5
Morningstar FundInvestor
April 2
014
Morningstar Analyst Rating
03-31-14
´
Morningstar Pillars
Process
Performance
People
Parent
Price
¶
Positive
Positive
Positive
Neutral
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
18.19
18.57
14.42
12.44
12.58
11.00
7.39
11.87
10.12
9.61
8.41
7.51
Total Return %
-2.03
37.67
18.16
1.19
14.46
49.58
-37.74
18.25
5.50
14.36
11.98
29.71
+/-S&P 500
-3.84
5.28
2.16
-0.92
-0.60
23.12
-0.74
12.76
-10.29
9.45
1.10
1.03
+/-Russ 1000Gr
-3.15
4.19
2.90
-1.45
-2.25
12.37
0.70
6.44
-3.57
9.10
5.68
-0.04
Income Return %
0.00
0.00
0.13
0.00
0.10
0.56
0.00
0.13
0.19
0.09
0.00
0.00
Capital Return %
-2.03
37.67
18.03
1.19
14.36
49.02
-37.74
18.12
5.31
14.27
11.98
29.71
Total Rtn % Rank Cat
96
17
20
21
57
8
27
24
66
7
15
34
Income $
0.00
0.00
0.02
0.00
0.01
0.04
0.00
0.01
0.02
0.01
0.00
0.00
Capital Gains $
0.00
1.22
0.26
0.28
0.00
0.00
0.00
0.08
0.00
0.00
0.00
0.00
Expense Ratio %
.
0.78
0.78
0.78
0.78
0.80
0.80
0.80
0.80
0.80
0.80
0.80
Income Ratio %
.
0.13
-0.17
0.06
0.12
0.41
0.05
0.35
0.09
0.29
-0.07
0.29
Turnover Rate %
.
76
96
98
72
132
102
112
137
145
102
87
Net Assets $mil
2,165
1,994
1,471
667
393
167
56
66
6
5
4
3
Performance
03-31-14
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
0.14 17.30 13.76 11.95 49.58
2.09 -12.02 14.27 11.52 14.46
6.20 1.95 -14.02 8.70
1.19
19.21 -6.81
7.24 -0.82 18.16
8.04 1.54 11.69 12.35 37.67
Trailing
Total
+/-
+/- Russ %Rank Growth of
Return% S&P 500 1000Gr
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
-2.03 -3.84
-3.15
96 9,797
10.06 -2.45
-1.61
66 11,006
24.83 2.97
1.61
33 12,483
14.94 0.28
0.32
17 15,185
22.49 1.33
0.81
16 27,574
10.30 2.88
2.44
4 26,654
4.90 0.44
1.92
38 20,494
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
13.88
20
0.92
68
21.76
16
0.59
69
9.94
4
0.32
43
Potential Capital Gain Exposure: 15% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
24.83
3 Yr
14.94
+Avg
+Avg
5 Yr
22.49
+Avg
+Avg
10 Yr
10.30
High
Avg
Incept
6.26
Other Measures
Standard Index
Best Fit Index
S&P 500 M* U.S. Grwth TR
Alpha
-1.1
-0.5
Beta
1.12
1.09
R-Squared
82
96
Standard Deviation
15.52
Mean
14.94
Sharpe Ratio
0.97
Morningstar’s Take
by Dan Culloton 03-31-14
Laudus US Large Cap Growth is looking like itself
again.
Charles Schwab Investment Management, this
fund’s advisor, made a big change in 2013 to stop a
string of manager changes. It replaced longtime
subadvisor, UBS Global Asset Management, with
BlackRock Investment Management. It was less of a
replacement than a reunion--the BlackRock crew’s lead
manager is Lawrence Kemp, who ran this fund for more
than 10 years before leaving UBS for BlackRock in
November 2012. Kemp’s seven-member BlackRock
squad (including him), which runs BlackRock Capital
Appreciation MDFGX, includes at least three UBS
expatriates who worked with Kemp during his first tour
here. This fund’s Morningstar Analyst Rating dropped
to Neutral when Kemp left, but it’s back to Bronze now
that Kemp has returned with a rebuilt team of investors
who know his process.
Kemp and his current team, which officially took
over on Oct. 4, 2013, are using the same approach this
fund has followed for more than 10 years. Kemp still
attempts to craft a compact portfolio of 40-60 stocks
that fall into three broad buckets: superior, durable,
and periodic growth companies. Most of the fund’s
assets usually will be in the superior and durable
growers, and it will keep a smaller, more opportunistic
stake in the cyclical firms.
Diversifying across types of growth stocks and
being unafraid to trim winners, even as they continue
to run--as this fund did as stocks rallied in 2013--may
keep a lid on the fund’s volatility, at least relative to
its peers and benchmark. This is still a compact,
unabashed growth fund. It’s willing to own highly
valued stocks, such as Amazon AMZN, Facebook FB,
Autodesk ADSK, and Starbucks SBUX. It attempts to
buy such stocks when they are down and mixes in
more undervalued stocks like Eastman Chemical EMN,
but this is not a tame portfolio; it has hefty helpings of
tech and consumer discretionary stocks, for instance.
