Morningstar Direct SM Asset Flows Commentary: United States

Transcription

1 ? Morningstar Direct SM Asset Flows Commentary: United States Morningstar Research 17 April 2017 Data through March 31, 2017 U.S. Mutual Funds and Exchange- Traded Products Alina Lamy Senior Analyst Quantitative Research Some Flows Are Going Into Equity, but Fixed Income Is Still in the Lead Taxable-bond funds attracted the highest inflows once again in March, even higher than they had in February. The flow this month was almost evenly distributed between active and passive taxable-bond funds, underlining that in fixed income, as opposed to equity, active management is still very much alive. All active equity flows were negative (U.S., sector, and international), and all their passive counterparts were positive. International-equity flows have been consistent for a few months, indicating renewed investor interest toward diversification overseas. U.S. stock-market performance has been practically flat during the month, with the S&P 500 posting a 0.1% return. Confidence in the new administration s promises to implement policies that would create a business-favorable environment was somewhat shaken when the healthcare bill was stopped dead in its tracks (or even before hitting the tracks). U.S.-equity flows, however, stayed positive for the fifth consecutive month. In other words, there hasn t been a month of outflows for U.S. equity since the election. Active Passive Estimated Net Flows* Mar Assets Mar Assets 1 Year 1 Year 2017 $Bil 2017 $Bil U.S. Equity (18,588) (269,658) 3,724 31, ,332 3,231 Sector Equity (2,421) (31,024) 390 2,640 57, International Equity (2,852) (70,313) 1,527 20, ,840 1,046 Allocation (1,367) (43,272) 1, , Taxable Bond 19,796 96,309 2,378 18, , Municipal Bond , , Alternative 383 (12,287) Commodities 152 1, (437) 2, All Long Term (4,111) (309,564) 10,049 73, ,939 5,899 Money Market (19,271) (100,533) 2,623 *Includes liquidated and merged funds.

2 Page 2 of 11 Total (Active and Passive) Estimated Net Flows Mar Assets 1 Year 2017 $Bil U.S. Equity 12,544 30,674 6,955 Sector Equity , International Equity 17,744 34,527 2,573 Allocation (693) (42,124) 1,277 Taxable Bond 38, ,755 3,354 Municipal Bond 1,201 25, Alternative 726 (11,791) 211 Commodities (286) 4, All Long Term 69, ,375 15,948 Money Market (19,271) (100,533) 2,623 The Federal Reserve raised rates for the second time in three months at its March meeting, this time to a 0.75% 1.00% range. The Fed s statement expressed expectations that economic activity will expand at a moderate pace and that near-term risks to the economic outlook appear roughly balanced. Exhibit 1 U.S.-Equity Category Group Monthly Flows ($ Billion) Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17

3 Page 3 of 11 Flows into U.S. equity remained roughly balanced as well meaning rough outflows on the active side and sustained inflows on the passive side. Notably, however, the inflows are generally large enough these days that they are able to maintain the overall U.S.-equity category group in positive territory. All category groups except allocation and commodities received inflows in March. Commodities were dragged down by a $384 million outflow from precious-metals funds, following a drop in the price of gold (it later recovered) during the first half of the month. Allocation s largest outflows came from world-allocation funds: $1.1 billion. Exhibit 2 Category Group Flows During the Past 12 Months ($ Billion) U.S. Equity Sector Equity International Equity Allocation Taxable Bond Municipal Bond Alternative Commodities Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar The most intriguing pattern in Exhibit 2 is that investors are back to pouring money into bond funds even as the Federal Reserve is raising rates. Bonds tend to not perform as well during periods of rising rates, so one has to wonder why, even though good performance is unlikely in the near future, bonds remain an investor favorite. Flows have been more evenly distributed in the past three months, though, so the general strategy resembles overall diversification with a heavier fixed-income component.

