GLOBAL EQUITY STYLE ROTATION

Transcription

1 First Quarter 21 GLOBAL EQUITY STYLE ROTATION GLOBAL EQUITY OWNERSHIP BY INSTITUTIONS UP 4%. MAJORITY HELD BY VALUE INVESTORS - From Q4 '9 to Q1 '1, institutional ownership of public global equity securities increased from $18.8 trillion to $19.6 trillion, an increase of 4.1%. investors hold roughly 25% of these equity assets, while and investors own 2 and 19%, respectively. and investors together own just over 5% of equity assets held by all global institutional investors. AND HEDGE FUND INVESTORS ONLY STYLES WITH NET INCREASES IN EACH SECTOR - Investors with either or styles increased their holdings in every sector from Q4 '9 to Q1 '1. Their largest increases were in the Consumer Discretionary and Materials sectors, respectively. 's Consumer Descretionary holdings increased 12%, and investors grew their Materials equities by 22%. HOLDINGS IN DIVERSIFIED AND UTILITIES SECTORS INCREASED BY 11% EACH - Institutions of all styles had a net increase in position in the Diversified sector, but and investors were the only styles with increases less than 9% (5.7% and.25%, respectively). With Utilities, these two styles saw significant value; investors had a net increase of 35%, and s increased their Utilities holdings by 16%. Q1 '1 Institutional Ownership in Global Equity Assets by Style 4,5 4,5 4, 4, 3,5 3,5 3, 3, ($ Billions) 2,5 2, Q4 '9 Total 2,5 2, 1,5 1,5 1, 1, 5 5 Cons Disc Cons Stap Diversified Energy Financials Health Care Industrials Materials Technology Telecom Utilities

2 First Quarter 21 GLOBAL EQUITY STYLE ROTATION TOTAL EQUITY ASSET BREAKDOWN BY STYLE - : 22.9%; : 19%; : 2.4%; : 24.6%; : 3.; : 15.7%; : 4.6%; No Defined Style: 7.5%. These percentages remained relatively intact quarter-over-quarter. VALUE INVESTORS INCREASED UTILITIES HOLDINGS SIGNIFICANTLY - From Q4 '9 to Q1 '1, investors grew their holdings in the Utilities sector more than any other style. They held 3% of the total Utilities equity versus 25% in the previous quarter. FINANCIALS TOP HELD SECTOR BY EACH INVESTMENT STYLE - Holdings in the Financials sector account for at least 18% of each investment style's aggregate portfolio. Financials equity assets represent more than 3% of investors with either no predefined style or a style. CONSUMER DISCRETIONARY AND FINANCIALS TOP SECTORS HELD BY HEDGE FUNDS - In aggregate, 17. and 18% of holdings are in the Consumer Discretionary and Financials sectors. Health Care, Materials, and Technology each make up at least 1% of their equity assets. ($ Billions) 5, 4,5 4, 3,5 3, 2,5 2, Q1 '1 Institutional Ownership in Global Equity Assets by Style Utilities Telecom Technology Materials Industrials Health Care Financials Energy Diversified Cons Stap Cons Disc 1,5 1, 5

3 Global Consumer Discretionary Sector Total Global Institutional Ownership by Style ($Billions) 2,489 2,233 1,678 1,517 1,831 2,19 2,336 2, , (USD Billions) 2,5 2, 1,5 1, 5

4 Global Consumer Staples Sector Total Global Institutional Ownership by Style ($Billions) 1,595 1,518 1,235 1,91 1,221 1,346 1,464 1, ,8 (USD Billions) 1,6 1,4 1,2 1,

5 Global Diversified Sector Total Global Institutional Ownership by Style ($Billions) , (USD Billions)

6 Global Energy Sector Total Global Institutional Ownership by Style ($Billions) 2,64 1,925 1,417 1,264 1,445 1,592 1,723 1, , (USD Billions) 2,5 2, 1,5 1, 5

7 Global Financials Sector Total Global Institutional Ownership by Style ($Billions) 4,911 4,522 3,18 2,57 3,216 3,824 4,41 4,29 1, , , (USD Billions) 5, 4, 3, 2, 1,

8 Global Health Care Sector Total Global Institutional Ownership by Style ($Billions) 1,831 1,788 1,528 1,351 1,474 1,634 1,723 1, , (USD Billions) 1,8 1,6 1,4 1,2 1,

9 Global Industrials Sector Total Global Institutional Ownership by Style ($Billions) 2,358 1,968 1,48 1,165 1,345 1,563 1,77 1, ,5 (USD Billions) 2, 1,5 1, 5

10 Global Materials Sector Total Global Institutional Ownership by Style ($Billions) 1,847 1, ,13 1,318 1, , (USD Billions) 1,8 1,6 1,4 1,2 1,

11 Global Technology Sector Total Global Institutional Ownership by Style ($Billions) 2,42 2,46 1,518 1,53 1,837 2,148 2,379 2, , (USD Billions) 2,5 2, 1,5 1, 5

12 Global Telecommunication Services Sector Total Global Institutional Ownership by Style ($Billions) 1, ,2 (USD Billions) 1,

