Upload
trinhthu
View
220
Download
3
Embed Size (px)
Citation preview
?
Market Outlook Q1 2018
Talking Points
× The S&P 500 lost 0.76% during the first quarter.
× Technology, consumer cyclical and financial services stocks outperformed during the quarter.
× All other sectors endured losses for the quarter, with the real estate, communication services, and
consumer defensive sectors losing more than 6% each.
× The market-cap-weighted price/fair value estimate ratio for our equity analysts' coverage universe is
1.03, suggesting that the market overall is slightly overvalued.
× Communication services is the most undervalued sector, with a price/fair value ratio of 0.86. Basic
materials is the most overvalued sector, with a price/fair value ratio of 1.34.
× The large growth category led the pack this quarter among style-based fund categories, while growth
styles overall generated gains during the first quarter. Value and blend funds were in the red.
× The Latin America stock fund category led the pack among international equity during the quarter,
notching an 8.16% return; foreign small/mid growth and diversified emerging markets funds also
performed relatively well. India stock funds, meanwhile, lost 8.43% during the quarter.
× Emerging-markets local-currency bond funds notched 4.2% gains, while bank loan and world bond funds
eked out gains. Long government and long-term bond funds suffered most.
Morningstar, Inc.
Contents
1 Talking Points
3 Stock Market Outlook: Stocks Look
Slightly Overvalued Today
5 First Quarter in U.S. Stock Funds: The
Return of Volatility
7 A Tumultuous First Quarter for
International-Stock Funds
9 A Tempestuous Start to the Year for
Fixed-Income Markets
12 Index Returns
13 Fund Category Returns
Sponsored by:
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 2 of 17
Page 2 of 17
Page 2 of 17
Page 2 of 17
Page 2 of 17
Page 2 of 17
Page 2 of 17
Page 2 of 17
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 3 of 17
Page 3 of 17
Page 3 of 17
Page 3 of 17
Page 3 of 17
Page 3 of 17
Page 3 of 17
Page 3 of 17
Stock Market Outlook: Stocks Look Slightly Overvalued Today 4- and 5-star stocks are harder to come by in today's market, but a few
values are still out there.
× The Morningstar Global Markets Index has risen 1% year to date following a quarter of increased
volatility.
× For our entire coverage universe, the market-cap-weighted price/fair value ratio is 1.03, suggesting the
market is slightly overvalued.
× On a sector-specific level, communication services continues to be the most undervalued sector,
with a price/fair value of 0.86. Basic materials remains the most overvalued sector, with a price/fair
value of 1.34.
The communication services sector continues to look undervalued. In Europe, regulators caused
valuation pressures by rejecting a couple of mergers that would have allowed for cost-cutting and
margin expansion, but we still see value in the space. From a more global perspective, narrow-moat
China Mobile CHL is a 5-star-rated stock in the sector. We continue to expect fixed broadband market
share gains for the company in an industry that should post strong organic growth over the long term as
consumption demand looks favorable in China.
Another area where we find attractive valuations is in the large-cap drug and biotechnology industry.
While the overall healthcare sector looks fairly valued with a price/fair value of 1.01, the overvalued
medical instruments companies are offsetting the low valuations of drug firms. We believe unwarranted
concern about high drug pricing has created opportunities for long-term investors. A couple of top stock
picks in the drug space are wide-moat Roche RHHBY and narrow-moat Shire SHPG. These companies
hold strong positions in oncology and ultra-rare diseases, respectively, which are two therapeutic areas
with some of the strongest pricing power in the market.
On the overvalued side, the basic materials group looks significantly overvalued with a price/fair value of
1.34, much higher than the next most overvalued sector, industrials, which carries a price/fair value of
1.06. A core pillar of our basic materials overvalued call is the expectation that China demand will
transition away from an investment-led growth model.