4 Page 4 of 11 Top- and Bottom-Flowing Morningstar Categories Active Passive Estimated Net Flows* Mar Assets Mar Assets 1 Year 1 Year 2017 $Bil 2017 $Bil Leading Intermediate-Term Bond 10,903 47, ,464 77, Large Blend (6,125) (65,404) , ,573 2,026 Foreign Large Blend 542 (14,309) ,313 77, Ultrashort Bond 4,347 22, ,102 2, Diversified Emerging Mkts (367) (4,294) 229 5,189 34, Lagging High-Yield Bond (7,529) (5,770) 271 (1,070) 2, Large Growth (6,594) (120,413) 1,203 3,409 13, Foreign Large Growth (1,393) (14,041) 352 (60) World Stock (1,976) (20,283) , Japan Stock 10 (411) 7 (1,241) (5,440) 28 *Excludes money market. The top three Morningstar Categories were unchanged since last month: intermediate-term bond, large blend, and foreign large blend. And, also just like last month, flows into large blend were negative on the active side and positive on the passive side. For the intermediate- bond category, however, active flows largely surpassed passive ones. Investors are putting their hopes in the ability of fixed-income managers to navigate what will most likely be a shaky environment for bonds, as interest rates rise and new policies out of Washington move markets in unexpected ways. Also, intermediate-term bonds are less sensitive to interest-rate movements than their longer-term counterparts, so it makes sense that, in the fixed-income space, flows would be concentrated in the intermediate-term category. High-yield bond, on the other hand, was the category with the largest outflows. High-yield bonds tend to be correlated with oil prices because many of these bonds are issued by energy companies. In the wake of the recent U.S. airstrike in Syria and concerns over global supply, oil prices may prove much more volatile, and it s possible that investors are moving away based on that anticipation. High-yield performance has been neither great nor abysmal: 2.7% in the first quarter.

5 Page 5 of 11 Exhibit 3 Intermediate-Term and High-Yield Monthly Flows ($ Billion) Intermediate-Term Bond High-Yield Bond Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Top 10 U.S. Fund Families by Assets Under Management Active Passive Estimated Net Flows Mar Assets Mar Assets 1 Year 1 Year 2017 $Bil 2017 $Bil Vanguard 1,798 14, , ,321 2,797 American Funds 295 (6,392) 1,334 Fidelity Investments (3,118) (65,179) 1,009 4,802 42, BlackRock/iShares (1,095) (20,943) , ,321 1,106 SPDR State Street Global Advisors 147 1, ,366 57, T. Rowe Price (306) (4,883) 502 (186) Franklin Templeton Investments (3,430) (40,121) Dimensional Fund Advisors 3,066 23, PIMCO 4,025 (4,230) 307 (263) (55) 4 JPMorgan (1,775) (10,374) For the first time in recent memory, an active-management company managed to beat Vanguard in terms of active flows, and, in a beautiful twist of fate, it s the company that seemed all but doomed by overwhelming outflows from their flagship fund and the disasterspelling departure of their famous flagship manager a few years ago. Overcoming major hurdles,

6 Page 6 of 11 PIMCO managed to come out of that maelstrom with its reputation intact and with a new star fund, PIMCO Income PIMIX, that s been one of the best-flowing funds in the last few years. This fund's atypical-for-pimco yield focus, heavier-than-usual reliance on sectors less tied to macro decisions, and strong resources have helped isolate it from the fallout of Bill Gross' late departure. In fact, it has been pulling in assets hand-over-fist at a time when its favorite markets are shrinking, writes my colleague Eric Jacobson, who covers the fund. Dan Ivascyn and comanager Alfred Murata have set a high bar for the fund, which is ranked first in its category in terms of five-year performance and third in terms of three-year performance. Franklin Templeton and Fidelity were in over-$3-billion-outflow territory last month for their active products. However, Fidelity was able to compensate for the outflows by attracting $4.8 billion to its passive funds. Concerns about Franklin s investment lineup and firm leadership have led the Morningstar Manager Research team to downgrade Franklin Templeton s Parent Pillar rating to Neutral from Positive. After experiencing massive outflows and poor performance in recent years, the firm cut 300 personnel worldwide and launched seven exchange-traded funds in the United States, in an attempt to start competing in the passive arena. Exhibit 4 Year-to-Date Flows by Fund Family, Active ($ Billion) J.P. Morgan Dimensional Fund Advisors PIMCO Franklin Templeton Investments SPDR State Street Global Advisors T. Rowe Price BlackRock/iShares Fidelity Investments American Funds Vanguard