13 Global Utilities Sector Total Global Institutional Ownership by Style ($Billions) , (USD Billions)

14 Style Definitions MOMENTUM: Momentum institutions invest in stocks whose price, earnings, or earnings estimates are advancing at a faster rate than the market or other stocks in the same sector. Momentum investors generally look for stocks experiencing upward earnings revisions or producing positive earnings surprises. Most of the investors in this category have relatively high portfolio turnover rates due to a shortterm (often quarterly) focus, and therefore will liquidate positions at the slightest hint of a disappointment or deceleration in earnings. TR categorizes these funds based on its knowledge of a firm s historical investment behavior. AGGRESSIVE GROWTH: Aggressive growth investors employ an extreme version of the growth style. This can be seen by their propensity to hold the stocks of companies that are growing their revenue and EPS extremely quickly, are in an early stage of their life cycle, or have minimal or no current earnings. GROWTH: investors bridge the gap between the Aggressive and Core investment styles. They tend to be slightly more aggressive than Core investors, willing to pay slightly higher multiples for stocks and trade at a slightly more active pace. In general, they are looking for companies growing at superior rates than the general marketplace, but are unwilling to pay the extremely high multiples associated with the hyper growth stocks. CORE GROWTH: Core managers typically invest in mid or large blue chip companies that have historically performed near the top of their sector or the S&P 5 in terms of profitability, earnings growth, and revenue growth. These investors are often willing to pay premium PE multiples for highly sustainable businesses, strong management and consistent growth over the long term. investors try and build their portfolios with two types of securities: 1) those that are trading at a discount to the market yet are expected to grow at higher than the market average, and 2) those whose forward PE ratio is less than, equal to, or only slightly above the long term projected growth of the company. Stated another common way, investors will often say they are either looking at large cap stocks whose PEG (forward PE divided by 5 year projected ) ratio less than the S&P 5 or at any size company whose PEG ratio is less than 1. This is a more conservative investment style in comparison to an outright growth-oriented strategy. In addition, dividend yield is generally not a concern of most investors. INCOME VALUE: investors are similar to those in the Core category except they are as interested in the dividend yield as they are in the low valuation ratios of the stocks they purchase. As a result, portfolios typically exhibit above average current income and low PE ratios. ( continued) YIELD: Yield investors focus on buying companies with indicated dividend yields that are comfortably above the S&P 5 average that are perceived to be able to continue making or increasing dividend payments over time. Investors that fall into this category tend to focus on income and safety more than on capital appreciation, and many have a dividend yield hurdle rate below which they will be either unlikely to consider owning a particular stock or forced to pare back a current position. CORE VALUE: Core investors focus on buying companies at relatively low valuations on an absolute basis, in relation to the market or its peers, or in comparison to an individual stock s historical levels. These portfolios typically exhibit price-to-earnings, price-to-book and price-to-cash flow multiples below the S&P 5. In addition, secular revenue growth rates of the companies in these portfolios are frequently below market averages and their earnings tend to be more cyclical. DEEP VALUE: Deep investors employ a more extreme version of value investing that is characterized by holding the stocks of companies with extremely low valuation measures. Often these companies are particularly out-of-favor or in industries that are out of favor. Some investors in this category are known for agitating for changes such as new management, a merger, or the spin-off of a subsidiary. investors have the majority of their funds invested is some sort of market neutral strategy. Notably, this is different from the legal structure that defines a hedge fund versus a mutual fund, but many of these managers are organized as hedge funds and are only open to sophisticated investors. Many are offshore funds that are unregistered, have no investment limitations, and are not subject to disclosure regulations. The common element is that the long position taken in a specific equity is offset by a short position in either a merger partner (risk arbitrage), an overvalued member of the same sector (long/short paired trading), a convertible bond (convertible arbitrage), a futures contract (index arbitrage) or an option contract (volatility arbitrage). Because of the idiosyncratic nature of these investors, the fundamentals of their portfolios are not indicative of their investment styles. TR categorizes these funds based on its specific knowledge of the firm s historical investment behavior. investors generally create portfolios that are designed to match the composition of one or more broad-based indices such as the S&P 5, the Russell 2, or the Wilshire 5. Therefore, the performance and risk of the portfolio mirrors the general market. Their investment decisions are driven solely by the makeup of the index they are tracking rather than by an evaluation of the company and its business prospects. firms are often referred to as passive investors. TR categorizes these funds based on its specific knowledge of a firm s historical investment behavior. INTERNATIONAL: This style refers to those money managers investing the majority of their equity assets in stocks of companies domiciled outside of North America. In most cases, the North American portion of the portfolio is either too small or does not exist, precluding Thomson Financial from determining an accurate investment style based on the fundamentals of these companies. For "Global" investors which have more significant North American holdings, a specific style may be given which will apply primarily to the North American portion of the portfolio. SPECIALTY: This category encompasses a range of styles that are not based on the financial fundamentals of the stocks in the portfolio relative to the overall market. Examples include investors that hold a particularly high concentration of a single stock or a very small set of stocks, or specialize in convertible securities. This category is also reserved for any institution or mutual fund that does not meet the criteria for any of the other investment styles. TF categorizes these funds based on its specific knowledge of the firm s historical investment behavior. SECTOR SPECIFIC: Sector Specific investors have the majority of their assets in a single major industry category. Many times these investors are forced to own most if not all of the stocks in a given sector whether or not they are deemed overvalued. Since their portfolio exposure is linked to a single sector, their performance is usually measured against an index that is pertinent only to that industry. As such, tweaking the relative exposure to the companies that makeup a given sector will determine these firm s investment decisions. VENTURE CAPITAL/PRIVATE EQUITY: Venture Capital investors are usually owners of public companies only when they have participated in a round of financing prior to an IPO and subsequently retained ownership after the transition from a private company to a public company. Other investors often consider positions held by venture capitalists as an overhang on the stock of a publicly traded company since VCs will typically dispose of their holdings of public companies during the first few years following an IPO. BROKER-DEALER: Broker-Dealers are usually trading facilitators rather than investors. Included in this group are sell-side research firms with broker operations, NYSE and NASDAQ trading desk positions of investment banks, investment banking client desks that execute buyback programs on behalf of corporations, private client firms that essentially act as custodians for high net worth individuals, and brokers that sell unit investment trusts or exchange traded products.

