Morningstar Direct SM U.S. Asset Flows Update

Transcription

1 ? Morningstar Direct SM U.S. Asset Flows Update Morningstar Manager Research 15 December Data through Nov. 30, U.S. Mutual Funds and Exchange- Traded Products Alina Lamy Senior Analyst Markets Research International and Sector Equity Receive Largest Flows in November After a one-off month in which taxable-bond funds received the highest flows, international equity was once again the highest-receiving Morningstar Category group, with a $4.9 billion total inflow in November. Sector equity followed with $4.2 billion. The strong inflow for international equity occurred despite the weak performance of foreign stocks this past month, driven mainly by disappointing third-quarter GDP growth in Europe. The U.S. stock market, on the other hand, was mostly up as many economic indicators continued to show strength: increasing consumer confidence, a solid employment report, and improvement in most housing data. Despite the encouraging outlook, investors withdrew $19.7 billion from active U.S.-equity funds in November. The positive $13.0 billion flow on the passive side was not large enough to offset the active outflow, resulting in an overall $6.7 billion outflow for the category group. Active Passive Estimated Net Flows* Nov Assets Nov Assets 1 Year 1 Year $Mil $Bil $Bil U.S. Equity (19,743) (163,091) 3,689 13, ,809 2,465 Sector Equity (407) 9, ,596 34, International Equity (4,224) 33,442 1,550 9, , Allocation (4,126) (13,805) 1,127 (2) 2, Taxable Bond (8,377) (59,953) 2,243 2, , Municipal Bond 2,562 14, , Alternative 686 7, ,385 8, Commodities (1,305) (3,260) 22 (376) 1, All Long Term (34,934) (175,211) 9,762 30, ,751 4,580 Money Market 7,465 85,954 2,733 *Includes liquidated and merged funds.

2 Morningstar Manager Research 15 December Page 2 of 10 Total (Active and Passive) Estimated Net Flows* Nov Assets 1 Year $Mil $Bil U.S. Equity (6,705) (56,282) 6,154 Sector Equity 4,189 44, International Equity 4, ,261 2,382 Allocation (4,128) (11,011) 1,183 Taxable Bond (5,723) 41,277 2,995 Municipal Bond 2,981 19, Alternative 2,071 15, Commodities (1,681) (1,925) 70 All Long Term (4,067) 259,540 14,342 Money Market 7,465 85,954 2,733 As we approach the end of the year, looking back at flows over the past 11 months clearly reveals investors appetite for international equity. The largest flows went into passive funds, but active funds also received positive flows, in sharp contrast with U.S.-equity and taxablebond funds. Exhibit 1. Flows Through November ($ Billion) Active Passive

3 Morningstar Manager Research 15 December Page 3 of 10 Socially Responsible Funds: A Small but Successful Active Niche In November, actively managed U.S. equity funds saw their sixth-worst monthly outflow since 1993 when Morningstar s fund flow data begins (Exhibit 2). However, a small subcategory has been growing in popularity recently and has managed to attract positive flows on a 12-month rolling basis since October 2013 (Exhibit 3). Socially responsible funds avoid or favor certain investments for moral or ethical reasons; because of this investment style, the majority of them are active. There are currently 75 socially responsible active funds under the U.S.-equity category in Morningstar's database. It is a small subset compared with the entire universe of active U.S.-equity funds (2,210), but again, it is a subset with positive rolling 12-month flows. For a group of active funds, that s nothing short of impressive. Exhibit 2. Worst Monthly Outflows From Active U.S. Equity Since 1993 ($ Billion) July 2002 January 2008 October 2008 July 2011 March 2009 November

