Mutual Fund Broad diversification, distinctive ...

Morningstar Investment Services

Mutual Fund Portfolios Asset Allocation

Broad diversification, distinctive, independent research and progressive risk management in five core model portfolios that span the risk spectrum.

A range of core choices for every stage of your lifetime

Our investment team creates these diversified portfolios using a research-driven process supported by independent fund analysis from Morningstar, Inc. and regular meetings with fund managers.

Ibbotson Asset Allocation In investing, the essentials matter. That's why we start with research from our affiliate, Ibbotson Associates--a leading authority on asset allocation-- to build our portfolios. Ibbotson Associates have shown that the mix of assets in a portfolio can have a greater impact on investment returns than timing markets or picking stocks. Guided by this research, we use Ibbotson's risk and return forecasts to develop a strategic asset allocation for our portfolios.

Morningstar Data We think our independent approach sets us apart. Once we've determined a portfolio's asset allocation, we sift through thousands of investments to identify those which we think are worthwhile. Our research process is backed by trusted data from our parent company, Morningstar, Inc. From there, we evaluate each potential holding using a proprietary methodology. Only those with our highest conviction make it into your portfolio.

Active Management Because markets are in constant motion, we don't take a `set it and forget it' approach. We're firm believers in active investing, and embrace an independent approach by selecting flexible managers or lesser-known boutique shops--seeking those with the potential to deliver above-average risk-adjusted results over the long term.

Face-to-Face Research Before we invest in a fund, we want to understand the people behind it. We meet one-on-one with fund managers, asking detailed questions to uncover how they make decisions. We look for those who 'eat their own cooking' by investing their own personal savings in the funds they oversee.

Inside Our Investment Process

Each portfolio is created using a continual, five-step process.

3 Capital Markets Assumptions Ibbotson Associates' respected asset class research forms the building blocks of our portfolios--starting with real-world data on how asset classes perform over time.

3 Strategic and Dynamic Asset Allocation

3 Manager Selection

3 Portfolio Construction

3 Ongoing Monitoring

Our investment professionals Each potential holding As markets change, so do

In this step, we use Ibbotson meet personally with undergoes careful scrutiny-- our portfolios. Our investment

research to develop an managers and evaluate their including risk and expense team monitors them each

efficient asset allocation mix investment styles using a reviews--to help deter-

day to stay well-positioned

designed to maximize return five-pillar system to identify mine if it's a good fit within and risk-aware through

for a given level of risk.

the most appropriate a portfolio.

the market's ups and downs.

strategies to include in

our portfolios.

Asset Allocation Portfolios

Our model portfolios are designed to put your needs

We offer both taxable and tax-deferred (shown below)

front and center--where they belong. To select

portfolios for investors in non-qualified and qualif-

a portfolio, talk to your financial advisor, who can help ied accounts. The taxable versions are designed to avoid

you build a wealth strategy with your long-term

asset classes that are not tax efficient and will

goals in mind.

invest in municipal bonds to earn tax-exempt income.

Active/Passive 20 / 80

Active/Passive 40 / 60

Active/Passive 60 / 40

Active/Passive 80 / 20

Portfolios Aggressive Growth

% Asset Allocation Goal

58 U.S. Stocks

Long-term capital appreciation. Designed to allow investors to

30 International Stocks

participate fully in the growth the stock market can offer,

5 Real Estate REITS Active/tPhaespsoirvtfeolio invests pAricmtaivriely/iPnadsosmiveestic and foreiAgncteiqvueit/iPesa.ssive

0 Taxable Bonds

20 / 80

40 / 60

60 / 40

5 Alternatives

2 Short Term Reserves

Aggressive Growth

Growth

48 U.S. Stocks

Long-term capital appreciation. Allows investors to take

Mom2e3ntuInmternational StocksMomentumadvantage of theMpootemnteianltfuormstock market groMwtohmbyeinntvuemsting

20/850 Real Estate REITS 40/60 primarily in dome6st0ic/A4acn0tdivfoer/ePigansesqivueities, whil8e0s/eA2eck0itnivge/Passive

15 Taxable Bonds

to cushion equity ma2rk0et/d8o0wnturns with modest e4x0po/su6r0e to

7 Alternatives

fixed-income securities.