While we raised our forecasts for U.S. steelmakers on Feb. 19 in anticipation of President Donald Trump
electing one of the more aggressive tariff options presented by the U.S. Department of Commerce, we
continue to expect steel prices to fall in the years to come amid faltering Chinese fixed-asset investment
and persistent global overcapacity. No-moat-rated Steel Dynamics STLD is a stock that we expect will
By Damien Conover, CFA
Published 3/29/18
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 4 of 17
Page 4 of 17
Page 4 of 17
Page 4 of 17
Page 4 of 17
Page 4 of 17
Page 4 of 17
Page 4 of 17
falter amid these challenges to a much higher degree than the investment community has factored into
the company’s valuation. K
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 5 of 17
Page 5 of 17
Page 5 of 17
Page 5 of 17
Page 5 of 17
Page 5 of 17
Page 5 of 17
Page 5 of 17
First Quarter in U.S. Stock Funds: The Return of Volatility Growth stocks held on to small gains as Amazon continued to rise.
The markets were jolted back to reality in the first quarter after the halcyon days of 2017.
Volatility returned with a vengeance, with the markets making some of their biggest moves in months.
After going all of 2017 without a move of 2% or more in absolute terms, the S&P 500 had six such moves
in the first three months of 2018, capped by a 4% decline on Feb. 5. Simmering inflation fears, the
prospects of a trade war with China, and revelations of Facebook's FB data-harvesting activities roiled
the markets during the period. As a result, the S&P 500 fell 2.1% during the quarter, its first quarterly
loss since the third quarter of 2015. Small-cap stocks fared a bit better as a class during the market's
swoons, though the Russell 2000 Index still lost 1.2% in the period.
Despite the market's gyrations, some 2017 story lines carried over into 2018. Growth stocks continued to
outperform their value counterparts, especially as the Federal Reserve's interest-rate hike in March—its
sixth since December 2015 and the first under its new chairman, Jerome Powell—made dividend-payers
less attractive and put pressure on REITs. Among growth stocks, large caps led their smaller peers,
paced by the extension of Amazon.com's AMZN stellar run. Amazon shored up the consumer cyclical
sector, which joined technology as the only two sectors to advance in the first quarter.
Winners
The Primecap team's patient, contrarian growth strategy served it well in the first quarter. Primecap
Odyssey Aggressive Growth POAGX surged 10% and led the mid-growth Morningstar Category, while
sibling Primecap Odyssey Growth POGRX finished in the large-growth category's top decile with its 7%
tally. The top holding in both funds, Nektar Therapeutics NKTR, has quadrupled since November 2017 on
positive test results for a key cancer drug and rumors of a potential sale of the company. The Nektar
position shows the Primecap team's research acumen and patience: It has owned the stock in both
funds since late 2009.
Fidelity Growth Company FDGRX captain Steve Wymer, Morningstar's 2017 Domestic-Stock Fund
Manager of the Year, got off to a good start in 2018. His fund gained 4%, led by strong showings for its
top two holdings, Nvidia NVDA and Amazon. It also benefited from renewed interest in Netflix NFLX,
which jumped 49% in the quarter. Although these are large companies, Wymer's no stranger to smaller,
more obscure fare. He found BeiGene BGNE, a Chinese biopharmaceutical firm, in early 2016 and rode
the stock to new heights in 2018.
As U.S. President Donald Trump's saber-rattling on international trade shook many large caps, small-cap
stocks held up rather well thanks to their reliance on the domestic economy. Artisan Small Cap ARTSX
exemplified that strength with a 6% gain for the quarter. The fund tilted strongly toward technology,
which took up nearly half of its assets in the first quarter. Its top contributor for the quarter, Veeva
By Tony Thomas
Published 4/2/18
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 6 of 17
Page 6 of 17
Page 6 of 17
Page 6 of 17
Page 6 of 17
Page 6 of 17
Page 6 of 17
Page 6 of 17
Systems VEEV, took off after the market bottomed on Feb. 8, capitalizing on news of solid full-year
revenue growth for fiscal-year 2018.
