(PUB) Investing 2016

12

Brexit Hits Europe Hard, but U.S. Rebounds Market Overview | Andrew Daniels

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

06-30-16

1Mo YTD 3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

-1.5 -1.9 10.6 10.0 7.2 -0.2 2.2 9.4 10.1 6.4 0.0 4.0 8.0 9.4 5.5 -0.8 0.0 8.2 7.9 6.8 -0.8 2.8 7.6 8.3 6.4 -0.8 4.9 7.8 8.8 6.5 -0.1 -0.7 6.5 7.3 6.6 -0.4 3.0 6.4 7.6 5.9

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

The shocking Brexit vote made June a volatile month. The S&P 500 gained 0.3% and the Russell 2000 Index fell 0.1% . Stocks were hammered after Britain unex- pectedly voted to leave the European Union, but it quickly rallied back close to pre-vote levels. Uncertainty surrounding the vote and the May jobs report that indicated U.S. employers added just 38,000 jobs — the worst month since 2010 — pushed the Federal Reserve to shelve plans to raise short-term interest rates at its mid-June meeting. Defensive yield plays fared the best. The telecom sector gained 9%, led by Verizon Communications VZ and AT&T T. The utilities sector gained 8%, led by American Water Works ’ AWK 14% and NextEra Energy ’s NEE 9% gains. Franklin Utilities FKUTX, which has a Morningstar Analyst Rating of Gold, rose 7%. The consumer staples sector also posted slight gains in June — tobacco firms Altria MO and Reynolds American RAI both gained more than 9%. On the flip side, financials was one of the worst per- forming sectors in June, losing 2%. Several banks such as SVB Financial SIVB and Comerica CMA fell more than 12%. Davis Financial RPFGX fell 4%. The techno- logy sector also posted a loss of 2% — IT services firms Alliance Data Systems ADS and Global Payments GPN lost more than 8%. The price of Brent crude ended the month slightly down in June — its first down month since January — ending the month at $49.68 per barrel. The energy sector still gained 3% during the month; Neutral-rated Vanguard Energy VGENX gained about 4%. Overseas markets posted mixed results in June. Euro- pean stocks dropped 3.4% and are now down more than 4% for the year. Irish, Spanish, and Italian stocks all dropped more than 9%. Gold-rated Oakmark Inter- national OAKIX fell nearly 7% because of a big weighting in European financials. Emerging-markets stocks gained 4%. K Contact Andrew Daniels at andrew.daniels@morningstar.com

Small Growth Small Blend Small Value

-0.5 4.6 5.9 7.7 5.7 Allocation—30% to 50% Equity 1.0 4.3 4.3 4.7 4.6 Allocation—50% to 70% Equity 0.5 3.2 5.9 6.1 5.2 Allocation—70% to 85% Equity 0.2 2.7 6.1 6.1 4.7 Communications 2.3 8.3 8.3 7.4 5.3 Financial -5.0 -5.2 4.8 7.4 1.3 Global Real Estate 2.5 6.2 6.4 6.3 3.1 Health -2.0 -9.4 15.0 15.6 11.2 Natural Resources 2.2 14.5 -3.6 -4.9 -0.2 Equity Precious Metals 22.4 95.5 8.4 -11.1 0.0 Real Estate 5.9 10.5 12.1 11.2 6.4 Technology -2.1 -2.1 12.8 9.4 8.4 Utilities 5.7 19.5 10.6 10.1 7.6 S&P 500 0.3 3.8 11.7 12.0 7.3 S&P MidCap 400 0.4 7.9 10.5 10.5 8.6 Russell 2000 0.0 2.4 7.3 8.4 6.3

Diversified Pacific/Asia Diversified Emerging Mkts

2.1 2.1 4.3 3.6 3.4 3.6 6.2 -1.3 -3.2 3.2 -4.6 -5.4 2.4 2.2 2.5 -2.6 -3.0 1.7 1.1 1.5 -2.1 -2.3 3.2 2.5 2.9 -3.1 -3.0 0.7 0.3 0.5 -3.1 -3.0 5.2 4.8 4.7 -1.1 0.7 6.9 6.6 4.4 4.6 7.6 -1.7 -4.4 2.9 -2.4 -3.0 2.1 1.6 1.5 -4.4 -5.1 2.0 1.0 1.5 11.3 24.0 -10.7 -12.7 -0.4 -1.4 -2.9 2.2 3.0 1.7 0.7 6.4 2.9 4.6 6.0 1.8 5.2 1.2 1.5 3.7 1.6 4.9 3.6 3.6 4.8 1.7 4.5 5.8 5.7 4.6 -3.5 -1.4 3.6 2.2 2.6 -1.1 0.4 5.6 5.3 4.3

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 2.2 6.6 2.1 1.9 4.5 BarCap US Agg Bond TR USD 1.9 5.3 4.1 3.7 5.0 BofAML US HY Master II TR 1.1 9.3 4.2 5.7 7.4 BarCap Municipal TR USD 1.6 4.3 5.6 5.3 5.1