Morningstar Direct SM U.S. Asset Flows Update

Transcription

1 ? Morningstar Direct SM U.S. Asset Flows Update Morningstar Manager Research 16 May 2016 Data through April 30, 2016 U.S. Mutual Funds and Exchange- Traded Products Alina Lamy Senior Analyst Markets Research Taxable- and Municipal-Bond Funds Attract the Highest Inflows in April Investors continued to gravitate toward fixed income for the third consecutive month in April. Taxable- and municipal-bond funds were the highest-receiving Morningstar category groups, with estimated net inflows of $22.8 billion and $5.9 billion, respectively. Taxable bonds received balanced inflows on both the active and passive side; municipal bonds received a majority of the inflows on the active side (not surprising, since there aren t many passive municipal-bond fund options out there). All the equity category groups (and allocation) sustained outflows in April on the heels of weak U.S. corporate earnings and a disappointing employment report, which fueled concerns that the U.S. economy might be losing momentum. Active equity funds once again bore the brunt of these outflows; all flows into passive equity funds were positive, although not large enough to drag the overall flows into positive territory. International-equity funds posted their first outflow since October Even though this may be just another off month (like October 2014), international-equity flows, although positive, have been significantly decreasing and are now nowhere near the levels witnessed in the first half of Active Passive Estimated Net Flows* April Assets April Assets 1 Year 1 Year $Mil 2016 $Bil 2016 $Bil U.S. Equity (20,300) (179,452) 3,478 10, ,408 2,515 Sector Equity (1,623) (13,313) , International Equity (3,994) (699) 1,471 2, , Allocation (2,499) (51,880) 1, Taxable Bond 11,691 (86,447) 2,227 11, , Municipal Bond 5,631 26, , Alternative (118) 8, , Commodities 438 (539) , All Long Term (10,775) (297,045) 9,515 26, ,458 4,747 Money Market (41,223) 163,874 2,722 *Includes liquidated and merged funds.

2 Page 2 of 12 Total (Active and Passive) Estimated Net Flows April Assets 1 Year $Mil 2016 $Bil U.S. Equity (9,885) (52,044) 5,993 Sector Equity (634) (3,750) 744 International Equity (1,513) 114,901 2,322 Allocation (2,217) (51,207) 1,190 Taxable Bond 22,765 18,308 3,056 Municipal Bond 5,864 31, Alternative , Commodities 676 6, All Long Term 15,675 81,413 14,263 Money Market (41,223) 163,874 2,722 Recent economic and market news has been mixed. The U.S. stock market has recovered somewhat after its January and February losses, but not enough, it seems, to drive investors back to equities. The Federal Reserve increased rates once last year, but further raises are beginning to look less and less certain. The trend toward international-equity diversification has also slowed down compared with last year. In times of uncertainty, investors are turning to the asset class that offers moderate risk and at least some return (and also a fairly certain income stream): fixed income. Exhibit 1. Category Group Flows During the Past 12 Months ($ Billion) U.S. Equity Sector Equity International Equity Allocation Taxable Bond Municipal Bond Alternative Commodities May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

3 Page 3 of 12 However, monthly flows can be highly volatile, and sometimes even a seemingly established trend can be misleading over short periods of time. To put things in perspective, Exhibit 2 displays rolling 12-month flows into U.S. and international equity and taxable and municipal bonds since Taxable-bond inflows were clearly at their peak after the financial crisis (as fear persisted long after the actual returns started to recover). Investors only started going back to U.S. stocks in U.S. equity flows started declining again in 2014, and international-equity flows also had a big drop recently. However, what s most interesting is that taxable-bond flows, which have been increasing during the past few months, are not anywhere near their pre- or post-crisis levels, but actually close to zero on a rolling 12-month basis. Risk management and yield chasing? Most likely. Flight to safety? Not even close. Exhibit 2. Rolling 12-Month Flows ($ Billion) U.S. Equity International Equity Taxable Bond Municipal Bond

