Voya SmallCap Opportunities A NSPAX. Analyst Notes. Voya SmallCap Opportunities Trims Management Fee, but Ratings Are Unchanged

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1 Page 1 of 1 Analyst Notes Voya SmallCap Opportunities Trims Management Fee, but Ratings Are Unchanged Maintain Rating Oct 3, 218 The prospectus net expense ratios for all seven of Voya SmallCap Opportunities' share classes have dropped because of a reduction in the management fee from.91% to.88%, effective Sept. 28, 218. While a welcome change, it is not enough to move the needle on the fund's relatively expensive pricing, and it still earns a Negative rating for Price, and its Morningstar Analyst Rating of Neutral is unchanged. Analyst Departs at Voya Small Cap Maintain Rating Apr 4, 218 An equity analyst, covering the technology sector, on Voya's small-cap team has left the firm. His departure does not change our of Neutral on Voya SmallCap Opportunities. Chris Jennings, an equity analyst on Voya's small-cap team, left the firm effective March 29, 218. Jennings was covering the technology sector and had been at Voya for 11 years, making him the second-longest-tenured analyst on the small-cap investment team. Additionally his 25 years of investment experience was the longest on the team. Voya has identified a replacement who is set to begin at the end of April 218. The new analyst will assume coverage of the software and semiconductors sectors while James Hasso and a junior analyst will cover the hardware sector. We are maintaining our People Pillar Rating of Neutral following the change.

2 Morningstar Category Category Index Total Assets Inception Date Domicile Currency Morningstar Rating US Fund Small Growth Russell 2 Growth TR USD 1,562 6/5/95 USA USD QQQ Mil USD Page 2 of 1 Style Map Deep Value Value Blend Growth High Growth Regional Exposure Americas 99.5% People Europe & Africa.5% Giant Large Mid Small Micro Asia & Australia.% James Hasso 1/8 Joseph Basset 4/12 Total Named Managers & ( & & * ( * * * ( ) 3K 2K 15K 1K 4K Performance 9/3/18 Growth of 1, Annualized USD Value USD Ret % Fund 26, Category 24, Index 27, Full Manager Change Partial Manager Change Bear Market Morningstar Rating QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQ QQ Quartile Rank in Category Percentile Rank in Category # of Funds in Category % Total Return USD /- Category /- Index Process Equity Style Box Super Sector % x Defensive % w Sensitive % m Cyclical Asset Allocation Stock Bond Cash Other High fees and capacity concerns limit this fund s attractiveness. Analyst View Linda Abu Mushrefova Analyst Morningstar Pillars Process Page 2-3 Performance Page 4 People Page 5 Parent Page 6 Price Page 7 Negative Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ Á % Price TER/OGC Mar 29, 218 Voya SmallCap Opportunities high fees and an increasing asset base restrict it to a of Neutral. James Hasso has been at the helm of the strategy since October 214 but was a listed comanager dating back to October 28. He is supported by comanager Joseph Basset and six fundamental analysts. In addition to Hasso s short track record in his current role, two of the six analysts were hired in the past three years. The team s bottom-up, fundamental approach is solid. The analysts are responsible for identifying attractive names and modeling them two to three years out using a terminal value model. They assess characteristics such as cash flows, leverage, and return on capital. Hasso is tasked with making portfolio construction decisions based on the risk/reward profiles. He maintains a portfolio of stocks, generally keeping sector bets tight to the benchmark. While the process is sound, asset growth and no indication of when the fund will be closed offset the merits of this approach. Fund assets stand at about $1.5 billion, but the strategy total is $3.9 billion. The fund ranks in the top quintile based on fund size in the small growth Morningstar Category, but of more concern is the strategy s burgeoning asset base. Capacity management is of particular importance in the small-cap arena. Another feature is its expensive price tag, which creates a higher hurdle to produce alpha for investors, something it has struggled to do recently. While Hasso s track record is short and limited to a rising market environment, results under his tutelage leave more to be desired. From his assumption of the lead role in October 214 through March 218, the fund trails peers and its Russell 2 Growth Index benchmark on both an absolute and risk-adjusted basis. However, the fund s relatively conservative approach has not yet had the opportunity to demonstrate its ability to protect on the downside under Hasso. Over longer periods, results are more encouraging, albeit under a different lead manager. Nevertheless, investors seeking small-cap exposure may be better served elsewhere.