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16 First Quarter 21 GLOBAL EQUITY SECTOR ROTATION GLOBAL EQUITY OWNERSHIP BY INSTITUTIONS UP 4% - From Q4 '9 to Q1 '1, institutional ownership of public global equity securities increased from $18.8 trillion to $19.6 trillion, an increase of 4%. FINANCIALS REMAINS TOP HELD SECTOR - The financials sector remained the top held by institutions of the 11 macro sectors, totaling $4.2 trillion, or 22% of global equity assets. INCREASE IN HOLDINGS OF ALL SECTORS, EXCEPT ENERGY AND TELECOM - 9 of the 11 macro sectors saw an increase in total investment in equity assets, and institutions increased their holdings in the Diversified and Utilities sectors by 11% each. Energy and Telecommunication Services, however, had slight decreases in total investment by institutions. Investment decreased in both by less than 1%. VALUE INVESTORS TOP BUYERS. GROWTH INVESTORS TOP SELLERS - Looking at the broad overview of global institutions by style, Investors respresent the top holders and buyers of global equity securities, while Investors top the sellers with and equal for the next top sellers by style. 4,5 4, Institutional Ownership in Global Equity Assets by Sector Q4Y29 Q1Y21 16% Style Breakdown of Institutional Holders 5% 25% No Defined Style 7% 2% 2 Style Breakdown of Institutional Buyers No Defined Style 5% 1% 2% 9% 19% ($ Billions) 3,5 3, 2,5 2, 1,5 1, 5 9% 9% 26% 2% Style Breakdown of Institutional Sellers No Defined Style 8% 6% 27% GAR 19% 22% 22%

17 Global Consumer Discretionary Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 84, Fidelity Management & Research 565,313 83, Vanguard Group, Inc. 579,96 69,938 2,666 4 State Street Global Advisors (US) 56,968 6, Capital Research Global Investors Core 38,424 45,149 (1,258) Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Columbia Management Advisors, LLC 172,923 18,719 6,347 2 INVESCO Institutional (N.A.), Inc. Core 53,418 6,92 5,124 3 Wells Fargo Bank, N.A. Core 67,17 5,57 3,972 4 Vanguard Group, Inc. 579,96 69,938 2,666 5 J.P. Morgan Investment Management Inc. (New York) 16,885 13,493 2,64 14% 5% 12% Style Breakdown of Institutional Holders 4% 25% 7% 2% Style Breakdown of Institutional Buyers 6% 6% 25% 4% 1% 24% 2 19% 2 Style Breakdown of Institutional Sellers Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Invesco Management Group, Inc. 12,43 1,9 (4,874) 2 AllianceBernstein L.P. Core 177,67 27,998 (4,81) 3 Thornburg Investment Management, Inc. Core 23,867 2,16 (3,95) 9% 9% 3 4 Schroder Investment Management Ltd. (SIM) Core 65,19 19,75 (2,943) 5 Fidelity Investments Japan Ltd. 24,897 7,29 (2,213) 22% 2% 19%

18 Global Consumer Staples Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 53,329 (1,796) 2 Vanguard Group, Inc. 579,96 49,77 1,54 3 State Street Global Advisors (US) 56,968 44,365 (852) 4 Fidelity Management & Research 565,313 4,887 (1,29) 5 Capital Research Global Investors Core 38,424 37,71 (31) Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Advisors (UK) Limited 184,29 26,323 6,33 2 Wells Fargo Bank, N.A. Core 67,17 5,861 4,376 3 LIC Mutual Fund Asset Management Company Ltd. Core 49,235 4,234 3,893 4 Columbia Management Advisors, LLC 172,923 14,68 3,415 5 UTI Asset Management Co. Pvt. Ltd. Core 11,359 2,869 2,596 Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 T&D Asset Management Co., Ltd. 2, (6,52) 2 Thornburg Investment Management, Inc. Core 23, (3,32) 3 BlackRock Institutional Trust Company, N.A. 751,71 53,329 (1,796) 4 Evergreen Investment Management Company, LLC 18,325 1,491 (1,763) 5 Invesco Management Group, Inc. 12,43 1,746 (1,672) 17% 1 1% 9% Style Breakdown of Institutional Holders 26% 6% Style Breakdown of Institutional Buyers 3 6% 24% 19% Style Breakdown of Institutional Sellers 8% 2% 6% 2% 18% 15% 1% 24% 28%