4 Page 4 of 12 Cost Can Predict Fund Performance In a recently released study, my colleague Russel Kinnel, director of manager research and editor of Morningstar s FundInvestor, examined the importance of cost to a fund s ability to deliver superior performance. The findings revealed that expense ratios are proven predictors of future fund performance. Funds with lower expenses have higher success ratios, which indicate the percentage of funds that survived and outperformed their category group average, while higher-cost funds have lower success ratios. The study found that the least expensive funds were at least 2 to 3 times more likely to succeed than the priciest funds, and this finding held across virtually every asset class and time period examined, which clearly indicates that investors should keep cost in mind no matter what type of fund they are considering. Exhibit 3. Subsequent Total-Return Success Ratio by Expense Ratio Quintile Expense Ratio Quintile Begin Year U.S. Equity Sector Equity International Equity Balanced Taxable Bond Municipal Bond and Investors Are Paying Attention If a lower expense ratio means a higher probability of success (and a higher return), and investors are becoming aware of this fact, why would an investor still choose a more expensive fund? The answer is, (s)he wouldn t, at least in equity and fixed income, as Exhibit 4 illustrates. In the equity and fixed-income categories, a fund needs to be in the least expensive 20% of funds to receive positive flows on a consistent basis. In the alternative category, fees are not the main driver of flows, as strategies are more diverse and performance can vary widely. Allocation funds had outflows across the board, irrespective of fee level.

5 Page 5 of 12 Again, this doesn t mean immediately running to the least-expensive funds and disregarding all the rest. What it does mean is that investors should pay close attention to cost and include the expense ratio as an important factor in fund selection. Exhibit 4. Trailing 12-Month Flows Into Open-End Funds ($ Billion) Allocation Alternative Equity Fixed Income Low Below Average Average Above Average High Intermediate-Term Bond and Large Blend Are the Top-Flowing Categories Intermediate-term bond was the Morningstar Category with the highest flows once again in April. Intermediate bonds are a reasonable middle-of-the-road choice for most investors, because short-term bonds don t yield enough and long-term ones have higher interest-rate risk. The same reasoning applies to municipal bonds (the municipal-national intermediate category had the fourth-largest flows), plus the tax benefits, of course.

6 Page 6 of 12 Top- and Bottom-Flowing Morningstar Categories Active Passive Estimated Net Flows* April Assets April Assets 1 Year 1 Year $Mil 2016 $Bil 2016 $Bil Leading Intermediate-Term Bond 7,052 14, ,440 39, Large Blend (3,893) (50,005) 673 8,307 76,261 1,603 Foreign Large Blend , , , Muni-National Intermediate 2,769 17, ,587 9 Short-Term Bond 2,774 (3,444) , Lagging Large Growth (9,715) (36,727) 1,148 (2,953) 6, World Allocation (2,351) (25,866) (72) 0 Nontraditional Bond (2,077) (23,301) 111 (17) (72) 0 Mid-Cap Growth (2,134) (13,834) Small Growth (1,579) (9,591) 155 (267) (1,025) 26 *Excludes money market. Surprisingly, though, for all the outflows from U.S. equity, large blend appeared second on the top-flowing category list. Vanguard Total Stock Market Index VITSX and ishares MSCI USA Minimum Volatility USMV pulled this category up to second place, with inflows of $2.8 billion and $1.2 billion, respectively. The ishares MSCI USA Minimum Volatility exchange-traded fund seeks to track the investment results of an index composed of U.S. equities that, in the aggregate, have lower volatility characteristics relative to the broader U.S. equity market. Even though it hasn t made the top five in this report, this ETF has been enjoying higher flows in the past four months, indicating that investors are still interested in U.S. equity s potential returns but unwilling to shoulder the increased risk and volatility the U.S. market has been experiencing recently. USMV returned 5.2% this year through the end of April, a much more attractive prospect than SPDR S&P 500 s SPY 1.7% return during the same time period. Also, in line with our earlier cost discussion, both ETFs have reasonable expense ratios of 0.15% and 0.09%, respectively.

7 Page 7 of 12 Exhibit 5. ishares MSCI USA Minimum Volatility Flows ($ Billion) 2.0 ishares MSCI USA Minimum Volatility (0.5) Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 On the other hand, it seems investors are shying away from growth, as evidenced by the three growth categories appearing on the bottom-flowing list. There was no sign of high-yield bond anywhere near the top five this month after a significant $10.7 billion inflow in March. Nontraditional bond hasn t budged from the bottom five. American Funds Overtakes Fidelity to Become Second-Largest After Vanguard Consistent inflows for American Funds and outflows for Fidelity prompted a reversal in the top 10 this month, with American Funds climbing to the second spot and Fidelity dropping to the third. American Funds and Vanguard were the only firms with sizable inflows on the active side in April. Vanguard, ishares, DFA, and Fidelity enjoyed inflows on the passive side.

