(PUB) Investing 2015

12

A Powerful Rally in October Market Overview | Robert Goldsborough

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

10-31-15

1Mo YTD 3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

7.9 4.7 16.6 13.4 7.9 7.5 0.6 14.6 12.5 7.0 7.3 -1.7 13.1 11.7 6.2 5.2 0.9 14.8 12.0 8.0 5.6 -1.8 13.9 11.6 7.2 6.2 -1.9 14.4 11.9 7.5 4.5 -0.9 13.8 12.1 7.9 5.7 -2.4 13.1 11.4 7.0 5.7 -3.6 12.5 10.6 6.8 5.7 -0.5 9.5 8.3 5.5 2.9 -0.4 4.3 5.0 4.6 4.6 0.0 8.3 7.8 5.7 8.2 3.3 10.0 8.2 5.1 4.6 0.3 13.7 10.4 2.5 5.3 1.2 7.0 7.1 4.8 5.4 5.2 26.1 21.4 12.2 9.5 -14.4 -5.6 -2.4 1.6 7.9 -16.7 -30.2 -21.3 -1.8 5.7 1.4 10.9 11.5 7.0 9.4 5.1 18.7 12.0 9.1 3.4 -7.2 8.2 9.0 6.9 8.5 2.7 16.2 14.2 7.8 5.6 0.7 15.5 13.4 9.1 5.6 -2.6 13.9 12.1 7.6 6.6 1.8 7.6 4.4 4.9 6.0 -9.3 -2.2 -2.8 5.1 5.3 4.4 9.2 5.9 5.5 6.5 1.1 6.6 3.8 3.9 6.6 2.9 7.5 4.9 4.9 6.2 0.1 6.0 3.4 2.9 4.9 6.3 9.7 7.3 6.9 5.1 3.8 8.8 5.3 5.0 6.7 0.7 10.5 8.0 5.9 7.9 1.4 11.6 9.1 5.8 6.4 -10.6 -3.5 -3.6 4.7 6.6 2.1 7.7 4.6 3.9 7.2 1.6 8.0 4.8 4.4 5.9 -26.4 -18.1 -15.0 0.1 9.1 3.1 8.0 4.8 3.5 2.3 0.1 3.4 5.2 6.2 0.5 -1.2 -2.5 1.2 3.3 0.3 0.6 1.5 3.1 4.4 0.4 1.8 2.7 4.4 4.2

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

Stocks rebounded nicely during October, amid strong macroeconomic data and mostly solid corporate earnings reports. U.S. stocks rose between 8% and 8 . 5% in October. Foreign developed-markets stocks returned 7 . 8% , and emerging-markets stocks rose more than 7% . Although the U.S. Federal Reserve left interest rates unchanged, it clearly left open the possibility of a rate hike on the table for its December meeting, which was a clear sign of its confidence in the U.S. economy. However, the United States was only part of the story behind October’s rally. Central banks overseas provided some stimuli, including China’s central bank enacting an interest-rate cut and European Central Bank president Mario Draghi hinting at more quantitative easing. Energy prices whipsawed during October, with the Brent Crude oil spot price finishing the month higher at $49 . 50 a barrel after a September month-end level of $47 a barrel. That was good news for the battered energy sector, with energy funds rising about 11 . 5% for the month. Higher energy prices helped to fuel basic-materials funds, which rose about 12 . 8% for the month. While all U.S. equity sectors rose for the month, the most defensive sectors performed the worst, with utilities funds up 2 . 0% . China stocks were among the biggest gainers, rally- ing 9 . 1% . That helped Matthews China MCHFX , which has a Morningstar Analyst Rating of Bronze, to rise 10 . 6% . Other big winners were German stocks, which surged about 10 . 6% , and Japanese firms, which rose about 10 . 1% . By contrast, Indian stocks lagged other emerging markets during October, returning 1 . 6% . Even so, Bronze-rated Matthews India MINDX rose about 1 . 5% .

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 World

MSCI Emerging Markets

MSCI EAFE MSCI Europe

MSCI Latin America

MSCI Pacific

High Yield Bond

Inflation-Protected Bond Intermediate-Term Bond

Muni National Long

World Bond 0.9 -2.7 -0.7 1.2 4.1 BarCap US Agg Bond TR USD 0.1 1.1 1.7 2.9 4.5 BofAML US HY Master II TR 2.7 0.1 4.1 6.0 7.5 BarCap Municipal TR USD 0.4 2.2 2.9 4.3 4.7

The U.S. bond market was flat in October. K Contact Robert at robert.goldsborough@morningstar.com