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©2012 Morningstar Investment Services, Inc. All rights reserved. The Morningstar name and logo are registered marks of Morningstar, Inc. All other marks are the property of the respective
owners. Morningstar Investment Services, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary
material of Morningstar Investment Services. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Morningstar Investment Services is
prohibited.
Morningstar®
Investment Services
Process and Philosophy
Peter Dugery
Senior VP, National Sales and Distribution
Morningstar Investment Services
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Morningstar’s Investment Management Division (MIM)
Morningstar Investment Management includes Morningstar Associates, LLC, Morningstar Investment Services, Inc., and Ibbotson Associates, Inc., all
registered investment advisors and wholly owned subsidiaries of Morningstar, Inc. All investment advisory services described herein are provided by one or
more of the registered investment advisor subsidiaries. * Ibbotson Associates Inc. was established in 1977, and acquired by Morningstar in 2006.
Morningstar Associates was established in 1999 and Morningstar Investment Services, Inc. was established in 2001.
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We combine the strengths of Morningstar, Inc… × Investors first
× Independent investment research since 1984
× Global resources in 26 countries
× Trusted brand
Asset
Allocation
Manager
Research
Portfolio
Construction
Retirement Solutions
Managed Portfolios
Advisory Services
…with over 30 years investment experience* Expertise in asset allocation, manager selection, and portfolio construction
…to create innovative solutions for institutions, advisors, and individual investors. Offer leading retirement, investment management, and consulting services
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Morningstar Investment Services
× Part of Morningstar’s Investment Management division
× Work exclusively with fee-based advisors to grow their practices
× Leverage Morningstar, Inc.’s proprietary, independent data and analysis
on mutual funds, stocks, and exchange-traded funds (ETFs)
$185.5B Total Assets*
34 Serving Clients**
+ years 2 patents Human Capital and Asset Allocation
with Annuities***
*As of June 30, 2012. Includes Morningstar Associates, Ibbotson Associates, Morningstar Investment Services, OBSR, and Ibbotson Australia.
** Ibbotson Associates Inc. was established in 1977. Morningstar Associates was established in 1999 and Morningstar Investment Services, Inc. was established in 2001.
***Patent issued to Ibbotson Associates for Asset Allocation with Annuities in 2006. Patent issued to Ibbotson Associates for Human Capital in 2007.
Morningstar’s Investment Management division includes Morningstar Associates, LLC, Morningstar Investment Services, Inc., and Ibbotson Associates, Inc., all registered
investment advisors and wholly owned subsidiaries of Morningstar, Inc. All investment advisory services described herein are provided by one or more of the U.S. registered
investment advisor subsidiaries.
3
Independent. Experienced. Well Researched.
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Our Investment Team
Jeffrey Ptak, CFA, CPA
President and Chief Investment Officer
University of Wisconsin, BS
18 years of financial industry experience
Marta Norton, CFA
Investment Manager
Wheaton College, BS
7 years of financial industry experience
Paul Gozali, CFA
Director of Quantitative Analysis
University of Iowa, BS
University of Iowa, MBA
21 years of financial industry experience
Sean Hynes, CFA
Investment Manager
University of Notre Dame, BS
Carnegie Mellon University, MBA
8 years of financial industry experience
Venus Phillips
Investment Manager
Howard University, BBA
University of Chicago, MBA
6 years of financial industry experience
Sam Yan, CFA
Quantitative Analyst
Tsinghua University, BS
University of Illinois, MS
12 years of financial industry experience
John Owens, CFA, CPA
Investment Manager
Oklahoma State University, BS
University of Texas, MBA
16 years of financial industry experience
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For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
The Insight of an Advisor, The Strength of Morningstar
► Determines target asset mix
► Evaluates investment performance data to
peer group and benchmark
► Analyzes, selects, and monitors investments
► Creates and constructs portfolios
► On-going risk management
► Analyzes clients current financial situation
► Assists in determining client’s risk/return profile
► Helps client’s select the appropriate portfolio
► Monitors performance relative to client’s goals
► Reviews changes in client’s circumstances
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For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Our Philosophy
We invest for the long term
We are independent thinkers
We employ a disciplined, consistent investment process
We actively manage portfolios
We are sensitive to costs and taxes
We invest clients’ money as if it were our own
We communicate in a timely and candid fashion
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For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Our Investment Process
× Established and repeatable, our continual four-step process is designed to help
the portfolios stay well-positioned through the market’s up and downs
7
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Develop Asset Allocation: Ibbotson Associates
× Founded in 1977; acquired by Morningstar, Inc. in 2006
× Leading source of independent academic research
× Capital markets, asset allocation expertise
× Ibbotson Associates sets the strategic asset allocation for our diversified portfolios
× Ibbotson’s strategic asset allocation forms the building blocks for each portfolio
Neither diversification nor asset allocation ensure a profit or guarantee against a loss.