8 Page 8 of 12 Top 10 U.S. Fund Families Active Passive Estimated Net Flows April Assets April Assets 1 Year 1 Year $Mil 2016 $Bil 2016 $Bil Vanguard 3,382 15, , ,760 2,235 American Funds 1,503 5,209 1,202 Fidelity Investments (3,706) (28,448) 975 1,834 16, BlackRock/iShares (967) (5,569) 212 4,577 93, T. Rowe Price 77 (1,443) (260) 28 SPDR State Street Global Advisors 24 2,027 4 (546) 23, Franklin Templeton Investments (2,803) (41,307) 389 PIMCO (873) (50,403) 297 (80) (590) 4 Dimensional Fund Advisors 2,034 23, J.P. Morgan 601 5, (236) 6 Although recent inflows are still nowhere near its precrisis glory days, American Funds has made a skillful comeback, all the more impressive because it s happening at a time when most active funds (especially equity ones) are in a world of pain. Exhibit 6. American Funds Monthly Flows ($ Billion) 12 8 American Funds 4 0 (4) (8) (12) (16)

9 Page 9 of 12 American Funds has been so successful recently because it delivers on a promise that, as we ve seen, really matters: cost. Eighty-two percent of its funds are in the low or belowaverage fee level, meaning least expensive (in the bottom two quintiles in terms of cost). And in terms of performance, American Funds American Balanced ABALX, which appears on the top-flowing list this month, beat out 97% of its peers in the allocation 50%-70% equity Morningstar Category in the past year. Although American Funds has mostly been known for its equity lineup, its bond funds have taken center stage (and the highest inflows) recently. The firm s Bond Fund of America ABNDX and Intermediate Bond Fund of America AIBAX took in $334 million and $213 million, respectively, in April, indicating that American Funds is joining the battle for investors fixedincome money. Top-Flowing Active and Passive Funds Assets Assets Estimated Net Flows April Year April 2016 April 2015 $Mil $Mil $Mil Active Funds Metropolitan West Total Return Bond 1,736 8,843 75,633 65,775 PIMCO Income 1,256 11,998 57,856 44,877 DoubleLine Total Return Bond 1,046 11,360 58,781 46,171 American Funds American Balanced 963 5,492 90,439 82,579 JPMorgan Short Duration Bond ,709 11,132 Passive Funds Vanguard Total Bond Market Index 2,838 13, , ,738 Vanguard Total Stock Market Index 2,752 18, , ,550 Vanguard Total Bond Market II Index 2,056 3,016 98,819 93,489 Vanguard Total International Stock Index 1,695 60, , ,548 Vanguard Total International Bond Index 1,325 16,476 57,580 39,657 Top-Flowing Funds: Welcome Back, MetWest Total Return Bond After a month that saw a Vanguard fund lead the active top-flowing list (oh, the irony), Metropolitan West Total Return Bond MWTRX claimed the top spot after a notable absence. Regulars PIMCO Income PIMIX and DoubleLine Total Return Bond DBLTX were joined by JPMorgan Short Duration Bond OGLVX, adding up to four fixed-income funds and an allocation fund in the top five in April.

10 Page 10 of 12 If its active fixed-income fund didn t make it to the top five this month, Vanguard more than made up for it by grabbing the top five spots on the passive list. The five index funds are a welldiversified mix, covering U.S. equity, international equity, and fixed-income. Exhibit 7. Flows for Select Fixed-Income Funds During the Past 6 Months ($ Billion) 3 2 DoubleLine Total Return Bond Fund PIMCO Total Return Fund Vanguard Intermediate-Term Invmt-Grd PIMCO Income Fund Templeton Global Bond Fund Metropolitan West Total Return Bond 1 0 (1) (2) (3) Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16