7 Page 7 of 11 Exhibit 5 Year-to-Date Flows by Fund Family, Passive ($ Billion) J.P. Morgan Dimensional Fund Advisors PIMCO Franklin Templeton Investments SPDR State Street Global Advisors T. Rowe Price BlackRock/iShares Fidelity Investments American Funds Vanguard Exhibit 6 Annual Flows, Vanguard Versus the Rest of the World ($ Billion) Vanguard The rest of the U.S. fund industry (100) (200)

8 Page 8 of 11 As of this writing, my colleague John Rekenthaler is writing a column entitled For Vanguard, Every Year is a New Record (But So Far This Year, There Is Also Some Consolation for the Others), which is in perfect resonance with Exhibit 6 above. In 2015 and 2016, not only did Vanguard dominate with the largest flows, but flows for all the other fund companies put together were actually negative. For the year to date in 2017, Vanguard is still dominating, but the big reversal is that flows for everybody else are now positive. Another very interesting piece of news came on March 28 from BlackRock: The company announced it would restructure strategies for its actively managed U.S. equity funds to rely more heavily on computer-generated algorithms and quantitative models. The revamped new funds will be called Advantage and will have lower fees even though they will remain, technically, active. The move will be accompanied by approximately 40 layoffs, including a few portfolio managers. In other words, human stock-pickers are being replaced with computers, at lower cost. The key question is, will this also result in better performance? Top-Flowing Active and Passive Funds Estimated Net Flows Mar 2017 Assets 1 Year Mar 2017 Assets Mar 2016 Active Funds PIMCO Income Fund 3,167 17,425 79,077 55,993 Bridge Builder Core Bond Fund 2,254 2,912 13,041 10,093 Prudential Total Return Bond 1,307 7,968 21,742 13,492 T. Rowe Price New Income Fund 1,134 5,095 33,518 28,175 Dodge & Cox Income Fund 1,079 2,898 48,863 44,239 Passive Funds Vanguard Total Stock Market Index Fund 8,292 54, , ,942 ishares Core S&P 500 4,312 19, ,822 71,060 Vanguard 500 Index Fund 4,189 42, , ,468 Vanguard Total International Bd Idx Fund 4,162 20,635 77,252 56,369 Vanguard Total Intl Stock Idx Fund 3,897 34, , ,580 Providing a sharp contrast to the predicament of active equity managers, every single active fund in the top-flowing five last month was a bond fund. In addition to PIMCO Income, fixedincome funds from Bridge Builder, Prudential, T. Rowe Price, and Dodge & Cox attracted more than $1 billion each.

9 Page 9 of 11 Bronze-rated Prudential Total Return PDBAX is more than what you might expect from an asset manager owned by a quiet insurance company, and is run by a fixed-income group that rivals the largest in the industry in terms of research manpower and boasts similarly massive investments in number-crunching analytics, writes my colleague Eric Jacobson, who covers the fund. It is top-10-ranked in its category based on long-term returns. Dodge & Cox Income DODIX has a Morningstar Analyst Rating of Gold earned by a veteran and well-resourced team, time-tested process, low expenses, and an impressive long-term track record, according to director of manager research Cara Esser. Adds Russel Kinnel, editor of Morningstar FundInvestor: Dodge & Cox has been very consistent at delivering value to investors, though with fewer funds and less money than Vanguard. Even more impressive, though, is that Dodge & Cox has a perfect five Gold medalists out of five funds. Its focus and dedication to long-term thinking have built some great funds. Bottom-Flowing Active and Passive Funds Estimated Net Flows Mar 2017 Assets 1 Year Mar 2017 Assets Mar 2016 Active Funds JPMorgan High Yield Fund (1,664) 97 11,498 10,109 Harbor International Fund (1,397) (8,724) 34,598 40,500 JPMorgan Short Duration Bond Fund (1,347) (6,169) 4,706 10,869 Templeton Global Bond Fund (1,331) (14,630) 40,370 50,900 BlackRock Global Allocation Fund (842) (10,673) 40,217 47,288 Passive Funds Vanguard Institutional Index Fund (2,568) (9,726) 222, ,079 SPDR Blmbg Barclays High Yield Bd ETF (921) (1,732) 11,478 12,199 First Trust Energy AlphaDEX Fund (894) (817) 519 1,274 SPDR S&P MIDCAP 400 ETF (881) 1,319 19,669 15,343 ishares MSCI Japan (550) (3,049) 15,714 17,123 Vanguard Institutional Index VIMIX was the passive fund with the worst outflows last month, showing that even Vanguard can take a hit once in a while. On the active side, two JPMorgan funds landed in the bottom-flowing five in March, a highyield bond fund and a short-duration one. Harbor International HAINX is an interesting appearance: Gold-rated, yet in severe outflow territory. Senior analyst Kevin McDevitt explains: The fund is experiencing the most severe withdrawals in its history, but they haven't been