Make Asset
Class
Forecasts
Determine an
Efficient
Asset Mix
Create Asset
Class
Recommendations
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For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Analyze Investments: Research: Rigorous, Independent
× We do our own work
× Draw on decades of experience
researching managers
× Leverage proprietary data, analytics,
grading system
× Look beyond stars, style-box
× The world is our oyster
× Use any fund available to us
× No “select list”
From our base in Chicago, our investment
team travels across the country, meeting with
each manager in person.
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For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Research: Using Boutique Managers
For illustrative purposes only. Morningstar Investment Services is not
affiliated with companies shown.
10
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Research: Proprietary Fund Selection (“GPA”)
11
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Evaluating Long-Term Performance
× Monitor
× Managers
× Portfolio positioning
× Risk factors
× Adjust
× Rebalance accounts
× Top-down adjustments
× Fund specific changes
Source: Morningstar Investment Services, Inc.; as of August 20, 2012. For illustrative
purposes only; past performance is not a guarantee of future results. Should not be viewed
as a recommendation buy or sell the mentioned securities.
Fund Performance Scorecard
12
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Constructing Portfolios
× Portfolio Level
× Holdings-based analysis
× Manage to target risk
× Monitor fund overlap
× Fund Level
× Tailor fund to strategy
× Contribution to Portfolio risk and expenses
Deep-Value Core-Value Core Core-Growth High-Growth
G i a
n t
L a r g
e
M i d
S
m a l l
M i c
r o
Holdings-Based Style Map
13
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Our Mutual Fund Portfolios
Our Mutual Fund Portfolios
14
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Our Asset Allocation Portfolios
× Broad diversification, open architecture, sophisticated risk management, good
complement to niche/specialized strategies
× Taxable and tax-deferred versions of mutual fund portfolios available
15
Conservative
Income &
Growth
Moderate
Growth
Growth
Aggressive
Growth
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Diversification: Asset Allocation Portfolios
Conservative Income &
Growth
Moderate
Growth
Growth Aggressive
Growth
US Stocks Large Growth 5 8 10 12 15
Large Value 9 12 14 16 18
Mid-Cap 5 6 7 10 11
Small-Cap 0 4 7 10 14
Non-US Stocks Developed 5 8 14 18 23
Emerging 1 2 4 5 7
Real Estate REITs 0 0 4 5 5
Taxable Bonds Investment-Grade 30 25 18 12 0
High-Yield 7 6 4 3 0
Inflation-Protected 8 6 3 0 0
Non-Domestic 10 8 5 4 0
Alternatives Commodities 3 3 3 3 5
Absolute Return 10 7 5 2 0
Cash Short Term Reserves 7 5 2 0 2
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For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Our Retirement Income Portfolios
× Four distinct managed portfolios
× Targeted payouts ranging from 4–7%
× Time horizons from 1 to 20+ years
× Endowment-like approach
× Diversified across asset classes
× Payouts derived from total return, not reliant solely on yield
Ultra Short Short-Range Mid-Range Long-Range
Targeted Payout 7% 6% 5% 4%
Time Horizon 1–5 years 2–10 years 10–20 years 20+years
Probability of
Principal Preservation
2.1% 9.9% 17.3% 36%
Probability of Principal Depletion 0.1% 0.1% 0.4% 0.8%
Monte Carlo Analysis, 95% Confidence Monte Carlo adjusts for inflation. 17
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Diversification: Retirement Income’s Asset Allocation
Tax-Deferred Allocation % Ultra Short Short-Range Mid-Range Long-Range
