FIRST QUARTER 2018 FUND FOCUS CLASS A SHARE QUARTERLY PERFORMANCE UPDATE

Transcription

1 FIRST QUARTER 2018 FUND FOCUS QUARTERLY PERFORMANCE UPDATE CLASS A SHARE

2 How to use this booklet To help give you a better understanding of each, this booklet provides information about Thrivent Mutual Funds, including each Fund s: Performance over the period. Investment objectives and risks. Portfolio management team, their processes and their strategies. Potential investor profile. To provide context and a performance comparison, we also include the performance of the Fund s benchmark and Lipper peer group (when applicable). All data represents past performance and does not guarantee future results.

3 TABLE OF CONTENTS Thrivent Asset Management The Team Behind Your Investments Economic and Financial Market Review Thrivent Mutual Funds that received 4- and 5-Star Overall Morningstar Ratings Overall Lipper Leaders and Ratings Additional marketing materials: Thrivent Mutual Funds Fact Sheets Thrivent Aggressive Allocation Fund Thrivent Balanced Income Plus Fund Thrivent Diversified Income Plus Fund Thrivent Government Bond Fund Thrivent Growth and Income Plus Fund Thrivent High Yield Fund Thrivent Income Fund Thrivent Large Cap Growth Fund Thrivent Large Cap Stock Fund Thrivent Large Cap Value Fund Thrivent Limited Maturity Bond Fund Thrivent Mid Cap Stock Fund Thrivent Moderate Allocation Fund Thrivent Moderately Aggressive Allocation Fund Thrivent Moderately Conservative Allocation Fund Thrivent Money Market Fund Thrivent Municipal Bond Fund Thrivent Opportunity Income Plus Fund Thrivent Partner Emerging Markets Equity Fund Thrivent Partner Worldwide Allocation Fund Thrivent Small Cap Stock Fund Our View (#112) Thrivent Asset Allocation Funds Tactical Allocations and Performance (#090B) Performance Summary Thrivent Mutual Funds Quarterly Total Returns Thrivent Income Plus Funds Tactical Allocations and Performance (#090C) Page 1 of Only valid with all pages.

4 THE TEAM BEHIND YOUR INVESTMENTS Thrivent Investment Committee Senior Management David Royal VP, Chief Investment Officer Mark Simenstad, CFA VP, Chief Investment Strategist David Francis, CFA VP, Head of Equities Steve Lowe, CFA VP, Head of Fixed Income Philosophy We at Thrivent Asset Management and our parent company, Thrivent Financial, have operated with an emphasis on integrity for more than a century. Our investment philosophy reflects the approach we believe best serves our members, which includes the following goals: Consistent, competitive performance. Our portfolio managers aim for consistent, competitive performance. Instead of risking too much for outsized gains, they aim to achieve steady progress year after year. Style consistency. Our Portfolios strive to remain true to their stated investment objectives to support an overall asset allocation strategy. Competitive fees and expenses. We strive to provide value to our members by keeping net operating expenses at or below the industry average on most of our products. Process Our investment professionals use a robust, multi-step process to create a product suite of well-diversified portfolios that meet a range of investment goals and objectives. Strategic asset allocation: We use sophisticated portfolio optimization strategies based on risk and return expectations, mathematical models and statistical analysis to develop our long-term strategic asset allocation targets for each portfolio. Tactical investment decisions: We use our knowledge, experience and the latest market and economic data to form views and make decisions in an effort to stay on top of ever-changing market conditions. Company research: Our analysts perform an intensive review of the companies within their sectors by meeting with management, examining financial statements and assessing the company s competitiveness and long-term prospects. Portfolio management: Our portfolio managers determine which securities to buy and sell in order to construct well-diversified portfolios within their respective asset class categories, such as large-cap stocks or corporate bonds. Risk management: We strive to keep our Portfolios within certain parameters and guidelines so that the risks remain consistent with each Portfolio s investment objective. People We put the strength and wisdom of more than 100 investment professionals to work for you. Of these individuals: 84% of them have at least 10 years of experience. 55% have at least 20 years of experience. 87% have a graduate degree, CFA designation, or both. We manage not only a family of mutual funds, but variable subaccounts and the general account assets for Thrivent, a not-for-profit Fortune 500 financial services organization with more than $16 billion in assets under management 1 (as of December 1, 2017). Darren Bagwell, CFA Senior Equities Portfolio Manager 1 Includes the Thrivent General Account (which manages surplus and the assets backing Thrivent Financial s life insurance, fixed annuity and health products), mutual funds, variable subaccount portfolios (primarily connected to variable annuities and variable universal life insurance) and other assets related to Thrivent Financial s affiliates and other subsidiaries. Page 2 of Only valid with all pages.