4 Morningstar Manager Research 15 December Page 4 of 10 Exhibit 3. Rolling 12-Month Flows, U.S. Equity, Socially Responsible ($ Billion) High-Yield Market Turbulent Following Third Avenue Closure The high-yield bond category has been highly volatile in terms of flows over the past few months, jumping from the bottom five list in September to the leading five in October, and now back again to the bottom-flowing list in November. Adding fuel to the fire, Third Avenue Management announced in the early days of December that it would liquidate its high-yield bond fund, Third Avenue Focused Credit TFCIX, without allowing investors to redeem their shares right away. The fund's remaining assets ($942 million as of Nov. 30) were placed into a liquidating trust, which will make distributions to the fund's shareholders as income is received and assets are sold. Third Avenue expects the liquidation to take up to a year or more to complete. The fund had been posting some of the worst returns among funds in the high-yield category and experiencing massive outflows. It held a large, concentrated allocation in distressed, illiquid bonds and was unable to sell them when performance deteriorated and shareholders asked for their money back. Liquidating a fund in this manner, however, is highly unusual and caused major unrest in the credit markets in early December.

5 Morningstar Manager Research 15 December Page 5 of 10 Foreign Large-Blend and Intermediate-Term Bond Lead Category Flows Intermediate-term bond remained among the top five receiving categories in November, as well as in October. So did foreign large-blend (which is mostly Europe). In essence, the dominant trend observed so far this year seems poised to continue, with investors diversifying heavily into international stocks while maintaining U.S. equity and taxable-bond positions, but predominantly in passively managed funds. The financial and technology open-end categories were among the best-performing in November, rising 2.3% and 2.0%, respectively. For once, flows happened concurrently with returns instead of following them, as financial and technology landed in the top-flowing five last month. Top- and Bottom-Flowing Morningstar Categories Active Passive Estimated Net Flows* Nov Assets Nov Assets 1 Year 1 Year $Mil $Bil $Bil Leading Foreign Large Blend , , , Intermediate-Term Bond 2,144 25, ,055 36, Technology ,350 3, Financial ,386 3, Muni National Interm 1,353 13, ,674 8 Lagging High-Yield Bond (3,104) (15,078) 256 (488) 4, Large Value (4,322) (32,940) 820 1,855 8, World Allocation (2,211) (10,250) 318 (9) 46 0 World Stock (2,202) (3,766) , Bank Loan (1,526) (19,152) 102 (454) (1,491) 5 *Excludes money market and funds of funds. Energy Limited Partnerships: Flows and Returns Oil prices continued to slide, with Brent crude, the global benchmark, falling below $40 a barrel on Tuesday, Dec. 8, for the first time since March 2009, and the shares of energy-focused companies followed. Funds and ETFs in the energy limited partnership category invest a significant amount of their portfolios in energy master limited partnerships. These are partnerships specialized in producing, processing, and especially transporting energy products. Many MLPs run pipelines

6 Morningstar Manager Research 15 December Page 6 of 10 that move natural gas and other energy products around the country. MLPs often catch the eye of income-oriented investors because their payouts can be compelling and their yields very high. These companies have been marketing to investors by emphasizing their steady and almost guaranteed cash flow. Once the pipelines are established, fuel has to flow and whomever wants to transport the fuel has to pay for using the pipelines; therefore, the pipeline owner can enjoy a fairly certain stream of revenue. The problem, however, is that relying on that fairly consistent stream of revenue these businesses have been taking on a lot of debt while paying out 90% 95% of their cash flow and at the same time continuing to pursue aggressive growth strategies. Left without any safety margin, MLPs were hit pretty hard when oil prices began to drop and had no choice but to start cutting distributions to investors. Boardwalk Pipeline BWP did it in early 2014, and Kinder Morgan KMI did it in recent weeks. There may be even more dividend and distribution cuts in the future from other businesses that have been similarly aggressive. The implications are that we started and will very likely continue to see more volatility in flows for funds concentrated in MLPs, as Exhibit 4 illustrates. Also, historically, most of the inflows came in the year or two before the 2014 peak, so most investors only caught the last-minute benefits of the climb. Back in 2009 and 2010, before all the growth happened, the flows were minimal to nonexistent. Exhibit 4. Flows ($ Billion) and Growth of $10,000 for the U.S. Energy Limited Partnership Category Flows Flows Growth of $10,000 Growth of $10,000 40,000 32, , , Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr ,000 0