US Stocks Large Growth 0 2 5 6
Large Value 0 5 7 10
Mid-Cap 0 0 3 6
Small-Cap 0 0 2 4
Non-US Stocks Developed 0 3 6 7
Emerging 0 0 2 2
Real Estate REITs 0 0 4 4
Taxable Bonds Investment-Grade 60 36 30 30
High-Yield 5 22 8 6
Inflation-Protected 5 5 5 4
Non-Domestic 5 6 5 4
Alternatives Commodities 0 3 3 4
Absolute Return 0 10 15 8
Cash Short Term
Reserves
25 8 5 5
18
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Breaking down the Retirement Income portfolios
× Four distinct managed portfolios
× Targeted payouts ranging from 4–7%
× Time horizons from 1 to 20+ years
× Endowment-like approach
× Diversified across asset classes
× Payouts derived from total return, not reliant solely on yield
19
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
× Limited diversification
× Lower growth potential
× Income levels can fluctuate
× Vulnerable to rising
inflation, interest rates
Why not just income?
Income Portfolio
× Churns out income
× In theory, do not need to
sell investments to meet
spending needs
Advantages
Disadvantages
Total Return Portfolio
× Balances the need for
income and growth
× Offers diversification
× Protects against inflation
and interest rate risk
× May need to sell securities
in down markets
to meet income needs
20
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
$0
$200
$400
$600
$800
$1,000
$1,200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Declining coupons make income strategies more dangerous
× Income generated by a $100,000 portfolio
Corporate High
Yield Bond Index
Aggregate Bond
Index
21
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Stocks Growth Engine Domestic Small Caps
Domestic Large Caps
International
Emerging
Bonds Income Producer Investment-grade
High-yield
Non-U.S.
Inflation-protected
Alternatives Volatility Dampener Commodities
Real estate
Long/Short funds
Arbitrage strategies
Diversification: Retirement Income’s asset allocation
22
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Goals of the Absolute Return Portfolio
× Deliver moderate returns over time with lower volatility
× Provide downside protection relative to equity markets
× Provide low correlation to the traditional broad market indexes
Note: There can be no assurance that the stated goals will be met
23
Absolute Return
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Absolute Return Portfolio Allocation
Data as of April 2012. Weightings shown are subject to change without notice.
%
US Stocks 12
International Stocks 8
Taxable Bonds Investment-Grade 13
High-Yield 5
Alternatives Multi-Strategy 11
Long-Short Equity 10
Convertible Arbitrage 10
Credit Arbitrage 9
Merger Arbitrage 9
Global Macro 8
Commodities 4
Cash Short Term Reserves 25
24
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
How You Can Use Absolute Return
× Stand-alone solution: Good choice for conservative investors
× Enhance diversification: Complement to traditional stock and bond portfolios
× Meet distribution needs: Lower volatility makes regular distributions less disruptive
25
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Building Wealth: The Importance of Low Volatility
$65,000
$75,000
$85,000
$95,000
$105,000
$115,000
Year 4: Return Port A: 9% Port B: 25%
Four-Year Growth of Two Portfolios
Beginning Balance: $100,000
Portfolio A
Portfolio B
Portfolio Returns
Year 1 Year 2 Year 3 Year 4
11% -12% 12% 9%
10% -40% 25% 25%
Portfolio Returns
Avg Rate of Return Cum Rate of Return
5% 19.2%
5% 3.1%
26
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Performance of Alternative Strategies
Source: Morningstar Direct, as of 4/29/2012.
An index is unmanaged and an investor cannot invest directly in an index.