At least an accomplished management team that’s
familiar and has delivered good risk-adjusted returns
with the strategy in the past is at the helm.
Address:
211 MAIN STREET
SAN FRANCISCO, CA 94105
800-447-3332
Web Address:
Inception:
10-14-97
Advisor:
Charles Schwab Investment Management Inc
Subadvisor:
BlackRock Investment Management, LLC
NTF Plans:
Federated Tr NTF
Minimum Purchase:
$100
Add: $0 IRA: $0
Min Auto Inv Plan:
$100
Add: $50
Sales Fees:
No-load, 2.00%R
Management Fee:
0.70% mx./0.55% mn., 0.00%A
Actual Fees:
Mgt:0.66% Dist:
.
Expense Projections:
3Yr:$252
5Yr:$445 10Yr:$1006
Income Distribution:
Semi-Annually
Data through March 31, 2014
Laudus US Large Cap Growth
Ticker
Status Yield Total Assets
Mstar Category
LGILX Open
0.0% $2,165 mil
Large Growth
99% 97% 97% 98% 99% 97% 98% 98%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 03-14
Historical Profile
Return
Risk
Rating
High
Above Avg
Highest
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
S&P 500
Performance Quartile
(within Category)
History
10.0
15.0
20.0
26.0
33.0
Portfolio Analysis
12-31-13
Share change since 09-13 Total Stocks:60 Sector
PE Tot Ret% % Assets
Google, Inc. Class A
Technology 31.0 -0.55 4.78
SOFTBANK Corp
Comm Svs 29.9 -13.99 3.72
Visa, Inc. Class A
Finan Svs 28.7 1.64 3.42
priceline.com Incorporat
Cnsmr Cyc 33.0 2.54 3.28
Precision Castparts Corp
Industrl
22.3 -4.24 3.12
Comcast Corp Class A
Comm Svs 20.2 -0.53 3.01
Amazon.com Inc
Cnsmr Cyc
.
-15.65 2.97
Eaton Corporation PLC
Industrl
19.1 -1.85 2.59
Autodesk, Inc.
Technology 48.3 4.29 2.48
Yahoo! Inc
Technology 33.1 -4.38 2.47
Gilead Sciences Inc
Hlth care 45.7 10.24 2.40
Liberty Global PLC Class
Comm Svs
.
-2.75 2.38
Time Warner Inc
Cnsmr Cyc 17.8 -3.26 2.34
MasterCard Incorporated
Finan Svs 29.1 -10.46 2.34
Union Pacific Corp
Industrl
19.9 12.24 2.34
Walt Disney Co
Cnsmr Cyc 22.2 5.77 2.23
United Technologies Corp
Industrl
18.8 3.35 2.17
Valeant Pharmaceuticals
Hlth care
.
12.29 2.17
United Therapeutics Corp
Hlth care 31.0 -10.31 2.15
Nike, Inc. Class B
Cnsmr Cyc 26.7 -0.13 2.13
Current Investment Style
Market Cap %
Giant
39.2
Large
42.1
Mid
18.7
Small
0.0
Micro
0.0
Avg $mil:
40,410
Value Blnd Growth
Large Mid Small
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
24.82
3.98
3.51
16.17
0.59
1.39
1.39
1.94
1.62
0.45
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
16.00
11.58
9.30
13.30
21.06
1.19
1.12
1.16
1.03
0.95
Profitability
% Rel Category
Return on Equity
Return on Assets
Net Margin
18.53
8.59
13.70
0.89
0.88
0.97
Sector
Weightings
% of
Stocks
Rel
S&P 500 High
3 Year
Low
Cyclical 33.54 1.17
BasicMat 1.91 0.62 7 2
CnsmrCyc23.81 2.78 22 18
FinanSvs 7.82 0.50 10 4
Real Est 0.00 0.00 1 0
Sensitive 51.12 1.17
CommSrvs10.47 2.61 4 2
Energy 3.55 0.33 8 5
Industrl 15.11 1.33 13 7
Technlgy 21.99 1.25 38 25
Defensive15.35 0.56
CnsmrDef 2.17 0.18 10 4
Hlthcare 13.18 1.12 15 6
Utilities 0.00 0.00 0 0
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash
0.0
Stocks 99.6
Bonds 0.0
Other
0.4
Foreign 18.2
©
2014Morningstar, Inc.All rights reserved. The information herein isnot representedorwarranted tobe accurate, correct, completeor
timely.Pastperformance isnoguaranteeof future results.Accessupdated reports at
To order reprints, call 312-696-6100.
mfb.morningstar.com.
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