10 Page 10 of 11 terribly disruptive. Harbor International's results have been below its historical standard, but it is still a formidable competitor. And, lo and behold, PIMCO Total Return PTTRX was nowhere in sight on the bottom-flowing list. Exhibit 7 PIMCO Total Return Monthly Flows ($ Billion) Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17

11 Page 11 of 11 Note: The figures in this report were compiled on April 11, 2017, 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. 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

12 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 () 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 US Fund Large Blend 13,939 35,812 35, ,183 2, , US Fund Large Growth (3,185) (15,978) (15,978) (107,284) 1, , US Fund Intermediate-Term Bond 18,367 36,918 36, ,561 1, , (0.02) US Fund Large Value (468) 3,430 3,430 15,780 1, (1.27) US Fund Foreign Large Blend 12,855 31,151 31,151 63, US Fund Allocation--50% to 70% Equity 751 1,461 1,461 (1,342) US Fund Diversified Emerging Mkts 4,822 13,609 13,609 30, US Fund Mid-Cap Blend 1,420 10,988 10,988 20, (0.33) US Fund World Stock (1,397) (2,787) (2,787) (18,138) US Fund Foreign Large Growth (1,453) (1,592) (1,592) (13,900) US Fund Small Blend 2,880 8,449 8,449 24, (0.06) US Fund Short-Term Bond 3,053 7,784 7,784 17, US Fund High Yield Bond (8,599) (7,647) (7,647) (2,934) (0.42) US Fund World Allocation (1,127) (4,387) (4,387) (29,703) US Fund Mid-Cap Growth (686) (2,166) (2,166) (20,610) US Fund Mid-Cap Value (379) (383) (383) (3,710) (1.14) US Fund World Bond 3,424 8,289 8,289 4, US Fund Allocation--30% to 50% Equity US Fund Small Growth (1,000) (941) (941) (9,485) US Fund Multisector Bond 3,099 6,482 6,482 10, US Fund Muni National Interm 454 1,995 1,995 11, US Fund Foreign Large Value 705 2,314 2, US Fund Small Value 24 3,029 3,029 9, (1.24) US Fund Corporate Bond 1,316 9,704 9,704 23, (0.31) US Fund Real Estate (172) , (4.26) US Fund Health (609) (2,411) (2,411) (14,294) (0.24) US Fund Inflation-Protected Bond 3,197 8,268 8,268 21, US Fund Allocation--70% to 85% Equity (579) (1,076) (1,076) (5,062) US Fund Bank Loan 3,858 13,055 13,055 28, US Fund Muni National Short 690 1,859 1,859 4, US Fund Ultrashort Bond 5,448 12,579 12,579 25, US Fund Intermediate Government (425) (1,161) (1,161) 1, (0.06) US Fund Nontraditional Bond 1,819 4,498 4,498 (6,807) US Fund Technology 1,134 4,048 4,048 4, US Fund Muni National Long (113) , 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 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 () 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 US Fund High Yield Muni 636 3,364 3,364 4, US Fund Emerging Markets Bond 1,513 3,589 3,589 12, US Fund Financial 1,096 5,313 5,313 15, (3.91) US Fund Europe Stock 1, (19,663) US Fund Short Government US Fund Equity Energy (550) (600) (600) 2, (2.64) (11.76) 42 US Fund Multialternative (97) (747) (747) (6,112) (0.06) US Fund Global Real Estate (293) (128) (128) (3,194) (1.63) US Fund Commodities Precious Metals (384) 1,041 1,041 2, (2.35) US Fund Energy Limited Partnership 611 2,547 2,547 6, US Fund Preferred Stock 483 1,246 1,246 8, US Fund Natural Resources (398) , (1.02) US Fund Foreign Small/Mid Growth (52) (185) (185) (2,229) US Fund Muni California Long (236) (325) (325) (72) US Fund Long-Short Equity 55 (81) (81) (3,762) US Fund Foreign Small/Mid Blend 696 2,516 2,516 2, US Fund Tactical Allocation , US Fund Japan Stock (1,231) (148) (148) (5,851) US Fund Miscellaneous Region (97) (1,613) US Fund Utilities 102 (871) (871) (4,696) US Fund Commodities Broad Basket (66) , (5.90) (4.04) 57 US Fund Allocation--85%+ Equity (125) (673) (673) (3,813) US Fund Equity Precious Metals 369 2,920 2,920 8, (1.44) US Fund Industrials (375) 1,117 1,117 8, (1.17) US Fund Long Government 615 1,189 1,189 (5,004) (1.11) US Fund Foreign Small/Mid Value (393) US Fund Managed Futures 3 (137) (137) 2, (1.84) US Fund Consumer Cyclical (909) (378) (378) (4,158) US Fund Muni California Intermediate , US Fund Pacific/Asia ex-japan Stk (50) US Fund Muni Single State Long (77) (76) (76) US Fund Market Neutral (2,586) US Fund Long-Term Bond (864) (0.75) US Fund Trading--Leveraged Equity 268 (1,216) (1,216) (2,505) US Fund Consumer Defensive (89) (104) (104) (4,502) 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