References to investments above should not be considered an offer (as defined by the Securities and Exchange Act) to buy or sell that
specific investment. Past performance does not indicate or guarantee future returns.
BarCap US Agg Bond Hennessee HF Convertible Arbitrage Hennessee HF Long/Short Equity
Hennessee HF Merger Arbitrage S&P 500
Merger Arb
S&P 500
Convert Arb
Long/Short
BarCap US Agg
BarCap US Agg
S&P 500
Long/Short
Merger Arb
Convert Arb
27
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Traditional
Traditional Plus
Alternatives
Russell 3000 45% 37.5%
MSCI World Ex. US 15% 12.5%
BarCap Agg 35% 25%
Citigroup T-Bill 3 Mo. 5% 5%
Hennessee HF Merger Arbitrage 7%
Hennessee HF Long/Short Equity 7%
Hennessee HF Convertible Arbitrage 6%
Return Benefits: Traditional Portfolio with Alternatives
Traditional
Traditional Plus Alternatives
See appendix for definition of statistics. An index is unmanaged and an investor cannot invest directly in an index.
References to specific investments should not be considered an offer (as defined by the Securities and Exchange
Act) to buy or sell that specific investment. Past performance does not indicate or guarantee future returns.
28
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Return Benefits: Traditional Portfolio with Alternatives
Traditional Traditional Plus
Alternatives
Return (annualized) 5.60% 5.93%
Standard Deviation
(annualized)
9.95% 9.15%
Sharpe Ratio* 0.32 0.38
Beta* 0.58 0.53
Alpha* 1.06 1.48
Downside Capture* 53.25 47.63
Growth of $10,000 from June 30, 1997 – July 1, 2012
Traditional Plus Alternative
Russell 3000 TR USD)
Trailing 15 Years of Statistics as of 06/30/2012
Source: Morningstar Direct, as of June 30, 2012 See appendix for definition of statistics. An index is unmanaged and an investor cannot invest directly in
an index. References to specific investments should not be considered an offer (as defined by the Securities and Exchange Act) to buy or sell that specific
investment. Past performance does not indicate or guarantee future returns.
2000 2002 2004 2006 2008 2010 2012
11K
12K
13K
15K
17K
19K
22K
24K
29
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Absolute Return Portfolio Results
► Less than half the volatility of the S&P 500 Index since its inception
► Provides good downside protection relative to the broad equity market
► Beta of 0.36. Returns have not been very dependent on the domestic equity market
Source: Morningstar, Inc. Portfolio returns noted are gross of annual program fees. Addition of these fees would reduce the performance shown. The
maximum program fee for this portfolio is 1.50% *The portfolio returns presented are from a portfolio seeded on 3-31-2005.See appendix for definition of
statistics. Past performance does not guarantee future results. An index is unmanaged and an investor cannot invest directly in an index.
April 2005 through June 2012
Absolute Return* S&P 500
Annualized Return 4.03% 4.14%
Standard Deviation 6.41% 16.43%
Sharpe Ratio 0.32 0.13
Up Capture 42.59% 100.0%
Down Capture 32.26% 100.0%
Alpha vs. Market 2.18% 0.0%
Beta vs. Market 0.36 1.00
30
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Absolute Return Portfolio: Calendar Year Return
Source: Morningstar Direct, as of December 31, 2011. Portfolio returns noted are gross of annual program fees. Addition of these fees would reduce the
performance shown. The maximum program fee for this portfolio is 1.50%
-40
-30
-20
-10
0
10
20
30
Absolute Return US OE Long/Short Equity S&P 500
2011 2010 2009 2008 2007
31
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Select Stock Baskets
Our Select Stock Baskets
Our ETF Portfolios LFA Only
32
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Exchange-Traded Fund Portfolios
× Diversified ETF portfolios
× Invest in passive ETFs, utilizing tactical overlay
× Well-suited to anchor core of a portfolio
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Morningstar Managed ETF Strategies
× Core-and-Explore format leverages Morningstar’s
strengths
× Asset allocation research
× Strategic asset allocations set by Ibbotson
Associates
× Security research, portfolio construction
× Morningstar, Inc.’s deep ETF analytics, data
× MIS’ extensive experience managing client
capital, making tactical decisions
34
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Core and Explore Approach
+
Core
× Broadly diversified ETFs
× Passive and low cost
× Track asset classes in strategic asset allocation
Explore
× ETFs that track narrower segments (style, sector, region, etc.)
