Morningstar Direct SM U.S. Asset Flows Update

Transcription

1 ? Morningstar Direct SM U.S. Asset Flows Update Morningstar Manager Research 17 June 2015 Data through May 31, 2015 U.S. Mutual Funds and Exchange- Traded Products Alina Lamy Senior Analyst Markets Research International-Equity Funds Continue to Lead Flows in May Investors continued to direct money to international-equity and taxable-bond funds in May. International equity was the leading Morningstar category group, with a $24.0 billion estimated total inflow. Again, most of this inflow went into passive funds, signaling strong investor preference for passive strategies in the international-equity space. However, it s worth noting that May s total international-equity inflow was lower than those of previous months. Whether it was an off month or the beginning of a slowdown, it s too early to say. The foremost question on everyone s mind nowadays is why taxable-bond funds keep receiving strong inflows despite rising long-term bond yields and the strong possibility that the Federal Reserve will raise short-term interest rates in Active U.S. equity funds once again experienced an outflow in May. After an April outflow of $18.9 billion, the largest seen in a single month since July 2011, May s outflow was smaller, at $13.0 billion. Still, the active-passive pattern held: Active U.S. equity kept suffering redemptions, while passive U.S. equity received a small inflow. Active Passive Estimated Net Flows* Assets May Assets May Year 1 Year $Mil $Bil 2015 $Bil U.S. Equity (12,970) (152,743) 3,854 1, ,241 2,448 Sector Equity , , International Equity 3,490 46,195 1,689 20, , Allocation 1,348 28,988 1, , Taxable Bond 1,378 (20,935) 2,337 4, , Municipal Bond (594) 28, , Alternative 2,042 8, , Commodities (134) 1, (1,423) All Long Term (5,231) (39,860) 10,264 25, ,791 4,592 Money Market 32,171 19,190 2,611 *Includes liquidated and merged funds. Source: Morningstar Direct Asset Flows.

2 Page 2 of 9 Traditional bonds and bond funds tend not to perform well when interest rates rise, which is why one would expect investors to be selling heavily by now. Instead, after a few negative months driven largely by the PIMCO shakeup, bond funds began attracting consistent inflows. The largest taxable-bond inflow was $29.3 billion in February, and inflows have been decreasing since then. It s difficult, however, to interpret this decreasing trend as meaningful as long as bond flows remain positive and U.S. equity flows negative. Judged in the context of interest rates that are likely to begin rising soon, piling money into bond funds seems counterintuitive, but then again, investors are not the best market-timers. What if, however, interest rates are not the most important factor behind this decision, and investors are moving money into bond funds because they are influenced by stock market performance? After all, bonds still provide income and have a lower risk level than stocks, no matter whether interest rates are rising or falling. What the recent flow data seems to indicate is that investors are more concerned with equity risk than with rising interest rates right now. Looking back over the past 12 months, the clear winner in the equity/bond battle is international equity, as highlighted in Exhibit 2. When they are willing to assume risk, investors prefer to take it in international markets rather than at home. Also, the fact that U.S. stocks have been riding a bull market for the past six years may also weigh heavily in international equity s (or even taxable bonds ) favor. Exhibit 1. Monthly Flows During the Past 12 Months ($ Billion) U.S. Equity Taxable Bond International Equity Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Source: Morningstar Direct Asset Flows.

3 Page 3 of 9 Highest-Receiving Categories: Foreign Large Blend and Intermediate Bond Foreign large blend was the top-receiving Morningstar Category in May, illustrative of the general move toward international equity. Again, passive funds took in the bulk of the inflow. In terms of top-flowing regions, investors continued to show interest in Europe stock. Intermediate-term bond funds kept receiving strong inflows in May. Within the taxable-bond category group, this is not surprising because intermediate-term bonds are less sensitive to interest rates than bonds with longer maturities. Just like in April, world bond was the other fixed-income category besides intermediate-term bond to grab a spot in the top five. Investors may see an opportunity in bonds overseas because, unlike U.S. rates, rates in other countries may stay low. With all of the quantitative-easing measures now in place in Europe, for example, rates are probably not going up anytime soon. Top- and Bottom-Flowing Categories in May Active Passive Estimated Net Flows* May Assets May Assets 1 Year 1 Year $Mil 2015 $Bil 2015 $Bil Leading Foreign Large Blend 2,074 25, ,128 92, Intermediate-Term Bond 1,732 14, ,574 57, World Bond (466) 4, ,678 17, Health 1,185 15, ,025 10, Europe Stock 279 (5) 15 1,680 19, Lagging Large Growth (2,686) (48,174) 1,249 (899) 2, Large Value (2,381) (20,034) 864 (33) 19, Mid-Cap Growth (2,273) (23,305) , Long Government (119) (225) 5 (1,894) (585) 17 Large Blend (4,410) (23,107) 748 2,560 91,181 1,551 *Excludes money market and funds of funds. Source: Morningstar Direct Asset Flows. Most U.S. equity categories landed on the lagging list in May. So did long government bonds, which are the most susceptible to rising interest rates because of their long maturities. Investors, understandably, would want to get rid of the bonds that carry the highest interestrate risk first.

