(PUB) Investing 2016

12

A Brutal Start to 2016 Market Overview | Robert Goldsborough

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

01-31-16

1Mo YTD 3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

-7.1 -7.1 10.7 9.6 6.2 -5.5 -5.5 9.2 9.0 5.5 -5.3 -5.3 7.6 8.1 4.7 -8.4 -8.4 7.4 7.4 5.5 -6.3 -6.3 6.8 7.3 5.3 -6.4 -6.4 6.7 7.1 5.3 -9.8 -9.8 6.3 7.0 5.2 -7.4 -7.4 5.4 6.4 4.6 -6.7 -6.7 4.8 6.1 4.5 -4.7 -4.7 4.7 5.3 3.8 -1.8 -1.8 1.9 3.7 3.8 -3.4 -3.4 4.6 5.5 4.6 -2.2 -2.2 6.6 6.4 3.7 -8.7 -8.7 6.3 6.2 1.0 -4.6 -4.6 1.6 4.9 2.8 -13.8 -13.8 17.7 17.5 10.1 -6.3 -6.3 -11.8 -8.3 -2.3 1.7 1.7 -27.0 -21.7 -6.0 -4.1 -4.1 7.5 9.5 5.5 -8.2 -8.2 12.2 8.1 6.7 1.8 1.8 6.6 7.9 6.2 -5.0 -5.0 11.3 10.9 6.5 -5.7 -5.7 8.0 9.0 6.9 -8.8 -8.8 6.1 7.3 4.9 -5.9 -5.9 2.2 2.1 2.6 -5.5 -5.5 -8.0 -5.0 1.5 -6.0 -6.0 2.5 3.0 3.1 -5.8 -5.8 0.3 1.1 1.5 -6.0 -6.0 1.6 2.5 2.6 -5.7 -5.7 -0.3 0.5 0.6 -6.3 -6.3 5.3 5.0 4.1 -6.9 -6.9 2.5 1.9 2.6 -5.4 -5.4 4.5 5.0 3.7 -6.0 -6.0 5.6 5.8 3.9 -6.5 -6.5 -9.2 -5.6 1.8 -7.2 -7.2 0.7 1.6 1.7 -6.6 -6.6 0.2 1.7 2.0 -4.6 -4.6 -21.6 -14.4 -0.9 -8.4 -8.4 1.3 1.5 1.0 -1.6 -1.6 0.3 3.3 5.3 0.8 0.8 -2.4 1.7 3.1 0.8 0.8 1.5 3.3 4.3 1.0 1.0 3.0 6.1 4.3

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

Stocks and oil prices plummeted in January 2016 . Slowing growth in China underpinned both moves. There, investors were surprised by an unexpectedly large decrease in the Caixin Purchasing Manager Index near the start of the month. Not surprisingly, inves- tors have flocked to Treasury bonds, and credit spreads have widened. Also not surprisingly, emerging markets—which include both oil-exporting geogra- phies and China—again suffered meaningfully in January, with the MSCI Emerging Markets Index declining more than 6 . 5% for the month. The S & P 500 slid almost 5% in January. Some U.S. economic data also caused investors heart- burn. Industrial production and retail sales numbers disappointed and showed outright declines, while the Consumer Price Index posted a modest deflationary report. While most economists didn’t in turn make major downward revisions to their full-year gross do- mestic product forecasts, the negative economic data certainly did nothing to calm anxious investors. Within emerging markets, Chinese funds felt the greatest pain in January, declining 13% . Matthews China MCHFX , which has a Morningstar Analyst Rating of Bronze, fared worse, sliding almost 15% . U.S. crude-oil prices continued to fall, declining 9 . 3% in January. Late in the month, oil prices rose on prospects of an output cut after hitting a bottom early in January. As a result, energy wasn’t the month’s worst-performing sector (although energy funds still were down about 5% for the month). The health- care sector did the worst in January, with healthcare funds falling 13 . 8% . Gold-rated Vanguard Health Care VGHCX held up better than the sector but still was down 9% for the month. Financials funds also struggled (down 8 . 7% ), as did technology funds (down 8 . 2% ), and industrial funds (down 6 . 9% ). K Contact Robert at robert.goldsborough@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 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 0.1 0.1 -1.4 1.3 3.8 BarCap US Agg Bond TR USD 1.4 1.4 2.2 3.5 4.7 BofAML US HY Master II TR -1.6 -1.6 0.6 4.1 6.5 BarCap Municipal TR USD 1.2 1.2 3.4 5.8 4.8