(PUB) Morningstar FundInvestor

12

Stocks Surge in June Market Overview | Alec Lucas

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

06-30-14

1Mo YTD 3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

2.5 4.7 14.4 17.6 7.8 2.1 6.4 14.9 17.5 7.3 2.2 7.0 14.9 17.3 7.3 4.0 4.0 12.6 19.0 8.8 3.4 6.5 14.1 19.8 8.7 3.3 7.8 15.3 20.5 9.0 5.9 0.9 12.7 19.9 8.7 4.4 3.8 14.2 19.9 8.7 4.0 4.7 14.5 20.1 8.8 2.0 5.8 10.5 14.2 6.7 1.0 4.9 6.5 9.5 5.4 1.5 5.4 9.6 12.6 6.4 0.7 2.6 10.1 14.5 6.7 2.4 3.1 13.9 14.2 3.4 1.5 10.5 8.6 15.3 7.5 5.1 11.4 22.8 22.1 11.3 4.5 11.3 2.4 11.9 10.6 17.9 27.5 -19.3 -3.1 5.9 1.1 16.6 10.9 22.6 8.9 4.5 7.1 13.0 18.0 8.6 4.2 16.4 14.4 15.8 10.8 2.1 7.1 16.5 18.7 7.7 4.2 7.3 15.0 21.7 10.5 5.3 3.3 14.6 20.2 8.7 2.8 3.2 5.4 10.0 7.4 2.4 5.8 0.1 9.1 11.2 -0.4 3.2 8.8 13.7 8.6 1.2 3.8 6.6 11.3 6.8 1.5 3.1 6.9 12.1 7.2 1.1 5.0 7.0 11.0 6.4 1.7 4.3 10.1 17.0 10.1 1.8 6.1 8.5 14.3 8.4 2.0 5.7 10.6 14.8 7.8 0.9 4.4 7.9 11.7 6.7 1.8 6.2 11.8 15.0 7.2 2.4 4.2 -1.3 8.0 11.1 -0.1 5.2 8.8 13.3 7.5 3.9 5.3 -8.9 2.5 12.2 2.9 2.5 6.8 9.7 5.8 0.8 4.8 8.2 12.6 7.6 0.3 4.9 2.6 4.9 4.7 0.2 4.1 4.1 6.0 4.8 -0.1 6.9 5.6 6.1 4.3

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

Stocks rallied despite mixed economic data in June. Auto sales were encouraging, while gross domestic product in the first quarter turned out to be worse than previously thought. However, the Fed carried the day by declaring it would stay the course on unwind- ing the government’s bond-buying program while eventually raising short-term interest rates. As in May, U.S. stocks posted positive gains across the board in June, with the S & P 500 rising 2 . 1% . In contrast to May, though, small-cap growth stocks led the way. The Russell 2000 Growth Index returned 6 . 2% , spurred by biotech holdings like Indenix Phar- maceuticals IDIX . Its shares soared nearly 300% on news that Merck MRK plans to buy the firm for its hepatitis C drug therapies. That was one of a number of acquisitions, fueled by high stock prices, cash-heavy balance sheets, and cheap financing. Gold prices rose as investors worried about instability in the Middle East. That boosted shares of mining firms, which are highly leveraged to commodity prices like gold. As a result, the typical equity precious- metals fund gained 17 . 9% in June, nearly 3 times the average energy limited partnership fund’s advance, which benefited from a surge in oil prices. The MSCI Emerging Markets Index outperformed the MSCI EAFE Index for the second-straight month. The former’s 6 . 1% year-to-date gain now leads the latter’s by 1 . 4 percentage points. Russian equities slowed somewhat, but thanks in part to currency tail- winds, the MSCI Russia Index returned 5 . 4% in June. Emerging-markets bond funds led the way for the month in fixed income, but their 6 . 5% average year- to-date return is still only about half that of the long-government bond peer norm. Vanguard Long- Term Treasury ’s VUSTX 12 . 3% gain in 2014 lands in the middle of the latter category’s pack. œ Contact Alec Lucas at alec.lucas@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 0.7 4.9 3.4 6.0 5.3 BarCap US Agg Bond TR USD -0.1 3.8 3.6 4.5 4.7 BofAML US HY Master II TR 0.8 5.6 9.3 13.9 8.9 BarCap Municipal TR USD 0.1 6.0 5.4 5.8 5.0