4 Page 4 of 9 Top 10 U.S. Fund Families Active Passive Estimated Net Flows May Assets May Assets 1 Year 1 Year $Mil 2015 $Bil 2015 $Bil Vanguard (446) 18, , ,706 2,103 Fidelity Investments (385) (13,284) 1,121 1,113 22, American Funds 916 8,392 1,230 BlackRock/iShares , ,442 99, T. Rowe Price 719 5, (58) 1, Franklin Templeton Investments (579) (5,116) 452 SPDR State Street Global Advisors ,391 12, PIMCO (4,848) (173,604) (2,052) 5 JPMorgan , (72) 8 Dimensional Fund Advisors , Source: Morningstar Direct Asset Flows. Wait. Wait. Wait. Is that a red (446) on Vanguard s line? I must confess that I felt compelled to go back and double-check the numbers. However, it was only on the active side, and at this point, a half-billion outflow can probably do as much damage to Vanguard as a flea bite to an elephant. On the passive side, Vanguard still received more money than all the other firms together, active and passive combined. On the active side, things didn t look stellar in May. American Funds, T. Rowe Price, and J.P. Morgan managed to stay positive in terms of flows, but overall flows were very small. Fidelity and Franklin Templeton continued to experience redemptions. State Street broke its streak of outflows after what was beginning to look like a worrying trend of redemptions from its flagship SPDR S&P 500 ETF SPY. A Light at the End of the Tunnel for PIMCO? PIMCO outflows are finally slowing down. In May, PIMCO Total Return PTTRX again lagged its benchmark, the Barclays U.S. Aggregate Bond Index. The fund's return from Sept. 27, 2014 (a day after Bill Gross' departure) to May 31, 2015, was 2.6%, which was just below the 2.8% return of the Aggregate Index. The fund experienced a $2.6 billion outflow in May. Although this was still an outflow, it was the fund s smallest since Gross left the firm. Another month of redemptions brought PIMCO s total outflows to $201.1 billion since January 2014, a 38% decrease in assets. Outflows from PIMCO Total Return alone amounted to $115.9 billion in the space of nine months.

5 Page 5 of 9 Exhibit 2. PIMCO Total Return and Firm-Level Flows ($ Billion) PIMCO Total Return Fund -49 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Source: Morningstar Direct Asset Flows. Bottom-Flowing Active and Passive Funds Assets Assets Estimated Net Flows May Year May 2015 May 2014 $Mil $Mil $Mil Active Funds PIMCO Total Return Fund (2,623) (125,200) 107, ,927 Artisan International Value Fund (1,435) (1,697) 9,407 12,172 Artisan International Fund (892) 1,323 19,059 17,291 Harbor Capital Appreciation Fund (883) (1,092) 26,158 23,263 Columbia Acorn Fund (796) (8,395) 12,469 19,954 Passive Funds ishares Russell 2000 (1,988) ,240 24,034 PowerShares QQQ (1,934) (12,485) 39,008 43,383 ishares Short Treasury Bond (1,698) 254 2,415 2,161 Vanguard Total Stock Market Index Fund (1,426) 31, , ,711 ishares iboxx $ High Yield Corporate Bd (1,394) 2,546 15,507 13,524 Source: Morningstar Direct Asset Flows.

