.4 11.8 8.5 8 8 71 86 11 0.9 14.41 (56) -Avg
Third Avenue Small Cap Value Instl TASCX QQQ 26.3 26.3 6.9 13.4 5.6 48 48 56 64 80 0.5 14.23 (66) -Avg
Vanguard Small Cap Value Index Admiral VSIAX ] QQQQQ 24.8 24.8 9.6 16.4 7.7 61 61 12 10 24 1.8 14.0 (74) -Avg
Allocation 5.8 5.8 2.7 6.0 3.4 6.54 (75)
American Funds 2020 Trgt Date Retire A AACTX TE QQQQQ 6.7 6.7 4.3 8.6 36 36 4 3 1.3 6.22 (95) Avg
American Funds American Balanced A ABALX MA QQQQQ 8.6 8.6 6.3 10.8 6.5 24 24 6 5 8 1.7 7.08 (88) Avg
American Funds Income Fund of Amer A AMECX AL QQQQQ 10.6 10.6 5.7 9.3 5.4 17 17 8 33 12 3.1 7.66 (92) Low
AMG Managers Montag & Caldwell Balancd N MOBAX MA QQQ -1.5 -1.5 2.8 6.3 5.3 99 99 79 88 33 0.7 6.01 (59) Low
Arbitrage R ARBFX NE QQQQ 3.4 3.4 1.8 1.3 2.9 47 47 36 51 20 0.0 1.95 (0) Low
Berwyn Income BERIX CA QQQQ 8.7 8.7 2.8 6.3 6.8 20 20 58 30 1 1.6 3.98 (78) Low
Calamos Market Neutral Income A CVSIX NE QQQQ 4.7 4.7 2.6 3.9 3.1 30 30 23 9 12 1.1 3.31 (1) Avg
Dodge & Cox Balanced DODBX MA QQQQ 16.6 16.6 7.2 13.4 6.0 3 3 3 1 15 2.2 9.01 (76) High
Fidelity Balanced FBALX MA QQQQ 7.0 7.0 5.8 10.0 6.0 45 45 12 11 16 1.6 7.76 (91) +Avg
Fidelity Four-in-One Index FFNOX AL QQQQ 8.3 8.3 5.0 10.6 5.2 34 34 13 10 19 2.1 9.25 (94) Avg
Fidelity Puritan FPURX MA QQQQ 5.0 5.0 5.8 10.1 5.9 84 84 13 10 17 1.7 7.75 (85) +Avg
Fidelity Strategic Real Return FSRRX XY QQ 9.1 9.1 0.7 1.6 2.5 12 12 90 85 82 2.1 5.16 (42) +Avg
FPA Crescent FPACX MA QQQQQ 10.3 10.3 4.8 9.2 6.9 13 13 27 25 5 0.8 7.58 (78) +Avg
Franklin Income A FKINX CA QQQQ 16.3 16.3 3.7 7.7 5.2 1 1 19 6 11 5.2 9.08 (86) High
Franklin Mutual Beacon A TEBIX XM ] QQQQ 15.8 15.8 5.7 12.0 4.2 7 7 12 8 49 2.0 10.83 (86) +Avg
Franklin Mutual Shares A TESIX XM QQQQ 15.6 15.6 6.0 11.8 4.5 9 9 6 12 37 1.9 10.1 (87) -Avg
Gateway A GATEX XR [ QQ 5.2 5.2 3.6 4.7 3.0 51 51 41 78 1 1.4 4.3 (86) -Avg
Greenspring GRSPX MA QQQ 19.8 19.8 3.2 7.2 5.3 1 1 70 72 32 1.3 8.66 (62) High
Invesco Equity and Income A ACEIX MA QQQQQ 14.8 14.8 6.9 11.5 6.3 5 5 3 2 13 1.7 8.78 (76) High
Janus Balanced T JABAX MA [ QQQQ 4.4 4.4 4.4 9.0 6.9 89 89 38 27 5 2.1 6.94 (85) Avg
JPMorgan Income Builder A JNBAX CA QQQQ 7.6 7.6 3.4 7.2 30 30 31 13 4.3 6.23 (89) +Avg
Leuthold Core Investment Retail LCORX TV QQQQ 4.5 4.5 4.0 7.7 4.6 65 65 15 5 11 0.0 6.38 (56) -Avg
Litman Gregory Masters Alt Strats Inv MASNX GY QQQQQ 6.7 6.7 3.0 4.8 10 10 7 15 2.3 3.19 (80) Low
Mairs & Power Balanced Inv MAPOX MA QQQQQ 11.4 11.4 5.5 10.4 6.8 9 9 18 7 6 2.2 7.14 (89) Avg
Manning & Napier Pro-Blend Cnsrv Term S EXDAX CA QQQ 4.3 4.3 1.7 4.3 4.5 87 87 87 88 34 1.2 4.58 (89) -Avg
Manning & Napier Pro-Blend Extnd Term S MNBAX MA QQ 3.8 3.8 1.2 6.4 4.2 92 92 93 86 70 0.5 7.72 (89) +Avg
Manning & Napier Pro-Blend Mod Term S EXBAX CA [ QQ 3.2 3.2 0.8 5.1 3.9 95 95 95 70 64 0.7 6.08 (88) +Avg
Merger Investor MERFX NE QQQQ 2.6 2.6 1.1 2.1 2.4 55 55 45 44 23 0.3 2.96 (1) -Avg
MFS Total Return A MSFRX MA QQQQ 8.9 8.9 5.5 9.2 5.3 21 21 17 23 36 2.1 6.22 (93) -Avg
Oakmark Equity And Income Investor OAKBX MA QQQQ 11.0 11.0 4.2 8.9 6.6 10 10 43 28 7 1.5 8.4 (82) High
Pax Balanced Individual Investor PAXWX MA QQQ 5.8 5.8 4.4 8.0 4.0 74 74 39 52 73 1.3 6.97 (91) Avg
Permanent Portfolio Permanent I PRPFX CA QQ 10.3 10.3 0.7 1.4 4.8 8 8 96 99 23 0.8 7.67 (41) High
Legend Categories
Red Lowest return in group E New this month AL Allocation70% to 85% Equity SF Financial TH Target Date 20262030
Green Highest return in group ][ Increase/decrease in rating
CA Allocation30% to 50% Equity SH Health TI Target Date 20312035
Italic Extended performance GY Multi-Alternative SN Natural Resources TJ Target Date 20362040
NR No Morningstar Rating; fund LO Long-Short SP Equity Precious Metals TK Target Date 20412045
less than three years old. MA Allocation50% to 70% Equity SR Real Estate TL Target Date 2050+
MR Miscellaneous Sector ST Technology TV Tactical Allocation
NE Market Neutral TD Target Date 20112015 XM Allocation85%+ Equity
RI Retirement Income TE Target Date 20162020 XY Allocation15% to 30% Equity
SC Communications TG Target Date 20212025 XR Option Writing
35
Current Portfolio Style Costs Operations
Legend Categories
Red Lowest return in group E New this month AL Allocation70% to 85% Equity SH Health TI Target Date 2031-2035
Green Highest return in group ][ Increase/decrease in rating
BB Commodities Broad Basket SN Natural Resources TJ Target Date 2036-2040
CA Allocation30% to 50% Equity SP Equity Precious Metals TK Target Date 2041-2045
Italic Extended performance NR No Morningstar Rating; fund EE Equity Energy SR Real Estate TL Target Date 2050+