5 ECONOMIC AND FINANCIAL MARKET REVIEW March 1, 2018 Economic and Financial Market Review Although economies across the globe continued to pick up steam during the quarter, volatility returned to the markets after a prolonged period of complacency. The final reading for fourth quarter s U.S. gross domestic product (GDP) was revised upward to 2.9% due to an increase in consumer spending, while current estimates for 2018 are averaging around % growth. 1 The U.S. job market remained strong with unemployment holding steady at 4.1%, boosting consumer confidence and spending. 2 In February, consumer confidence hit its highest level since late 2000 before declining modestly the following month. After years of stagnant wages and prices following the Great Recession, inflation rose in January more than economists expected. Wages finally showed signs of edging higher, recording their largest annual gain since 2009 and increasing expectations for higher inflation as 2018 progresses. 4 As widely anticipated, the Federal Reserve (Fed), led by new Chairman Jerome Powell, voted to increase the federal funds rate by 0.25% in mid-march to its highest level since 2008 because of ongoing strength in the economy and labor market. Policymakers also increased their projections for U.S. GDP growth over the next two years, while reiterating the likelihood of two more rate increases this year. Equities Review After an extended period of seemingly continuous gains and extreme calm in the stock market, equity investors rediscovered the consequences of volatility in the first quarter of In January, stocks appeared on track to continue last year s upward momentum, propelled by enthusiasm surrounding the deep corporate tax cuts passed in December. Investors were also encouraged by continued robust corporate profits, with analysts increasing their estimates for first-quarter 2018 earnings growth for S&P 500 companies to 18.5%, up significantly from earlier projections. 5 However, in early February, the yield on the benchmark 10-year Treasury rose sharply to 2.85% its highest level in four years on the back of the inflationary worries and strong wage data, which investors feared may prompt more aggressive interest rate hikes than previously signaled by the Fed. Stocks sold off sharply with major indexes experiencing their worst monthly performance in more than two years. Then in March, markets seemed on course to recover much of their losses until talk of a trade war between the U.S. and China escalated and shook investor confidence. As the quarter ended, the technology sector, which had been one of the few bright spots, gave back some of its gains after concerns emerged regarding a data privacy breach at Facebook. After surpassing the 2800 mark for the first time ever in January, the bellwether S&P 500 Index ended the quarter with a -0.76% return, its first quarterly loss since Only two sectors in the index were in positive territory information technology and consumer discretionary while the quarter s biggest laggards were telecommunication services, consumer staples and energy. Although the performance dispersion was not significant, small-cap stocks modestly outperformed their larger-cap counterparts as measured by the 0.57% return of the S&P Small Cap 600 Index. Continuing a trend that persisted throughout 2017, value stocks again underperformed growth stocks across the market capitalization range. Overseas markets were not immune to the increased volatility felt in the U.S., and many of them ended the quarter either flat or in the red. On the heels of last year s impressive performance, emerging markets again fared better than developed markets, with the MSCI Emerging Markets Index advancing 1.42% for the quarter. This compares to a -1.5% quarterly return for the MSCI EAFE Index, which is the most broadly used benchmark for the performance of major developed equity markets outside the U.S. and Canada. Fixed-Income Review The bond market was hit by the same fears regarding inflation and a more hawkish Fed that roiled the stock market. Inflation and rising rates are two of the bond market s biggest enemies, because the former erodes the value of the fixed payments that bonds make, while the latter causes the prices for existing bonds to fall because they are less attractive than newly issued bonds. Yields rose across the U.S. Treasury market during the quarter and the yield curve flattened further as short-term rates rose more than longer-term rates. The spread between two-year Treasury and 10-year Treasury yields ended the quarter at its narrowest level since As a result, most broad bond market indexes produced negative returns for the quarter. The Bloomberg Barclays U.S. Aggregate Bond Index, the most commonly used bond market proxy, posted a -1.46% first-quarter return. Investment-grade corporate bonds turned in particularly weak results after spreads widened significantly versus Treasuries on the back of heavier supply, reduced demand from overseas investors, and trade war fears. As measured by the Bloomberg Barclays U.S. Corporate Investment Grade Index, the segment was down -2.2% for the quarter. The global bond market was somewhat insulated from U.S. volatility and produced modestly positive returns. This article refers to specific securities which Thrivent Mutual Funds may own. A complete listing of the holdings for each of the Thrivent Mutual Funds is available on ThriventFunds.com. 1 Bureau of Economic Analysis: Gross Domestic Product Fourth Quarter 2017 (March 28, 2018). 2 U.S. Bureau of Labor Statistics: The Employment Situation February 2018 (March 9, 2018). The Conference Board: Consumer Confidence Index (Feb. 27, 2018, and March 27, 2018). 4 Reuters Business News: U.S. hiring accelerates; annual wage growth strongest since 2009 (Feb. 1, 2018). 5 CNBC: Wall St Week Ahead Eager for calming news, investors look to earnings (Thomson Reuters data March 29, 2018). Page of Only valid with all pages.

6 Thrivent Mutual Funds that received 4- or 5-Star Overall Morningstar Ratings (as of March 1, 2018) A high rating does not imply positive performance results. Thrivent Mutual Fund Name (Morningstar Category) Thrivent Aggressive Allocation Fund 2 (Allocation, 85%+ Equity) Thrivent Balanced Income Plus Fund (Allocation, 0% to 50% Equity) Thrivent Diversified Income Plus Fund (Allocation, 0% to 50% Equity) Thrivent High Yield Fund (High Yield Bond) Thrivent Income Fund (Corporate Bond) Thrivent Large Cap Stock Fund (World Large Stock) Thrivent Limited Maturity Bond Fund (Short-Term Bond) Thrivent Mid Cap Stock Fund (Mid-Cap Blend) Thrivent Moderately Aggressive Allocation Fund 2 (Allocation, 70% to 85% Equity) Share Class Overall Morningstar Rating TM -Year 5-Year 10-Year # Peer Funds: S A # Peer Funds: S A # Peer Funds: S A # Peer Funds: S A # Peer Funds: S A # Peer Funds: S A # Peer Funds: S A # Peer Funds: S A # Peer Funds: S A All data represents past performance. Past performance does not guarantee future results. The investment return and principal value of the investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Visit ThriventFunds.com or call for performance results current to the most recent month-end. 1 Number of Peer Funds is consistent across all share classes. 2 The Adviser has contractually agreed, for as long as the current fee structure is in place, to waive certain investment advisory fees associated with the Fund. Refer to the expense table in the Fund s prospectus. Balanced Income Plus Fund had investment strategy changes effective Aug. 16, 201. As a result, peer group comparisons for more than three years are less relevant for this Fund. Page 4 of Only valid with all pages.

