(PUB) Investing 2016

they have newer capitalist economic systems and more fragile markets that are susceptible to missteps and instabili- ty—factors that can add to volatility and risk for investors. Examples of emerg- ing economies include China, many countries in Southeast Asia and Eastern Europe, as well as countries in Latin America. Recently, emerging markets have been further subdivided into two groups: The more established emerging economies, such as China and India, and a group of “frontier” markets, such as Vietnam, Kenya and Ukraine, that are in even earlier stages of free-market and investment-market development. Why Bother? From an investor’s perspective, it’s an awfully big world out there. But there are some investors who would tell you that you don’t need to bother with most of it. The argument for investing strictly in the U.S. is a favorite of former Vanguard Chairman Jack Bogle and his acolytes, who maintain that there’s little diversi- fication benefit in owning stock in non- U.S. companies because U.S. companies already derive a large share of sales and earnings from business conducted over- seas. Coca-Cola, the quintessential U.S. company, has a presence in virtually every foreign market you can think of. Coca-Cola may be based in Atlanta, but it is a global franchise earning profits in Egypt, Japan, Singapore and the U.K. Why bother buying a European soda maker when you can own Coke? Further, those who argue against investing overseas will warn that you add a new and unique risk to your port- folio—currency risk—when you invest in stocks that are not denominated in dollars; hence, you shouldn’t do it. Match the Market? Oddly enough, sitting on the oppo- site end of the spectrum from Jack Bogle (the father of the consumer index fund) are the efficient-market adherents. Using Total World Stock Index as a proxy, for instance, the U.S. makes up 53% of the value of the world’s stock markets. That would suggest that just over half of your stock portfolio should

(Turkey) and Samsung (Korea). Global funds, of course, also invest in U.S. companies. And you might actually find a handful of foreign stocks in your domestic stock funds too. Foreign countries and markets are then usually divided into two buckets: Developed and emerging. Developed countries and markets tend to be mature economies with high levels of gross national income and have histori- cally been considered less risky than their emerging markets counterparts. Examples of developed foreign markets include Germany, the United Kingdom, France, Japan and Australia. Emerging markets, as their name implies, are in the earlier stages of economic development. That can mean

OVERSEAS FROM PAGE 1 >

Look, there is a lot to unpack regard- ing Brexit, so before crossing that pond, let’s take a step back and consider the fundamental arguments for allowing foreign investments to remain in your portfolio and the arguments for giving them the heave-ho. Here are some basics. The first distinction most U.S. investors make when considering to remain or leave is between companies that are based inside of the U.S. versus those based outside our borders. So, foreign, international or global funds invest in companies based outside of the U.S., like Honda (Japan), Nestlé (Switzerland), Bayer (Germany), Nokia (Finland), Akbank

JUNE SPECIAL DISTRIBUTIONS

Inflation-Protected Securities $0.002 Information Technology ETF $0.350 Information Tech. Index Adm. $0.179 Int’l Dividend Appreciation ETF $0.199 Int’l Dividend Appr. Index $0.075 Int’l Dividend Appr. Index Adm. $0.096 Int’l High Dividend Yield ETF $0.559 Int’l High Dividend Yield Index $0.219 Int’l High Dividend Yld. Idx. Adm. $0.272 LargeCap ETF $0.426 LargeCap Index $0.160 LargeCap Index Adm. $0.215 Materials ETF $0.431 Materials Index Adm. $0.220 MegaCap ETF $0.368 MegaCap Growth ETF $0.304 MegaCap Value ETF $0.386 MidCap ETF $0.469 MidCap Growth ETF $0.151 MidCap Growth Index $0.046 MidCap Growth Index Adm. $0.065 MidCap Index $0.117 MidCap Index Adm. $0.580 MidCap Value ETF $0.447 MidCap Value Index $0.165 MidCap Value Index Adm. $0.230 Pacific ETF $0.457 Pacific Index $0.082 Pacific Index Adm. $0.565 REIT ETF $0.764 REIT Index $0.243 REIT Index Adm. $1.082 Russell 1000 ETF $0.438 Russell 1000 Growth ETF $0.355 Russell 1000 Value ETF $0.496 Russell 2000 ETF $0.313 Russell 2000 Growth ETF $0.174 Russell 2000 Value ETF $0.344 Russell 3000 ETF $0.409 S&P 500 ETF $0.953 S&P 500 Growth ETF $0.339 S&P 500 Value ETF $0.484 S&P MidCap 400 ETF $0.235 S&P SmallCap 600 Growth ETF $0.232 S&P SmallCap 600 Value ETF $0.266 SmallCap ETF $0.304 SmallCap Growth ETF $0.359

