Global Investing 2013 Morningstar. All Rights Reserved. 3/1/2013

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Tamsyn Walters
8 years ago
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2 World Stock Market Capitalization Year-end % 9.6% United States International: Other Europe United Kingdom Japan Other Pacific Canada 52.5% 8.5% 6.0% 4.9% Capitalization calculated at year-end Total market capitalization is $25.6 trillion. Estimates are not guaranteed Morningstar. All Rights Reserved. 3/1/2013

3 GDP Growth by Region Five-year average annual percentage change Russia 1.9% Canada 1.1% United Kingdom 0.6% India 6.9% China 9.3% Japan 0.1% United States 0.6% U.A.E. 2.2% Australia 2.4% Brazil 3.3% South Africa 2.1% Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment Morningstar. All Rights Reserved. 3/1/2013

4 Global Stock Market Returns Highest and lowest historical annual returns for each region % Annual ranges of returns % % 79.8% % % 9.7% 10.3% 9.5% 0 Compound annual return % 43.1% 46.1% 36.2% 50 United States International Europe Pacific Past performance is no guarantee of future results. Each bar shows the range of annual total returns for each region over the period This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

5 Risk Level by Region Annual standard deviation % Risk % 33.3% % % 25.2% % 18.3% Asia Pacific Canada Europe U.K. Japan U.S. Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

6 Global Investing $100 Compound annual return U.S. stocks International stocks International bonds U.S. bonds U.S. inflation 9.9% $58.82 $54.38 $45.33 $ $ Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of All values in U.S. dollars. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

7 Growth Through Global Investing Annual returns of top-performing developed global stock markets 2012 Belgium 41% Germany 32% Denmark 32% Singapore 31% United States 16% 2011 Ireland 14% New Zealand 6% United States 2% UK 3% United States 2% 2010 Sweden 35% Denmark 31% Hong Kong 23% Singapore 22% United States 15% 2009 Norway 89% Australia 77% Singapore 74% Sweden 66% United States 26% Past performance is no guarantee of future results. Returns expressed in U.S. dollars. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

8 Comparing U.S. and International Stock Performance Average returns over 10-year holding periods 25% U.S. stocks International stocks Past performance is no guarantee of future results. Based on data from Calculated using rolling 10-year average returns. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

9 Domestic Versus Global Domestic portfolio Global portfolio 13% U.S. stocks U.S. bonds International stocks 40% 47% 60% 40% Return 9.5% Risk 11.0% Return 9.7% Risk 10.8% Past performance is no guarantee of future results. Risk and return are based on annual data over the period This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

10 Key Differences Between Developed and Emerging Markets Developed countries Established and stable economies with strong consumption activities and ample resources. Ex. Australia, Canada, Japan, Germany, U.K., U.S. Emerging countries Countries that are starting to participate globally by implementing reform programs and undergoing economic improvement. Ex. Brazil, China, Mexico, Thailand, Russia, India 2013 Morningstar. All Rights Reserved. 3/1/2013

11 Regional Performance Growth of $1,000 from $100k Compound annual return Latin America U.S. Emerging Europe Emerging Asia Emerging Far East Int l developed stocks 19.4% $83,819 10k $10,136 $9,517 $7,562 $6,785 $3,809 1k Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

12 Emerging Market Performance Risk and return % 46.0% 46.0% Risk Return % % 24.0% % 15.8% 18.1% 10 0 Emerging Europe Emerging Latin America Emerging Asia Emerging Mideast and Africa Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

13 Undeveloped Opportunities Returns as of December % 18.6% 16.0% 16.9% Emerging markets United States % 8.8% 8.2% 1.7% 0 0.6% 5 1 year 5 year 10 year 20 year Growth of $10k $100k $54,224 $48, Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

14 Emerging Markets Experience a Wider Range of Returns % Return Developed markets Emerging markets 125 * compound annual return % * 9.7% 8.0% 20.9% 7.7% 6.2% 18.1% 0 0.1% Australia U.S. U.K. Japan Mexico Korea Taiwan Chile Past performance is no guarantee of future results. All values are expressed in U.S. dollars. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

15 Global Market Downturns and Recoveries Periods of turbulence, Number of downturns Greatest decline Average decline Average decline duration in months Average recovery duration in months* Emerging markets Asia 3 73% 57% Europe 5 75% 53% Far East 3 76% 58% Latin America 7 61% 37% 5 19 Developed markets International stocks 3 56% 45% Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. *Calculations do not include recovery from the downturn, as the recovery duration is still unknown for all regions except the U.S Morningstar. All Rights Reserved. 3/1/2013

16 Correlations by Region Emerging Developed Asia Europe Far East Latin America U.S. stocks International stocks Emerging Asia 1.00 Europe Far East Latin America Developed U.S. stocks International stocks Past performance is no guarantee of future results. Correlation ranges from 1 to 1, with 1 indicating that the returns move perfectly opposite to one another, 0 indicating no relationship, and 1 indicating that the asset classes react exactly the same. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

17 Emerging Markets Can Improve Developed Portfolios % Return Developed portfolios Developed portfolios with emerging-market stocks Emergingmarket stocks 16 Small stocks 12 Bonds Large stocks 8 Int l developed stocks 4 Cash 0 0% Risk Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

18 Global Winners and Losers Highest returns % Lowest returns U.S. stocks U.S. bonds International stocks International bonds Emerging-market stocks Emerging-market bonds Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

19 The Case for Emerging-Market Bonds Returns 20% U.S. stocks Long-term government bonds High-yield bonds Emerging-market bonds 10 0 Last 1 year Last 3 years Last 5 years Last 10 years Rolling 12-month standard deviation 9% Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 3/1/2013

Foreign Taxes Paid and Foreign Source Income INTECH Global Income Managed Volatility Fund

Foreign Taxes Paid and Foreign Source Income INTECH Global Income Managed Volatility Fund Income INTECH Global Income Managed Volatility Fund Australia 0.0066 0.0375 Austria 0.0045 0.0014 Belgium 0.0461 0.0138 Bermuda 0.0000 0.0059 Canada 0.0919 0.0275 Cayman Islands 0.0000 0.0044 China 0.0000