7 Morningstar Manager Research 15 December Page 7 of 10 Top 10 U.S. Fund Families Active Passive Estimated Net Flows Nov Assets Nov Assets 1 Year 1 Year $Mil $Bil $Bil Vanguard 953 7, , ,689 2,128 Fidelity Investments (2,502) (8,408) 1, , American Funds (45) 9,622 1,198 BlackRock/iShares (956) 8, ,022 94, T. Rowe Price 605 1, (169) (21) 28 SPDR State Street Global Advisors 261 1,710 3 (3,033) (7,768) 414 Franklin Templeton Investments (3,675) (27,249) 409 PIMCO (4,490) (105,437) 307 (120) (1,029) 4 JPMorgan (900) 17, (29) (361) 6 Dimensional Fund Advisors 1,333 21, November saw more outflows from most companies on the active side: PIMCO, Franklin Templeton, Fidelity, and even JPMorgan. Vanguard and ishares were pretty close with $14.2 billion and $13.0 billion flows on the passive side. Moreover, as Exhibit 5 illustrates, Vanguard and ishares have dominated this year, followed (at a much longer distance) by DFA. Exhibit 5. Flows Through November for Top 10 Fund Families ($ Billion)

8 Morningstar Manager Research 15 December Page 8 of 10 Speaking of Vanguard s domination, here are a few interesting bits of flows trivia: - $1 trillion: Net flows for Vanguard since the beginning of the financial crisis in December : Number of months during this time period when Vanguard experienced outflows (October 2010 and June 2013). - 8: Number of months during this time period when Vanguard received an inflow larger than $20 billion. - $34 billion: Vanguard s January inflow. Investors Continue to Flee Some Bond Funds, Reallocate to Others PIMCO Total Return PTTRX and Templeton Global Bond TPINX once again appear on the bottom-flowing active list in November. Bottom-Flowing Active and Passive Funds Assets Assets Estimated Net Flows Nov 1 Year Nov Nov 2014 $Mil $Mil $Mil Active Funds PIMCO Total Return Fund (1,590) (70,764) 91, ,810 Ivy Asset Strategy Fund (1,203) (10,085) 17,446 31,266 Templeton Global Bond Fund (1,163) (10,453) 58,792 72,741 Credit Suisse Commodity Return Strat FD (822) 436 4,040 5,386 Oppenheimer Developing Markets Fund (780) (4,234) 30,513 42,494 Passive Funds ishares 1-3 Year Treasury Bond (1,549) 3,193 11,366 8,206 American Beacon S&P 500 Index Fund (1,254) (1,315) 30 1,284 SPDR Gold Shares (1,207) (1,929) 22,348 27,276 Vanguard Institutional Index Fund (1,088) 4, , ,635 Utilities Select Sector SPDR Fund (903) (243) 5,740 6,558

9 Morningstar Manager Research 15 December Page 9 of 10 Top-Flowing Active and Passive Funds Assets Assets Estimated Net Flows Nov 1 Year Nov Nov 2014 $Mil $Mil $Mil Active Funds PIMCO Income Fund 1,223 11,384 52,389 40,363 Metropolitan West Total Return Bond ,498 69,435 43,941 DoubleLine Total Return Bond Fund ,196 51,072 38,885 T. Rowe Price New Income Fund ,119 27,697 Baird Aggregate Bond 592 3,358 6,706 3,331 Passive Funds Vanguard Total Intl Stock Idx Fund 3,618 64, , ,774 ishares Russell ,509 4,362 15,100 10,696 ishares Core US Aggregate Bond 2,460 8,607 29,916 21,679 ishares Russell , ,114 27,681 Vanguard Developed Markets Index Fund 1,766 10,542 53,949 45,535 Once again, all the top five active funds were fixed-income funds in November. PIMCO Income PIMIX is becoming a real contender in the fixed-income arena these days, beating out Metropolitan West Total Return Bond MWTIX in November with a $1.2 billion inflow. An interesting appearance on the top five this month is T. Rowe Price New Income PRCIX. On the passive side, two Vanguard funds and three ishares funds claim the top five. Vanguard Total International Stock Index VGTSX has been a regular on this list, and it continues to enjoy strong flows. It should be noted, however, that the majority of these flows tend to come from other Vanguard funds, principally its target-date open-end funds, as well as targetrisk and target-date offerings from 529 plans. These funds tend to enjoy regular flows in the form of monthly investor contributions as opposed to lump sums. The fact that Vanguard Total International Stock Index keeps showing up on the top-flowing list could reflect Vanguard s decision to increase its allocation to international stocks within these funds of funds.