19 Global Diversified Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 31,285 (1,923) 2 State Street Global Advisors (US) 56,968 26,13 5,613 3 Vanguard Group, Inc. 579,96 22,318 3,24 4 Fidelity Management & Research 565,313 16,381 1, 5 Capital Research Global Investors Core 38,424 1,81 (612) Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 State Street Global Advisors (US) 56,968 26,13 5,613 2 Vanguard Group, Inc. 579,96 22,318 3,24 3 Columbia Management Advisors, LLC 172,923 7,671 2,128 4 Wells Fargo Bank, N.A. Core 67,17 2,991 1,356 5 INVESCO Institutional (N.A.), Inc. Core 53,418 1,67 1,33 Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 LIC Mutual Fund Asset Management Company Ltd. Core 49,235 6,82 (3,38) 2 BlackRock Institutional Trust Company, N.A. 751,71 31,285 (1,923) 3 Capital World Investors Core 363,727 9,76 (1,863) 4 Thornburg Investment Management, Inc. Core 23, (1,224) 5 Invesco Management Group, Inc. 12, (1,25) 17% 2% 28% 8% Style Breakdown of Institutional Holders 5% 9% 21% 2% 24% Style Breakdown of Institutional Buyers 6% 4% 18% 19% Style Breakdown of Institutional Sellers 6% 6% 35% 5% 15% 2% 2% 19% 2

20 Global Energy Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 69, Vanguard Group, Inc. 579,96 53,71 1,667 3 Fidelity Management & Research 565,313 49,884 (156) 4 State Street Global Advisors (US) 56,968 49,438 (1,753) 5 Capital World Investors Core 363,727 37,736 (1,361) Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Investment Management (UK) Ltd. 198,335 32,188 5,273 2 Columbia Management Advisors, LLC 172,923 17,744 4,655 3 INVESCO Institutional (N.A.), Inc. Core 53,418 5,437 3,587 4 Wells Fargo Bank, N.A. Core 67,17 5,39 3,22 5 Legal & General Investment Management Ltd. (UK) 162,953 24,478 2,751 Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Invesco Management Group, Inc. 12, (3,496) 2 Evergreen Investment Management Company, LLC 18,325 1,384 (1,81) 3 State Street Global Advisors (US) 56,968 49,438 (1,753) 4 Wellington Management Company, LLP Core 27,6 31,563 (1,457) 5 Capital World Investors Core 363,727 37,736 (1,361) 17% 9% 12% 6% Style Breakdown of Institutional Holders 4% 26% 4% 2% Style Breakdown of Institutional Buyers 7% 26% 4% 1% Style Breakdown of Institutional Sellers 7% 26% 5% 4% 4% 24% 24% 27% 21% 2% 17%

21 Global Financials Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 169,82 6,511 2 Vanguard Group, Inc. 579,96 19,786 4,956 3 Fidelity Management & Research 565,313 92,984 1,115 4 State Street Global Advisors (US) 56,968 85,815 (2,264) 5 Norges Bank Core 337,398 6,987 (232) Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Wells Fargo Bank, N.A. Core 67,17 23,814 12,519 2 Columbia Management Advisors, LLC 172,923 37,57 11,253 3 RBC Asset Management, Inc. Core 6,443 23,425 6,951 4 BlackRock Institutional Trust Company, N.A. 751,71 169,82 6,511 5 INVESCO Institutional (N.A.), Inc. Core 53,418 11,773 5,834 Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Credit Suisse Securities (USA) LLC Broker-Dealer 43,63 14,15 (7,158) 2 Thornburg Investment Management, Inc. Core 23,867 3,211 (6,453) 3 Standard Life Investments Ltd. Core 52,519 11,937 (5,585) 4 Invesco Management Group, Inc. 12,43 1,195 (5,4) 5 RBC Capital Partners Core 5,367 1,288 (4,424) 14% 11% 5% 12% Style Breakdown of Institutional Holders 8% 1% 21% 22% Style Breakdown of Institutional Buyers 7% 29% 7% 18% Style Breakdown of Institutional Sellers 19% 19% 4% 22% 19% 2% 18%