Losers
Rising interest rates made real estate investments less attractive in the first quarter, and some of the
worst-performing funds in the Morningstar 500 (a list of funds in the Morningstar FundInvestor
newsletter that meet or clear some fundamental hurdles) had significant exposure to that sector. Fidelity
Real Estate Investment FRESX, for instance, fell 7% as most stocks in its 46-name portfolio gave ground
in the first three months of 2018.
One fund that didn't deliver on its expected downside protection was Royce Special Equity RYSEX. Lead
manager Charlie Dreifus' conservative approach keeps him out of high-debt companies and firms that
use accounting gimmicks, and he entered 2018 with 10% in cash. But he was seriously exposed to
consumer cyclicals (48% of assets in December 2017), and his top holding, The Children's Place PLCE,
gave back some of its late-2017 gains.
Mairs & Power Growth MPGFX isn't your typical growth fund. In fact, it's housed in the large-blend area
of the Morningstar Style Box. Managers Mark Henneman and Andy Adams have a modest definition of
growth—firms that are growing faster than the overall economy—but that didn't put them in the
market's good graces. The fund continued its 2017 lackluster performance versus its peers as it fell over
5% in the first quarter of 2018. Its technology underweighting as of December 2017 (7.5% versus 22.0%
in the S&P 500 benchmark) didn't help, and key consumer defensive picks such as General Mills GIS and
Hormel HRL languished. K
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 7 of 17
Page 7 of 17
Page 7 of 17
Page 7 of 17
Page 7 of 17
Page 7 of 17
Page 7 of 17
Page 7 of 17
A Tumultuous Quarter for International-Stock Funds Funds in this group experienced a wide range of returns during the period.
International-stock funds faced a topsy-turvy investment environment in the first quarter of 2018. The
year started off positively as the generally favorable macroeconomic, geopolitical, and corporate
conditions of 2017 persisted. The MSCI ACWI ex USA Index returned 5.6% in U.S. dollar terms in
January, in fact, while the French, German, Japanese, and several other developed exchanges posted
mid-single-digit gains and the Brazilian, Chinese and a few other emerging markets earned somewhat
higher returns.
But several factors roiled foreign markets in February and March, including rising concerns about
inflation and interest rates around the world, growing worries about a trade war between the United
States and China and other nations, and surfacing company-specific fears in the technology sector.
Consequently, most international markets suffered mid- to high-single-digit losses during February and
March, with the Brazil and Japanese exchanges performing somewhat better than that, and the Chinese
and Indian markets faring slightly worse.
All told, the MSCI ACWI ex USA Index lost 1.2% in U.S. dollar terms in the first quarter. Markets were all
over the map in both the developed and the developing worlds during the period. The U.K. and many
other European exchanges posted moderate declines, whereas the French and Japanese markets eked
out small gains. The South African and several other emerging markets finished in the red. But the
Chinese, Mexican, and some other developing markets earned modest gains, while the Brazilian market
posted double-digit returns as optimism about economic progress, valuations, and other local factors
trumped pessimism about outside considerations.
A Wide Range of Results
Not surprisingly, given this volatile and varied investment climate, there was a wide range in the
performance of international-stock funds in the first quarter, particularly among those with narrow
geographic purviews. The average Latin America fund, which has roughly two thirds of its assets in
Brazilian equities and 15% of its assets in Mexican stocks, gained 8.2%, which was the best result of any
type of international-stock offering by far. The typical China-region fund returned 1.2%. But the average
India equity offering fell 8.4%—the worst performance of any category of international-stock funds by a
wide margin—as worries about government spending, slower economic growth, and corporate scandals
in India added to global concerns.