less than three years old. GR Global Real Estate ST Technology TV Tactical Allocation
IH World Allocation SU Utilities RI Retirement Income
LO Long-Short TA Target-Date 20002010 XM Allocation85%+ Equity
MA Allocation50% to 70% Equity TD Target Date 20112015 XY Allocation15% to 30% Equity
NE Market Neutral TE Target Date 20162020
SC Communications TG Target Date 2021-2025
SF Financial TH Target Date 2026-2030
37
Current Portfolio Style Costs Operations
DRGTX 7 25.3 4.2 74,225 a 78 t 13 y 6 144 171 9 91 0 0 11 NL 1.17 54.11 1,138 Chen/Price (21.0/21.0)
CSRSX 8 35.0 2.6 11,020 u 96 t 3 i 1 49 58 1 98 0 1 0 NL 0.96 65.63 5,276 Management Team
RPFGX 1 15.5 1.3 52,572 y 89 p 4 a 4 31 5 4 96 0 0 15 4.75 0.86 44.57 976 Christopher Davis (3.0)
FRESX 5 27.9 2.3 11,277 u
100 50 24 3 97 0 0 0 NL 0.78 41.69 4,725 Steve Buller (19.0)
FSENX 5 28.8 1.9 17,418 o 96 f 2 r 1 92 79 3 97 0 0 5 NL 0.8 46.76 2,542 John Dowd (10.4)
FSPHX 7 22.7 2.3 17,944 d 94 a 4 p 1 103 76 3 97 0 0 9 NL 0.73 184.81 6,382 Edward Yoon (8.2)
FSPTX 7 23.6 3.4 32,845 a 88 p 4 t 3 270 130 6 94 0 0 32 NL 0.78 130.13 3,474 Charlie Chai (10.0)
FKUTX 1 19.4 1.8 17,897 f 93 o 5 r 1 53 7 0 99 1 0 7 4.25 0.73 17.65 5,943 Kohli/Schmicker (18.0/7.0)
HACMX 0 209 784 3 0 67 30 7 NL 0.94 3.81 76 Management Team
PCRDX 0 481 111 20 0 59 21 -24 NL 1.19 7.03 6,463 Management Team
PRGTX 7 33.2 5.8 27,736 a 63 i 21 t 8 65 219 8 92 0 1 30 NL 0.91 13.22 3,249 Joshua Spencer (4.6)
PRHSX 7 21.1 2.9 21,731 d 96 s 2 p 1 141 31 1 99 0 1 3 NL 0.76 59.08 10,647 Ziad Bakri (0.7)
PRMTX 7 34.5 4.5 76,007 i 41 t 28 a 28 76 13 3 95 0 2 22 NL 0.79 74.25 3,789 Paul Greene (3.6)
PRNEX 4 22.8 1.9 14,409 o 52 r 25 f 8 123 76 1 99 0 0 34 NL 0.67 33.66 3,549 Shawn Driscoll (3.2)
TRREX 5 25.8 2.7 12,352 u 97 t 2 r 1 38 6 5 94 0 1 0 NL 0.76 28.5 6,035 David Lee (19.2)
PRSCX 7 26.1 3.4 48,522 a 61 t 25 i 8 65 82 12 86 1 2 23 NL 0.84 36.96 3,986 Kennard Allen (8.0)
TAREX 4 16.2 1.0 7,966 u 68 r 12 t 12 47 20 5 93 0 2 53 NL 1.1 29.87 1,742 Management Team
VGENX 1 26.3 1.4 35,398 o 97 f 2 r 1 144 23 4 94 0 2 27 NL 0.37 53.67 10,667 Management Team
VGHCX 7 22.8 2.7 43,173 d 95 a 4 s 1 93 18 1 97 0 1 21 NL 0.36 184.76 43,764 Jean Hynes (8.6)
VGPMX 8 31.4 1.4 3,715 r 97 p 2 s 1 66 8 5 95 0 1 86 NL 0.35 9.4 2,262 Jamie Horvat (2.8)
VGSLX 5 26.8 2.3 9,396 u 99 p 1 t 159 11 0 100 0 0 0 NL 0.12 116.87 59,903 Nejman/OReilly (0.6/20.6)
18.5 2.7 80,601
Legend Categories
Red Lowest return in group E New this month FA ForeignSmall/Mid Value FV ForeignLarge Value SP Equity Precious Metals
Green Highest return in group ][ Increase/decrease in rating
FB ForeignLarge Blend SC Communications SR Real Estate
FG ForeignLarge Growth SF Financial SU Utilities
Italic Extended performance NR No Morningstar Rating; fund FQ Foreign Small/Mid Blend SH Health ST Technology
less than three years old. FR ForeignSmall/Mid Growth SN Natural Resources
39
Current Portfolio Style Costs Operations
World Stock (contd) 5.5 5.5 2.1 9.2 3.7 11.55 (76)
Artisan Global Value Investor ARTGX QQQQQ 10.0 10.0 3.7 11.7 14 14 21 10 0.6 11.22 (79) Avg
BBH Global Core Select N BBGNX ] QQQ 4.8 4.8 0.9 57 57 73 0.5 9.87 (79) Low
Dodge & Cox Global Stock DODWX QQQQQ 17.1 17.1 4.8 13.2 3 3 11 6 1.2 13.51 (84) High
Fidelity Worldwide FWWFX QQQQ -0.6 -0.6 1.1 10.1 4.8 90 90 70 32 24 0.9 11.16 (70) Avg
Franklin Mutual Global Discovery A TEDIX QQQQQ 12.6 12.6 4.4 10.1 5.5 7 7 13 32 13 1.9 10.03 (80) -Avg
Harding Loevner Global Equity Advisor HLMGX
QQQQ 5.8 5.8 4.1 9.6 5.4 47 47 16 44 16 0.1 11.3 (84) Avg
Janus Global Research T JAWWX
QQQQ 1.9 1.9 2.2 9.1 5.6 79 79 47 53 11 0.7 11.83 (79) Avg
MFS Global Equity A MWEFX
QQQQ 7.1 7.1 3.0 11.4 5.6 31 31 32 14 11 0.6 11.31 (83) Avg
Oakmark Global Investor OAKGX
QQQ 4.7 4.7 1.2 10.8 4.6 59 59 68 19 27 1.1 14.56 (72) High
Oakmark Global Select Investor OAKWX
QQQQQ 9.9 9.9 4.7 13.8 7.4 14 14 11 4 2 1.0 13.8 (79) High
Old Westbury Small & Mid Cap OWSMX QQQQQ 8.9 8.9 4.1 10.5 7.2 17 17 16 25 3 0.6 10.27 (77) -Avg
Oppenheimer Global A OPPAX QQQ 0.2 0.2 2.0 10.2 4.1 87 87 50 30 41 0.7 13.08 (77) +Avg
Perkins Global Value T JGVAX [ QQQ 3.1 3.1 2.1 7.5 4.1 71 71 49 80 40 2.0 8.17 (85) Low
Tweedy, Browne Value TWEBX QQQQ 9.7 9.7 2.6 8.9 4.9 15 15 40 58 22 0.9 9.35 (73) Low
Tweedy, Browne Worldwide Hi Div Yld Val TBHDX Q 4.6 4.6 -1.4 5.0 60 60 94 95 2.6 10.84 (85) -Avg
USAA World Growth USAWX QQQQ 7.1 7.1 3.0 11.5 5.8 30 30 31 13 8 0.7 11.35 (83) Avg
Vanguard Global Equity Inv VHGEX QQQQ 6.6 6.6 3.5 11.1 3.5 37 37 25 17 55 1.5 10.84 (85) -Avg
Vanguard Global Minimum Volatility Inv VMVFX ] QQQQQ 8.5 8.5 9.3 20 20 1 2.7 6.93 (45) Low