22 Global Health Care Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 71, Fidelity Management & Research 565,313 63,743 (1,592) 3 Vanguard Group, Inc. 579,96 6,216 1,354 4 State Street Global Advisors (US) 56,968 53,26 (3,24) 5 Wellington Management Company, LLP Core 27,6 5,283 (2,987) 17% 4% Style Breakdown of Institutional Holders 4% 26% 5% 2% 2 19% Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Novartis International AG N/A 39,623 39,617 39,617 2 INVESCO Institutional (N.A.), Inc. Core 53,418 7,134 5,475 3 Columbia Management Advisors, LLC 172,923 17,136 4,696 4 Wells Fargo Bank, N.A. Core 67,17 5,876 4,343 5 Vanguard Group, Inc. 579,96 6,216 1,354 Style Breakdown of Institutional Buyers 4% 4% 12% 9% 18% 1 1% Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Invesco Management Group, Inc. 12,43 1,913 (4,98) 2 State Street Global Advisors (US) 56,968 53,26 (3,24) 3 Wellington Management Company, LLP Core 27,6 5,283 (2,987) 4 Evergreen Investment Management Company, LLC 18,325 1,937 (2,638) 5 Thornburg Investment Management, Inc. Core 23,867 3,358 (2,348) 7% Style Breakdown of Institutional Sellers 7% 25% 6% 2% 28% 22%

23 Global Industrials Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 61, State Street Global Advisors (US) 56,968 52,147 (2,883) 3 Vanguard Group, Inc. 579,96 48, Fidelity Management & Research 565,313 45, Capital Research Global Investors Core 38,424 37,438 1,149 Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Wells Fargo Bank, N.A. Core 67,17 6,724 5,265 2 Columbia Management Advisors, LLC 172,923 15,418 5,155 3 INVESCO Institutional (N.A.), Inc. Core 53,418 4,373 3,643 4 J.P. Morgan Investment Management Inc. (New York) 16,885 9,124 1,539 5 ING Investment Management (Netherlands) Core 58,61 5,382 1,232 14% 2% 8% Style Breakdown of Institutional Holders 4% 25% 1% Style Breakdown of Institutional Buyers 4% 29% 6% 1% 2 27% 22% 19% Style Breakdown of Institutional Sellers Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Berkshire Hathaway Inc. 52, (7,62) 2 Invesco Management Group, Inc. 12,43 1,214 (3,338) 3 State Street Global Advisors (US) 56,968 52,147 (2,883) 9% 7% 7% 4% 2 4 AllianceBernstein L.P. Core 177,67 14,176 (2,343) 5 Thornburg Investment Management, Inc. Core 23,867 1,395 (1,97) 18% 4% 28%

24 Global Materials Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 45,965 (826) 2 BlackRock Investment Management (UK) Ltd. 198,335 42, Capital World Investors Core 363,727 35,868 2,283 4 Fidelity Management & Research 565,313 33,821 (1,91) 5 Vanguard Group, Inc. 579,96 28,629 1,534 Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Columbia Management Advisors, LLC 172,923 1,345 3,621 2 Capital World Investors Core 363,727 35,868 2,283 3 Deutsche Asset Management Americas Core 43,726 4,888 1,712 4 Schroder Investment Management North America Inc. 13,962 1,762 1,571 5 Mitsubishi UFJ Trust and Banking Corporation Core 62,69 4,896 1, % 6% 1 Style Breakdown of Institutional Holders 24% 1% 2% Style Breakdown of Institutional Buyers 6% 25% 6% 1% 25% 24% 18% 19% Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Fidelity Management & Research 565,313 33,821 (1,91) 2 Invesco Management Group, Inc. 12,43 49 (1,348) 3 Baillie Gifford & Co. Core 4,538 3,353 (1,333) 4 Aviva Investors Global Services Limited Core 39,141 2,494 (1,18) 5 Wellington Management Company, LLP Core 27,6 15,484 (1,9) 9% Style Breakdown of Institutional Sellers 21% 6% 2% 5% 1% 21% 35%

25 Global Technology Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Fidelity Management & Research 565, ,192 (285) 2 BlackRock Institutional Trust Company, N.A. 751,71 15,19 (2,442) 3 Vanguard Group, Inc. 579,96 93,896 2,13 4 State Street Global Advisors (US) 56,968 8,928 (5,14) 5 Capital Research Global Investors Core 38,424 66,689 (1,184) Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Columbia Management Advisors, LLC 172,923 24,629 8,118 2 INVESCO Institutional (N.A.), Inc. Core 53,418 9,71 7,224 3 Wells Fargo Bank, N.A. Core 67,17 7,121 4,693 4 Bain Capital, LLC VC/Private Equity 5,16 2,58 2,465 5 Waddell & Reed Investment Management Company Core 49,945 13,173 2,452 18% 12% Style Breakdown of Institutional Holders 5% 24% 2% Style Breakdown of Institutional Buyers 4% 6% 25% 4% 2% 24% 26% 21% 21% Style Breakdown of Institutional Sellers Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Invesco Management Group, Inc. 12,43 1,262 (7,219) 2 State Street Global Advisors (US) 56,968 8,928 (5,14) 3 Loomis, Sayles & Company, L.P. 17,233 3,12 (4,366) 4 AllianceBernstein L.P. Core 177,67 28,26 (3,33) 1% 8% 9% 2% 29% 5 Credit Suisse Securities (USA) LLC Broker-Dealer 43,63 5,177 (2,778) 19% 2% 21%