10 Morningstar Manager Research 15 December Page 10 of 10 Note: The figures in this report were compiled on Dec. 11,, 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. 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

11 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 11- Mkt Sh % Mkt Sh % 1-Mo YTD 1 Large Blend (1,639) (2,623) (27,878) 375 2, , Large Growth 1 2,864 (21,640) (24,741) 1, , Intermediate-Term Bond 6,199 13,899 49,732 62,366 1, , (0.61) Large Value (2,467) (2,779) (26,338) (24,218) 1, , (2.02) 5 Foreign Large Blend 9,003 13, , , (1.88) (0.33) 6 Moderate Allocation (432) (371) 1,344 2, (1.00) (4.71) 7 World Stock (2,063) (2,420) (3,192) (867) (2.19) (3.22) 8 Diversified Emerging Mkts (1,360) (775) 3,827 (963) (6.01) (25.56) 9 Foreign Large Growth (31) 999 8,802 8, Mid-Cap Blend (285) 1,997 15,068 15, (1.87) 11 Short-Term Bond 125 1,666 (1,620) (1,907) (0.25) World Allocation (2,220) (4,348) (8,764) (10,204) (2.10) (10.28) 13 High Yield Bond (3,592) 5,311 (1,038) (10,521) (3.64) (3.39) 14 Mid-Cap Growth (1,013) (2,265) (8,997) (9,625) Small Blend 567 (779) (28) 1, (0.74) 16 Mid-Cap Value (488) (695) (9,808) (10,246) (3.63) 17 World Bond ,892 12, (2.41) (8.72) 18 Small Growth (1,006) (2,650) (3,132) (4,524) Conservative Allocation (917) (1,781) (2,551) (2,412) (1.49) (2.84) 20 Health (684) (1,995) 20,434 22, Multisector Bond (353) (668) (1.22) (0.88) 22 Muni National Interm 1,488 2,748 14,224 16, Foreign Large Value (716) (1,474) 4,599 4, (3.29) (6.71) 24 Nontraditional Bond (1,502) (3,743) (10,171) (12,242) (0.92) (3.17) 25 Real Estate 669 2,115 (3,438) (2,004) (0.45) Small Value (375) (444) (498) (623) (3.91) 27 Muni National Short (3,606) (2,778) (0.21) Corporate Bond (199) 2,564 11,351 12, (0.52) Bank Loan (1,980) (3,088) (13,630) (20,643) (2.19) (0.92) 30 Intermediate Government (538) (702) 2,882 2, (0.58) Inflation-Protected Bond ,243 3, (0.31) (2.18) 32 Europe Stock 810 3,680 36,457 37, (0.82) Technology 2,796 4,577 3,374 4, Muni National Long Ultrashort Bond (663) (1,923) (3,615) (5,672) 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