7 MORNINGSTAR RATINGS About Morningstar Ratings The Morningstar Rating for funds, or star rating, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk- Adjusted Return measure that accounts for variation in a managed product s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive five stars. The next 22.5% receive four stars. The next 5% receive three stars. The next 22.5% receive two stars. And the bottom 10% receive one star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 6-59 months of total returns, 60% five-year rating/40% three-year rating for months of total returns, and 50% 10-year rating/0% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods Morningstar, Inc. All rights reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and () 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. Ratings may differ among share classes of a mutual fund as a result of different expense structures; however, the ratings do not consider sales loads. The Thrivent Growth and Income Plus, Balanced Income Plus, and Opportunity Income Plus Funds had investment strategy changes effective August 16, 201. As a result, peer group comparisons are less relevant for these products. Page 5 of Only valid with all pages.

8 Overall Lipper Leaders and Ratings (as of March 1, 2018) Lipper ranks funds against their peers on five separate measures. The highest 20% in each peer group are named Lipper Leaders for that measure. Listed here are the Thrivent Mutual Funds that have a rating of 5 in one or more of the Lipper Leader measures in the overall period. See the next page for details on this rating. Thrivent Mutual Fund Name (Lipper Classification) Thrivent Aggressive Allocation Fund (Mixed-Asset Target Allocation Aggressive Growth Funds) Thrivent Diversified Income Plus Fund (Mixed-Asset Target Allocation Conservative Funds) Share Class Overall Lipper Leader Measures 2 # Peer Funds Lipper Ratings for Lipper Leader Measures 1, 2 -Year # Peer Funds 5-Year # Peer Funds 10-Year # Peer Funds S & A S & A S & A S A S & A 4,89 4,89,467 2,021 Thrivent Government Bond Fund 4 (General U.S. Government Funds) S N/A S N/A Thrivent High Yield Fund (High Yield Funds) S A Thrivent Large Cap Growth Fund (Large-Cap Growth Funds) Thrivent Large Cap Stock Fund (Global Large-Cap Core Funds) Thrivent Large Cap Value Fund (Large-Cap Value Funds) Thrivent Limited Maturity Bond Fund (Short Investment Grade Debt Funds) S & A S S S S S & A 5,717 5,717 4,884,219 Thrivent Mid Cap Stock Fund (Mid-Cap Core Funds) S & A S & A Thrivent Moderate Allocation Fund (Mixed-Asset Target Allocation Moderate Funds) Thrivent Moderately Aggressive Allocation Fund (Mixed-Asset Target Allocation Growth Funds) Thrivent Moderately Conservative Allocation Fund (Mixed-Asset Target Allocation Conservative Funds) Thrivent Small Cap Stock Fund (Small-Cap Core Funds) S S S S S & A 4,89 4,89,467 2,021 S All data represents past performance. Past performance does not guarantee future results. The investment return and principal value of the investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Call or visit ThriventFunds.com for performance results current to the most recent month-end. Page 6 of Only valid with all pages.

9 LIPPER RATINGS Information about Lipper Leaders and Ratings 1 For the Lipper Leader rating, funds are ranked against their peers on each of five measures: Total Return, Consistent Return, Preservation, Expense, and Tax Efficiency. Scores are subject to change every month and are calculated for the following periods: -year, 5-year, 10-year, and overall. The overall calculation is based on an equalweighted average of percentile ranks for each measure over -year, 5-year, and 10-year periods (if applicable). For each measure, the highest 20% of funds in each peer group are named Lipper Leaders. The next 20% receive a rating of 4; the middle 20% are rated ; the next 20% are rated 2, and the lowest 20% are rated 1. Ratings do not reflect funds sales charges. Ratings may differ among share classes of a mutual fund as a result of different expense structures. See prospectus for more details. 2 Lipper Leader Measures: Lipper Ratings for Total Return reflect funds historical total return performance relative to peers. Lipper Ratings for Consistent Return reflect funds historical risk-adjusted returns, relative to peers. Lipper Ratings for Tax Efficiency reflect the funds historical success in postponing taxable distributions, relative to peers. Lipper Ratings for Expense reflect the funds expense minimization, relative to peers with similar load structures. Ratings for Total Return, Consistent Return, Tax Efficiency, and Expense are computed for all Lipper classifications with five or more distinct portfolios and span both equity and fixed income funds (e.g., large-cap core, general U.S. Treasury, etc.). Lipper Ratings for Preservation reflect funds historical loss avoidance, relative to other funds within the same asset class. Ratings for Preservation are computed from three broad asset classes equity funds, mixed-asset funds, and bond funds (e.g., equity includes U.S. diversified, sector, and world equity funds). The Adviser has contractually agreed, for as long as the current fee structure is in place, to waive certain investment advisory fees associated with the Fund. Refer to the expense table in the Fund s prospectus. 4 The Adviser has contractually agreed, through at least Feb. 28, 2019, to reimburse certain expenses associated with the Fund. Refer to the expense table in the Fund s prospectus for details. The Thrivent Growth and Income Plus, Balanced Income Plus, and Opportunity Income Plus Funds had investment strategy changes effective Aug. 16, 201. As a result, peer group comparisons are less relevant for these Funds. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. As a result, you should not make an investment decision on the basis of this information. Rather, you should use the Lipper ratings for informational purposes only. Certain information provided by Lipper may relate to securities that may not be offered, sold or delivered within the United States (or any state thereof) or to, or for the account or benefit of, United States persons. Lipper is not responsible for the accuracy, reliability or completeness of the information that you obtain from Lipper. In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its affiliates. Source: Lipper, a Thomson Reuters company. Thomson Reuters All rights reserved. More information is available at Lipperweb.com. Page 7 of Only valid with all pages.