The average diversified emerging-markets fund gained 2.0% in the first quarter, whereas the typical
Europe stock fund lost a similar amount. The former was buoyed by its exposure to some smaller markets
like Thailand and Russia as well as by its exposure to Brazil, China, and Mexico. The latter was burdened
by its exposure to several of the region's larger markets, including the United Kingdom, where Brexit-
related issues compounded worldwide concerns.
By Bill Rocco
Published 4/9/18
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 8 of 17
Page 8 of 17
Page 8 of 17
Page 8 of 17
Page 8 of 17
Page 8 of 17
Page 8 of 17
Page 8 of 17
As was the case in the rally of 2017, smaller-cap stocks outpaced large-cap equities and growth stocks
fared better than value issues overseas in the choppy first quarter of 2018. (Smaller companies tend to
be less dependent on foreign trade and the global economy than large firms, while growth names tend
to be less vulnerable to rising interest rates than dividend-paying and many other value issues.) Thus,
the average foreign small/mid-growth fund, which gained 2.4%, performed the best among these six
categories of foreign-stock offerings during the period, and the average foreign large-value fund, which
lost 1.7%, did the worst.
Notable Outperformers and Underperformers
Several prominent international-stock funds did better than most of their rivals during the first quarter.
Harding Loevner Emerging Markets HLEMX, which has a Morningstar Analyst Rating of Silver and is
closed to most new investors, returned 3.6% and outpaced more than 80% of its diversified emerging-
markets peers, because its quality-growth discipline and several of its Brazilian, Chinese, and other picks
stocks paid off. Bronze-rated T. Rowe Price Japan PRJPX benefited from its growth bias, its exposure to
smaller caps, and its manager’s stock selection; it gained 4.5% while the average Japan stock fund lost
0.8%. And whereas the typical foreign large-growth fund returned 0.2%, Silver-rated Vanguard
International Growth VWILX gained 3.4% because it is even more growth-oriented than its average peer
and many of its technology and consumer-cyclical holdings flourished.
Finally, a number of well-known foreign-stock funds lagged well behind the majority of their peers
during the period. Bronze-rated Aberdeen Emerging Markets ABEMX was slowed by its relatively hefty
stake in the weak Indian market as well as its stock selection in Indonesia and a few other places; it was
up just 0.1% while the typical diversified emerging-markets offering rose 2.0%. The typical Pacific/Asia
ex-Japan offering gained 0.4%, but Silver-rated Matthews Asian Growth and Income MACSX lost 1.8%,
hurt by the facts that it is more value-oriented than most of its rivals and it has far less exposure to the
relatively buoyant Chinese market. And Bronze-rated Oakmark International Small Cap OAKEX lost 3.4%
while the typical foreign small/mid-blend fund lost 0.4%, largely because it is more value-driven than
most of its peers and a number of its Swiss and Canadian stocks struggled. K
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 9 of 17
Page 9 of 17
Page 9 of 17
Page 9 of 17
Page 9 of 17
Page 9 of 17
Page 9 of 17
Page 9 of 17
A Tempestuous Start to the Year for Fixed-Income Markets Bond markets turned volatile against a backdrop of rising rates, a
weakening dollar, and end-of-credit-cycle anxiety.
The Bloomberg Barclays U.S. Aggregate Index, a proxy for core bond performance, lost 1.5% for the
quarter—its first negative quarterly return in over a year—while the intermediate-term bond
Morningstar Category was down a more modest 1.3%. Funds with limited exposure to investment-grade
credit held up better, as did those with exposure to non-U.S securities, given a weakening dollar and
more robust global growth projections. As interest rates continued their ascent, funds with lower
duration, a measure of interest-rate risk, also benefited. The positioning of Loomis Sayles Investment
Grade Bond LSIIX (with a Morningstar Analyst Rating of Gold), with its combination of lower duration,
high-yield holdings, and non-U.S. credit and currency exposures, elevated its performance above 95% of
unique intermediate-term category peers, as it gained a modest seven basis points for the quarter.