3 Process: Approach Page 3 of 1 Morningstar Category Category Index Index Proxy US Fund Small Growth Russell 2 Growth TR USD ishares Russell 2 Growth ETF Capacity bears watching. Process Pillar Mar 29, 218 The managers' investment philosophy emphasizes bottom-up stock selection through fundamental research by sector specialist analysts. They focus on high-quality companies that generate positive cash flows and benefit from secular growth trends. The analysts use a terminal value model to forecast names out two to three Equity Style Box 6/3/218 years and determine a price target. One concerning trend is the strategy s growing asset base and a lack of direction on capacity. This limits the Process Pillar rating to Neutral. The team starts with a universe of stocks falling within the market-cap range of the Russell 2 Index benchmark and narrows this universe down by ranking stocks according to various fundamental factors, including growth, valuation, leverage, and return on capital. The analysts then do in-depth fundamental analysis on promising names, adopting a heavy balance-sheet focus. A Asset Allocation 6/3/218 conversation with management is required prior to purchasing a name. Lead manager James Hasso makes the buy/sell decisions, taking into account whether a stock's fundamentals are improving and its valuations are attractive. He maintains a portfolio of stocks, generally keeping sector weightings within 3 percentage points of the index, and aims for a tracking error of 3%-6%. Assets have grown significantly, but there has not been any indication of closing the strategy, a negative for investors. Giant Large Mid Small Micro Fund Centroid: Weighted average of equity holdings Zone: 75% of fund equity holdings Category Average Index Proxy Current Allocation 3-Year Average Assets % Fund 3-Yr Avg Category Proxy U.S. Equities Non-U.S. Equities Bonds.... Cash Other Deep Value Core Value Core Core Growth High Growth Regional Exposure 6/3/218 Sector Delta 6/3/218 Style Box Factors 6/3/218 Market Cap Fund 3-Yr Avg Category Proxy Giant/Large Mid Small/Micro Avg Market Cap Bil USD Value Measures Fund 3-Yr Avg Category Proxy Price/Prospect. Earnings Price/Book Price/Sales Price/Cash Flow Dividend Yield Growth Measures Fund 3-Yr Avg Category Proxy Long-Term Earnings % Historical Earnings % Sales % Cash Flow % Book-Value % Market Type Equity % Fund 3-Yr Avg Category Proxy Developed Emerging Top 5 Countries Equity % Fund 3-Yr Avg Category Proxy United States United Kingdom Puerto Rico....1 Peru....1 Singapore....1 Economic Moat 6/3/218 Moat Rating Fund 3-Yr Avg Category Proxy Wide Moat Narrow Moat No Moat Coverage Ratio Key Ratios 6/3/218 Fund 3-Yr Avg Category Proxy Net Margin % ROA % Debt/Total Capital % ROE % Defensive Sensitive Cyclical Fund Index Proxy Equity Sector Breakdown 6/3/218 Larger sector concentrations versus the index move the investment to the corner of the triangle corresponding to that equity Super Sector. Sectors Fund 3-Yr Avg Category Proxy xdefensive sconsumer Defensive dhealthcare futilities wsensitive icommunication Serv oenergy pindustrials atechnology mcyclical rbasic Materials tconsumer Cyclical yfinancial Services ureal Estate

4 Process: Portfolio Page 4 of 1 Morningstar Category Category Index Index Proxy US Fund Small Growth Russell 2 Growth TR USD ishares Russell 2 Growth ETF Well-diversified portfolio. Process Pillar Similarity to Index Proxy 1/11/218 Mar 29, 218 James Hasso tends to keep sector weightings close to the Russell 2 Growth Index, allowing security selection to drive performance rather than sector or macro bets. Sector deviations are limited to 5% from the benchmark weighting and a maximum position size of 5% in a single name ensures that the portfolio is diversified. The team typically holds between 13 and 16 names and limits the cash position to 5% of assets. One change that Hasso has implemented is lowering the allocation to biotech names given their binary nature and riskiness. On average, each name in the portfolio accounts for about 7 basis points of assets except for biotech stocks, which are closer to 2-3 basis points. The relatively conservative approach to portfolio construction should protect investors on the downside but can lead to underperformance in frothier markets, such as in 217 when more speculative biotech names did well. Security selection within healthcare and technology were the leading detractors for the year. As of Dec. 31, 217, about 12% of assets were held in the top 1 names. The largest singlename holding was a 1.26% allocation to Knight- Swift