12 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 11- Mkt Sh % Mkt Sh % 1-Mo YTD 36 High Yield Muni 690 1,834 2,507 3, Emerging Markets Bond (1,216) (2,224) (7,456) (9,828) (1.49) (6.10) 38 Short Government (1,919) (2,523) 6,247 3, (0.39) Global Real Estate (87) (757) 2,657 2, (5.30) (1.70) 40 Multialternative 1,072 1,993 14,279 15, (0.38) (2.93) 41 Long/Short Equity (522) (776) (5,079) (5,458) (1.72) 42 Japan Stock ,462 12, Financial 1,573 2, , Equity Energy ,833 11, (2.22) (37.22) 45 Foreign Small/Mid Growth ,416 1, (0.49) Energy Limited Partnership ,576 4, (16.56) (60.31) 47 Muni California Long Commodities Precious Metals (1,216) (1,265) (2,013) (2,682) (16.56) (26.26) 49 Preferred Stock 1,104 2,288 6,152 6, Miscellaneous Region (564) (428) 1,336 (201) Natural Resources (277) (436) (1,979) (2,908) (4.09) (31.39) 52 Foreign Small/Mid Blend ,667 5, Tactical Allocation (208) (440) 1,154 1, (0.68) (7.98) 54 Consumer Cyclical 865 1,817 4,857 8, (1.61) Utilities (1,170) (1,127) (6,626) (4,116) (5.34) (15.60) 56 Commodities Broad Basket (1,406) (1,439) (2,757) (4,258) (13.66) (44.64) 57 Long Government (1,421) (408) 1,168 2, (1.52) (1.80) 58 Market Neutral (170) (401) (4,970) (7,839) (1.18) (1.83) 59 Managed Futures 400 1,330 8,320 8, (1.19) 60 Foreign Small/Mid Value ,348 2, (1.73) Pacific/Asia ex-japan Stk (138) (340) (4,097) (4,212) (4.60) (16.01) 62 Muni California Intermediate ,067 2, Long-Term Bond (230) (378) (2,681) (2,475) (0.43) (2.95) 64 Muni Single State Long (213) (253) Trading-Leveraged Equity 750 (439) 380 1, Consumer Defensive (491) 943 (881) (341) (1.38) China Region (769) (723) (351) (577) (2.35) (3.90) 68 Convertibles (39) (468) (1,612) (1,828) (0.42) (0.61) 69 Muni New York Long (50) (74) (861) (938) Industrials (4,582) (4,316) (2.92) 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