10 ThrivenT Aggressive AllocATion Fund class A Investment Objective Thrivent Aggressive Allocation Fund seeks longterm capital growth. Who Should Consider Investing? The Fund may be suitable for investors who: Seek long-term growth. Have a long-term investment time horizon and an aggressive risk tolerance. Are able to withstand a high level of risk and volatility in pursuit of potentially high longterm returns. Minimum Investment Initial (non-retirement): $2,000 Initial (IRA or tax-deferred): $1,000 Subsequent: $50 Expense Ratio Gross 1.50% Net 1.2% The Adviser has contractually agreed, for as long as the current fee structure is in place, to waive certain investment advisory fees associated with the Fund. Refer to the expense table in the Fund s prospectus. Benchmark(s) Indexes are unmanaged and do not reflect the fees and expenses associated with active management. Investments cannot be made directly into an index. Index is a market-cap weighted index that represents the average performance of a group of 500 large-capitalization stocks. Bloomberg Barclays (BBgBarc) U.S. Aggregate Bond Index is an index that measures the performance of U.S. investment grade bonds. Morgan Stanley Capital International (MSCI) All Country World Index ex-usa - USD Net Returns is an index that is designed to measure equity market performance in all global developed and emerging markets outside of the U.S. Fund Management & Experience David C. Francis, CFA - Fund Start: 2005; Industry Start: 1978; Mark L. Simenstad, CFA - Fund Start: 2005; Industry Start: 198; Darren M. Bagwell, CFA - Fund Start: 2016; Industry Start: 1991; Stephen D. Lowe, CFA - Fund Start: 2016; Industry Start: 1996 Risks: The Fund invests in other funds managed by the Adviser and in directly-held equity and debt instruments. The Fund is subject to its own fees and expenses and the expenses of the other funds in which it invests, as well as the risks of the other funds in which it invests. The value of the Fund is influenced by factors impacting the overall market, certain asset classes, certain investment styles, and specific issuers. The Fund may incur losses due to investments that do not perform as anticipated by the investment adviser. Foreign investments involve additional risks, including currency fluctuations, liquidity, political, economic and market instability, and different legal and accounting standards. Bond prices may decline during periods of rising interest rates. Credit risk is the risk that an issuer of a debt security may not pay its debt, and high yield securities are subject to increased credit risk as well as liquidity risk. The use of derivatives (such as futures and swaps) involves additional risks and transaction costs, which could leave the Fund in a worse position than if it had not used these instruments. The Fund may engage in active and frequent trading of portfolio securities in implementing its principal investment strategies, which may result in higher transaction costs and higher taxes. March 1, 2018 Inception Date Total Net Assets Ticker 6/0/2005 $1.2 billion TAAAX Fund Description Thrivent Aggressive Allocation Fund is the most aggressive in Thrivent Mutual Fund s suite of Asset Allocation Funds, is designed for investors with the longest time horizon and highest risk tolerance. The Fund is globally diversified across major equity and fixed income sectors and styles. The Fund is actively managed and invests in a combination of other funds managed by the Adviser and direct investments in stocks, bonds, and derivatives. Investment Strategy/Process The Fund has a long-term target allocation of 95% equity securities and 5% fixed income. The Fund s asset allocation strategy starts with the construction of a model that sets the long-term target allocations for the broad asset classes of equity and fixed income. Next, the target weightings for sub-classes are determined. Equity sub-classes are often based on market capitalization (large, mid, and small), investment style (such as growth and value), economic sector and world region. Fixed income sub-classes may be based on maturity, duration, credit quality and security type. The portfolio management team actively manages the Fund with overweight and underweight positions in the various sub-classes based on their views of the market and economy. Individual stocks and bonds are analyzed and selected on an ongoing basis. The Fund is regularly rebalanced to ensure that the holdings are within appropriate ranges. Growth of $10,000 and Calendar Year Performance (%) Growth of $10,000 Calendar Year Total Returns (CYTR) Total Market Value (assumes the reinvestment of. all.. dividends and.... capital gains) $19, Accumulated Dividends and.... Capital Gains $6, $25, $20, $15, $10, $5,000 $ % 0% 15% 0% -15% -0% -45% Performance shown does not reflect the Fund s sales charge. Performance of other share classes will vary from the results shown based on differences in sales charges and expenses. Trailing Returns Average Annual (%) Since Month YTD 1 Year Year 5 Year 10 Year Incept. Class A share (without sales charge) Class A share (with 4.5% max sales charge) Index N/A Aggregate Bond Index N/A MSCI ACWI ex-usa - USD Net Returns N/A Lipper Mixed-Asset Target Allocation Aggressive N/A Growth Funds Median¹ All data represents past performance and assumes the reinvestment of dividends and capital gains. Past performance does not guarantee future results. The investment return and principal value of the investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Visit ThriventFunds.com or call for performance results current to the most recent month-end. All performance shown reflects the current maximum sales charge of 4.5%. Prior to Feb. 29, 2016, the maximum sales charge was 5.5%; however, the prior rate is not reflected for periods that began prior to that date. 1 Source: Lipper LANA. The Lipper median represents the median annualized total return for all reported funds in the classification. Lipper medians do not include sales charges or fees. If included, returns would have been lower YTD CYTR Page 8 of Only valid with all pages.