11 Page 11 of 12 Bottom-Flowing Active and Passive Funds Assets Assets Estimated Net Flows April Year April 2016 April 2015 $Mil $Mil $Mil Active Funds PIMCO Total Return (1,140) (23,455) 87, ,398 Ivy Asset Strategy (1,075) (11,940) 9,340 24,758 American Funds Growth Fund of America (834) (5,821) 140, ,715 Templeton Global Bond (834) (14,154) 49,973 68,283 T. Rowe Price Real Assets (734) (124) 4,509 4,725 Passive Funds PowerShares QQQ (3,212) (3,581) 36,251 39,499 ishares MSCI Japan (1,291) (290) 16,564 18,577 ishares 1-3 Year Treasury Bond (1,122) 1,619 10,311 8,672 ishares 20+ Year Treasury Bond (858) 2,356 8,905 6,309 Consumer Staples Select Sector SPDR (856) 927 9,352 7,717 Ivy Asset Strategy IVAEX posted its third month of outflows following a manager change announcement on Feb. 2. Michael Avery, who has managed the fund since 1997, will retire on June 30. My colleague Leo Acheson, who covers the fund, writes that Avery s departure comes as a surprise and represents a meaningful loss for the firm. He served as the longesttenured manager on this fund and has been widely viewed as the heir apparent to CEO Hank Herrmann. As successful as American Funds was this month with its balanced fund, it didn t fare as well with its Growth Fund of America AGTHX, which was severely hit as investors pulled money out of all domestic growth categories. T. Rowe Price Real Assets PRAFX was a newcomer to the bottom-flowing list in April. The five bottom-flowing passive funds were an interesting mix, with ishares suffering outflows from three of its ETFs (short- and long-term Treasury bonds and Japan equity). PowerShares QQQ is a very technology-heavy ETF, and its performance dropped again in April after a March recovery, dragged down by weaker-than-expected earnings from large tech companies.

12 Page 12 of 12 Note: The figures in this report were compiled on May 12, 2016, and reflect only the funds that had reported net assets by that date. The figures in both the commentary and the extended tables are survivorship-bias-free. This report includes both mutual funds and exchange-traded funds, but not funds of funds unless specifically stated so. Important methodology note: Morningstar computes flows using the approach that is standard in the industry: Estimated net flow is the change in assets not explained by the performance of the fund. Our method assumes that flows occur uniformly over the course of the month. Adjustments for mergers are performed automatically. When liquidated funds are included, the final assets of the fund are counted as outflows. Reinvested dividends are not counted as inflows. We use fund-level reinvestment rates to improve accuracy in this respect. We make ad hoc adjustments for unusual corporate actions such as reverse share splits, and we overwrite our estimates with actual flows if managers are willing to provide the data to us. Please click here for a full explanation of our methodology.? 22 West Washington Street Chicago, IL USA Morningstar All Rights Reserved. The information, data, analyses and opinions presented herein do not constitute investment advice; are provided solely for informational purposes and therefore are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. The opinions expressed are as of the date written and are subject to change without notice. Except as otherwise required by law, Morningstar shall not be responsible for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses or opinions or their use. The information contained herein is the proprietary property of Morningstar and may not be reproduced, in whole or in part, or used in any manner, without the prior written consent of Morningstar. To order reprints, call To license the research, call

13 Morningstar Direct SM Publishing Date: Page 1 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 1 Large Blend 4,416 4,416 18,153 26,259 2, , Large Growth (12,669) (12,669) (27,874) (30,345) 1, , (1.18) (4.93) 3 Intermediate-Term Bond 15,492 15,492 40,211 54,682 1, , Large Value 1,453 1,453 1,687 (15,841) 1, , Foreign Large Blend 3,679 3,679 28, , Allocation--50% to 70% Equity (441) (3,272) World Stock (1,420) (1,420) (4,307) (6,200) Diversified Emerging Mkts 1,278 1,278 4,443 (5,459) Short-Term Bond 2,924 2,924 5,236 5, Foreign Large Growth (1,569) (1,569) 1,455 7, (1.16) 11 Mid-Cap Blend (556) (556) (4,868) 2, World Allocation (2,350) (2,350) (11,265) (25,939) High Yield Bond 2,314 2,314 13,840 (8,111) Small Blend 1,133 1,133 (1,326) (941) Mid-Cap Growth (2,071) (2,071) (8,783) (13,341) (2.02) 16 Mid-Cap Value (35) (35) (505) (8,815) World Bond (3,360) (5,064) Allocation--30% to 50% Equity (1,861) (10,416) Multisector Bond 1,401 1, (8,024) Small Growth (1,845) (1,845) (5,579) (10,616) (5.09) 21 Muni National Interm 3,043 3,043 10,571 20, Health (824) (824) (10,660) (5,775) (21.22) 23 Foreign Large Value ,597 1, Real Estate ,403 (2,263) (3.62) Corporate Bond 2,724 2,724 10,999 13, Small Value ,444 (538) Muni National Short (457) (457) 659 (962) Allocation--70% to 85% Equity (243) (1,820) Inflation-Protected Bond 1,761 1,761 2, Nontraditional Bond (2,094) (2,094) (11,797) (23,373) Intermediate Government (44) (44) 4,244 5, Bank Loan (459) (459) (6,256) (21,284) Muni National Long 1,003 1,003 2,360 2, High Yield Muni 1,018 1,018 4,454 6, Ultrashort Bond (1,029) (1,029) (1,468) (388) Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