6 Page 6 of 9 PIMCO Total Return once again was the leader in terms of outflows, followed by two Artisan funds, Harbor Capital Appreciation HACAX, and Columbia Acorn ACRNX, the latter of which landed on the bottom-flowing list for the second month in a row. On the passive side, the list looks somewhat mixed. Last month, it was State Street that had two of its exchange-traded funds land on the list of funds with the largest outflows. This month, it was ishares (with three ETFs). Strangely, Vanguard Total Stock Market VTSMX had a large outflow, even though total international-stock and U.S. passively managed stock funds all had big inflows at the category level. Top-Flowing Active and Passive Funds Assets Assets Estimated Net Flows May Year May 2015 May 2014 $Mil $Mil $Mil Active Funds Bridge Builder Large Cap Growth Fund 2,609 2,610 2,610 Bridge Builder Large Cap Value Fund 2,176 2,177 2,177 Bridge Builder Small/Mid Cap Growth Fund 1,412 1,413 1,413 GMO Implementation Fund 1,144 5,180 17,348 12,013 PIMCO Income Fund 1,005 8,856 46,197 35,727 Passive Funds Vanguard Total Intl Stock Idx Fund 5,797 40, , ,364 Vanguard Total International Bd Idx Fund 3,012 16,789 42,391 24,314 SPDR S&P 500 ETF 2,953 1, , ,160 ishares MSCI EAFE 1,654 7,847 61,591 55,803 Vanguard Total Bond Market Index Fund 1,170 26, , ,386 Source: Morningstar Direct Asset Flows. Three Bridge Builder funds were newcomers to the top-flowing list this month. Considering their April 27, 2015, inception date, it s difficult to ascertain exactly why these newly created funds attracted such high inflows. The flows are probably not fresh investor capital and more likely the result of a transfer from a different investment vehicle. PIMCO Income PIMIX, which has a Morningstar Analyst Rating TM of Silver, landed fifth on the top-flowing active list in May, a welcome surprise. Or perhaps not such a surprise, given that Income outperformed Total Return over the past five years, as illustrated in the table below. One caveat, though: PIMCO Income is in the multisector bond Morningstar category and can

7 Page 7 of 9 have much higher allocations to emerging-market and high-yield bonds, so the comparison isn t 100% fair. In any case, however, it s encouraging to see investors regain some confidence (and PIMCO some of its footing) after so many months of severe outflows. Total Return (%) Name 1 month 6 months 1 year 3 year annualized 5 year annualized PIMCO Income PIMCO Total Return After four consecutive months of outflows, it s good to see State Street s SPDR S&P 500 ETF once again on the top-flowing list. Three Vanguard index funds and ishares MSCI EAFE EFA complete the ensemble, once again demonstrating the strong shift toward international-stock and taxable-bond funds.

8 Page 8 of 9 The currency-hedged ETF trend continues, with WisdomTree Europe Hedged Equity HEDJ and Deutsche X-trackers MSCI EAFE Hedged Equity DBEF continuing to receive strong inflows, although not strong enough to land them in the top-flowing five in May. Investors are diversifying away from U.S. equities, increasing their overseas allocations and positioning their portfolios to take advantage of the potential upside in Europe and possibly other regions. It appears that their main concern while doing so is currency risk, hence the preference for currency-hedged ETFs. As Exhibit 5 illustrates, assets in these vehicles increased from almost zero in 2012 to $63 billion currently. Exhibit 3. Assets in Currency-Hedged ETFs 30% 25% 20% 15% 10% 5% 0% Assets in Currency Hedged ETFs Trade Weighted U.S. Dollar Index % Change Billion % Source: Morningstar Direct.

9 Page 9 of 9 Note: The figures in this report were compiled on June 10, 2015, 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. Also note that this report includes both mutual funds and exchange-traded funds, while past commentaries excluded ETFs. The decision to include ETFs and to split some of the data tables into active and passive groups was based on the fact that ETFs now account for a significant share of assets and flows. In addition, a large share of the flows to mutual funds during the past several years have gone to passive investments, often within retirement savings accounts. These flows may not be completely representative of incremental investment decisions. 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

10 Morningstar Direct SM Publishing Date: Page 1 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 1 Large Blend (1,850) (17,974) (23,374) 68,073 2, , Large Growth (3,582) (8,378) (20,363) (45,517) 1, , Intermediate-Term Bond 5,306 11,898 44,174 71,895 1, , (0.42) Large Value (2,414) (7,473) (10,841) (477) 1, Foreign Large Blend 14,202 38,158 64, , (0.55) Moderate Allocation (134) (18) 4,654 11, World Stock (179) 360 (371) 5, (0.22) Diversified Emerging Mkts 1,086 8,061 13,152 24, (6.60) Foreign Large Growth 661 2,982 2,715 (6,933) (0.07) World Allocation , (0.63) Mid-Cap Growth (2,081) (3,379) (7,529) (19,686) Short-Term Bond (336) (1,343) (2,977) 5, High Yield Bond (899) (281) 9,772 (15,606) Mid-Cap Blend 646 2,699 10,338 18, Small Blend (1,819) (2,988) (1,325) Mid-Cap Value (1,529) (2,955) (3,938) (6,422) Conservative Allocation 336 1,101 4,393 15, (0.49) World Bond 2,217 7,559 13,927 22, (2.91) (3.62) 19 Small Growth 942 1, (9,713) Health 2,210 4,233 17,203 26, Multisector Bond 768 1,595 5,121 11, Foreign Large Value ,267 10, (2.64) Muni National Interm 833 2,423 8,468 19, (0.78) Nontraditional Bond (642) (1,242) (3,232) (233) Real Estate (1,789) (3,283) (1,319) 3, (0.57) (2.43) 26 Small Value (167) (24) Bank Loan (4,834) (31,573) Corporate Bond 731 1,713 9,460 17, (0.97) Muni National Short (75) (1,854) (1,450) 3, (0.41) (0.03) 30 Inflation-Protected Bond 354 1,498 4,963 5, (1.59) Intermediate Government (116) 110 1,493 1, (0.24) Technology 1, , Ultrashort Bond (219) (2,559) (3,985) Muni National Long (222) , (1.19) Europe Stock 1,959 7,918 25,193 19, 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