Transportation Holdings KNX, a longtime holding. The team s active share is at about 75%; this is an area Hasso has emphasized, and he would like to see that number rise. Index Proxy Overlap Number of Equity Holdings Largest Common Holdings Fund % Proxy % Largest Distinct Holdings Fund % Proxy Fund Circle size represents number of holdings. Fund 144 Index Proxy 1,253 Fund Overlap With Index Proxy Holdings Overlap 111 Asset Overlap 2.9% Integrated Device Technology Inc Primerica Inc HealthEquity Inc Five Below Inc HubSpot Inc Morgan Stanley Instl Lqudty Govt Instl 2.94 ishares Russell 2 Growth ETF 1.51 Extended Stay America Inc.88 Matthews International Corp Class A.82 PRA Health Sciences Inc.81 Portfolio Holdings 6/3/18 Current Portfolio Date Previous Portfolio Date Equity Holdings Bond Holdings Assets in Top 1 Holdings Turnover Ratio (Reported) 6/3/18 3/31/ % 88% Top 1 Holdings Country Assets % Assets % Proxy % 6/3/18 3/31/18 6/3/18 First Bought Days Trading Morningstar Rating for Stocks Economic Moat Sector 1-Yr Total R Morgan Stanley Instl Lqudty Govt Instl USA 2.94 Y ishares Russell 2 Growth ETF USA T The Brink's Co USA /17 <1 p Industrials Y j2 Global Inc USA /12 <1 a Technology T EMCOR Group Inc USA /17 <1 p Industrials 8.72 T Planet Fitness Inc A USA /16 <1 t Consumer Cyclical 1.26 Y Medidata Solutions Inc USA /17 <1 a Technology -6.9 T Integrated Device Technology Inc USA /16 <1 a Technology T Children's Place Inc USA /11 <1 t Consumer Cyclical 9.78 T Woodward Inc USA /9 <1 p Industrials 4.9 Change since last portfolio: T Increase Y Decrease R New New Holdings Largest Purchases % Assets Sector Morgan Stanley Instl Lqudty Govt Instl 2.94 Marriott Vacations Worldwide Corp 1.3 t BlackLine Inc.83 a Green Dot Corp.83 y United Community Banks Inc.69 y Eliminated Holdings Largest Sales % Assets Sector BlackRock Liquidity FedFund Instl 1.72 Nektar Therapeutics Inc 1.18 d MKS Instruments Inc.9 a Monolithic Power Systems Inc.88 a Sage Therapeutics Inc.85 d Largest Position Changes Current % Prior % R Morgan Stanley Instl Lqudty Govt Instl R Marriott Vacations Worldwide Corp 1.3. Y BlackRock Liquidity FedFund Instl Y Nektar Therapeutics Inc Y MKS Instruments Inc..9

5 Page 5 of 1 Morningstar Category Category Index Performance US Fund Small Growth Russell 2 Growth TR USD Underwhelming under James Hasso s tutelage. Performance Pillar Mar 29, 218 Voya SmallCap Opportunities has been a steady performer over the long term, though most of that performance came under a different lead manager, keeping its Performance Pillar rating at Neutral. Since James Hasso assumed the lead manager role in October 214, the fund has posted unimpressive results. Rolling three-year returns from his assumption of the lead role through March 218 have never topped small-growth peers nor its benchmark, the Russell 2 Growth Index. The sample is small, and Hasso s tenure has been limited to an environment in which the market has continuously risen, so the fund has not had the opportunity to demonstrate its ability to protect on the downside as seen under the previous lead manager. Security selection has been the culprit of recent underperformance. From Hasso s start date as lead manager through March 218, the fund trails peers by more than 6 basis points and its benchmark by more than 17 basis points. On a risk-adjusted basis, the fund looks similarly lackluster. Trailing three- and five-year numbers also trail its bogies. If we include the track record preceding Hasso s assumption of the lead role, the fund looks more attractive and has demonstrated its ability to better protect on the downside than peers and its index during the financial crisis. More evidence is needed that Hasso can produce similar results when he is the primary decision-maker. Morningstar Rating and Risk 9/3/218 Period Load-Adj Return % Morningstar Ret vs Cat Morningstar Risk vs Cat Morningstar Rating 3 Years Below Avg Avg QQ 5 Years 8.44 Below Avg Avg QQ 1 Years Avg Below Avg QQQ Overall Rating 3-Year Return and Risk Analysis 9/3/18 Total Return % QQQ Fund Category Index Standard Deviation Return/Risk Analysis 9/3/218 Fund Category Index Standard Deviation Sharpe Ratio R-Squared Beta Alpha Maximum Drawdown Fund Category Index Max Drawdown (%) Peak Date 6/8 1/8 1/8 Valley Date 2/9 2/9 2/9 Max Drawdown (Months) & ( & & * ( * * * ( ) Trailing Returns (Annualized) 9/3/218 Total Investor % Rank in Cat Cat Index 1 Year Years Years Years Tenure 1/ Inception 6/ Rolling-Returns Summary 9/3/218 33% Month Rolling Periods 185 Observations, 15 Years The shading and percentages correspond to how often the fund returns landed in each category quartile. Calendar Year Returns Return % Fund Category Index History 9/3/18 12-Month Rolling Return % Fund Full Manager Change Partial Manager Change Quartile Rank in Cat Percentile Rank in Cat # of Funds in Category % Total Return USD /- Category /- Index % Income Return /18 Year Fund Category Index /