14 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 () 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 US Fund Muni New York Long (92) (162) (162) (421) US Fund Convertibles 34 (250) (250) (920) US Fund Infrastructure US Fund China Region (19) (471) (471) (2,810) US Fund Diversified Pacific/Asia US Fund Option Writing 45 (443) (443) (239) US Fund Allocation--15% to 30% Equity 47 (158) (158) (254) US Fund Muni Single State Interm (93) (156) (156) (192) US Fund Emerging-Markets Local-Currency Bond (76) US Fund India Equity US Fund Muni New York Intermediate US Fund Muni Single State Short (382) (0.31) US Fund Trading--Inverse Equity 101 1,081 1,081 2, US Fund Muni Pennsylvania (38) (39) (39) (130) US Fund Latin America Stock , US Fund Communications (124) (141) (141) (577) US Fund Long-Short Credit 22 (83) (83) (2,224) (0.54) US Fund Multicurrency (113) (215) (215) (766) US Fund Muni Massachusetts (7) (1) (1) (94) US Fund Muni New Jersey (17) (22) (22) (205) US Fund Commodities Energy (1,275) (4.26) (21.07) 92 US Fund Miscellaneous Sector US Fund Muni Ohio (24) (50) (50) (2) US Fund Muni Minnesota (5) US Fund Target-Date (93) (93) (563) US Fund Trading--Inverse Debt (76) US Fund Target-Date 2020 (40) (250) (250) (631) US Fund Target-Date 2040 (3) (25) (25) (405) US Fund Volatility , US Fund Bear Market (30) (2.69) (19.31) 101 US Fund Trading--Leveraged Commodities (992) US Fund Target-Date (31) (31) (792) US Fund Target-Date (119) US Fund Target-Date (453) US Fund Target-Date Retirement 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 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 () 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 US Fund Commodities Agriculture (52) (8.21) (2.41) 107 US Fund Target-Date US Fund Single Currency (59) (102) (102) (60) US Fund Trading--Miscellaneous (37) (54) (54) US Fund Trading--Inverse Commodities 39 (2) (2) US Fund Target-Date US Fund Commodities Industrial Metals (11) (10) (10) US Fund Target-Date 2015 (13) (102) (102) (409) US Fund Trading--Leveraged Debt (1) (34) (34) (167) US Fund Target-Date (15) (47) (47) (227) US Fund Target-Date US Fund Commodities Miscellaneous (1) Top 10 45, , , ,823 9, , All 69, , , ,378 15, , Top Fund Families Ranked by Current TNA () Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1 Vanguard 37, , , ,168 3, , American Funds 295 3,300 3,300 (6,392) 1, , Fidelity Investments 1,684 (2,062) (2,062) (22,247) 1, , ishares 22,691 52,973 52, ,197 1, SPDR State Street Global Advisors 1,514 11,460 11,460 59, T. Rowe Price (493) 1,424 1,424 (4,624) Franklin Templeton Investments (3,424) (7,445) (7,445) (39,767) Dimensional Fund Advisors 3,066 10,051 10,051 23, Pimco 