11 Morningstar Direct SM Publishing Date: Page 2 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 36 Emerging Markets Bond 836 1, (584) (1.57) High Yield Muni (659) (108) 1,526 5, (0.20) Global Real Estate 30 (47) 1,751 3, (3.39) Long/Short Equity (74) (545) (1,600) (2,758) Short Government (530) (124) 1,180 2, Equity Energy (1,669) 754 6,711 8, (12.60) Energy Limited Partnership 808 1,242 3,083 12, (5.42) (0.71) 43 Multialternative 1,829 3,683 6,372 11, Japan Stock 1,545 4,011 7,835 10, Miscellaneous Region 506 2,939 5,062 2, Natural Resources (89) (320) 2 (5,759) (4.74) Commodities Precious Metals (1,196) (916) 312 (2,703) Financial 1,925 1,202 (4,177) (1,115) Commodities Broad Basket 70 (449) (351) 1, (5.57) (6.37) 50 Foreign Small/Mid Growth ,054 (690) Muni California Long (53) , (0.33) Pacific/Asia ex-japan Stk ,767 5, (3.94) Utilities (284) (897) (4,278) (117) (4.68) 54 Tactical Allocation ,801 2, (0.31) Preferred Stock ,256 6, (0.48) Foreign Small/Mid Blend 847 1,701 3,166 4, China Region 1,469 2,910 3,746 6, (0.67) Consumer Cyclical (413) (1,200) 2,434 7, Market Neutral (151) (949) (3,209) (4,552) Foreign Small/Mid Value ,301 2, (0.17) Muni New York Long (86) (73) (147) (543) (0.35) Long-Term Bond (265) (594) (1,786) (2,388) (2.49) (0.83) 63 Long Government (2,013) (1,273) (2,491) (810) (3.05) (1.45) 64 Aggressive Allocation (4) , Convertibles (522) (169) Muni Single State Long (44) (3) 52 (288) (0.07) Managed Futures 529 1,342 3,718 4, Trading-Leveraged Equity (806) (1,886) (2,147) (506) Industrials (697) (1,423) (3,373) (3,645) Muni California Intermediate ,142 2, (0.56) Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