14 Morningstar Direct SM Publishing Date: Page 2 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 36 Technology (249) (249) (4,793) (4.10) (7.73) 37 Europe Stock (1,829) (1,829) (7,530) 6, (1.90) 38 Short Government (1,136) (1,136) 407 4, Multialternative (119) (119) 2,075 14, Global Real Estate (80) (80) (1,298) (1,149) Emerging Markets Bond 1,127 1, (5,474) Commodities Precious Metals ,012 4, Equity Energy ,371 4, Energy Limited Partnership ,039 3, Financial (248) (248) (5,074) 2, (3.57) 46 Preferred Stock 1,112 1,112 3,084 6, Muni California Long ,065 1, Foreign Small/Mid Growth (79) (79) 189 2, (2.41) 49 Utilities ,660 1, (1.21) Natural Resources (2,535) Japan Stock (1,806) (1,806) (5,534) (112) (10.02) 52 Long-Short Equity (389) (389) (2,042) (6,718) (0.48) (0.96) 53 Miscellaneous Region (213) (213) 24 (2,193) Long Government (1,316) (1,316) 5,467 6, (0.98) Commodities Broad Basket ,588 (583) Foreign Small/Mid Blend (82) (82) 289 3, Tactical Allocation (1,200) (2,136) Managed Futures ,267 10, Consumer Cyclical (1,211) (1,211) (3,833) (1,853) (2.44) Foreign Small/Mid Value (40) (40) 214 1, Equity Precious Metals Muni California Intermediate ,415 2, Market Neutral (2,864) (1.13) Consumer Defensive (615) (615) 1,552 2, Muni Single State Long Long-Term Bond (734) (1,889) Pacific/Asia ex-japan Stk (94) (94) (704) (8,962) (0.25) Muni New York Long (697) Allocation--85%+ Equity (161) (161) (726) (1,977) Trading--Leveraged Equity (861) (861) (2,901) (502) Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

15 Morningstar Direct SM Publishing Date: Page 3 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 71 Industrials (2,662) Convertibles (187) (187) (1,523) (3,250) (1.09) 73 China Region (388) (388) (1,945) (4,488) (1.38) (12.82) 74 Infrastructure (154) (154) (745) (2,608) Muni Single State Interm Diversified Pacific/Asia (594) (969) Trading--Inverse Equity 1,037 1,037 4,608 5, Option Writing (0.63) 79 Long-Short Credit (321) (321) (1,389) (3,089) Muni New York Intermediate Muni Single State Short (61) (61) (646) (1,448) Allocation--15% to 30% Equity (141) (445) Muni Pennsylvania (60) India Equity (97) (838) (5.84) 85 Emerging-Markets Local-Currency Bond (337) (337) (1,282) (5,084) Communications Multicurrency (328) (328) (830) (4,009) Muni Massachusetts Muni New Jersey (284) Latin America Stock Commodities Energy (515) (515) 407 2, Muni Ohio Volatility ,038 2, Muni Minnesota Target-Date (50) (386) Target-Date (148) (701) Trading--Inverse Debt (256) (623) Bear Market (32) (32) 249 (567) (1.82) (5.69) 99 Target-Date (35) (311) Target-Date (81) (1.25) Trading--Leveraged Commodities (503) (503) 56 3, Miscellaneous Sector (73) (250) Target-Date (1.51) Target-Date (2) (1.71) Commodities Agriculture Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