Vanguard Total World Stock Index Inv VTWSX QQQ 8.7 8.7 3.4 9.7 19 19 26 41 2.3 11.0 (90) Avg
Regional Stock
Matthews Asia Dividend Investor MAPIX DP QQQQQ 4.1 4.1 2.5 7.8 7.6 38 38 15 28 1 1.9 11.44 (73) Low
Matthews Asian Growth & Inc Investor MACSX PJ QQQQ 1.3 1.3 -1.3 5.0 4.8 64 64 82 51 53 3.0 11.03 (73) Low
Matthews China Investor MCHFX CH QQQ -5.2 -5.2 -2.5 2.1 4.9 71 71 75 84 11 1.5 20.87 (48) Avg
Matthews Emerging Asia Investor MEASX PJ QQQQQ 19.3 19.3 10.9 2 2 2 1.0 8.91 (48) Low
Matthews India Investor MINDX EI ] QQQQQ -1.2 -1.2 17.7 15.1 7.6 86 86 5 11 1 0.0 17.83 (18) Avg
Matthews Pacific Tiger Investor MAPTX PJ [ QQQQ -0.2 -0.2 3.3 6.7 6.6 74 74 7 13 6 0.5 13.66 (61) Avg
T. Rowe Price New Asia PRASX PJ QQQ 0.9 0.9 0.8 4.7 5.8 69 69 37 62 27 0.8 13.88 (69) Avg
Vanguard European Stock Index Adm VEUSX ES QQQ -0.6 -0.6 -3.1 6.6 0.6 34 34 55 54 52 3.5 13.04 (86) Avg
Diversified Emerg. Mkts. 8.5 8.5 -3.2 1.6 1.3 15.06 (71)
American Funds New World A NEWFX QQQQQ 3.9 3.9 -2.0 4.4 3.1 77 77 30 9 11 0.9 11.53 (90) Low
Causeway Emerging Markets Investor CEMVX ] QQQQ 8.9 8.9 -2.4 2.5 47 47 38 28 1.3 15.96 (73) Avg
DFA Emerging Markets Value I DFEVX QQQ 19.8 19.8 -2.4 1.3 2.3 5 5 37 56 30 2.0 18.13 (69) High
Harding Loevner Emerging Markets Advisor HLEMX QQQQ 13.2 13.2 -1.3 4.2 2.7 17 17 16 11 19 0.6 14.98 (77) Avg
Lazard Emerging Markets Equity Open LZOEX ] QQQQ 20.2 20.2 -2.9 2.0 2.6 5 5 49 39 21 1.2 17.98 (69) High
Oppenheimer Developing Markets A ODMAX QQQQ 6.9 6.9 -4.4 2.7 4.2 58 58 75 25 2 0.2 15.33 (77) Avg
Parametric Emerging Markets Investor EAEMX QQQQ 12.0 12.0 -3.6 1.5 1.5 24 24 65 52 45 1.5 14.17 (77) -Avg
Seafarer Overseas Gr and Income Investor SFGIX QQQQQ 9.3 9.3 1.3 45 45 2 1.7 14.3 (71) Avg
T. Rowe Price Emerging Markets Stock PRMSX ] QQQQ 11.9 11.9 0.2 2.8 1.5 25 25 5 23 46 0.5 16.19 (72) +Avg
Vanguard Emerging Mkts Stock Idx Adm VEMAX QQQ 11.7 11.7 -1.6 1.4 1.9 26 26 24 54 38 2.5 16.32 (72) +Avg
Virtus Emerging Markets Opportunities A HEMZX [ QQQQ 1.2 1.2 -1.0 1.7 4.0 90 90 13 47 3 0.3 13.22 (57) -Avg
World Allocation 6.0 6.0 1.0 5.3 3.7 7.96 (83)
American Funds Capital Income Bldr A CAIBX
QQQQ 6.9 6.9 3.4 7.3 4.0 27 27 8 17 38 3.5 8.35 (84) +Avg
American Funds Global Balanced A GBLAX
QQQQ 6.4 6.4 2.1 7.1 35 35 32 21 2.0 7.49 (88) Avg
BlackRock Global Allocation Inv A MDLOX
QQQQ 3.7 3.7 1.5 5.7 4.6 75 75 45 55 23 1.0 6.72 (92) -Avg
First Eagle Global A SGENX
QQQQQ 10.6 10.6 4.1 7.9 6.3 9 9 4 7 2 0.4 8.19 (87) Avg
Franklin Mutual Quest A TEQIX
QQQQQ 16.0 16.0 4.1 9.7 5.2 3 3 4 1 10 6.2 8.17 (83) Avg
IVA Worldwide A IVWAX QQQ 6.2 6.2 2.3 5.9 38 38 29 50 0.0 5.55 (90) Low
Loomis Sayles Global Equity and Income A LGMAX QQQQQ 4.4 4.4 3.0 7.9 6.7 67 67 15 9 1 1.3 8.7 (87) +Avg
T. Rowe Price Global Allocation RPGAX QQQQQ 6.5 6.5 3.4 34 34 8 1.2 7.24 (94) Avg
MSCI Emerging Markets Index 10.9 10.9 -3.7 0.5 1.1
MSCI World Index 7.5 7.5 3.8 10.4 3.8
MSCI Pacific Index 4.2 4.2 1.4 7.1 1.6
Legend Categories
Red Lowest return in group E New this month CH China Region FB ForeignLarge Blend LS Latin America Stock
Green Highest return in group ][ Increase/decrease in rating
DP Diversified Pacific/Asia Stock FG ForeignLarge Growth PJ Pacific/Asia ex-Japan Stock
EI India Equity FR ForeignSmall/Mid Growth TV Tactical Allocation
Italic Extended performance NR No Morningstar Rating; fund ES Europe Stock FV ForeignLarge Value
less than three years old. FA ForeignSmall/Mid Value JS Japan Stock
41
Current Portfolio Style Costs Operations
Legend Categories
Red Lowest return in group E New this month CI Intermediate-Term Bond GI Intermediate Government Bond IP Inflation-Protected Bond
Green Highest return in group ][ Increase/decrease in rating CL Long-Term Bond GL Long Government Bond TW Corporate Bond
Italic Extended performance CS Short-Term Bond GS Short Government Bond UB Ultrashort Bond
NR No Morningstar Rating; fund
less than three years old.
43
Current Portfolio Style Costs Operations
Current Cat
Bond Avg Avg Avg Credit Quality Breakdown Turn- Recent Composition Sales Total
Style Duration Duration Credit (% of Bonds) over (% of Assets) Charge Expense Assets
Box Years Years Quality High Mid Low Other % Cash Stock Bond Other % Ratio% NAV($) ($Mil) Portfolio Manager (Tenure Years)
Fixed Income Style Box PIMCO Composition Figures Bold # Cheapest Quintile
Ltd Mod Ext PIMCO funds typically have large positions in futures and other derivatives
High Mid Low
that require that they hold an offsetting amount in bonds and cash.
As a result, the composition figures for PIMCO funds can be confusing.
We are working with PIMCO to get figures that better reflect the funds
true exposure levels.
44
Historical Performance Historical Risk
High-Yield Bond (contd) 13.3 13.3 3.2 6.2 5.9 5.48 (4)
Fidelity High Income SPHIX QQQ 16.0 16.0 3.7 6.4 6.6 15 15 40 43 23 6.0 6.29 (3) +Avg
Hotchkis & Wiley High Yield A HWHAX QQQQ 15.7 15.7 3.7 7.3 19 19 40 15 6.4 5.98 (2) +Avg
Janus High-Yield T JAHYX QQQQ 12.8 12.8 3.9 6.6 6.6 60 60 32 36 25 5.8 4.79 (5) -Avg
Metropolitan West High Yield Bond M MWHYX QQQ 7.7 7.7 1.9 5.2 6.3 93 93 90 83 38 3.0 4.04 (4) -Avg
PIMCO High Yield D PHYDX QQQ 12.3 12.3 4.2 6.4 6.1 67 67 22 46 43 4.8 5.3 (7) Avg
T. Rowe Price High Yield PRHYX QQQQ 14.5 14.5 4.2 7.3 6.9 36 36 23 15 14 5.2 5.43 (3) Avg
Vanguard High-Yield Corporate Inv VWEHX [ QQQ 11.2 11.2 4.7 6.5 6.3 78 78 11 39 35 5.0 4.7 (9) -Avg
Specialty Bond 7.5 7.5 1.3 3.4 4.1 6.15 (26)
American Funds Capital World Bond A CWBFX IB QQQ 2.3 2.3 -0.2 0.8 3.2 66 66 55 63 63 1.9 5.16 (54) Avg
Calamos Convertible A CCVIX CV QQ 4.4 4.4 1.8 6.0 4.5 84 84 76 88 75 8.96 (80) Avg
Dodge & Cox Global Bond DODLX IB NR 8.6 8.6 1.2 5 5 5.31 (12)
Eaton Vance Floating Rate A EVBLX BL QQQ 10.9 10.9 3.0 4.3 3.6 26 26 42 55 43 3.3 3.24 (0) Avg
Fidelity Floating Rate High Income FFRHX BL QQQQ 9.9 9.9 2.9 3.9 3.9 39 39 45 77 16 2.9 3.17 (0) Avg
Fidelity New Markets Income FNMIX EB ] QQQQQ 14.7 14.7 6.3 6.1 7.3 7 7 4 7 9 6.4 7.77 (13) +Avg
Fidelity Strategic Income FSICX MU QQQQ 8.8 8.8 3.6 4.3 5.8 30 30 21 47 27 3.5 4.24 (21) Avg
FPA New Income FPNIX NT QQQ 2.5 2.5 1.3 1.4 2.5 81 81 57 87 78 2.8 0.76 (34) Low
Janus Global Unconstrained Bond D JUCDX NT NR 4.9 4.9 45 45 15.0 ()
Loomis Sayles Bond Retail LSBRX MU QQQ 8.4 8.4 1.7 5.0 5.6 36 36 86 34 29 3.3 5.84 (6) High
Loomis Sayles Global Bond Retail LSGLX IB QQQ 3.3 3.3 -0.7 0.5 3.2 54 54 67 69 59 1.5 5.34 (41) Avg
PIMCO Emerging Local Bond Instl PELBX XP QQ 10.6 10.6 -4.6 -2.2 2.9 19 19 55 68 1 6.1 12.62 (15) High
PIMCO Foreign Bond (Unhedged) D PFBDX IB QQQ 3.4 3.4 -1.2 -0.7 4.0 52 52 77 84 40 1.6 7.35 (26) +Avg
PIMCO Foreign Bond (USD-Hedged) D PFODX IB QQQQQ 6.6 6.6 5.7 5.6 6.1 13 13 2 3 4 0.8 3.18 (57) -Avg
PIMCO Income D PONDX MU QQQQQ 8.4 8.4 5.8 8.6 37 37 6 2 3.3 2.66 (9) -Avg
PIMCO Unconstrained Bond D PUBDX NT QQ 5.3 5.3 1.7 2.1 37 37 49 70 3.4 3.25 (0) Avg
T. Rowe Price International Bond RPIBX IB QQ 2.2 2.2 -2.5 -1.1 2.2 68 68 87 85 85 1.7 7.65 (28) High
T. Rowe Price Spectrum Income RPSIX MU QQQ 8.2 8.2 3.3 4.6 5.1 39 39 30 43 47 3.2 3.88 (24) Avg
Templeton Global Bond A TPINX IB QQQQ 6.2 6.2 1.1 4.1 6.5 17 17 31 13 2 4.1 6.55 (1) +Avg
Vanguard Convertible Securities Inv VCVSX CV QQQQ 6.6 6.6 2.5 8.0 6.0 51 51 59 71 17 2.0 7.16 (74) -Avg
Vanguard Total Intl Bd Idx Investor VTIBX IB QQQQQ 4.7 4.7 4.8 37 37 6 0.7 2.9 (77) -Avg
Municipal Bond National 0.1 0.1 3.7 3.0 3.1 3.16 (87)
American Funds Tax-Exempt Bond A AFTEX MI QQQQ 0.3 0.3 4.3 3.8 4.0 16 16 16 10 15 1.9 3.28 (99) Avg
Baird Quality Intermediate Muni Bd Inst BMBIX MI QQQ -0.5 -0.5 2.1 1.6 3.6 65 65 87 89 39 1.8 2.65 (94) Low
Fidelity Interm Muni Inc FLTMX MI QQQ 0.0 0.0 2.9 2.4 3.6 32 32 57 58 41 2.0 2.85 (99) -Avg
Fidelity Limited Term Municipal Income FSTFX MS QQQQ -0.4 -0.4 1.0 1.0 2.5 69 69 29 30 23 1.4 1.66 (88) +Avg
Fidelity Municipal Income FHIGX ML [ QQQ 0.0 0.0 4.5 3.7 4.2 56 56 55 53 27 2.5 3.87 (99) Avg
Fidelity Tax-Free Bond FTABX ML QQQQ 0.4 0.4 4.7 3.8 4.4 29 29 47 43 15 2.7 3.82 (99) Avg
Franklin Federal Tax-Free Income A FKTIX ML QQQQ 0.7 0.7 4.7 3.6 4.1 10 10 46 57 33 1.5 3.21 (94) Low
Franklin High Yield Tax-Free Inc A FRHIX HM QQQ 1.1 1.1 5.9 4.2 4.2 38 38 65 82 21 2.5 4.21 (92) Avg
T. Rowe Price Summit Municipal Intm PRSMX MI QQQQ -0.1 -0.1 3.2 2.7 3.9 35 35 42 37 18 2.0 3.07 (99) Avg
T. Rowe Price Tax-Free High Yield PRFHX HM QQQQ 1.4 1.4 6.6 5.6 4.4 31 31 42 35 6 3.3 4.14 (94) Avg
T. Rowe Price Tax-Free Income Inv PRTAX ML QQQQ 0.3 0.3 4.6 3.7 4.2 33 33 54 52 30 2.3 3.38 (98) -Avg
T. Rowe Price Tax-Free Shrt-Interm PRFSX MS QQQQ -0.3 -0.3 0.9 1.1 2.6 61 61 33 28 21 1.3 1.71 (84) +Avg
USAA Tax Exempt Intermediate-Term USATX MI QQQQ -0.5 -0.5 3.1 3.1 3.9 69 69 48 23 16 2.4 3.33 (98) +Avg
Vanguard High-Yield Tax-Exempt VWAHX MI QQQQQ 0.8 0.8 5.4 4.4 4.4 9 9 4 4 3 3.4 4.07 (98) High
Vanguard Interm-Term Tx-Ex Inv VWITX MI QQQQ 0.1 0.1 3.4 2.8 3.9 27 27 36 35 19 2.2 3.09 (99) Avg
Vanguard Long-Term Tax-Exempt VWLTX ML QQQQ 0.6 0.6 5.1 4.0 4.3 16 16 24 32 20 2.8 3.97 (99) +Avg
Vanguard Ltd-Term Tx-Ex VMLTX MS QQQQ -0.2 -0.2 1.0 1.0 2.4 47 47 28 30 30 1.5 1.51 (84) Avg
Vanguard Short-Term Tx-Ex VWSTX MS QQ 0.4 0.4 0.5 0.6 1.6 17 17 65 67 73 1.1 0.5 (63) -Avg
Legend Categories
Red Lowest return in group E New this month BL Bank Loan HM High-Yield Muni MS Muni National, Short
Green Highest return in group CI Intermediate-Term Bond IB World Bond MU Multisector Bond
][ Increase/decrease in rating
CV Convertibles Bond MI Muni National, Intermediate NT Nontraditional Bond
Italic Extended performance NR No Morningstar Rating; fund EB Emerging Market Bond ML Muni National, Long XP Emerging Market Local Bond
less than three years old.
45
Current Portfolio Style Costs Operations
Current Cat
Bond Avg Avg Avg Credit Quality Breakdown Turn- Recent Composition Sales Total
Style Duration Duration Credit (% of Bonds) over (% of Assets) Charge Expense Assets
Box Years Years Quality High Mid Low Other % Cash Stock Bond Other % Ratio% NAV($) ($Mil) Portfolio Manager (Tenure Years)
Fixed Income Style Box PIMCO Composition Figures Bold # Cheapest Quintile
Ltd Mod Ext PIMCO funds typically have large positions in futures and other derivatives
High Mid Low
that require that they hold an offsetting amount in bonds and cash.
As a result, the composition figures for PIMCO funds can be confusing.
We are working with PIMCO to get figures that better reflect the funds
true exposure levels.
46 Area code is 800 unless otherwise indicated
AMG Funds 992-8151 BBH 575-1265 FAM Value Investor 932-3271 FAMVX 30 Fidelity Small Cap Value FCPVX 34
AMG Managers Fairpointe Mid Cap N CHTTX 30 BBH Core Select N BBTEX 26 FMI Funds 811-5311 Fidelity Stock Selector Small Cap FDSCX 32
AMG Managers Loomis Sayles Bond S MGFIX 42 BBH Global Core Select N BBGNX 40 FMI Common Stock FMIMX 30 Fidelity Strategic Income FSICX 44
AMG Managers Montag & Caldwell Bal MOBAX 34 Baird 866-442-2473 FMI International FMIJX 38 Fidelity Strategic Real Return FSRRX 34
AMG Managers Montag & Caldwell Grw MCGFX 24 Baird Aggregate Bond Inst BAGIX 42 FMI Large Cap FMIHX 26 Fidelity Tax-Free Bond FTABX 44
AMG Managers Skyline Special Eq S SKSEX 32 Baird Quality Interm Muni Bd Inst BMBIX 44 FPA 982-4372 Fidelity Total Bond FTBFX 42
AMG River Road Small Cap Value N ARSVX 32 Baird Short-Term Bond Inst BSBIX 42 FPA Capital FPPTX 30 Fidelity Total Market Index Investor FSTMX 26
AMG Yacktman Focused S YAFFX 26 Baron Capital Group 992-2766 FPA Crescent FPACX 34 Fidelity US Bond Index Investor FBIDX 42
AMG Yacktman I YACKX 26 Baron Asset Retail BARAX 28 FPA New Income FPNIX 44 Fidelity Value FDVLX 30
Akre Focus Retail 877-862-9556 AKREX 28 Baron Growth Retail BGRFX 28 FPA US Value FPPFX 26 Fidelity Worldwide FWWFX 40
Allianz Funds 988-8380 Baron Small Cap Retail BSCFX 32 Fairholme 866-202-2263 First Eagle 334-2143
AllianzGI NFJ Large-Cap Value A PNBAX 28 Becker Value Equity Retail 551-3998 BVEFX 28 Fairholme FAIRX 28 First Eagle Fund of America Y FEAFX 30
AllianzGI NFJ Small-Cap Value A PCVAX 32 Berwyn 888-995-5505 Fairholme Focused Income FOCIX 44 First Eagle Global A SGENX 40
AllianzGI Technology Institutional DRGTX 36 Berwyn BERWX 32 Fidelity Investments 544-8544 First Eagle Overseas A SGOVX 38
Amana 888-732-6262 Berwyn Income BERIX 34 Fidelity FFIDX 24 First Eagle US Value A FEVAX 26
Amana Growth Investor AMAGX 24 BlackRock Global Allocation 441-7762 MDLOX 40 Fidelity 500 Index Investor FUSEX 26 Franklin Templeton Investments 342-5236
Amana Income Investor AMANX 26 Bogle Small Cap Growth 877-264-5346 BOGLX 32 Fidelity Balanced FBALX 34 Franklin Federal Tax-Free Income A FKTIX 44
American Beacon 658-5811 Boston Partners All Cap Val 888-261-4073 BPAVX 28 Fidelity Blue Chip Growth FBGRX 24 Franklin High Yield Tax-Free Inc A FRHIX 44
American Beacon Intl Equity Inv AAIPX 38 Bridgeway 661-3550 Fidelity Capital & Income FAGIX 44 Franklin Income A FKINX 34
American Beacon Lg Cap Value Inv AAGPX 28 Bridgeway Blue Chip 35 Index BRLIX 26 Fidelity Capital Appreciation FDCAX 24 Franklin Mutual Beacon A TEBIX 34
American Beacon Small Cp Val Inv AVPAX 34 Bridgeway Ultra-Small Company Market BRSIX 32 Fidelity Contrafund FCNTX 24 Franklin Mutual Global Discovery A TEDIX 40
American Century Investments 345-2021 Broadview Opportunity 855-846-1463 BVAOX 32 Fidelity Diversified International FDIVX 38 Franklin Mutual Quest A TEQIX 40
American Century Equity Income Inv TWEIX 28 Brown Capital Mgmt Sm Co 877-892-4226 BCSIX 32 Fidelity Dividend Growth FDGFX 26 Franklin Mutual Shares A TESIX 34
American Century Growth Inv TWCGX 24 Buffalo Mid Cap 492-8332 BUFMX 30 Fidelity Equity Dividend Income FEQTX 28 Franklin Utilities A FKUTX 36
American Century Heritage Inv TWHIX 28 Fidelity Equity-Income FEQIX 28 Templeton Global Bond A TPINX 44
American Century International Gr Inv TWIEX 38 Calamos 582-6959 Fidelity Extended Market Index Investor FSEMX 30
American Century Mid Cap Value Inv ACMVX 30 Calamos Convertible A CCVIX 44 Fidelity Floating Rate High Income FFRHX 44 Gabelli Asset AAA 422-3554 GABAX 26
American Century Select Inv TWCIX 24 Calamos Market Neutral Income A CVSIX 34 Fidelity Focused Stock FTQGX 24 GoodHaven 855-654-6639 GOODX 30
American Century Small Cap Value Inv ASVIX 34 Causeway 866-947-7000 Fidelity Four-in-One Index FFNOX 34 Greenspring 366-3863 GRSPX 34
American Century Ultra Inv TWCUX 24 Causeway Emerging Markets Investor CEMVX 40 Fidelity GNMA FGMNX 42
American Century Value Inv TWVLX 28 Causeway International Value Inv CIVVX 38 Fidelity Government Income FGOVX 42 Harbor 422-1050
American Funds 421-4225 Century Small Cap Select Inv 303-1928 CSMVX 32 Fidelity Growth & Income FGRIX 26 Harbor Bond Institutional HABDX 42
American Funds 2020 Trgt Date Retire AACTX 34 Champlain Funds 866-773-3238 Fidelity Growth Company FDGRX 24 Harbor Capital Appreciation Instl HACAX 24
American Funds AMCAP A AMCPX 24 Champlain Mid Cap Adv CIPMX 30 Fidelity Growth Discovery FDSVX 24 Harbor Commodity Real Return ST Instl HACMX 36
American Funds American Balanced A ABALX 34 Champlain Small Company Adv CIPSX 32 Fidelity High Income SPHIX 44 Harbor International Institutional HAINX 38
American Funds American Mutual A AMRMX 28 Clipper 432-2504 CFIMX 26 Fidelity Independence FDFFX 24 Harbor Mid Cap Value Investor HIMVX 30
American Funds Capital Income Bldr A CAIBX 40 Cohen & Steers Realty Shares 437-9912 CSRSX 36 Fidelity Interm Muni Inc FLTMX 44 Harbor Real Return Instl HARRX 42
American Funds Capital World Bond A CWBFX 44 Columbia 345-6611 Fidelity Intermediate Bond FTHRX 42 Harbor Small Cap Value Instl HASCX 32
American Funds Capital World Gr&Inc CWGIX 38 Columbia Acorn International Z ACINX 38 Fidelity International Discovery FIGRX 38 Harding Loevner 877-435-8105
American Funds Europacific Growth A AEPGX 38 Columbia Acorn Select Z ACTWX 30 Fidelity International Growth FIGFX 38 Harding Loevner Emerging Mrkts Adv HLEMX 40
American Funds Fundamental Invs A ANCFX 26 Columbia Acorn USA Z AUSAX 32 Fidelity International Index Investor FSIIX 38 Harding Loevner Global Equity Advisor HLMGX 40
American Funds Global Balanced A GBLAX 40 Columbia Acorn Z ACRNX 30 Fidelity Investment Grade Bond FBNDX 42 Harding Loevner International Eq Inv HLMNX 38
American Funds Growth Fund of Amer AGTHX 24 Columbia Dividend Income Z GSFTX 28 Fidelity Large Cap Stock FLCSX 26 Hennessy Focus Investor 966-4354 HFCSX 30
American Funds Income Fund of Amer AMECX 34 Conestoga Small Cap Investors 494-2755 CCASX 32 Fidelity Leveraged Company Stock FLVCX 30 Hotchkis & Wiley 866-493-8637
American Funds Intl Gr and Inc A IGAAX 38 Fidelity Limited Term Municipal Income FSTFX 44 Hotchkis & Wiley High Yield A HWHAX 44
American Funds Invmt Co of Amer A AIVSX 26 Davis Funds 279-0279 Fidelity Low-Priced Stock FLPSX 30 Hotchkis & Wiley Mid-Cap Value A HWMAX 30
American Funds New Economy A ANEFX 24 Davis Financial A RPFGX 36 Fidelity Magellan FMAGX 24 Hotchkis & Wiley Value Opps A HWAAX 28
American Funds New Perspective A ANWPX 38 Davis NY Venture A NYVTX 26 Fidelity Mid-Cap Stock FMCSX 30 IVA Funds 866-941-4482
American Funds New World A NEWFX 40 Dean Small Cap Value 888-899-8343 DASCX 34 Fidelity Mortgage Securities FMSFX 42 IVA International A IVIOX 38
American Funds SMALLCAP World A SMCWX 40 Delafield Fund 697-3863 DEFIX 30 Fidelity Municipal Income FHIGX 44 IVA Worldwide A IVWAX 40
American Funds Tax-Exempt Bond A AFTEX 44 Diamond Hill Funds 888-226-5595 Fidelity New Markets Income FNMIX 44 Invesco 959-4246
American Funds Washington Mutual AWSHX 28 Diamond Hill Large Cap A DHLAX 28 Fidelity New Millennium FMILX 24 Invesco Comstock A ACSTX 28
Arbitrage R 295-4485 ARBFX 34 Diamond Hill Small Cap A DHSCX 34 Fidelity OTC FOCPX 24 Invesco Diversified Dividend A LCEAX 28
Ariel Investments, LLC 292-7435 Diamond Hill Small-Mid Cap A DHMAX 30 Fidelity Overseas FOSFX 38 Invesco Equity and Income A ACEIX 34
Ariel Appreciation Investor CAAPX 30 Dimensional Fund Advisors 888-576-1167 Fidelity Puritan FPURX 34 Invesco Growth and Income A ACGIX 28
Ariel Fund Investor ARGFX 30 DFA Emerging Markets Value I DFEVX 40 Fidelity Real Estate Investment Port FRESX 36
Ariel International Investor AINTX 38 DFA International Small Company I DFISX 38 Fidelity Select Energy FSENX 36 JOHCM Intl Select II 866-260-9549 JOHAX 38
Artisan 344-1770 DFA US Micro Cap I DFSCX 32 Fidelity Select Health Care FSPHX 36 JPMorgan 480-4111
Artisan Global Equity Investor ARTHX 40 DFA US Small Cap I DFSTX 32 Fidelity Select Technology FSPTX 36 JPMorgan Equity Income A OIEIX 28
Artisan Global Opportunities Inv ARTRX 40 DFA US Small Cap Value I DFSVX 34 Fidelity Small Cap Discovery FSCRX 32 JPMorgan Income Builder A JNBAX 34
Artisan Global Value Investor ARTGX 40 DFA US Targeted Value I DFFVX 34 Fidelity Small Cap Stock FSLCX 32 JPMorgan US Equity A JUEAX 26
Artisan International Investor ARTIX 38 Dodge & Cox 621-3979 JPMorgan Value Advantage A JVAAX 28
Artisan International Small Cap Investor ARTJX 38 Dodge & Cox Balanced DODBX 34 Janus 877-335-2687
Artisan International Value Investor ARTKX 38 Dodge & Cox Global Bond DODLX 44 Janus Balanced T JABAX 34
Artisan Mid Cap Investor ARTMX 28 Dodge & Cox Global Stock DODWX 40 Janus Enterprise T JAENX 30
Artisan Mid Cap Value Investor ARTQX 30 Dodge & Cox Income DODIX 42 Janus Flexible Bond T JAFIX 42
Artisan Small Cap Investor ARTSX 32 Dodge & Cox International Stock DODFX 38 Janus Global Research T JAWWX 40
Artisan Value Investor ARTLX 28 Dodge & Cox Stock DODGX 28 Janus Global Unconstrained Bond D JUCDX 44
Auxier Focus Inv 877-328-9437 AUXFX 28 DoubleLine Tot Return Bnd 877-354-6311 DBLTX 42 Janus Growth and Income T JAGIX 26
Dreyfus 373-9387 Janus High-Yield T JAHYX 44
Dreyfus Appreciation Investor DGAGX 26 Janus Research T JAMRX 24
Dreyfus Opportunistic Small Cap Inv DSCVX 32 Janus Triton T JATTX 32
Dreyfus Strategic Value A DAGVX 28 Janus Venture T JAVTX 32
Perkins Global Value T JGVAX 40
Eaton Vance 262-1122 Perkins Large Cap Value T JPLTX 28
Eaton Vance Floating Rate A EVBLX 44 Perkins Mid Cap Value T JMCVX 30
Eaton Vance Income Fund of Boston A EVIBX 42 Perkins Small Cap Value T JSCVX 34
Parametric Emerging Markets Investor EAEMX 40 Jensen Quality Growth J 992-4144 JENSX 24
Eventide Gilead N 877-771-3836 ETGLX 30
Morningstar FundInvestor January 2017 47
LKCM 688-5526 Oakmark 625-6275 T. Rowe Price International Bond RPIBX 44 Vanguard Explorer Value Inv VEVFX 32
LKCM Equity Instl LKEQX 24 Oakmark Equity And Income Investor OAKBX 34 T. Rowe Price International Discovery PRIDX 38 Vanguard Extended Market Idx Adm VEXAX 30
LKCM Small Cap Equity Instl LKSCX 32 Oakmark Global Investor OAKGX 40 T. Rowe Price International Stock PRITX 38 Vanguard FTSE All-Wld ex-US Idx Adm VFWAX 38
Lateef A 866-499-2151 LIMAX 24 Oakmark Global Select Investor OAKWX 40 T. Rowe Price International Value Eq TRIGX 38 Vanguard FTSE All-Wld ex-US SmCp Idx VFSVX 38
Laudus US Large Cap Growth 447-3332 LGILX 24 Oakmark International Investor OAKIX 38 T. Rowe Price Media & Telecomms PRMTX 36 Vanguard FTSE Social Index Inv VFTSX 26
Lazard Emerging Mrkts Eq Open 986-3455 LZOEX 40 Oakmark International Small Cap Inv OAKEX 38 T. Rowe Price Mid-Cap Growth RPMGX 30 Vanguard GNMA Inv VFIIX 42
Legg Mason 877-721-1926 Oakmark Investor OAKMX 26 T. Rowe Price Mid-Cap Value TRMCX 30 Vanguard Global Equity Inv VHGEX 40
ClearBridge Aggressive Growth A SHRAX 24 Oakmark Select Investor OAKLX 26 T. Rowe Price New America Growth PRWAX 24 Vanguard Global Minimum Volatility VMVFX 40
ClearBridge Mid Cap A SBMAX 30 Old Westbury Sm & Mid Cap 607-2200 OWSMX 40 T. Rowe Price New Asia PRASX 40 Vanguard Growth & Income Inv VQNPX 26
Western Asset Core Bond I WATFX 42 OppenheimerFunds 225-5677 T. Rowe Price New Era PRNEX 36 Vanguard Growth Index Adm VIGAX 24
Western Asset Core Plus Bond I WACPX 42 Oppenheimer Developing Markets A ODMAX 40 T. Rowe Price New Horizons PRNHX 32 Vanguard Health Care Inv VGHCX 36
Leuthold Core Investment Retail 273-6886 LCORX 34 Oppenheimer Global A OPPAX 40 T. Rowe Price New Income PRCIX 42 Vanguard High Dividend Yield Index Inv VHDYX 28
Litman Gregory Masters Funds 960-0188 Oppenheimer International Growth A OIGAX 38 T. Rowe Price Overseas Stock TROSX 38 Vanguard High-Yield Corporate Inv VWEHX 44
Litman Gregory Masters Alt Strats Inv MASNX 34 Osterweis 866-236-0050 OSTFX 30 T. Rowe Price Personal Strat Gr TRSGX 36 Vanguard High-Yield Tax-Exempt VWAHX 44
Litman Gregory Masters Equity Instl MSEFX 24 T. Rowe Price Personal Strat Inc PRSIX 36 Vanguard Inflation-Protected Secs Inv VIPSX 42
Litman Gregory Masters Intl Instl MSILX 38 PRIMECAP Odyssey Funds 729-2307 T. Rowe Price QM US Small-Cap Gr Eq PRDSX 32 Vanguard Interm-Term Bond Index Adm VBILX 42
Longleaf Partners 445-9469 PRIMECAP Odyssey Aggressive Growth POAGX 30 T. Rowe Price Real Estate TRREX 36 Vanguard Interm-Term Invmt-Grade Inv VFICX 42
Longleaf Partners LLPFX 26 PRIMECAP Odyssey Growth POGRX 24 T. Rowe Price Retirement 2015 TRRGX 36 Vanguard Interm-Term Treasury Inv VFITX 42
Longleaf Partners International LLINX 38 PRIMECAP Odyssey Stock POSKX 26 T. Rowe Price Science & Tech PRSCX 36 Vanguard Interm-Term Tx-Ex Inv VWITX 44
Longleaf Partners Small-Cap LLSCX 30 Parnassus 999-3505 T. Rowe Price Short-Term Bond PRWBX 42 Vanguard International Explorer Inv VINEX 38
Loomis Sayles Funds 633-3330 Parnassus PARNX 24 T. Rowe Price Small-Cap Stock OTCFX 32 Vanguard International Growth Inv VWIGX 38
Loomis Sayles Bond Retail LSBRX 44 Parnassus Core Equity Investor PRBLX 26 T. Rowe Price Small-Cap Value PRSVX 32 Vanguard International Value Inv VTRIX 38
Loomis Sayles Global Bond Retail LSGLX 44 Pax Balanced Individual Inv 372-7827 PAXWX 34 T. Rowe Price Spectrum Growth PRSGX 24 Vanguard LifeStrategy Income Inv VASIX 36
Loomis Sayles Small Cap Growth Retail LCGRX 32 Permanent Portfolio Permanent I 341-8900 PRPFX 34 T. Rowe Price Spectrum Income RPSIX 44 Vanguard Long-Term Investment-Grade VWESX 42
Lord Abbett Value Opp 888-522-2388 LVOAX 30 Perritt MicroCap Opportunities 332-3133 PRCGX 32 T. Rowe Price Summit Municipal Intm PRSMX 44 Vanguard Long-Term Tax-Exempt VWLTX 44
Pimco 888-877-4626 T. Rowe Price Tax-Free High Yield PRFHX 44 Vanguard Long-Term Treasury Inv VUSTX 42
MFS 225-2606 PIMCO All Asset All Authority D PAUDX 36 T. Rowe Price Tax-Free Income Inv PRTAX 44 Vanguard Ltd-Term Tx-Ex VMLTX 44
MFS Global Equity A MWEFX 40 PIMCO All Asset D PASDX 36 T. Rowe Price Tax-Free Shrt-Interm PRFSX 44 Vanguard Managed Payout Investor VPGDX 36
MFS Growth A MFEGX 24 PIMCO Commodity Real Ret Strat D PCRDX 36 T. Rowe Price Value TRVLX 28 Vanguard Mid Cap Growth Inv VMGRX 30
MFS Research A MFRFX 26 PIMCO Emerging Local Bond Instl PELBX 44 TCW 386-3829 Vanguard Mid Cap Index Adm VIMAX 30
MFS Total Return A MSFRX 34 PIMCO Foreign Bond (USD-Hedged) D PFODX 44 TCW Relative Value Dividend Apprec TGIGX 28 Vanguard Morgan Growth Inv VMRGX 24
MainStay 624-6782 PIMCO Foreign Bond (Unhedged) D PFBDX 44 TCW Total Return Bond I TGLMX 42 Vanguard PRIMECAP Core Inv VPCCX 26
MainStay ICAP Equity I ICAEX 26 PIMCO High Yield D PHYDX 44 TIAA-CREF Asset Management 877-518-9161 Vanguard PRIMECAP Inv VPMCX 26
MainStay ICAP Select Equity I ICSLX 26 PIMCO Income D PONDX 44 TIAA-CREF Growth & Income Instl TIGRX 24 Vanguard Precious Metals and Mining VGPMX 36
MainStay MAP I MUBFX 26 PIMCO Inflation Response MultiAsst PIRMX 36 TIAA-CREF Social Choice Eq Retail TICRX 26 Vanguard REIT Index Adm VGSLX 36
Mairs & Power 304-7404 PIMCO Investment Grade Corp Bd Instl PIGIX 42 Third Avenue 443-1021 Vanguard STAR Inv VGSTX 36
Mairs & Power Balanced Inv MAPOX 34 PIMCO Low Duration D PLDDX 42 Third Avenue Real Estate Value Instl TAREX 36 Vanguard Selected Value Inv VASVX 32
Mairs & Power Growth Inv MPGFX 26 PIMCO RAE Fundamental Adv PLUS PFSDX 36 Third Avenue Small Cap Value Instl TASCX 34 Vanguard Short-Term Bond Index Adm VBIRX 42
Mairs & Power Small Cap MSCFX 32 PIMCO Real Return D PRRDX 42 Thornburg Value A 847-0200 TVAFX 26 Vanguard Short-Term Federal Inv VSGBX 42
Manning & Napier 466-3863 PIMCO Short-Term D PSHDX 42 Torray 626-9769 TORYX 28 Vanguard Short-Term Investment-Grade VFSTX 42
Manning & Napier Pro-Blend Cnsrv Trm EXDAX 34 PIMCO Total Return Instl PTTRX 42 Touchstone Sands Cap Sel Grw 543-0407 PTSGX 24 Vanguard Short-Term Treasury Inv VFISX 42