Monetary Policy Stays the Course
True to its communications, the Federal Reserve continued its policy of a slow but steady tightening of
the money supply, even after a change to its chairmanship. After a quarter-point rate rise in December,
Janet Yellen maintained the 1.25% interest rate for January before departing the Federal Reserve. Her
successor, Jerome Powell, assumed chairmanship responsibilities on Feb. 5, and in his first Federal Open
Market Committee address on March 21, announced another quarter-point rise in rates, citing continued
strength in U.S. economic fundamentals as an impetus.
From the start to end of the quarter, the yield on the 10-year U.S. Treasury rose to 2.7% from 2.5%. The
shape of the yield curve, as signaled by the difference in spread between 30 and two-year U.S.
Treasuries, was malleable, with modest flattening in January, steepening in February, followed by more
flattening in March. Throughout 2017, despite three rate rises, the longer end of the U.S. Treasury yield
curve refused to budge, but that ended with 2018’s first rate move. Funds such as Wasatch-Hoisington
US Treasury WHOSX, with its 22-year duration, lost 4.3% over the quarter.
Expectations of higher inflation as well as the rising rate environment handicapped municipals, whose
supply was significantly diminished given the glut of advanced refundings that were issued to front-run
the implementation of tax reform in December. Mortgages also suffered lackluster performance because
of the same factors, but GNMA securities in particular were singled out for instances of churn in
underlying mortgage pools, as nine servicing companies were called out for unnecessarily encouraging
veterans to refinance loans. The Bloomberg Barclays GNMA Index and Bloomberg Barclays Municipal
Index lost 1.3% and 1.1%, respectively, in the first quarter.
By Emory Zink
Published 4/3/18
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 10 of 17
Page 10 of 17
Page 10 of 17
Page 10 of 17
Page 10 of 17
Page 10 of 17
Page 10 of 17
Page 10 of 17
No Shift in Credit Fundamentals
After delivering robust returns throughout 2017, the credit sector’s performance faltered in the first
quarter of 2018, primarily due to rising interest rates. The lowest quality tier of the Bloomberg Barclays
Investment-Grade Corporate Credit Index—BBB—has roughly doubled in size over the trailing decade,
sitting near a high of 13.5% at the end of March 2018, and recent S&P research estimates the number
of highly leveraged corporates at 37%, which is five percentage points higher than in 2007, however
these signals haven’t deterred credit appetites. In March, CVS Health Corp CVS raised $40 billion in the
third-largest corporate bond sale on record, as it attempts to finance an acquisition of Aetna AET before
the end of the year. And the average option-adjusted spread on the Bloomberg Barclays Investment-
Grade Corporate Index remained within a historically tight range, despite ending 2017 near a trailing-
decade low.
Within U.S. high yield, iHeartMedia IHRTQ defaulted on $16 billion of debt, though its situation was
widely anticipated and factored into pricing, while broader non-investment-grade corporate funds
experienced outflows. But the Bloomberg Barclays High Yield Corporate Index only lost 1.5% for the
quarter, relative to its Bloomberg Barclays Investment-grade Corporate Index counterpart’s 2.3% loss.
These results signal that credit’s underperformance stemmed from interest-rate sensitivity, which is
greater in higher-quality tiers, rather than from underlying credit fundamentals. For example, Silver-rated
Vanguard Intermediate-Term Investment-Grade Bond VFICX, which had one of the highest exposures to
AAA rated securities relative to peers in the corporate bond category, lost 1.8% for the quarter, while
high-quality core bond option Silver-rated Baird Aggregate Bond BAGIX also suffered commensurately
relative to its intermediate-term bond options, losing 1.5% over the same period.
Non-U.S.-Dollar-Denominated Debt Posted Attractive Returns
More accommodative policies by the European Central Bank and Bank of Japan contrasted with
continued tightening at the Federal Reserve, which resulted in attractive performance for funds with
select non-U.S. exposures. Five-year yields on government bonds from Germany, Japan, and the
Netherlands inched downward throughout the quarter and ended in negative territory, while 10-year
yields on each country’s government debt also inched downwards but remained positive.