6 Page 6 of 1 Morningstar Category Category Index People US Fund Small Growth Russell 2 Growth TR USD James Hasso s tenure as lead portfolio manager is still limited and leaves more to be desired. People Pillar Mar 29, 218 Lead manager James Hasso is still building a track record with a relatively new team and has not been able to consistently produce alpha for investors during his limited tenure. As a result, the fund receives a People Pillar rating of Neutral. Hasso, who also comanages Voya Small Experience and Asset Load Total AUM Bil USD in Funds Managed Tenure Years Company AESAX and heads Voya's U.S. small-cap team, has been a manager on this fund since October 28 and with Voya and its predecessor firms since 25. But he did not take over as lead until October 214, as former lead Steve Salopek retired. Joseph Basset has been comanager here since April 212. He is also an industrials, energy, materials, and utilities analyst for the small-cap team, and comanager of Voya Small Company since 26. Prior to joining Voya in 25, he worked for Banc One where he was comanager of Management Team Number of Managers Longest Tenure 2 1 Years Advisor Voya Investments, LLC what is now JPMorgan Large Cap Value OLVAX from January 1999 to June 23. In addition to Basset, the U.S. small-cap team includes six analysts who specialize by sector, several of whom joined the team only within the past few years. Two analysts have been hired within the past three years, one of which was brought on to take over financials sector coverage when James Hasso was promoted to lead portfolio manager. The analysts boast average industry experience of more than 19 years and just more than six years with the firm. 5-Year Manager-Retention Rate (Firm-wide) 92% Subadvisor Voya Investment Management Co. LLC (US) Largest Manager Investment in Fund None James Hasso 1/8 to Present Years of Experience Investment in Fund 9 None Fund AUM Current Funds Managed 3,622 Mil USD 6 Largest Funds Managed Tenure Dates Role Fund Size Bil USD Investment Mil USD Turnover Ratio Avg Tenure Index Voya SmallCap Opportunities Fund 1/8to Present 1 of None Voya Small Company Fund 4/12to Present 1 of 2.78 None Voya Small Company Portfolio 4/12to Present 1 of 2.65 None Voya SmallCap Opportunities Port 1/8to Present 1 of 2.43 None Laudus Small-Cap MarketMasters Fund 12/16to Present 1 of 1.2 None Joseph Basset 4/12 to Present Years of Experience Investment in Fund 19 None Fund AUM Current Funds Managed 3,622 Mil USD 6 Largest Funds Managed Tenure Dates Role Fund Size Bil USD Investment Mil USD Turnover Ratio Avg Tenure Index Voya SmallCap Opportunities Fund 4/12to Present 1 of None Voya Small Company Fund 5/6to Present 1 of 2.78 None Voya Small Company Portfolio 5/6to Present 1 of 2.65 None Voya SmallCap Opportunities Port 4/12to Present 1 of 2.43 None Laudus Small-Cap MarketMasters Fund 12/16to Present 1 of 1.2 None

7 Page 7 of 1 Morningstar Category Category Index Parent US Fund Small Growth Russell 2 Growth TR USD Continued improvements are encouraging. Parent Pillar Oct 1, 218 Since its May 213 spin-off from ING, Voya Financial has taken concerted actions to strengthen its brand across diversified offerings that include insurance, a retirement business, and asset management. The company availed itself of an opportunity to divest its variable annuity business, which carried considerable market risk and liabilities, in mid-218, shoring up resources and attention for other operations, particularly its asset-management endeavors. Christine Hurtsellers, CEO of the assetmanagement division, has led the group since late 216, following the unexpected departure of her predecessor Jeff Becker. Prior to her current appointment, she served as CIO of the Atlanta-based fixed-income cohort and led a rehabbing that resulted in a robustly staffed and well-resourced bond shop with reasonable processes. The senior-loan team, located in Scottsdale, Arizona, is also compelling. In contrast, the equity, target-date, and multi-asset lineups, based out of New York, continue to search for distinguishable edges relative to competitors. Across all asset-management divisions, increased manager ownership of funds, lower investment-personnel turnover, and