× Selection based on proprietary rating methodology
× Aim to add value over index
35
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Total
Stock
Foreign
Stock
Fixed
Income
Div-Pay
Stocks
Global
High-
Quality
Health
Care
Japan
Corp.
Bonds
Cash
Core
Explore
Tactical View Potential ETF
Investment-Grade Corp. Bond ETF
High-Yield Bond ETF
Japan Small-Cap ETF
Companies are flush;
Treasuries are rich
Stocks look cheap,
especially after quake
Fears over patent
“cliff” overdone Health Care Stock ETF
Dividends prized in a
lower-growth climate
Dividend Appreciation ETF
High-quality, global
firms to pace recovery
Technology Stock ETF
Information is for illustrative purposes only and is not a recommendation or an offer to purchase
or sell a specific security. Information is subject to change at anytime without notice.
Core-and-Explore Approach
36
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Tactical Decision-Making
37
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Diversification: ETF Asset Allocation Portfolios
Conservative Income &
Growth
Moderate
Growth
Growth Aggressive
Growth
US Stocks Large Growth 6 9 13 14 17
Large Value 10 13 16 18 20
Mid-Cap 3 5 7 9 11
Small-Cap 0 5 7 10 14
Non-US Stocks Developed 6 11 13 18 21
Emerging 0 0 2 3 5
Real Estate REITs 0 0 4 5 6
Taxable Bonds Investment-Grade 45 34 22 14 0
High-Yield 6 5 5 3 0
Inflation-Protected 8 6 3 0 0
Non-Domestic 5 4 3 0 0
Alternatives Commodities 3 3 3 4 4
Cash Short Term Reserves 8 5 2 2 2
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× The low-cost portfolios in this series offer specific risk and return profiles to meet investors’
needs throughout the stages of life, from capital preservation and income to capital
appreciation and growth.
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Why Morningstar Investment Services?
× Independent – Conflict free
× Objective – Use of best-of-breed managers
× Disciplined – Institutional research process
× Continuous oversight
× Ability to be proactive
× Breadth of solutions
39
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Platform Pricing – Mutual Fund Portfolios
Mutual Fund Portfolio
$50,000 Minimum
×Asset Allocation Mutual Fund Series, Taxable & Tax Deferred
×Absolute Return
×Retirement Income Series
Program Fee First 500K 0.45%
Over 500K 0.40%
× No custody and clearing fee
× Clients may pay transaction costs to have transferred securities liquidated as follows:
× $15 at Pershing for transaction fee mutual funds and general securities
× $35 at IWS for transaction fee mutual funds, and $7.99 for general securities
40
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Platform Pricing – ETF Portfolios for LFA
ETF Portfolios
$100,000 Minimum
×Asset Allocation ETF Series
Program Fee First 250K 0.42%
Next 250K 0.40%
Next 500K 0.37%
Over 1m 0.35%
× $150 per account/per year custody and clearing fee
41
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Peter Dugery 312 696-6040
National Director [email protected]
Morningstar Investment Services Sales Team
Reach our sales team members at 877 626-3224
1 Aaron Peterson Ext. 1 [email protected]
Region 1 – California, Oregon, and Alaska, Guam, Hawaii
2 Justin Stender Ext. 2 [email protected]
Region 2 – Idaho, Illinois, Iowa, Michigan, Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin
3 Steven Geiger Ext. 3 [email protected]
Region 3 – Delaware, Maryland, North Carolina, Pennsylvania, Virginia, West Virginia
4 Brad Murphy Ext. 4 [email protected]
Region 4 – Massachusetts, Maine, New Hampshire, Rhode Island, Vermont
5 Mike Reeves Ext. 5 [email protected]
Region 5 – Alabama, Florida, Georgia, South Carolina, Puerto Rico
6 John Green Ext. 6 [email protected]
Region 6 – Arizona, Kansas, Missouri, New Mexico, Oklahoma, Texas
7 Todd Schaul Ext. 7 [email protected]
Region 7 – Connecticut, New Jersey, New York
8 Tracy Unger Ext. 8 [email protected]
Region 8 – Arkansas, Louisiana, Mississippi, Tennessee
9 Adam Herakovich Ext. 9 [email protected]
Region 9 – Ohio, Indiana, Kentucky
10 Internal Ext. 10 [email protected]
Region 10 – Idaho, Montana, Washington, Utah, Colorado, Wyoming