Manning & Napier Pro-Blnd Extnd Trm MNBAX 34 PIMCO Unconstrained Bond D PUBDX 44 Tweedy Browne 432-4789 Vanguard Short-Term Tx-Ex VWSTX 44
Manning & Napier Pro-Blnd Mod Trm EXBAX 34 Polen Growth Investor 888-678-6024 POLRX 24 Tweedy, Browne Global Value TBGVX 38 Vanguard Shrt-Term Infl-Prot Sec Idx Inv VTIPX 42
Manning & Napier World Opportunities EXWAX 38 Tweedy, Browne Value TWEBX 40 Vanguard Small Cap Growth Index Adm VSGAX 32
Marsico Focus 888-860-8686 MFOCX 24 RiverPark/Wedgewood Ret 888-564-4517 RWGFX 24 Tweedy, Browne Wrldwd Hi Div Yld Val TBHDX 40 Vanguard Small Cap Index Adm VSMAX 32
Matthews Asia Funds 789-2742 Royce 221-4268 Vanguard Small Cap Value Index Adm VSIAX 34
Matthews Asia Dividend Investor MAPIX 40 Royce Opportunity Invmt RYPNX 34 USAA 531-8722 Vanguard Strategic Equity Inv VSEQX 30
Matthews Asian Growth & Inc Investor MACSX 40 Royce Pennsylvania Mutual Invmt PENNX 32 USAA Income USAIX 42 Vanguard Target Retirement 2025 Inv VTTVX 36
Matthews China Investor MCHFX 40 Royce Premier Invmt RYPRX 32 USAA International USIFX 38 Vanguard Tax-Managed Balanced Adm VTMFX 36
Matthews Emerging Asia Investor MEASX 40 Royce Small-Cap Value Service RYVFX 34 USAA Tax Exempt Intermediate-Term USATX 44 Vanguard Tax-Managed Capital App Ad VTCLX 26
Matthews India Investor MINDX 40 Royce Smaller-Companies Growth Svc RYVPX 32 USAA World Growth USAWX 40 Vanguard Tax-Managed Small Cap Ad VTMSX 32
Matthews Pacific Tiger Investor MAPTX 40 Royce Special Equity Invmt RYSEX 34 Vanguard Total Bond Market Index Adm VBTLX 42
Merger Investor 343-8959 MERFX 34 Royce Special Equity Multi-Cap Serv RSEMX 28 Vanguard 662-7447 Vanguard Total Intl Bd Idx Investor VTIBX 44
Meridian 446-6662 Royce Total Return Invmt RYTRX 32 Vanguard 500 Index Admiral VFIAX 26 Vanguard Total Intl Stock Index Admiral VTIAX 38
Meridian Contrarian Legacy MVALX 30 Vanguard Balanced Index Adm VBIAX 36 Vanguard Total Stock Mkt Idx Adm VTSAX 28
Meridian Growth Legacy MERDX 32 Schwab Funds 435-4000 Vanguard Capital Opportunity Inv VHCOX 24 Vanguard Total World Stock Index Inv VTWSX 40
Meridian Small Cap Growth Investor MISGX 32 Schwab Fundamental US Lrg Comp Idx SFLNX 28 Vanguard Capital Value Inv VCVLX 30 Vanguard US Value Inv VUVLX 28
Metropolitan West Funds 241-4671 Schwab S&P 500 Index SWPPX 26 Vanguard Convertible Securities Inv VCVSX 44 Vanguard Value Index Adm VVIAX 28
Metropolitan West High Yield Bond MWHYX 44 Schwab Total Stock Market Index SWTSX 26 Vanguard Developed Markets Idx Adm VTMGX 38 Vanguard Wellesley Income Inv VWINX 36
Metropolitan West Total Return Bd MWTRX 42 Scout Core Plus Bond Instl 996-2862 SCPZX 42 Vanguard Dividend Appreciation Idx Inv VDAIX 26 Vanguard Wellington Inv VWELX 36
Morgan Stanley Inst Growth A 548-7786 MSEGX 24 Seafarer Overseas Gr & Inc 855-732-9220 SFGIX 40 Vanguard Dividend Growth Inv VDIGX 26 Vanguard Windsor II Inv VWNFX 28
Selected American Shares D 243-1575 SLADX 26 Vanguard Emerging Mkts Stock Idx Ad VEMAX 40 Vanguard Windsor Inv VWNDX 28
Natixis Funds 225-5478 Sequoia 686-6884 SEQUX 24 Vanguard Energy Inv VGENX 36 Virtus 243-1574
Gateway A GATEX 34 Sound Shore Investor 551-1980 SSHFX 28 Vanguard Equity-Income Inv VEIPX 28 Virtus Emerging Markets Opportunities HEMZX 40
Loomis Sayles Global Equity and Inc LGMAX 40 Sterling Capital Stratton SmCp Val 228-1872 STSCX 32 Vanguard European Stock Index Adm VEUSX 40 Virtus Foreign Opportunities A JVIAX 38
Loomis Sayles Investment Grade Bond A LIGRX 42 Summit Glbl Inv Glbl Low 888-572-0968 DWUGX 24 Vanguard Explorer Inv VEXPX 32
Loomis Sayles Value A LSVRX 28 Wasatch 551-1700
Neuberger Berman 877-9700 T. Rowe Price 638-5660 Wasatch Core Growth WGROX 32
Neuberger Berman Genesis Inv NBGNX 32 T. Rowe Price Balanced RPBAX 36 Wasatch Small Cap Growth Investor WAAEX 32
Neuberger Berman International Eq Inv NIQVX 38 T. Rowe Price Blue Chip Growth TRBCX 24 Weitz 304-9745
Neuberger Berman Socially Rspns A NRAAX 24 T. Rowe Price Capital Appreciation PRWCX 36 Weitz Hickory WEHIX 30
T. Rowe Price Corporate Income PRPIX 42 Weitz Partners Value Investor WPVLX 28
T. Rowe Price Dividend Growth PRDGX 26 Weitz Value Investor WVALX 26
T. Rowe Price Emerging Markets Stock PRMSX 40 Westwood 877-386-3944
T. Rowe Price Equity Income PRFDX 28 Westwood Income Opportunity Instl WHGIX 36
T. Rowe Price GNMA PRGMX 42 Westwood SMidCap Institutional WHGMX 30
T. Rowe Price Global Allocation RPGAX 42 William Blair Small Cap Grwth 635-2886 WBSNX 32
T. Rowe Price Global Technology PRGTX 36
T. Rowe Price Growth & Income PRGIX 26
T. Rowe Price Growth Stock PRGFX 24
T. Rowe Price Health Sciences PRHSX 36
T. Rowe Price High Yield PRHYX 44
Morningstar FundInvestor
Morningstar FundInvestor Periodicals Postage Volume 25, Number 5
22 W. Washington Street P a i d Director of Manager Research and Editor
Russel Kinnel
Chicago, Illinois 60602 Chicago, Illinois and
Managing Editor
additional offices
Laura Lallos
ADDRESS SERVICE REQUESTED
Contributing Analysts
Dan Culloton, Andrew Daniels,
Eric Jacobson, Jason Kephart,
Janet Yang
Copy Editors
Tori Brovet, Edward Cavanaugh,
Thad Doria, Jennifer Ferone Gierat
Designers
Barbara Kennedy, Christine Lee,
Claudia Olariu
Quality Assurance
Mayur Patel
Publisher
Peggy Seemann
Director of Manager Research
Active StrategiesNorth America
Laura Pavlenko Lutton
Director of Personal Finance
Christine Benz
Head of Global Research
Haywood Kelly, CFA
using more than 150 data points. Stay on top of the latest trends and market This publication is printed on Cascades
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