13 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 11- Mkt Sh % Mkt Sh % 1-Mo YTD 71 Aggressive Allocation (34) (72) (161) (1.00) (5.54) 72 Diversified Pacific/Asia 3 (93) (1.56) (1.51) 73 Equity Precious Metals 183 (404) 573 (169) (17.52) (54.70) 74 Muni Single State Interm 2 (18) Muni Single State Short (37) (77) (807) (787) Muni New York Intermediate Trading-Inverse Equity (594) (29) 2,900 2, India Equity (73) 152 2,345 2, (5.13) (11.05) 79 Muni Pennsylvania 13 2 (128) (139) Multicurrency (182) (618) (1,705) (2,126) (3.20) 81 Communications (2.20) Muni Massachusetts Muni New Jersey (18) (39) (328) (351) Commodities Energy 934 1,315 4,181 5, (10.17) (32.79) 85 Trading-Inverse Debt (508) Muni Ohio 6 11 (6) Muni Minnesota Target Date (87) (122) (148) (222) (0.40) Target Date (129) (185) (430) (507) Miscellaneous Sector (7) (88) (255) (202) Latin America Stock (1,183) (1,863) (6.19) (59.86) 92 Volatility , Bear Market (87) (267) (747) (1,403) (2.43) (17.47) 94 Target Date (35) (64) (93) (156) Target Date (2.52) Trading-Leveraged Commodities 703 1,003 3,808 4, Target Date (2.74) Target Date (9) (24) (3.06) Single Currency Retirement Income (19) (17) (102) (147) (0.09) Commodities Agriculture 0 (6) (71) (192) (2.57) (15.29) 102 Trading-Miscellaneous (258) (262) Target Date (2.95) Trading-Inverse Commodities (69) (216) (288) (343) Target Date (11) (31) (210) (220) (2.11) 3.51 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 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 ($bil) Total Return 1-Mo QTD YTD 1-Yr 11- Mkt Sh % Mkt Sh % 1-Mo YTD 106 Target Date (22) (37) (180) (192) Trading-Leveraged Debt (225) (104) (302) (282) Target Date Commodities Industrial Metals 7 (1) (28) (68) Commodities Miscellaneous (0.81) Top 10 6,926 24, , ,439 8, , All (4,067) 25, , ,950 14, , Top Fund Families Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr 11- Mkt Sh % Mkt Sh % 1 Vanguard 15,190 31, , ,921 2, , Fidelity Investments (1,990) 693 8,888 10,678 1, , American Funds (45) ,024 9,622 1, , ishares 12,248 25,984 79,070 89, T. Rowe Price 436 (32) 1,692 1, SPDR State Street Global Advisors (2,773) 4,009 (31,875) (6,059) Franklin Templeton Investments (3,675) (6,905) (24,779) (27,249) Pimco (4,610) (9,226) (78,105) (106,467) JPMorgan (929) 1,109 12,859 17, Dimensional Fund Advisors 1,333 3,397 20,299 21, BlackRock (182) 1,621 12,286 13, Dodge & Cox (1,714) (2,258) 4,949 8, OppenheimerFunds (1,147) (1,439) (10,600) (11,554) MFS 275 (284) 3,216 3, Columbia (1,135) (1,723) (12,906) (13,646) Invesco (370) (1,306) (3,796) (4,353) Jackson National 648 1,748 8,161 9, John Hancock ,910 7, Principal Funds ,173 1, Janus (551) (633) (1,291) (860) Wells Fargo Advantage (989) (2,919) (9,403) (8,947) Lord Abbett (542) (686) (3,949) (6,042) American Century Investments (44) (174) (1,756) (2,091) AXA Equitable (316) (576) (3,071) (3,249) Hartford Mutual Funds (1,372) (1,624) 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 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 11- Mkt Sh % Mkt Sh % 26 PowerShares 1,097 3,509 1,659 (1,633) Legg Mason (258) 723 3,272 5, Goldman Sachs (941) (1,359) (7,507) (8,682) TIAA-CREF Mutual Funds ,892 6, SEI ,820 4, Voya (515) (1,272) (7,259) (7,638) Harbor (368) (837) (3,013) (3,844) Oakmark (548) (952) (1,558) (2,830) Metropolitan West Funds 869 1,932 18,305 25, Prudential Investments ,788 3, Putnam (641) (1,356) (3,309) (3,281) First Eagle (487) (1,284) (3,972) (4,392) GMO (260) (3,375) (7,132) (7,842) MainStay (1,011) (1,702) (9,546) (13,273) Eaton Vance (417) (744) (4,316) (5,541) Federated (66) (191) 160 (164) DoubleLine 994 2,591 12,998 15, Nuveen , WisdomTree ,974 21, AllianceBernstein (35) Dreyfus (1,115) (1,342) (3,247) (3,923) USAA (3) (4) 958 1, Natixis Funds (417) (1,015) 1,252 1, Schwab Funds ,211 1, Ivy Funds (1,445) (2,314) (8,516) (10,272) Top 10 15,184 50, , ,635 8, , Top 50 6,123 37, , ,330 12, , Other (10,190) (11,377) 16,642 7,768 2, , All (4,067) 25, , ,098 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

16 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 Asset Classes Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr 11- Mkt Sh % Mkt Sh % US Equity (6,705) (7,374) (83,251) (56,347) 6, , Sector Equity 4,189 8,829 26,096 44, International Equity 4,929 14, , ,440 2, , Allocation (4,128) (7,869) (11,150) (11,016) 1, , Taxable Bond (5,723) 10,848 53,899 41,518 2, , Municipal Bond 2,981 5,963 14,386 19, Alternative 2,071 2,573 18,269 15, Commodities (1,681) (1,396) (688) (1,879) All Long Term (4,067) 25, , ,950 14, , Morningstar Ratings Name Estimated Net Flow ($mil) Total Net Assets ($bil) 1-Mo QTD YTD 1-Yr 11- Mkt Sh % Mkt Sh % QQQQQ 11,498 30, , ,274 2, , QQQQ 4,692 19,287 69,825 98,180 5, , QQQ (12,893) (19,232) (71,659) (76,706) 4, , QQ (11,557) (15,527) (63,581) (77,129) 1, , Q (3,692) (6,602) (31,664) (36,366) Not Rated 7,886 16, , , Total (4,067) 25, , ,950 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