42
General Information 877 626-3227
Internal Service [email protected]
Representatives www.mp.morningstar.com
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
The information, data, analyses and opinions presented herein do not constitute investment advice; are provided solely for informational purposes and
therefore are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. The opinions expressed are as of the date
written and are subject to change without notice. Except as otherwise required by law, Morningstar Investment Services shall not be responsible for any
trading decisions, damages or other losses resulting from, or related to, the information, data, analyses or opinions or their use. Past performance is not a
guarantee of future results.
The information contained herein is the proprietary property of Morningstar Investment Services and may not be reproduced, in whole or in part, or used in
any manner, without the prior written consent of Morningstar Investment Services.
© 2012 Morningstar Investment Services, Inc. All rights reserved. Morningstar Investment Services is a registered investment advisor and wholly owned
subsidiary of Morningstar, Inc. The Morningstar name and logo are registered marks of Morningstar, Inc.
Appendix: Disclosures
43
For financial advisor use only; not for use with the general public. Presentation not complete without disclosures on pages 42-43.
Appendix: Disclosures
The portfolio returns are from a model portfolio (“Model Portfolio”). The Model Portfolio performance is provided for informational purposes only, and may
include seed account returns across various custodial platforms. The Model Portfolio has similar investment objectives and asset allocations as the portfolio
clients may be invested in; however, it is important to note that the Model Portfolio may not have contained and/or currently may not contain the same
holdings underlying the recommended portfolio.
The purpose in presenting the Model Portfolio performance is to provide a hypothetical historical indication of the performance of the investment strategy,
and in no way should the Model Portfolio performance be considered indicative of or a guarantee of the future performance of an actual portfolio. Results of
an investment made today in a Morningstar Managed Portfolio may differ substantially from the historical performance shown, and as a result, you may
incur a loss.
The Model Portfolio performance calculations assume all dividends and capital gains distributions are reinvested and are gross of all fees and expenses.
Model Portfolios containing common stocks and ETFs are calculated using the underlying holdings‘ market price, and Model Portfolios containing mutual
funds are calculated using the mutual funds’ net asset value, both as of the close of trading on the New York Stock Exchange at the last business day of a
month. Model Portfolio performance is calculated using a time weighted, geometrically linked rate of return formula. Returns for periods over one year are
annualized. Return calculations do not reflect the deduction of brokerage or other commissions/expenses, and does not include the maximum fee charged
by Morningstar Investment Services for investing in the portfolio. Fee Schedules vary per business relationship.
Index Returns Individual index performance is provided as a reference only. Each index is unmanaged and is not available for direct investment. Since
indices and/or composition levels may change over time, actual return and risk characteristics may be higher or lower than those presented. Although index
performance data is gathered from reliable sources, Morningstar Investment Services cannot guarantee its accuracy, completeness or reliability.
Benchmark data sources are: Morningstar, Inc., Russell Mellon Analytical Services, Barclays Capital, Citigroup, Morgan Stanley, Standard & Poor’s, NAREIT,
Dow Jones, and Merrill Lynch.
For blended benchmarks for specific strategies, please refer to the portfolio reports on our Website.
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