an eye to risk management signal encouraging moves for fundholders, but these adjustments are newer and will prove their value through permanence. In the meantime, the firm earns a Parent Pillar rating of Neutral. Assets By Region, By Domicile Bil USD /218 Net Flows Bil USD Growth Rate % Flows and Growth United States Quarterly Net Flows USD Growth Rate % Americas 86.1 Europe & Africa Asset Class Breakdown United States Assets Bil USD 5 4 Asia & Australia Net Flows USD Bil Total Net Assets USD Bil Growth Rate Industry Market Share Fund Family Details United States Morningstar Rating Breakdown Fee Quintile Breakdown Asset Class Assets Bil USD Assets % US Stock Non-US Stock Balanced Taxable Bond Municipal Bond Alternative.1.1 Commodities Manager Tenure Rating Assets % QQQQQ 14.3 QQQQ 36.2 QQQ 31.4 QQ 12.9 Q.3 Not Rated 4.9 Success Ratio 4% Manager Ownership Fee Quintile Share Class % Low 39.8 Below Average 22.4 Average 17. Above Average 16.1 High 4.8 Total Assets Tenure Years Assets % Retention Rate (5-Year) 92% Investment USD Assets % Over 1 Mil.8 5K-1 Mil K-5K K-1K 2.4 1K-5K 3.3-1K 8.7 None 47.6 No Data 2.4

8 Page 8 of 1 Morningstar Category Category Index Price US Fund Small Growth Russell 2 Growth TR USD Overpriced /218 TER/OGC % Fund Size Bil USD 2. 5 Expense History Fund Size Bil USD TER/OGC % Price Pillar Negative Mar 29, 218 The majority of the fund's assets in are housed in share classes that are more expensive than their typical peer. Assets in the I share class account for over 56% of total AUM; with a prospectus net expense ratio of 1.12%, it lands in the most expensive quartile relative to similarly distributed peers. The A share class, which charges 1.31%, is also in the most expensive quartile relative to peers. The R6 share class has a fee of.97% relative to its peers median fee of.88%. Only the W share class, which accounts for 6% of assets, ranks middle-of-the-road relative to peers with a fee of 1.16%. Overall, this is a pricey offering TER/OGC Fund Size Bil USD Net Flows Mil USD Expense Breakdown Net Expense Ratio % Annual Report 5/31/ Prospectus 9/29/ Selected Components % Management Actual.88 12b-1 Fee.25 Brokerage Commission (% of Avg Net Assets).15 Category Average.17 Tax Cost Ratio (3-Year) 1.77 Potential Capital Gains Exposure 19 Fee Level Fee Level Above Avg Fee Level Breakpoints Peer Group Small Cap Front Load 2.24 High >1.46 Above Average Average Below Average Low <1.18 Fund 1.36 Peer Median 1.3 Share Class Information Share Class Identifier Status Expense Ratio Fee Level Peer Group 12b-1 Fee A Open 1.36 Above Avg Small Cap Front Load , Inst NSPIX Open 1.7 Above Avg Small Cap Institutional 25, Retirement ISOZX Open.93 Above Avg Small Cap Retirement, Large 1,, Other ISOWX Open 1.11 Avg Small Cap No Load 1, C NSPCX Open 2.11 Above Avg Small Cap Level Load , Retirement ISORX Open 1.61 Above Avg Small Cap Retirement, Medium Front Load Deferred Load Minimum Initial Inv Assets Bil USD 1-Yr Flow Mil USD

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In our judgment, these funds are not likely to deliver standout returns, but they aren t likely to seriously underperform their relevant performance benchmark and/or peer group either. Negative Represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance, such as high fees or an unstable management team. Because of these faults, we believe these funds are inferior to most competitors and will likely underperform their relevant performance benchmark and/or peer group, within the context of the level of risk taken, over a full market cycle. For more information about methodology in analysing stocks, please go to Page 1 of 1 For Recipients in Australia: This Report has been issued and distributed in Australia by Morningstar Australasia Pty Ltd (ABN: ; ASFL: 24892). Morningstar Australasia Pty Ltd is the provider of the general advice ( the Service ) and takes responsibility for the production of this report. 