(PUB) Investing 2015

12

Fed Comments Push Equities to All-Time Highs Market Overview | Leo Acheson

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

12-31-14

1Mo YTD 3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

-0.7 10.0 19.4 14.1 7.7 -0.3 11.0 19.0 13.9 7.0 0.0 10.2 18.3 13.5 6.6 0.0 7.0 18.2 14.8 8.3 0.3 7.8 19.0 14.8 7.9 0.6 9.3 19.9 15.0 8.1 2.0 2.4 18.1 15.5 8.0 1.9 3.8 17.8 14.6 7.5 2.0 3.3 17.7 14.0 7.4 -1.0 5.7 13.5 10.1 5.9 -0.9 4.0 7.1 6.8 4.8 -0.7 6.2 11.7 9.4 5.9 -3.5 0.7 13.3 10.4 4.8 0.1 4.9 20.3 10.4 2.5 -0.5 11.7 14.6 9.9 4.9 0.5 27.2 31.3 21.6 12.4 -2.4 -12.5 -0.4 1.5 5.9 0.5 -10.0 -25.2 -14.0 0.8 1.6 28.0 15.2 16.2 7.5 -0.8 12.5 19.7 13.6 8.5 0.2 17.1 13.9 12.1 9.0 -0.3 13.6 20.4 15.4 7.6 0.8 9.8 20.0 16.5 9.7 2.9 5.0 19.3 15.6 7.8 -2.2 0.2 11.0 5.8 5.8 -4.8 -3.0 4.7 1.8 7.6 -3.3 -7.3 12.9 6.5 5.7 -3.5 -5.0 10.2 5.0 4.5 -3.2 -3.9 10.8 6.1 5.1 -3.8 -6.3 9.4 4.3 3.5 -1.6 -5.4 13.6 9.6 7.6 -1.7 -6.6 12.4 6.8 5.4 -1.7 2.8 14.1 9.5 6.2 -4.0 -6.2 10.6 5.1 4.2 -1.6 4.9 15.5 10.2 6.0 -4.0 -3.9 3.3 0.8 7.6 -4.3 -6.2 11.9 5.3 4.6 -9.3 -14.8 -8.9 -7.9 6.3 -1.8 -2.7 9.6 5.7 4.2 -1.7 1.1 7.4 7.9 6.3 -1.4 1.8 -0.2 3.2 3.5 -0.2 5.2 3.4 4.8 4.4 0.7 10.6 4.9 5.3 4.2

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

The markets sold off in the first half of December only to rally in the second half after Janet Yellen, chair of the Federal Reserve, announced she would take a patient approach toward raising interest rates. The U.S. government revised third-quarter gross domestic product up to 5% . Oil prices slid to a five-year low. Small caps performed well, rallying almost 3% in December, while mid-caps and large caps were about flat. Utilities led the way, with Franklin Utilities FKUTX up 2 . 7% . Telecom had a rough month: Verizon VZ and AT&T T had losses on concerns that mounting competition has impaired wireless business’ attrac- tiveness. T. Rowe Price Media & Telecommunica- tions PRMTX fell 3 . 6% during the month. Sinking commodity prices contributed to nearly 10% drops at Harbor Commodity Real Return HACMX and PIMCO Commodity Real Return PCRDX . International developed equities, as measured by the MSCI EAFE Index, retreated 3 . 5% . Portugal, Italy, and Spain led the declines, with a depreciating euro compounding the losses. The MSCI Emerging Markets Index tumbled 4 . 6% , as Russia and Brazil suffered double-digit declines because of low oil prices. Janus Overseas JAOSX , a foreign-stock fund with more than 40% of its assets in emerging markets, dropped about 7% and underperformed all foreign developed- markets funds in the M 500 . The yield curve flattened during the month: The 30 -year Treasury yield fell 14 basis points, the 10 -year rate held about steady, and the yield on three-year Treasuries jumped 22 basis points. So, long-duration securities rallied and short-term bonds struggled. The Barclays U.S. Aggregate Bond Index finished the month flat, while high-yield bonds and emerging- markets debt slid 1 . 5% and 2 . 9% , respectively. œ Contact Leo Acheson at leo.acheson@morningstar.com

Small Growth Small Blend Small Value

Aggressive Allocation Conservative Allocation Moderate Allocation

Communications

Financial

Global Real Estate

Health

Natural Resources

Equity Precious Metals

Real Estate Technology

Utilities

S&P 500

S&P MidCap 400

Russell 2000

Diversified Pacific/Asia Diversified Emerging Mkts

Europe Stock

Foreign Large Blend Foreign Large Growth Foreign Large Value

Foreign Small/Mid Growth Foreign Small/Mid Value

World Stock

MSCI EAFE MSCI World

MSCI Emerging Markets

MSCI Europe

MSCI Latin America

MSCI Pacific

High Yield Bond

Inflation-Protected Bond Intermediate-Term Bond

Muni National Long

World Bond -1.0 1.7 2.6 3.6 4.0 BarCap US Agg Bond TR USD 0.1 6.0 2.5 4.3 4.5 BofAML US HY Master II TR -1.5 2.5 8.4 8.9 7.6 BarCap Municipal TR USD 0.5 9.1 4.3 5.2 4.7