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Shawn Malaytershawn.malayter@morningstar.com
Most-Researched Investments in Morningstar Platforms Show Institutional Investors Interested in U.S. Equities in 2012; Individuals and Advisors Focused on Income, Risk Mitigation

CHICAGO, Feb. 28, 2013—Are institutional investors signaling a return to equities? According to a list of the most-researched investments in Morningstar’s platforms in 2012, about half of the most-researched mutual funds, exchange-traded funds (ETFs), and separate accounts by institutional investors were domestic and international equities. In January 2013, equity mutual funds saw inflows of $15.5 billion, the largest monthly intake to equity funds since 2004 and the first month of inflows to stock funds in nearly two years, according to Morningstar’s U.S. mutual fund asset flows report. While institutional investors demonstrated interest in equity funds or strategies in 2012, advisors and individuals were focused on income and risk mitigation.

Highlights of the most-researched investments in Morningstar platforms in 2012:
• Large-cap equity strategies led the list of most-researched separate accounts by institutional investors, including six of the top 10.
• Despite the institutional focus on equities, PIMCO Total Return Fund found a spot on the most-researched investment lists for individual investors, advisors, and institutions alike.
• The four most-viewed ETFs by individual investors, as well as six of the top 10, were from Vanguard, while iShares ETFs were researched most by advisors and institutional investors.
• Dividend focused ETFs were the most viewed investments among individual investors, while advisors showed particular interest in inflation-hedging ETFs, such as SPDR Gold Shares (GLD) and iShares Barclays TIPS Bond (TIP), as well as emerging-markets ETFs.

“Individual investors and financial advisors have been focused on producing income and avoiding risk for the last four years. This is consistent across ETFs and open-end mutual funds based on our fund flows and investment search statistics,“ Paul Justice, director of fund research for Morningstar, said. “While their risk aversion is high, they seem to be making an exception for emerging market equities, which illustrates that whatever risk appetite remains is focused overseas.”

“However, institutional investors are telling a different story,” Justice added. ”They seem to be demonstrating an affinity for domestic equities across the capitalization spectrum as well as international stocks. It’s also interesting to note that institutional investors searching the separate account space focused almost exclusively on active strategies last year. Perhaps the lower negotiated prices of separate accounts for large managers indicate that investors still have an appetite for active management, but only at a competitive price.”

Morningstar compiled the list by totaling the most-researched mutual funds, exchange-traded funds (ETFs), and separate accounts from Jan. 1, 2012 through Dec. 31, 2012 on Morningstar Direct, its global investment analysis platform for institutional investors. Morningstar also assembled a list of the most-researched mutual funds and ETFs from Morningstar.com, the company’s site for individual investors, and Morningstar Advisor Workstation, its investment planning and research platform for financial advisors, for the same time period.

Most Researched Investments 2012—Individual Investors (Morningstar.com):

Mutual Funds
Fund Name - (Ticker Symbol)

- Vanguard Dividend Growth Inv (VDIGX)
- PIMCO Total Return Instl (PTTRX)
- Vanguard Wellesley Income Inv (VWINX)
- Fidelity New Markets Income (FNMIX)
- Vanguard Equity-Income Inv (VEIPX)
- Dodge and Cox Income (DODIX)
- Vanguard Wellington Inv (VWELX)
- Loomis Sayles Bond Retail (LSBRX)
- T. Rowe Price Capital Appreciation (PRWCX)
- T. Rowe Price Equity Income (PRFDX)

ETFs
ETF Name (Ticker
Symbol)
- Vanguard Dividend Appreciation ETF (VIG)
- Vanguard High Dividend Yield Index ETF (VYM)
- Vanguard REIT Index ETF (VNQ)
- Vanguard MSCI Emerging Markets ETF (VWO)
- SPDR SandP Dividend (SDY)
- SPDR Gold Shares (GLD)
- ALPS Alerian MLP ETF (AMLP)
- Vanguard Energy ETF (VDE)
- Vanguard Health Care ETF (VHT)
- WisdomTree Emerging Markets Equity Income ETF (DEM)

Most Researched Investments 2012—Financial Advisors (Morningstar Advisor Workstation):

Mutual Funds
Fund Name (Ticker Symbol)
- Templeton Global Bond A (TPINX)
- PIMCO Total Return A (PTTAX)
- American Funds Growth Fund of America A (AGTHX)
- Franklin Income A (FKINX)
- Oppenheimer Developing Markets A (ODMAX)
- First Eagle Global A (SGENX)
- American Funds Capital World Growth and Income A (CWGIX)
- BlackRock Global Allocation Inv A (MDLOX)
- American Funds Capital Income Builder A (CAIBX)
- Permanent Portfolio (PRPFX)

ETFs
ETF Name (Ticker Symbol)
- SPDR Gold Shares (GLD)
- iShares Barclays TIPS Bond (TIP)
- Vanguard Dividend Appreciation ETF (VIG)
- Vanguard MSCI Emerging Markets ETF (VWO)
- iShares SandP U.S Preferred Stock Index (PFF)
- iShares MSCI Emerging Markets Index (EEM)
- iShares MSCI EAFE Index (EFA)
- SPDR SandP 500 (SPY)
- Vanguard REIT Index ETF (VNQ)
- iShares iBoxx $ Invest Grade Corporate Bond (LQD)

Most Researched Investments 2012—Institutional Investors (Morningstar Direct):

Mutual Funds
Fund Name (Ticker Symbol)
- PIMCO Total Return Instl (PTTRX)
- Dodge and Cox International Stock (DODFX)
- Harbor International Instl (HAINX)
- Oppenheimer Developing Markets A (ODMAX)
- Dodge and Cox Stock (DODGX)
- Fidelity Contrafund (FCNTX)
- Templeton Global Bond A (TPINX)
- T. Rowe Price Growth Stock (PRGFX)
- Vanguard 500 Index Signal (VIFSX)
- T. Rowe Price Equity Income (PRFDX)

ETFs
ETF Name (Ticker Symbol)

- SPDR SandP 500 (SPY)
- Vanguard FTSE Emerging Markets ETF (VWO)
- iShares MSCI EAFE Index (EFA)
- iShares MSCI Emerging Markets Index (EEM)
- SPDR Gold Shares (GLD)
- iShares Barclays TIPS Bond (TIP)
- iShares Russell 2000 Index (IWM)
- iShares Barclays Core Total U.S Bond Market ETF (AGG)
- iShares iBoxx $ High Yield Corporate Bond (HYG)
- iShares Russell 1000 Growth Index (IWF)

Separate Accounts
Strategy Name

- Schafer Cullen High Dividend Value Equity
- The London Co. Small Cap
- Polen Large Cap Growth
- Winslow Capital Management Large Cap Growth
- Wedgewood Concentrated Large Cap Growth
- CS McKee Value Equity
- Nuveen Intermediate-Term Municipal
- AIM Private International ADR Growth
- Dana Large Cap Equity
- WHV International Equity

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 416,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 9 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and has approximately $149 billion in assets under advisement and management as of Dec. 31, 2012. The company has operations in 27 countries.

The above is for information purposes only and should not be considered a solicitation to buy or sell any security or to participate in a managed separate account program noted.

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