16 Morningstar Direct SM Publishing Date: Page 4 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 106 Target-Date Retirement 5 5 (61) (172) Target-Date (1.75) Single Currency (213) (213) (258) (186) Trading--Inverse Commodities (150) Trading--Miscellaneous 7 7 (134) (448) Target-Date 2015 (13) (13) (59) (288) (0.85) Target-Date (5) (5) (31) (198) Trading--Leveraged Debt (105) (105) (61) (143) Target-Date Commodities Industrial Metals (7) (42) Target-Date Commodities Miscellaneous 0 0 (1) (28.23) Top 10 13,846 13,846 67, ,400 8, , All 15,565 15,565 64,284 81,815 14, , Top Fund Families Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1 Vanguard 21,323 21,323 92, ,937 3, , American Funds 1,503 1,503 6,267 5,209 1, , Fidelity Investments (1,872) (1,872) (4,976) (11,778) 1, , ishares 4,676 4,676 21,304 88, T. Rowe Price ,793 (1,703) SPDR State Street Global Advisors (522) (522) 5,947 25, Franklin Templeton Investments (2,803) (2,803) (13,399) (41,307) Pimco (952) (952) (6,144) (50,993) Dimensional Fund Advisors 2,034 2,034 9,613 23, JPMorgan (2,687) 4, BlackRock (1,066) (1,066) 432 (360) MFS (100) (100) OppenheimerFunds (706) (706) (2,792) (13,300) Dodge & Cox (851) (851) (2,487) (6,961) Columbia (107) (107) (2,838) (12,353) Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

17 Morningstar Direct SM Publishing Date: Page 5 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Top Fund Families Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 16 Invesco (125) (125) (709) (5,463) Jackson National , John Hancock , Principal Funds , Janus (91) (91) (605) (3,683) Wells Fargo Funds (601) (601) (3,098) (10,204) Lord Abbett (4,616) American Century Investments 3 3 (42) (2,217) AXA Equitable (419) (419) (1,822) (4,015) TIAA-CREF Asset Management ,621 6, Legg Mason (537) (1,960) Hartford Mutual Funds (317) (317) (1,236) (2,184) SEI , PowerShares (2,230) (2,230) (3,797) (2,313) Metropolitan West Funds 1,715 1,715 3,995 8, Goldman Sachs (1,288) (1,288) (4,637) (12,268) Voya (521) (521) (2,330) (7,553) Prudential Investments (837) Harbor (833) (833) (1,438) (4,493) Oakmark (1,100) (1,100) (3,437) (6,025) DoubleLine 1,449 1,449 7,498 14, First Eagle (173) (173) (1,329) (5,302) Eaton Vance (3,755) Nuveen ,326 2, Putnam (909) (909) (3,529) (8,254) AllianceBernstein ,477 1, Federated (1,339) GMO (867) (867) (3,625) (10,523) USAA 1 1 (956) (1,185) Dreyfus (3,621) Schwab Funds (163) (163) (458) MainStay (770) (770) (2,489) (6,687) Natixis Funds (440) (440) (1,638) (5,485) Artisan (397) (397) (1,067) (4,696) Thornburg (85) (85) (805) (1,812) Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

18 Morningstar Direct SM Publishing Date: Page 6 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Top Fund Families Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % Top 10 24,206 24, , ,631 8, , Top 50 19,610 19,610 86, ,974 12, , Other (4,045) (4,045) (21,019) (71,332) 2, , All 15,565 15,565 65,342 85,643 14, , Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

19 Morningstar Direct SM Publishing Date: Page 7 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Asset Classes Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % US Equity (9,882) (9,882) (27,651) (51,983) 5, , Sector Equity (634) (634) (11,807) (3,737) International Equity (1,510) (1,510) 18, ,960 2, , Allocation (2,217) (2,217) (17,539) (51,207) 1, , Taxable Bond 22,765 22,765 61,760 18,823 3, , Municipal Bond 5,864 5,864 21,864 31, Alternative ,336 17, Commodities ,070 6, All Long Term 15,565 15,565 64,284 81,815 14, , Morningstar Ratings Name Estimated Net Flow ($mil) Total Net Assets ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % QQQQQ 24,119 24,119 94, ,272 2, , QQQQ 6,081 6,081 20,924 31,308 5, , QQQ (6,048) (6,048) (33,447) (87,353) 4, , QQ (14,249) (14,249) (47,099) (124,555) 1, , Q (2,935) (2,935) (14,373) (45,121) Not Rated 8,597 8,597 43, , Total 15,565 15,565 64,284 81,815 14, , Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß