(PUB) Investing 2016

12

A Shaky End to 2015 Market Overview | Robert Goldsborough

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

12-31-15

1Mo

YTD

3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

-1.7 -2.0 -2.5 -2.8 -3.5 -4.0 -4.3 -5.0 -5.3 -2.1 -1.4 -1.8 -1.1 -3.4

3.6

15.3 13.2 11.6 12.8 11.4 11.5 12.2 10.3

11.7 10.7

7.3 6.4 5.6 7.2 6.5 6.6 7.1 6.3 6.0 4.7 4.1 5.2 4.4 2.1 3.9 6.6 8.3 6.5 7.3 8.2 6.8 3.9 3.2 4.5 2.8 3.9 1.8 5.7 4.0 5.0 5.0 2.8 2.8 3.4 5.6 3.0 4.2 4.2 3.9 4.3 6.8 4.7 2.4

-1.1 -4.0 -0.9 -4.7 -5.4 -2.4 -5.4 -6.7 -2.8 -2.3 -1.9

9.7

Mid-Cap Growth Mid-Cap Blend Mid-Cap Value

9.6 9.1 9.1 9.4 8.2 7.7 6.7 4.3 6.5 7.1 8.5 6.1

Equity markets around the globe suffered a punishing December, as continued energy-price declines and concerns about China’s economy dragged down stocks across many sectors and geographies. In the United States, the Federal Reserve increased inter- est rates. However, the move didn’t have much of an impact on the markets as the Fed had signaled the change for quite a while. Strong U.S. jobs data couldn’t overcome more pain from commodities, as oil and commodity prices continued to search for a bottom. U.S. stocks slid more than 1 . 5% for the month; foreign developed markets were down slightly less. Emerging markets felt the most pain in December, de- clining 2 . 2% for the month. The energy rout was the biggest contributor, although investors’ concerns about the Chinese real estate market and further devaluation of the Chinese yuan more than offset some encouraging economic data from the region, includ- ing better-than-expected retail sales, industrial produc- tion, and housing prices. The Brent Crude oil spot price fell more than $9 in December, finishing the year at $36 . 46 a barrel. The materials sector fell 4 . 6% , and the industrials sector slid 2 . 9% . Several defensive sectors actually rallied in December, including the staples sector, which was up 2 . 4% , and the bondlike utilities sector, which rose 2 . 0% . Franklin Utilities FKUTX , with a Morningstar Analyst Rating of Gold, lagged its Morningstar Cate- gory, returning 0 . 7% for the month. Amid commodity-price weakness, Russian stocks were not surprisingly among December’s worst country performers, falling 10 . 1% . The U.S. bond market was down in December, with bond yields up meaningfully for all but the shortest of maturities. K Contact Robert at robert.goldsborough@morningstar.com

Small Growth Small Blend Small Value

9.4

Aggressive Allocation Conservative Allocation Moderate Allocation

7.9 3.2 7.0

Communications

0.8

8.6

Financial

-0.9 -0.9

12.1

Global Real Estate

0.3 0.6

4.2

Health

8.0

26.8 -8.6

21.2 -6.8 -23.9 11.1 10.7

12.0 -0.3 -4.5

Natural Resources

-8.0 -22.2

Equity Precious Metals

0.4 -23.3 -29.4

Real Estate Technology

1.4

2.4 5.2

10.1 17.0

-2.1 -0.1 -1.7 -4.2 -5.0

Utilities

-9.9

7.6

7.9

S&P 500

1.3

15.0 12.8 11.6

12.5 10.7

S&P MidCap 400

-2.2 -4.5

Russell 2000

9.2

Diversified Pacific/Asia Diversified Emerging Mkts

-0.2

1.4

5.2

3.2

-2.5 -13.8

-5.7

-4.4

Europe Stock

-1.9 -1.9 -1.6 -2.1

1.7

6.2 3.7 4.9 3.0 8.8 6.4 8.3

4.8 2.6 3.8 2.2 6.2 3.6 6.5

Foreign Large Blend Foreign Large Growth Foreign Large Value

-1.6

1.0

-3.1

Foreign Small/Mid Growth Foreign Small/Mid Value

0.0

7.1 2.3

-0.5 -2.0

World Stock

-1.7

MSCI World

-1.8

-0.9

9.6

7.6

MSCI Emerging Markets

-3.8 -16.2

-8.1

-5.6

MSCI EAFE MSCI Europe

-2.3 -2.6

-1.0 -2.8

4.1 4.5

3.3 3.9

MSCI Latin America

-4.7 -32.9 -21.6

-16.9

-1.6

MSCI Pacific

0.9

3.0

5.8

3.2

High Yield Bond

-2.3 -0.9 -0.6

-4.0 -2.4 -0.3

1.3

4.1 1.6 3.2 5.7 1.3 3.1 4.8 5.3

Inflation-Protected Bond Intermediate-Term Bond

-2.8

1.2 2.9

Muni National Long

0.8

3.1

World Bond

-0.5

-4.0

-1.5

BarCap US Agg Bond TR USD BofAML US HY Master II TR BarCap Municipal TR USD

-0.2 -2.6

0.5

1.4 1.6 3.2

-4.6

0.7

3.3