26 Global Telecommunication Services Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 BlackRock Institutional Trust Company, N.A. 751,71 31,42 (325) 2 Capital Research Global Investors Core 38,424 27,29 (2,128) 3 Temasek Holdings Pte. Ltd. N/A 91,947 2,373 (319) 4 Capital World Investors Core 363,727 17,558 (248) 5 Vanguard Group, Inc. 579,96 17, Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Evercore Asset Management N/A 22,853 6,274 6,254 2 BBVA Gestión, S.A., S.G.I.I.C. Core 8,957 7,623 1,532 3 Columbia Management Advisors, LLC 172,923 4,51 1,337 4 Schroder Investment Management North America Inc. 13,962 1,139 1,14 5 Franklin Mutual Advisers, LLC Deep 43,524 2, % 4% 8% Style Breakdown of Institutional Holders 11% 2 2% 27% Style Breakdown of Institutional Buyers 2 26% 19% 17% 15% 2% Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Capital Research Global Investors Core 38,424 27,29 (2,128) 2 Thornburg Investment Management, Inc. Core 23,867 1,759 (1,93) 3 AllianceBernstein L.P. Core 177,67 5,359 (1,118) 4 Invesco Management Group, Inc. 12, (849) 5 Schroder Investment Management Ltd. (SIM) Core 65,19 2,411 (832) 6% Style Breakdown of Institutional Sellers 31% 4% 1% 18% 34%

27 Global Utilities Sector Top Holders Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Norges Bank Core 337,398 64,357 (18) 2 BlackRock Institutional Trust Company, N.A. 751,71 3,774 1,234 3 Vanguard Group, Inc. 579,96 27,468 1,996 4 State Street Global Advisors (US) 56,968 2,929 (642) 5 Capital Research Global Investors Core 38,424 19,356 2,585 Top Buyers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Capital Research Global Investors Core 38,424 19,356 2,585 2 Vanguard Group, Inc. 579,96 27,468 1,996 3 Columbia Management Advisors, LLC 172,923 5,77 1,42 4 BNP Paribas Asset Management S.A.S. Core 36,978 2,136 1,396 5 China Investment Corporation N/A 14,855 2,778 1,355 17% 12% 7% Style Breakdown of Institutional Holders 7% 2% 3% Style Breakdown of Institutional Buyers 4% 9% 15% 4% 4% 16% 15% Top Sellers Style Equity Assets ($MM) Val ($MM) Chg ($MM) 1 Grantham, Mayo, Van Otterloo & Co., L.L.C. 62,723 1,93 (2,52) 2 Fidelity International Limited Core 88,751 3,117 (1,952) 3 RBC Capital Partners Core 5, (1,22) 4 Schroder Investment Management Ltd. (SIM) Core 65,19 1,823 (993) 5 Credit Suisse Securities (USA) LLC Broker-Dealer 43,63 1,221 (689) 7% 2% 34% Style Breakdown of Institutional Sellers 5% 6% 1% 2 35%