11 March 1, 2018 ThrivenT Aggressive AllocATion Fund class A Fund Diversification Large Cap Equity International Equity Small Cap Equity Mid Cap Equity Cash Government Bonds International Debt Securitized Debt Short Term Bonds High Yield Bonds Investment Grade Credit 8.8% 25.1% 21.2% 6.7%.% 1.4% 1.1% 1.0% 0.6% 0.5% 0.% Bond Quality Rating Distribution (%) The lower of the bond ratings assigned by Moody s Investor Services, Inc. or Standard & Poor s Financial Services, LLC ( S&P ). Investments in derivatives and short-term investments are not included. Category Percentage HIGH QuALITY (HQ) Cash 1.7 U.S. Gov t Guaranteed 65.8 AAA.6 AA 0.5 A 2.7 BBB 8.8 HIGH YIELD (HY) BB 6.1 B 6.7 CCC 2.0 CC 0.1 C D OTHER Non-Rated (NR) 1.9 ETFs/Closed-End Funds 0.1 (may be (HQ/HY/NR) Top 10 Holdings Excluding Derivatives (42.5% of Fund, as of 02/28/2018) Thrivent Partner WW Alloc Fund, 11.01% Class S Thrivent Large Cap Growth Fund, 7.26% Class S Thrivent Mid Cap Stock Fund, 6.19% Class S Thrivent Large Cap Value Fund, 5.60% Class S Thrivent Core Int l Equity Fund 4.7% Thrivent Large Cap Stock Fund,.05% Class S Thrivent Small Cap Stock Fund, 2.57% Class S Amazon.com, Inc. 0.92% SPDR S&P 500 ETF Trust 0.6% Thrivent Ltd Mat Bond Fund, Class S 0.57% Dividend Distributions & Price History (Trailing 12-Months; Dividend Schedule: Paid Annually) Dividends Month-End NAV² Month-End POP³ Apr-17 $14.74 $15.4 May-17 $14.9 $15.6 Jun-17 $15.0 $15.74 Jul-17 $15. $16.05 Aug-17 $15.7 $16.09 Sep-17 $15.75 $16.49 Oct-17 $16.01 $16.76 Nov-17 $16. $17.10 Dec-17 $ $15.5 $16.26 Jan-18 $16.1 $17.08 Feb-18 $15.7 $16.47 Mar-18 $15.57 $16.0 $ (Total) $15.49 (Avg.)⁴ $16.22 (Avg.)⁴ Capital Gains - Trailing 12-Months Record Date Short- Term Gain Long-Term Gain Total 05/12/2017 $ $ $ /1/2017 $0.287 $ $ NAV = Net Asset Value (without sales charge, not available to all investors). POP = Public Offering Price (with sales charge - see prospectus for details). 4 Average of the daily NAV/POP values for the trailing 12 months. 5 Turnover Ratio: 12-month rolling as of 2/28/2018. A measure of the Fund s trading activity, calculated by dividing the lesser of long-term purchases or long-term sales by average long-term market value. 6 Source: Barclays Capital Indices, POINT Barclays Capital Inc. Used with permission. POINT is a registered trademark of Barclays Capital Inc. Bloomberg Barclays U.S. Aggregate Bond Index measures the performance of U.S. investment grade bonds. 7,8,9 is a registered trademark of Standard & Poor s Financial Services LLC, a part of McGraw Hill Financial, Inc. and/or its affiliates. The Index is a market-cap weighted index that represents the average performance of a group of 500 large-capitalization stocks. Sources: (7) Morningstar; (8) FactSet; (9) Thrivent Financial. Investing in a mutual fund involves risks, including the possible loss of principal. The prospectus contains more complete information on the investment objectives, risks, charges and expenses of the fund, which investors should read and consider carefully before investing. Prospectuses are available at ThriventFunds.com or by calling The principal underwriter for Thrivent Mutual Funds is Thrivent Distributors, LLC. Thrivent Distributors, LLC is a registered broker/dealer and member of FINRA. Thrivent Asset Management, LLC, an SEC-registered investment adviser, serves as the investment adviser for the Thrivent Mutual Funds. Both entities are wholly owned subsidiaries of Thrivent Financial for Lutherans, with their principal places of business at 625 Fourth Ave South, Minneapolis, MN Appleton, WI Minneapolis, MN ThriventFunds.com FuND STATISTICS Statistics shown below are compared to the S&P 500 Index and Bloomberg Barclays U.S. Aggregate Bond Index. These benchmarks are intended to provide a comparison to the broad U.S. large cap stock market and the broad U.S. bond market, and may not be representative of the Fund s investment strategies and holdings. Holdings Information Number of Holdings 922 Turnover Ratio (last 12-months)⁵ 55% Percent U.S. 7.8% Percent Non-U.S. 26.2% Risk/Volatility Measures Beta (-year vs. ): A measure of the volatility, or market risk, of an investment compared to the broad U.S. large cap stock market. Lower than Benchmark S&P Fund 0.96 Higher than Benchmark Standard Deviation: A statistical measure of volatility. The higher the standard deviation, the riskier an investment is considered to be. Fund Index⁷ Aggregate⁶ Year 10.2% 10.26% 2.6% 5 Year 9.74% 9.87% 2.88% 10 Year 15.9% 15.05%.24% Equity Characteristics (91.8% of Fund) Market Capitalization: A measure of the size of the companies held in the portfolio, calculated by multiplying a company s total outstanding shares by the stock price. Fund Index⁸ Avg Mkt Cap $2.2 B $48.9 B Wtd Median Mkt Cap $10.4 B $100.5 B Price to Earnings (P/E) Ratio: A valuation ratio calculated by dividing the share price of each stock held in the portfolio by its trailing 12- month earnings per share. Fund Index⁹ P/E Ratio Return on Equity (ROE): A measure of corporate profitability that shows how much net income the companies in the portfolio have generated as a percentage of shareholder equity. Fund Index⁹ ROE 16.% 19.7% Fixed Income Characteristics (8.2% of Fund) Average Duration: A measure of a portfolio s sensitivity to changes in interest rates; the longer the portfolio s duration, the more sensitive it is. Fund Aggregate⁶ Average Duration (years) Weighted Average Life: The market-value weighted average of the time remaining until the bond in the portfolio will repay principal. Fund Aggregate⁶ Wtd Avg Life (years) Page 9 of Only valid with all pages.