Also of note, the U.S. dollar’s continued weakness reduced demand from foreign investors searching for
yield in shorter-dated U.S.-dollar-denominated securities, as the costs of hedging increased. Beyond the
boost from overseas currencies, global growth remained robust, with the Bloomberg Barclays Global
Aggregate ex USD Index delivering 3.6%, its highest quarterly return in the trailing two years. Aided by
strong country selection and under 20% in U.S. dollar exposure, Silver-rated BrandywineGLOBAL Global
Opportunities Bond GOBSX topped the world bond category with a healthy 4.1% gain for the quarter.
Emerging-markets bonds, particularly those denominated in local currencies, also fared well due to the
weakening U.S. dollar in January and higher oil prices. West Texas Intermediate crude oil surpassed $60
a barrel at the start of the year and remained above that point throughout the quarter. The JPM GBI-EM
Global Diversified Index delivered 4.4% for the quarter, one of the most robust returns for a fixed-income
sector over the period. Actively managed funds, such as PIMCO Emerging Local Bond PELBX, delivered
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 11 of 17
Page 11 of 17
Page 11 of 17
Page 11 of 17
Page 11 of 17
Page 11 of 17
Page 11 of 17
Page 11 of 17
an entire percentage point of performance above that benchmark thanks to its heavier emphasis on
better performers, including Brazil and Russia. K
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 12 of 17
Page 12 of 17
Page 12 of 17
Page 12 of 17
Page 12 of 17
Page 12 of 17
Page 12 of 17
Page 12 of 17
Index Returns
Source: Morningstar Direct. Data as of 3-31-18. 3-, 5-, 10-, and 15-year returns annualized.
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 13 of 17
Page 13 of 17
Page 13 of 17
Page 13 of 17
Page 13 of 17
Page 13 of 17
Page 13 of 17
Page 13 of 17
Fund Category Returns
Source: Morningstar Direct. Data as of 3-31-18. 3-, 5-, 10-, and 15-year returns annualized.
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 14 of 17
Page 14 of 17
Page 14 of 17
Page 14 of 17
Page 14 of 17
Page 14 of 17
Page 14 of 17
Page 14 of 17
Fund Category Returns (Continued)
Source: Morningstar Direct. Data as of 3-31-18. 3-, 5-, 10-, and 15-year returns annualized.
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 15 of 17
Page 15 of 17
Page 15 of 17
Page 15 of 17
Page 15 of 17
Page 15 of 17
Page 15 of 17
Page 15 of 17
Fund Category Returns (Continued)
Source: Morningstar Direct. Data as of 3-31-18. 3-, 5-, 10-, and 15-year returns annualized.
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 16 of 17
Page 16 of 17
Page 16 of 17
Page 16 of 17
Page 16 of 17
Page 16 of 17
Page 16 of 17
Page 16 of 17
Market Outlook | 1Q 2018
Healthcare Observer | 11 April 2018
Paper Title | 11 April 2018
Healthcare Observer | 11 April 2018
Page 17 of 17
Page 17 of 17
Page 17 of 17
Page 17 of 17
Page 17 of 17
Page 17 of 17
Page 17 of 17
Page 17 of 17
About Morningstar
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 individual
investors, financial advisors, asset managers, and retirement plan providers and sponsors.
www.morningstar.com
?
22 West Washington Street
Chicago, IL 60602 USA
©2018 Morningstar. All Rights Reserved. Morningstar's Market Outlook is produced and offered by Morningstar, Inc., which is
not registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization
(“NRSRO”). Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original
distributor is based. 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 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. The information contained herein is the proprietary
property of Morningstar and may not be reproduced, in whole or in part, or used in any manner, without the prior written consent
of Morningstar. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.