28 Style Definitions MOMENTUM: Momentum institutions invest in stocks whose price, earnings, or earnings estimates are advancing at a faster rate than the market or other stocks in the same sector. Momentum investors generally look for stocks experiencing upward earnings revisions or producing positive earnings surprises. Most of the investors in this category have relatively high portfolio turnover rates due to a shortterm (often quarterly) focus, and therefore will liquidate positions at the slightest hint of a disappointment or deceleration in earnings. TR categorizes these funds based on its knowledge of a firm s historical investment behavior. AGGRESSIVE GROWTH: Aggressive growth investors employ an extreme version of the growth style. This can be seen by their propensity to hold the stocks of companies that are growing their revenue and EPS extremely quickly, are in an early stage of their life cycle, or have minimal or no current earnings. GROWTH: investors bridge the gap between the Aggressive and Core investment styles. They tend to be slightly more aggressive than Core investors, willing to pay slightly higher multiples for stocks and trade at a slightly more active pace. In general, they are looking for companies growing at superior rates than the general marketplace, but are unwilling to pay the extremely high multiples associated with the hyper growth stocks. CORE GROWTH: Core managers typically invest in mid or large blue chip companies that have historically performed near the top of their sector or the S&P 5 in terms of profitability, earnings growth, and revenue growth. These investors are often willing to pay premium PE multiples for highly sustainable businesses, strong management and consistent growth over the long term. investors try and build their portfolios with two types of securities: 1) those that are trading at a discount to the market yet are expected to grow at higher than the market average, and 2) those whose forward PE ratio is less than, equal to, or only slightly above the long term projected growth of the company. Stated another common way, investors will often say they are either looking at large cap stocks whose PEG (forward PE divided by 5 year projected ) ratio less than the S&P 5 or at any size company whose PEG ratio is less than 1. This is a more conservative investment style in comparison to an outright growth-oriented strategy. In addition, dividend yield is generally not a concern of most investors. INCOME VALUE: investors are similar to those in the Core category except they are as interested in the dividend yield as they are in the low valuation ratios of the stocks they purchase. As a result, portfolios typically exhibit above average current income and low PE ratios. ( continued) YIELD: Yield investors focus on buying companies with indicated dividend yields that are comfortably above the S&P 5 average that are perceived to be able to continue making or increasing dividend payments over time. Investors that fall into this category tend to focus on income and safety more than on capital appreciation, and many have a dividend yield hurdle rate below which they will be either unlikely to consider owning a particular stock or forced to pare back a current position. CORE VALUE: Core investors focus on buying companies at relatively low valuations on an absolute basis, in relation to the market or its peers, or in comparison to an individual stock s historical levels. These portfolios typically exhibit price-to-earnings, price-to-book and price-to-cash flow multiples below the S&P 5. In addition, secular revenue growth rates of the companies in these portfolios are frequently below market averages and their earnings tend to be more cyclical. DEEP VALUE: Deep investors employ a more extreme version of value investing that is characterized by holding the stocks of companies with extremely low valuation measures. Often these companies are particularly out-of-favor or in industries that are out of favor. Some investors in this category are known for agitating for changes such as new management, a merger, or the spin-off of a subsidiary. investors have the majority of their funds invested is some sort of market neutral strategy. Notably, this is different from the legal structure that defines a hedge fund versus a mutual fund, but many of these managers are organized as hedge funds and are only open to sophisticated investors. Many are offshore funds that are unregistered, have no investment limitations, and are not subject to disclosure regulations. The common element is that the long position taken in a specific equity is offset by a short position in either a merger partner (risk arbitrage), an overvalued member of the same sector (long/short paired trading), a convertible bond (convertible arbitrage), a futures contract (index arbitrage) or an option contract (volatility arbitrage). Because of the idiosyncratic nature of these investors, the fundamentals of their portfolios are not indicative of their investment styles. TR categorizes these funds based on its specific knowledge of the firm s historical investment behavior. investors generally create portfolios that are designed to match the composition of one or more broad-based indices such as the S&P 5, the Russell 2, or the Wilshire 5. Therefore, the performance and risk of the portfolio mirrors the general market. Their investment decisions are driven solely by the makeup of the index they are tracking rather than by an evaluation of the company and its business prospects. firms are often referred to as passive investors. TR categorizes these funds based on its specific knowledge of a firm s historical investment behavior. INTERNATIONAL: This style refers to those money managers investing the majority of their equity assets in stocks of companies domiciled outside of North America. In most cases, the North American portion of the portfolio is either too small or does not exist, precluding Thomson Financial from determining an accurate investment style based on the fundamentals of these companies. For "Global" investors which have more significant North American holdings, a specific style may be given which will apply primarily to the North American portion of the portfolio. SPECIALTY: This category encompasses a range of styles that are not based on the financial fundamentals of the stocks in the portfolio relative to the overall market. Examples include investors that hold a particularly high concentration of a single stock or a very small set of stocks, or specialize in convertible securities. This category is also reserved for any institution or mutual fund that does not meet the criteria for any of the other investment styles. TF categorizes these funds based on its specific knowledge of the firm s historical investment behavior. SECTOR SPECIFIC: Sector Specific investors have the majority of their assets in a single major industry category. Many times these investors are forced to own most if not all of the stocks in a given sector whether or not they are deemed overvalued. Since their portfolio exposure is linked to a single sector, their performance is usually measured against an index that is pertinent only to that industry. As such, tweaking the relative exposure to the companies that makeup a given sector will determine these firm s investment decisions. VENTURE CAPITAL/PRIVATE EQUITY: Venture Capital investors are usually owners of public companies only when they have participated in a round of financing prior to an IPO and subsequently retained ownership after the transition from a private company to a public company. Other investors often consider positions held by venture capitalists as an overhang on the stock of a publicly traded company since VCs will typically dispose of their holdings of public companies during the first few years following an IPO. BROKER-DEALER: Broker-Dealers are usually trading facilitators rather than investors. Included in this group are sell-side research firms with broker operations, NYSE and NASDAQ trading desk positions of investment banks, investment banking client desks that execute buyback programs on behalf of corporations, private client firms that essentially act as custodians for high net worth individuals, and brokers that sell unit investment trusts or exchange traded products.

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30 First Quarter 21 GLOBAL EQUITY REGION ROTATION GLOBAL EQUITY OWNERSHIP BY INSTITUTIONS UP 4%. MAJORITY HELD IN AMERICAS - From Q4 '9 to Q1 '1, institutional ownership of public global equity securities increased from $18.8 trillion to $19.6 trillion, an increase of 4.1%. Institutions in the Americas hold roughly 68% of these equity assets, those in Europe, the Middle East, and Africa hold 2 of this equity, and Asian institutional investors own 9%. DOUBLE DIGIT PERCENTAGE INCREASE IN HOLDINGS IN DIVERSIFIED, HEALTH CARE, UTILITIES - Investors in the Americas increased their holdings in the Diversfied sector by 15%, and those in EMEA grew their holdings in Health Care and Utilities by 11.4% and 3, respectively. SIGNIFICANT OPPOSITE MOVES IN FINANCIALS, HEALTH CARE - Since Q4 '9, institutions in the Americas increased their holdings in Financials by 7.25% while Asian investors lowered their exposure to this sector by 6.6%. In Health Care, EMEA and Americas increased their equity ownership by 11.4% and respectively, but those in Asia reduced their assets by 4%. TECHNOLOGY BOTH HIGHEST- AND LOWEST-HELD SECTOR BY TWO REGIONS - Investors in the Americas had the largest total percentage held in the Technology sector (82%), and EMEA investors had its lowest total percentage held across sectors with 12% of total Technology equity assets. 4,5 Institutional Ownership in Global Equity Assets by Region Asia 4, 3,5 EMEA Americas 3, ($ Billions) 2,5 2, 1,5 1, 5 Q4 '9 Q1 '1 Cons Disc Q4 '9 Q1 '1 Q4 '9 Q1 '1 Q4 '9 Q1 '1 Q4 '9 Q1 '1 Cons Stap Q4 '9 Q1 '1 Q4 '9 Q1 '1 Q4 '9 Q1 '1 Q4 '9 Q1 '1 Q4 '9 Q1 '1 Q4 '9 Q1 '1 Diversified Energy Financials Health Care Industrials Materials Technology Telecom Utilities