2 Short Term Reserves

Growth

Moderate Growth

Aggressive

Growth

38 U.S. Stocks

Long-term growth with moderate volatility. Built with a focus

18 International StockMs omentumon providing balaMncoedmaenndtuvamried exposure by Minvoemstienngtiunmboth

4 Real Estate REITS 20/80 equity and fixed-i4n0co/m60e securities.

60/A4c0tive/Passive

30 Taxable Bonds

20 / 80

8 Alternatives

2 Short Term Reserves

e

Moderate

Growth

Income & Growth

Growth

30 U.S. Stocks

Ag1g0resIsnitveernational Stocks Gro0wthReal Estate REITS

45 Taxable Bonds 10 Alternatives 5 Short Term Reserves

Moderate capital appreciation combined with current income.

Combines the grMowothmpeontetnutmial of equities witMh tohembeanlatnucme that fixed-income20se/c8u0rities can provide. 40/60

ve

LInocnogm-Rea&nge

Growth

Conservative

Moderate Growth

19 U.S. Stocks

Protection from capital loss and a safeguard against inflation.

Gro6wthInternational Stocks AggressiIvnevested in fixed-income and equity securitiesM, ito'smbesntt-um

0 Real Estate REITS Growth suited for investors who value current income2a0n/d8s0tability over

55 Taxable Bonds

all else.

13 Alternatives

7 Short Term Reserves

U.S. Stocks

International Stocks

Real Estate REITS

Taxable Bonds

Alternatives

Short Term Reserves

e

MCoinds-Rearvnagteive

LIGnorcnoogwm-tReha&nge

CMonosdeerrvaatteive Growth

InGcroomweth& Growth

MAogdgererassteive GGrroowwtthh

Growth

Range

Figures are based on a recent allocation, and are subject to change. Asset classes shown are Morningstar, Inc. category groups. Allocation of portfolios at the individual account level may vary.

Short-Range

Mid-Range

Long-Range

Conservative

Income & Growth

Moderate Growth

22 West Washington Street Chicago Illinois 60602 USA

+1 877 626?3227 global.mis mis@

About Morningstar Investment Services We're committed to helping financial advisors create better outcomes for investors like you.

Together, we offer the professional guidance and access to strategies that can help you achieve your goals. Our model portfolios are designed to be part of a long-term investing plan that helps meet your needs at each stage of your lifetime.

Important Information It is important to note that investments in securities (e.g., mutual funds, exchange-traded funds, common stocks) involve risk and will not always be profitable.

Neither diversification nor asset allocation ensure a profit or guarantee against a loss.

Morningstar Investment Services does not guarantee that the results of its advice, recommendations, or the objectives of your portfolio will be achieved. Morningstar Investment Services does not guarantee that negative returns can or will be avoided in any of its portfolios. An investment made in a security may differ substantially from its historical performance and as a result, you may incur a loss. Past performance is no guarantee of future results.

The Morningstar Managed Portfolios program ("Program") is offered by Morningstar Investment Services and is intended for citizens or legal residents of the United States or its territories. This Program can only be offered by a registered investment advisor or investment advisor representative.

The Program includes various strategies available to individuals and institutions primarily through arrangements Morningstar Investment Services has with various unaffiliated registered investment advisors. Within the Program, Morningstar Investment Services or its investment advisory affiliate provides discretionary investment advisory services.

In addition to the Program, Morningstar Investment Services also offers model portfolios to third-party advisory programs ("Advisory Program") of financial institutions on a non-discretionary basis as a strategist. Under a strategist arrangement, the Advisory Program has full discretion to invest the Advisory Program client accounts in accordance with the model or deviate from the model provided by Morningstar Investment Services.

?2015 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. TAMP-200-010915

Morningstar Investment Services

Mutual Fund

Designed for all stages of retirement, each model portfolio

in the series follows a targeted, endowment-like

Portfolios

approach to help support the shift from accumulating assets

to spending them.