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For enquiries regarding this research, please contact a Morningstar Investment Management Asia Limited Licensed Representative at For Recipients in India: This Investment Research is issued by Morningstar Investment Adviser India Private Limited. Morningstar Investment Adviser India Private Limited is registered with the Securities and Exchange Board of India (Registration number INA1357) and provides investment advice and research. Morningstar Investment Adviser India Private Limited has not been the subject of any disciplinary action by SEBI or any other legal/regulatory body. Morningstar Investment Adviser India Private Limited is a wholly owned subsidiary of Morningstar Investment Management LLC. In India, Morningstar Investment Adviser India Private Limited has one associate, Morningstar India Private Limited, which provides data related services, financial data analysis and software development. The Research Analyst has not served as an officer, director or employee of the fund company within the last 12 months, nor has it or its associates engaged in market making activity for the fund company. *The Conflicts of Interest disclosure above also applies to relatives and associates of Manager Research Analysts in India #The Conflicts of Interest disclosure above also applies to associates of Manager Research Analysts in IndiaThe terms and conditions on which Morningstar Investment Adviser India Private Limited offers Investment Research to clients, varies from client to client, and are detailed in the respective client agreement. For recipients in Japan: The Report is distributed by Ibbotson Associates Japan, Inc., which is regulated by Financial Services Agency. Neither Ibbotson Associates Japan, Inc., nor its representatives, are acting or will be deemed to be acting as an investment advisor to any recipients of this information. For recipients in Singapore: This Report is distributed by Morningstar Investment Adviser Singapore Pte Limited, which is licensed by the Monetary Authority of Singapore to provide financial advisory services in Singapore. Investors should consult a financial adviser regarding the suitability of any investment product, taking into account their specific investment objectives, financial situation or particular needs, before making any investment decisions. Morningstar may also use two other designations in place of a rating: Under Review This designation means that a change that occurred with the fund or at the fund company requires further review to determine the impact on the rating. Not Ratable This designation is used only where we are providing a report on a new strategy or on a strategy where there are no relevant comparators, but where investors require information as to suitability. For more information about our Analyst Rating methodology please go to Morningstar Star Rating The Morningstar Star Rating is a proprietary data point that is quantitatively driven. Funds are rated from one to five stars based on how well the fund performed (after adjusting for risk and accounting for sales charges) in comparison to similar funds. Within each Morningstar Category, the top 1% of funds receive five-stars and the bottom 1% receives one-star. Funds are rated for up to three time periods three-, five-, and ten-years and these ratings are combined to produce an overall star rating, which is noted within the Report. Funds with less than three years of history are not rated. Morningstar Star Ratings are based entirely on a mathematical evaluation of past performance. Morningstar Star Ratings are in no way to be considered a buy or sell signal nor should be viewed as a statement of fact. Equity-Related Data Points The Report lists the fund s top ten holdings as of the dated noted. For each underlying holding, a series of data points is provided including, where applicable, that security s Economic Moat as of the date noted. Economic Moat The concept of an economic moat plays a vital role in our equity analyst s qualitative assessment of a firm s long-term investment potential, but also in the actual calculation of its fair value estimate. An economic moat is a structural feature that allows a firm to sustain excess profits over a long period of time. We define economic profits as returns on invested capital (or ROIC) over and above our estimate of a firm s cost of capital, or weighted average cost of capital (or WACC). Without a moat, profits are more susceptible to competition. We have identified five sources of economic moats: intangible assets, switching costs, network effect, cost advantage, and efficient scale. Companies with a narrow moat are those we believe are more likely than not to achieve normalized excess returns for at least the next 1 years. Wide-moat companies are those in which we have very high confidence that excess returns will remain for 1 years, with excess returns more likely than not to remain for at least 2 years. The longer a firm generates economic profits, the higher its intrinsic value. We believe low-quality, nomoat companies will see their normalized returns gravitate toward the firm s cost of capital more quickly than companies with moats.