31 First Quarter 21 GLOBAL EQUITY REGION ROTATION FINANCIALS REMAINS TOP HELD SECTOR BY ALL THREE REGIONS - Institutional investors across the three main global regions held the largest percentage of equity assets in the Financials sector: Americas 21%, EMEA 2, and Asia 25%. INDUSTRIALS MAKE UP LARGE PERCENTAGE OF ASIAN PORTFOLIOS - Asian investors invested 16% of their equity assets into the Industrials sector, while American and EMEA institutions had just 8% and 9% invested, respectively. AMERICAN ASSETS IN TECH SECTOR MORE THAN EMEA'S AND ASIA'S COMBINED - Institutions in the Americas invested 15% of their aggregate portfolio in the Technology sector in Q1 '1. The holdings by EMEA and Asian investors was just 6.7% and 8.2%, respectively. 14, Institutional Ownership in Global Equity Assets by Region 12, 1, 8, 6, 4, Utilities Telecom Technology Materials Industrials Health Care Financials Energy Diversified Cons Stap Cons Disc 2, Americas EMEA Asia

32 Global Consumer Discretionary Sector Total Global Institutional Ownership by Region ($Billions) 2,489 2,232 1,678 1,517 1,831 2,19 2,336 2,491 Americas 1,688 1,562 1,155 1,46 1,219 1,46 1,524 1,655 EMEA Asia , 2,5 USD Billions 2, 1,5 1, Asia EMEA Americas 5

33 Global Consumer Staples Sector Total Global Institutional Ownership by Region ($Billions) 1,595 1,518 1,235 1,91 1,221 1,346 1,464 1,518 Americas 1,66 1, EMEA Asia ,8 1,6 1,4 USD Billions 1,2 1, 8 6 Asia EMEA Americas 4 2

34 Global Diversified Sector Total Global Institutional Ownership by Region ($Billions) Americas EMEA Asia , Asia USD Billions EMEA Americas 3 2 1

35 Global Energy Sector Total Global Institutional Ownership by Region ($Billions) 2,64 1,925 1,417 1,264 1,445 1,592 1,723 1,715 Americas 1,958 1,417 1, ,49 1,175 1,247 1,24 EMEA Asia , 2,5 USD Billions 2, 1,5 1, Asia EMEA Americas 5

36 Global Financials Sector Total Global Institutional Ownership by Region ($Billions) 4,911 4,522 3,18 2,56 3,216 3,824 4,4 4,29 Americas 2,773 2,61 1,853 1,551 2,27 2,454 2,547 2,732 EMEA 1,718 1, ,27 1,42 Asia , 5, USD Billions 4, 3, 2, Asia EMEA Americas 1,

37 Global Health Care Sector Total Global Institutional Ownership by Region ($Billions) 1,831 1,788 1,528 1,351 1,474 1,634 1,723 1,799 Americas 1,443 1,427 1,29 1,64 1,167 1,288 1,322 1,364 EMEA Asia , 1,8 1,6 1,4 Asia USD Billions 1,2 1, 8 EMEA Americas 6 4 2

38 Global Industrials Sector Total Global Institutional Ownership by Region ($Billions) 2,358 1,968 1,48 1,165 1,345 1,563 1,77 1,788 Americas 1,356 1, ,59 1,126 EMEA Asia ,5 2, Asia USD Billions 1,5 1, EMEA Americas 5

39 Global Materials Sector Total Global Institutional Ownership by Region ($Billions) 1,847 1, ,13 1,318 1,366 Americas 1, EMEA Asia , 1,8 1,6 1,4 Asia USD Billions 1,2 1, 8 EMEA Americas 6 4 2

40 Global Technology Sector Total Global Institutional Ownership by Region ($Billions) 2,41 2,46 1,518 1,53 1,837 2,148 2,378 2,442 Americas 1,944 1,654 1,226 1,258 1,521 1,778 1,945 1,996 EMEA Asia , 2,5 USD Billions 2, 1,5 1, Asia EMEA Americas 5

41 Global Telecommunication Services Sector Total Global Institutional Ownership by Region ($Billions) 1, Americas EMEA Asia ,2 1, USD Billions Asia EMEA Americas 2