12 Morningstar Direct SM Publishing Date: Page 3 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 71 Equity Precious Metals 75 (717) (2.47) Consumer Defensive (672) (644) (2,270) 3, Diversified Pacific/Asia ,037 1, (0.89) Muni Single State Interm (15) (12) (0.25) Multicurrency (57) (196) 793 1, (1.77) (0.37) 76 Muni Single State Short (25) (94) (156) (259) (0.18) India Equity 501 1,028 3,311 5, Muni Pennsylvania (25) (65) (0.07) Trading-Inverse Equity 495 1,241 1,794 1, Target Date Communications (0.22) Target Date (1) (23) 133 (11) Muni Massachusetts (0.15) Muni New Jersey (55) (61) (83) (241) (0.32) (0.31) 85 Latin America Stock (100) (116) (762) (447) (14.23) (19.18) 86 Trading-Inverse Debt (75) Commodities Energy (588) (1,054) 1,936 3, (2.53) (0.15) 88 Muni New York Intermediate (22) (2) (0.50) Target Date Miscellaneous Sector (18) (52) Muni Ohio (6) (0.18) Muni Minnesota (0.20) Bear Market 113 (27) (186) (1,284) (3.10) (14.47) 94 Target Date (1.99) Trading-Leveraged Commodities 7 (550) 1,168 3, Volatility , Retirement Income Target Date (14) (2.37) Target Date (2.06) Commodities Agriculture (43) (313) (3.70) (12.44) 101 Trading-Miscellaneous 36 (34) (61) Single Currency (30) Target Date (2.23) Trading-Inverse Commodities (639) Target Date (11) (25) (84) (140) (1.73) 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 4 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Morningstar Categories Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Total Net Assets ($bil) Total Return 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1-Mo YTD 106 Target Date (8) (23) (87) (153) Trading-Leveraged Debt (128) (68) (298) (1,776) Commodities Industrial Metals (24) Target Date Commodities Miscellaneous (1) (1.16) 0.25 Top 10 13,976 28,472 75, ,844 8, , All 20,780 58, , ,823 14, , Top Fund Families Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 1 Vanguard 15,968 38, , ,486 2, , Fidelity Investments 727 2,589 11,519 9,707 1, , American Funds 916 3,382 9,101 8,392 1, , ishares 1,203 10,775 35,227 95, T. Rowe Price 662 2,273 5,761 6, Franklin Templeton Investments (579) (1,573) (3,217) (5,116) SPDR State Street Global Advisors 2,578 (12,084) (40,929) 12, PIMCO (4,795) (12,300) (47,450) (175,656) JPMorgan ,711 21, Dimensional Fund Advisors 633 1,104 9,774 25, BlackRock 553 2,957 10,019 21, OppenheimerFunds (1,379) (1,977) (3,914) (7,151) Dodge & Cox ,228 27, MFS (43) 1,685 3,392 8, Columbia (1,617) (2,816) (5,701) (11,974) Invesco (500) (700) (569) (1,572) Jackson National 889 2,365 4,607 10, John Hancock 261 1,767 2,794 6, Principal Funds ,408 3, Wells Fargo Advantage (252) (2,000) (3,371) (2,965) Janus (92) 198 1,240 1, Lord Abbett (337) (295) (941) (2,229) American Century Investments (2,076) AXA Equitable (172) (521) (1,322) (3,384) Goldman Sachs (69) (1,064) (1,385) 2, 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 5 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Top Fund Families Ranked by Current TNA ($Mil) Rank Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % 26 Hartford Mutual Funds (200) (319) (800) (3,788) Legg Mason (54) 553 4,165 10, PowerShares (2,391) (1,530) (1,815) (7,916) Voya (838) (1,785) (3,284) (7,644) SEI 1,538 2,239 3,375 4, TIAA-CREF Mutual Funds ,222 7, Harbor (1,052) (1,157) (2,334) (5,099) Oakmark (147) 1, Prudential Investments ,351 6, GMO 24 (105) (1,152) (1,014) Putnam (227) (629) (198) 2, First Eagle (113) (245) (1,150) (604) Metropolitan West Funds 803 2,830 15,138 37, MainStay (853) (1,962) (4,917) (15,333) Eaton Vance (328) (558) (1,813) (8,248) Federated ,290 4, Ivy Funds (308) (991) (3,300) (10,439) Natixis Funds ,063 8, Dreyfus 94 (274) (519) (2,512) WisdomTree 1,698 5,491 19,035 24, AllianceBernstein , Nuveen (405) (270) 616 4, Schwab Funds (168) 71 1,268 3, USAA ,084 2, Artisan (2,809) (3,021) (4,294) (6,866) Top 10 18,219 33, , ,761 8, , Top 50 12,004 35, , ,668 12, , Other 8,776 22,489 55,119 85,485 2, , All 20,780 58, , ,153 14, , Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß

15 Morningstar Direct SM Publishing Date: Page 6 Fund Flows Monthly Market Summary: US Open-end & ETF ex MM ex FoF Including merged and liquidated funds Effective Date Asset Classes Name Estimated Net Flow ($mil) Assets Under Management ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % US Equity (11,854) (38,299) (55,828) 4,620 6, , Sector Equity ,868 58, International Equity 24,205 72, , ,565 2, , Allocation 1,566 2,819 12,775 33,748 1, , Taxable Bond 5,909 19,752 74,621 92,852 3, , Municipal Bond (321) ,191 33, Alternative 2,283 3,004 8,130 11, Commodities (1,557) (2,268) 1,904 2, All Long Term 20,780 58, , ,823 14, , Morningstar Ratings Name Estimated Net Flow ($mil) Total Net Assets ($bil) 1-Mo QTD YTD 1-Yr Mkt Sh % Mkt Sh % QQQQQ 9,377 39, , ,599 2, , QQQQ 5,001 7,857 47, ,095 6, , QQQ (2,506) (5,067) (8,336) (12,983) 4, , QQ (6,461) (18,384) (42,981) (92,169) 1, , Q (2,847) (4,725) (5,617) (17,699) Not Rated 18,215 39,097 87, , Total 20,780 58, , ,823 14, , Morningstar, Inc. All Rights Reserved. For institutional use only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ß