(PUB) Morningstar FundInvestor

12

Tapering Talk Spurs Sell-Off Market Overview | Russ Kinnel

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

06-30-13

1Mo YTD 3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

-1.8 11.0 16.2 5.1 6.2 -1.5 13.2 16.4 5.6 6.5 -1.0 14.9 16.7 5.9 6.7 -1.3 13.0 16.9 5.7 8.1 -1.4 14.8 17.4 7.1 8.8 -0.9 15.9 17.6 8.0 9.1 0.2 16.0 18.1 7.5 8.3 -0.7 15.3 17.8 8.0 9.1 -0.7 15.3 17.5 9.1 9.4 -2.1 7.1 11.9 4.3 6.4 -2.0 1.5 7.5 4.7 4.6 -1.8 5.7 10.7 4.8 5.7 1.1 8.2 14.7 4.3 7.8 -1.1 15.9 13.2 4.2 3.4 -3.0 0.2 14.2 3.3 9.2 -1.5 21.3 22.5 12.2 9.3 -5.2 -5.1 4.8 -8.1 9.4 -17.6 -46.1 -20.3 -11.4 6.0 -2.2 4.7 16.8 6.7 9.9 -1.3 9.9 14.3 7.2 7.6 0.2 9.9 15.4 2.7 9.7 -1.3 13.8 18.5 7.0 7.3 -1.9 14.6 19.5 8.9 10.7 -0.5 15.9 18.7 8.8 9.5 -3.5 2.3 8.2 0.9 9.3 -6.6 -7.8 3.5 -1.6 12.4 -3.3 3.4 10.3 -1.4 7.9 -3.1 2.4 9.5 -1.2 7.1 -3.4 1.7 9.8 -0.1 7.6 -2.8 3.2 8.9 -1.0 7.1 -2.5 7.3 13.5 2.9 11.7 -2.7 4.9 10.7 1.3 9.1 -2.4 7.3 12.2 2.6 7.6 -3.6 4.1 10.0 -0.6 7.7 -2.5 8.4 13.7 2.7 7.3 -6.8 -10.9 0.8 -2.9 11.0 -4.8 2.2 10.5 -1.4 7.5 -9.1 -16.1 -4.3 -7.7 14.8 -1.2 7.8 9.5 1.1 8.2 -2.5 1.4 9.6 8.2 7.1 -3.4 -6.9 3.8 3.4 4.2 -2.1 -2.3 4.2 5.3 4.0 -3.8 -3.7 4.5 4.9 3.7

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

Federal Reserve chairman Ben Bernanke triggered a wide-ranging sell-off by talking about when the Fed might “taper” its bond-buying program. Although he made clear that it was still somewhere in the distance, it was enough to end complacency around minuscule government-bond yields. Long-term government bonds, especially Treasury Inflation-Protected Securities, were hard hit. The aver- age long-government fund lost 3% , and TIPS funds lost 4% . The prospects of stronger growth but lower inflation were particularly tough for TIPS . At the same time, the U.S. economy has strengthened, while China and some other emerging markets have weak- ened, leading to a drop in inflation expectations. PIMCO was one firm that was bullish on longer-term government debt, and a number of its funds lagged in June; PIMCO Total Return PTTRX lost 2 . 6% . Muni markets were stung, too, as they dealt with a rise in interest rates and growing problems for Detroit. Declining expectations for inflation also hit precious- metals and commodity funds hard. The typical precious-metals fund shed 18% in June and com- modities funds lost 5% . Oppenheimer Gold & Special Minerals OPGSX shed 17% . Funds outside of precious metals that have gold stakes also had a rough time. Permanent Portfolio PRPFX shed 5% to be one of the biggest losers in conservative allocation. Appleseed APPLX lost 2% to be one of the hardest-hit funds in mid-value. In U.S. equities, the month was actually pretty tame as economic growth countered some of the pain of rising rates. The S&P 500 lost about 1% . Small caps held up the best as some funds like Artisan Small Cap Investor ARTSX even produced gains.

Small Growth Small Blend Small Value

Aggressive Allocation Conservative Allocation Moderate Allocation

Communications

Financials

Global Real Estate

Health

Natural Resources Precious Metals

Real Estate Technology

Utilities

S&P 500

S&P MidCap 400

Russell 2000

Diversified Asia/Pac. Stock Diversified Emerg. 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 -2.3 -4.7 4.0 4.2 4.7 BarCap US Agg Bond TR USD -1.6 -2.4 3.5 5.2 4.5 BofAML US HY Master II TR -2.6 1.5 10.4 10.6 8.8 BarCap Municipal TR USD -2.8 -2.7 4.5 5.3 4.4

Overall, emerging markets fell about 6% as slowing growth and unrest in Brazil took their toll. œ