3,761 5,869 5,869 (4,285) JPMorgan (1,751) (2,581) (2,581) (9,613) BlackRock 409 1,091 1,091 (8,819) MFS (589) (279) (279) 1, Dodge & Cox 636 1,677 1,677 (6,856) OppenheimerFunds (611) (7,380) Invesco (133) , 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 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 () Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 16 Columbia (717) (2,968) (2,968) (8,502) Jackson National 393 1,213 1,213 3, John Hancock 560 (860) (860) (5,156) Principal Funds (338) (1,136) (1,136) (473) PowerShares 280 4,499 4,499 12, Lord Abbett 1,211 3,832 3,832 8, TIAA-CREF Asset Management 1,070 3,559 3,559 9, Janus (353) (891) (891) (2,798) American Century Investments 139 (922) (922) (1,223) AXA Equitable (540) (1,571) (1,571) (5,415) Hartford Mutual Funds (1,374) Legg Mason 1,284 1,078 1,078 1, SEI (417) (471) (471) (838) Wells Fargo Funds (1,284) (4,047) (4,047) (17,001) Metropolitan West Funds (8) , Prudential Investments 455 (404) (404) 3, Goldman Sachs (7,773) Voya (1,440) (3,064) (3,064) (8,545) First Eagle , Oakmark 686 2,059 2,059 (10,810) DoubleLine 637 1,273 1,273 3, Eaton Vance , AllianceBernstein 1,186 2,049 2,049 1, Schwab ETFs 2,297 6,759 6,759 20, Harbor (1,852) (3,915) (3,915) (13,614) Nuveen 5 1,673 1,673 2, Federated (376) (552) (552) (119) Putnam (305) (802) (802) (5,984) Schwab Funds (498) USAA (663) Dreyfus (1,092) (1,007) (1,007) (2,732) Guggenheim Investments 1,676 5,464 5,464 12, MainStay (1,785) (3,265) (3,265) (9,488) Natixis Funds 48 (623) (623) (5,666) GMO (815) (3,442) (3,442) (16,513) 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 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 () Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % Top 10 65, , , ,642 9, , Top 50 66, , , ,539 13, , Other 2,832 15,953 15,953 (53,232) 2, , All 69, , , ,307 15, , 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 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 12,545 42,240 42,240 30,772 6, , Sector Equity ,426 13,426 26, International Equity 17,744 48,712 48,712 34,685 2, , Allocation (693) (4,605) (4,605) (42,124) 1, , Taxable Bond 38, , , ,463 3, , Municipal Bond 1,201 7,752 7,752 25, Alternative 729 (119) (119) (11,873) Commodities (273) 1,345 1,345 4, All Long Term 69, , , ,378 15, , Morningstar Ratings Name Estimated Net Flow ($mil) Total Net Assets ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % QQQQQ 36, , , ,225 3, , QQQQ 20,206 73,139 73, ,190 6, , QQQ 5,064 16,182 16,182 (49,925) 4, , QQ (3,844) (6,031) (6,031) (77,122) Q (493) (2,095) (2,095) (16,473) Not Rated 12,484 30,440 30,440 65, Total 69, , , ,378 15, , 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