SmallCap Growth Index $0.091 SmallCap Growth Index Adm. $0.125 SmallCap Index $0.128 SmallCap Index Adm. $0.145 SmallCap Value ETF $0.320 SmallCap Value Index $0.069 SmallCap Value Index Adm. $0.138 Social Index $0.051 STAR $0.170 STAR Cons. Gro. $0.107 STAR Growth $0.294 STAR Income $0.080 STAR Mod. Growth $0.241 Target Retirement Income $0.061 Telecom Services ETF $0.593 Telecom Svcs. Index Adm. $0.302 T-M Balanced Adm. $0.138 T-M Capital Appreciation Adm. $0.416 T-M SmallCap Adm. $0.107 Total Int’l Stock ETF $0.537 Total Int’l Stock Index $0.170 Total Int’l Stock Index Adm. $0.288 Total Stock Index Adm. $0.228 Total Stock Market ETF $0.469 Total Stock Market Index $0.216 Total World Stock ETF $0.466 Total World Stock Index $0.182 Utilities ETF $0.834 Utilities Index Adm. $0.419 Value ETF $0.484 Value Index $0.178 Value Index Adm. $0.188 Wellesley Income $0.187 Wellesley Income Adm. $0.465 Wellington $0.253 Wellington Adm. $0.454 Windsor $0.152 Windsor Adm. $0.543 Windsor II $0.387 Windsor II Adm. $0.712 World ex-U.S. ETF $0.530 World ex-U.S. Index $0.203 World ex-U.S. Index Adm. $0.330 World ex-U.S. SmallCap ETF $0.796 World ex-U.S. SmallCap Index $0.289

500 Index

$0.908 $0.959 $0.139

500 Index Adm. Balanced Index

Balanced Index Adm. $0.149 Consumer Discretionary ETF $0.405 Consumer Disc. Index Adm. $0.209 Consumer Staples ETF $0.763 Consumer Staples Index Adm. $0.377 Convertible Securities $0.018 Developed Markets ETF $0.482 Developed Markets Index $0.118 Developed Markets Index Adm. $0.155 Dividend Appreciation ETF $0.446 Dividend Appreciation Index $0.171 Dividend Appr. Index Adm. $0.121 Dividend Growth $0.179 Emerging Markets Stock Adm. $0.186 Emerging Markets Stock ETF $0.223 Emerging Markets Stock Index $0.129 Energy ETF $0.544 Energy Index Adm. $0.271 Equity Income $0.214 Equity Income Adm. $0.464 Europe ETF $0.924 European Index $0.483 European Index Adm. $1.158 Extended Duration Treasury ETF $0.822 Extended Market ETF $0.219 Extended Market Index $0.145 Extended Mkt. Index Adm. $0.166 Financials ETF $0.283 Financials Index Adm. $0.142 Global ex-U.S. Real Estate ETF $0.481 Global ex-U.S. Real Est. Idx. $0.178 Global ex-U.S. Real Est. Idx. Adm. $0.291 Growth & Income $0.402 Growth & Income Adm. $0.696 Growth ETF $0.323 Growth Index $0.148 Growth Index Adm. $0.166 Health Care ETF $0.429 Health Care Index Adm. $0.214 High Dividend Yield ETF $0.578 High Dividend Yield Index $0.224 Industrials ETF $0.484 Industrials Index Adm. $0.249 Inflation-Protected Sec. Adm. $0.005

12 • Fund Family Shareholder Association

www.adviseronline.com