12 ThrivenT Balanced income Plus Fund class a Investment Objective Thrivent Balanced Income Plus Fund seeks longterm total return through a balance between income and the potential for long-term capital growth. Who Should Consider Investing? The Fund may be suitable for investors who: Seek a balance of income and the opportunity for long-term growth. Have a medium to long-term investment time horizon and a moderate risk tolerance. Are able to withstand a moderate level of risk and volatility in pursuit of moderate long-term returns. Minimum Investment Initial (non-retirement): $2,000 Initial (IRA or tax-deferred): $1,000 Subsequent: $50 Expense Ratio Gross 1.09% Net 1.09% Benchmark(s) Indexes are unmanaged and do not reflect the fees and expenses associated with active management. Investments cannot be made directly into an index. Morgan Stanley Capital International (MSCI) World Index - USD Net Returns represents large and mid cap stocks in 2 developed market countries. Bloomberg Barclays (BBgBarc) U.S. Mortgage-Backed Securities Index represents the performance of securities backed by pools of mortgages. Bloomberg Barclays (BBgBarc) U.S. High Yield Ba/B 2% Issuer Capped Index represents the performance of the non-investment grade, Ba or B-rated corporate bond market. Issuers are constrained to a maximum 2% weighting. S&P/LSTA U.S. Leveraged Loan Index is a market-value weighted index representing the performance of the universe of U.S. dollar-denominated, senior secured, syndicated term loans. Fund Management & Experience John T. Groton, Jr., CFA - Fund Start: 2016; Industry Start: 199; Stephen D. Lowe, CFA - Fund Start: 201; Industry Start: 1996; Mark L. Simenstad, CFA - Fund Start: 2015; Industry Start: 198; Noah J. Monsen, CFA - Fund Start: 2015; Industry Start: 2008; Reginald Pfeifer, CFA - Fund Start: 2015; Industry Start: 1986 Risks: The Fund invests in debt securities and equity securities. The value of the Fund is influenced by factors impacting the overall market, certain asset classes, certain investment styles, and specific issuers. The Fund may incur losses due to investments that do not perform as anticipated by theinvestment adviser. Bond prices may decline during periods of rising interest rates. Credit risk is the risk that an issuer of a debt security may not pay its debt, and high yield securities are subject to increased credit risk as well as liquidity risk. Leveraged loans, REITs, preferred securities, convertible securities, sovereign debt, and mortgage-related and other asset-backed securities are subject to additional risks. Foreign investments involve additional risks, including currency fluctuations, liquidity, political, economic and market instability, and different legal and accounting standards; these risks are magnified for investments in emerging markets. An ETF is subject to additional fees and expenses, tracking error, and the risks of the underlying investments that it holds. The use of derivatives (such as futures and swaps) involves additional risks and transaction costs, which could leave the Fund in a worse position than if it had not used these instruments. The Fund may engage in active and frequent trading of portfolio securities in implementing its principal investment strategies, which may result in higher transaction costs and higher taxes. March 1, 2018 Inception Date Total Fund Assets Ticker 12/29/1997 $5.5 million AABFX Fund Description Thrivent Balanced Income Plus Fund provides a balanced approach to income and capital appreciation. Approximately half of the portfolio is invested in equity securities to provide potential growth, while the other half of the portfolio is invested in higher-yielding, higher-risk, fixed-income securities to generate income. Investments are diversified across sectors in order to manage risk, potentially provide more stability when interest rates rise, and to provide the opportunity for long-term capital growth and income. Investment Strategy/Process The Fund has a long-term target allocation of 50% equity securities and 50% fixed income. The portfolio management team actively manages the Fund with overweight and underweight positions in the various sectors based on their views of the market and economy. Individual stocks and bonds are analyzed and selected on an ongoing basis. The Fund is regularly rebalanced to ensure that the holdings are within appropriate ranges. Prior to August 16, 201, the Fund was named Thrivent Balanced Fund. It invested in a balanced mix of stocks, bonds and cash alternatives. On August 16, 201, the Fund adopted its current name and investment strategy, which includes the ability to invest a greater portion of its assets in higher-yielding fixed-income securities. Growth of $10,000 and Calendar Year Performance (%) Growth of $10,000 Calendar Year Total Returns (CYTR) Total Market Value (assumes the reinvestment of. all.. dividends and.... capital gains) $18, Accumulated Dividends and.... Capital Gains $6, $20, $15,000 $10, $5,000 $ Performance shown does not reflect the Fund s sales charge. Performance of other share classes will vary from the results shown based on differences in sales charges and expenses. 40% 0% 20% 10% 0% -10% -20% -0% -40% Trailing Returns Average Annual (%) Since Month YTD 1 Year Year 5 Year 10 Year Incept. Class A share (without sales charge) Class A share (with 4.5% max sales charge) MSCI World Index - USD Net Returns N/A Mortgage- Backed Securities Index N/A High Yield Ba/B 2% Issuer Capped Index N/A S&P/LSTA Leveraged Loan Index N/A Lipper Mixed-Asset Target Alloc Moderate Funds Median¹ N/A All data represents past performance and assumes the reinvestment of dividends and capital gains. Past performance does not guarantee future results. The investment return and principal value of the investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Visit ThriventFunds.com or call for performance results current to the most recent month-end. All performance shown reflects the current maximum sales charge of 4.5%. Prior to Feb. 29, 2016, the maximum sales charge was 5.5%; however, the prior rate is not reflected for periods that began prior to that date. 1 Source: Lipper LANA. The Lipper median represents the median annualized total return for all reported funds in the classification. Lipper medians do not include sales charges or fees. If included, returns would have been lower YTD CYTR Page 10 of Only valid with all pages.

13 March 1, 2018 ThrivenT Balanced income Plus Fund class a Fund Diversification US Large Cap Equity Floating-Rate Bank Loans International Equity Securitized Debt US Mid/Small Cap Equity International Debt High Yield Bonds Opportunistic Fixed Income Investment Grade Credit Real Estate Cash Opportunistic Equity 2.8% 16.0% 14.6% 11.7% 7.0% 6.6% 5.% 5.0% 4.6% 4.4% 0.7% 0.% Bond Quality Rating Distribution (%) The lower of the bond ratings assigned by Moody s Investor Services, Inc. or Standard & Poor s Financial Services, LLC ( S&P ). Investments in derivatives and short-term investments are not included. Category Percentage HIGH QuALITY (HQ) Cash 2.5 U.S. Gov t Guaranteed 11.6 AAA 0.7 AA 1. A 5.0 BBB 15.9 HIGH YIELD (HY) BB 25.5 B 22. CCC 5.0 CC 1.0 C 0.1 D 0.5 OTHER Non-Rated (NR) 4.9 ETFs/Closed-End Funds (may.7 be (HQ/HY/NR) Top 10 Holdings Excluding Derivatives (1.98% of Fund, as of 02/28/2018) Thrivent Core EM Debt Fund.1% FNMA Conv l 0-yr. Pass-Thru 2.5% Amazon.com, Inc. 1.50% FNMA Conv l 0-yr. Pass-Thru 1.9% UnitedHealth Grp, Inc. 1.18% Cisco Systems, Inc. 0.98% Apple, Inc. 0.91% FNMA Conv l 0.8% Materials Select Sector SPDR Fund 0.77% Visa, Inc. 0.76% Dividend Distributions & Price History (Trailing 12-Months; Dividend Schedule: Paid Quarterly) Month-End Month-End Dividends NAV² POP³ Apr-17 $12.81 $1.41 May-17 $12.92 $1.5 Jun-17 $0.077 $12.91 $1.52 Jul-17 $1.06 $1.68 Aug-17 $1.06 $1.68 Sep-17 $ $1.1 $1.75 Oct-17 $1.26 $1.88 Nov-17 $1.42 $14.05 Dec-17 $ $1.27 $1.90 Jan-18 $1.58 $14.22 Feb-18 $1.26 $1.88 Mar-18 $ $1.14 $1.76 $ (Total) $1.1 (Avg.)⁴ $1.75 (Avg.)⁴ Capital Gains - Trailing 12-Months Short- Long-Term Record Date Term Gain Gain Total 12/1/2017 $ $ $ NAV = Net Asset Value (without sales charge, not available to all investors). POP = Public Offering Price (with sales charge - see prospectus for details). 4 Average of the daily NAV/POP values for the trailing 12 months. 5 Turnover Ratio: 12-month rolling as of 2/28/2018. A measure of the Fund s trading activity, calculated by dividing the lesser of long-term purchases or long-term sales by average long-term market value. 6 0-Day SEC Yield: Previous 0 calendar days ending /1/ Source: Barclays Capital Indices, POINT Barclays Capital Inc. Used with permission. POINT is a registered trademark of Barclays Capital Inc. Bloomberg Barclays U.S. Aggregate Bond Index measures the performance of U.S. investment grade bonds. 8,9,10 is a registered trademark of Standard & Poor s Financial Services LLC, a part of McGraw Hill Financial, Inc. and/or its affiliates. The Index is a market-cap weighted index that represents the average performance of a group of 500 large-capitalization stocks. Sources: (8) Morningstar; (9) FactSet; (10) Thrivent Financial. Investing in a mutual fund involves risks, including the possible loss of principal. The prospectus contains more complete information on the investment objectives, risks, charges and expenses of the fund, which investors should read and consider carefully before investing. Prospectuses are available at ThriventFunds.com or by calling The principal underwriter for Thrivent Mutual Funds is Thrivent Distributors, LLC. Thrivent Distributors, LLC is a registered broker/dealer and member of FINRA. Thrivent Asset Management, LLC, an SEC-registered investment adviser, serves as the investment adviser for the Thrivent Mutual Funds. Both entities are wholly owned subsidiaries of Thrivent Financial for Lutherans, with their principal places of business at 625 Fourth Ave South, Minneapolis, MN Appleton, WI Minneapolis, MN ThriventFunds.com FuND STATISTICS Statistics shown below are compared to the S&P 500 Index and Bloomberg Barclays U.S. Aggregate Bond Index. These benchmarks are intended to provide a comparison to the broad U.S. large cap stock market and the broad U.S. bond market, and may not be representative of the Fund s investment strategies and holdings. Holdings Information Number of Holdings 1,045 Turnover Ratio (last 12-months)⁵ 15% Percent U.S. 78.7% Percent Non-U.S. 21.% Yield Yield: The income return on an investment. 0-Day SEC Yield⁶ 1.77% Risk/Volatility Measures Beta (-year vs. ): A measure of the volatility, or market risk, of an investment compared to the broad U.S. large cap stock market. Lower than Benchmark Fund 0.56 S&P Higher than Benchmark Standard Deviation: A statistical measure of volatility. The higher the standard deviation, the riskier an investment is considered to be. Fund Index⁸ Aggregate⁷ Year 6.09% 10.26% 2.6% 5 Year 6.07% 9.87% 2.88% 10 Year 11.59% 15.05%.24% Equity Characteristics (50.1% of Fund) Market Capitalization: A measure of the size of the companies held in the portfolio, calculated by multiplying a company s total outstanding shares by the stock price. Fund Index⁹ Avg Mkt Cap $2.8 B $48.9 B Wtd Median Mkt Cap $6.4 B $100.5 B Price to Earnings (P/E) Ratio: A valuation ratio calculated by dividing the share price of each stock held in the portfolio by its trailing 12- month earnings per share. Fund Index¹⁰ P/E Ratio Fixed Income Characteristics (49.9% of Fund) Average Duration: A measure of a portfolio s sensitivity to changes in interest rates; the longer the portfolio s duration, the more sensitive it is. Fund Aggregate⁷ Average Duration (years) Weighted Average Life: The market-value weighted average of the time remaining until the bond in the portfolio will repay principal. Fund Aggregate⁷ Wtd Avg Life (years) Page 11 of Only valid with all pages.

14 ThrivenT DiversifieD income Plus fund class A Investment Objective Thrivent Diversified Income Plus Fund seeks to maximize income while maintaining prospects for capital appreciation. Who Should Consider Investing? The Fund may be suitable for investors who: Seek a high level of income and the opportunity for long-term growth. Have a medium to long-term investment time horizon and a moderately conservative risk tolerance. Are able to withstand a low to moderate level of risk and volatility in pursuit of commensurate long-term returns. Minimum Investment Initial (non-retirement): $2,000 Initial (IRA or tax-deferred): $1,000 Subsequent: $50 Expense Ratio Gross 1.05% Net 1.05% Benchmark(s) Indexes are unmanaged and do not reflect the fees and expenses associated with active management. Investments cannot be made directly into an index. Morgan Stanley Capital International (MSCI) World Index - USD Net Returns represents large and mid cap stocks in 2 developed market countries. Bloomberg Barclays (BBgBarc) U.S. Mortgage-Backed Securities Index represents the performance of securities backed by pools of mortgages. Bloomberg Barclays (BBgBarc) U.S. High Yield Ba/B 2% Issuer Capped Index represents the performance of the non-investment grade, Ba or B-rated corporate bond market. Issuers are constrained to a maximum 2% weighting. S&P/LSTA U.S. Leveraged Loan Index is a market-value weighted index representing the performance of the universe of U.S. dollar-denominated, senior secured, syndicated term loans. Fund Management & Experience Mark Simenstad, CFA - Fund Start: 2006; Industry Start: 198; Stephen D. Lowe, CFA - Fund Start: 2015; Industry Start: 1996; Noah J. Monsen, CFA - Fund Start: 2015; Industry Start: 2008; Reginald L. Pfeifer, CFA - Fund Start: 2015; Industry Start: 1986; John T. Groton, Jr., CFA - Fund Start: 2016; Industry Start: 199 Risks: The Fund invests in debt securities and equity securities. The value of the Fund is influenced by factors impacting the overall market, certain asset classes, certain investment styles, and specific issuers. The Fund may incur losses due to investments that do not perform as anticipated by the investment advisor. Bond prices may decline during periods of rising interest rates. Credit risk is the risk that an issuer of a debt security may not pay its debt, and high yield securities are subject to increased credit risk as well as liquidity risk. Leveraged loans, REITs, preferred securities, convertible securities, sovereign debt, and mortgagerelated and other asset-backed securities are subject to additional risks. Foreign investments involve additional risks, including currency fluctuations, liquidity, political, economic and market instability, and different legal and accounting standards; these risks are magnified for investments in emerging markets. An ETF is subject to additional fees and expenses, tracking error, and the risks of the underlying investments that it holds. The use of derivatives (such as futures and swaps) involves additional risks and transaction costs, which could leave the Fund in a worse position than if it had not used these instruments. The Fund may engage in active and frequent trading of portfolio securities in implementing its principal investment strategies, which may result in higher transaction costs and higher taxes. March 1, 2018 Inception Date Total Fund Assets Ticker 1/8/1997 $875.9 million AAHYX Fund Description Thrivent Diversified Income Plus Fund looks to provide a steady and dependable income stream along with modest capital appreciation. It invests in higher-yielding, higher-risk, fixed-income securities to generate income, and in equities to provide potential growth and income. Investments are diversified across sectors in order to manage risk and potentially provide more stability when interest rates rise. Investment Strategy/Process The Fund has a long-term target allocation of 70% fixed income and 0% equity securities. The portfolio management team actively manages the Fund with overweight and underweight positions in various sectors based on their views of the market and economy. Individual stocks and bonds are analyzed and chosen on an ongoing basis. The Fund is regularly rebalanced to ensure that the holdings are within appropriate ranges. Growth of $10,000 and Calendar Year Performance (%) Growth of $10,000 Calendar Year Total Returns (CYTR) Total Market Value (assumes the reinvestment of. all.. dividends and.... capital gains) $18, Accumulated Dividends and.... Capital Gains $6, $20,000 $15, $10, $5, $ % 0% 20% 10% 0% -10% -20% -0% -40% Performance shown does not reflect the Fund s sales charge. Performance of other share classes will vary from the results shown based on differences in sales charges and expenses. Trailing Returns Average Annual (%) Since Month YTD 1 Year Year 5 Year 10 Year Incept. Class A share (without sales charge) Class A share (with 4.5% max sales charge) MSCI World Index - USD Net Returns N/A Mortgage- Backed Securities Index N/A High Yield Ba/B 2% Issuer Capped Index N/A S&P/LSTA Leveraged Loan Index N/A Lipper Mixed-Asset Target Alloc Consv Funds Median¹ N/A All data represents past performance and assumes the reinvestment of dividends and capital gains. Past performance does not guarantee future results. The investment return and principal value of the investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Visit ThriventFunds.com or call for performance results current to the most recent month-end. 1 Source: Lipper LANA. The Lipper median represents the median annualized total return for all reported funds in the classification. Lipper medians do not include sales charges or fees. If included, returns would have been lower YTD CYTR Page 12 of Only valid with all pages.