Retirement Income

Risk-managed portfolios for each stage of retirement

We created the Retirement Income series of portfolios to help deliver a mix of capital appreciation and income to support your spending needs as you move into retirement.

The Shift Into Retirement Retirees often face a quandary--preserving wealth while achieving the growth needed to sustain future withdrawals. To help ease the shift into retirement, the portfolios aim to strike a balance between capital stability and growth by spreading investments across a broad range of asset classes. This helps support regular payouts without courting some risks common to other incomeoriented strategies.

Inside the Retirement Income Portfolios

To help meet the targeted spending goals, the Retirement Income portfolios invest in stock, bond, and alternative mutual funds, with each type of fund playing its own valuable role.

Stocks: Growth 3 Stocks of companies large and

small, the world over 3 Emphasize undervalued, not just

high-yielding, stocks 3 Aim to responsibly compound

portfolio value

Bonds: Stability 3 Widely diversified across sectors,

geographies 3 Emphasize total return, not yield alone 3 Aim to generate income, stabilize

portfolio value

Alternatives: Manage Volatility 3 Different than traditional stock or

bond funds 3 Returns less sensitive to broad

market currents 3 Aim to further diversify, cushion portfolios

The Total Return Advantage Many "income" strategies rely on high-yielding bonds, dividend-paying stocks, or complex securities to generate payouts. Investors often like this approach, as it suggests income payments alone can fund their spending--without dipping into principal. Yet such income strategies can court excessive risks, with the potential for jarring volatility. By contrast, a "total return" approach aims to both generate income and grow capital, helping retirees avoid the shortcomings of singularly income-focused approaches.

Endowment-Like Approach The portfolios adapt an approach widely used by universities and philanthropic organizations, who invest across a wide variety of asset classes to support their future spending needs and reinvest the excess back into the fund, reaping the benefits of compounding. Like endowments, the portfolios invest not just in traditional stocks and bonds, but also in less traditional strategies to help diversify and stabilize their returns without forsaking the opportunity for growth.

Powerful Asset Class Research In constructing the portfolios, we start with research from our affiliate, Ibbotson Associates--a leading authority on asset allocation. They've shown that the mix of assets in a portfolio can have a greater impact on investment returns than timing markets or picking stocks, and they estimate the future returns and volatility of every asset class we include in the portfolios. This helps us set expectations for the spending rate each portfolio will support, and alter the mix of investments as needed.

Retirement Income Portfolios

Growth

Each portfolio aims to support a targeted annual distribution over the recommended time horizon while

Active/Passive

Active/Passive

It's important to not2e0th/at8i0n any given year, a p4o0rt/fo6li0o's

returns could be more or less than the target due to

striving to deliver capital preservation. To help

market fluctuations. Average payouts over a longer time

deliver consistent rates of return and downside pro-

horizon are more likely to achieve these objectives.

tection, each portfolio may invest in mutual

To select a portfolio, talk to your financial advisor, who

Afugngdrsesspsaivnening a broad range of market segmentsM. omentucman help you buiMld oamweenatltuhmstrategy focuseMd oonmentum

Growth

20/80 your long-term g4o0al/s6.0

60/A4c0tive/Passive

20 / 80

Portfolios

Moderate Growth

Retirement Income

GLroonwg-tRhange

% Asset Allocation Goal

26 U.S. Stocks

Ag9greIsnsteivrneational Stocks G4rowtRheal Estate REITS

44 Taxable Bonds

12 Alternatives

5 Short Term Reserves

A steady rate of return driven by capital appreciation and

income over 20 orMmoorme eyenatrusm. Aims to support Ma 4o%maennntuuaml distribution over t2hi0s/t8im0e horizon without fully 4de0p/l6e0ting

the account's assets.

eve

LInocnogm-Rea&nge

Growth

Retirement Income

MMoidd-eRraantege Growth

17 U.S. Stocks

A steady rate of return driven by capital appreciation

Gr8owthInternational Stocks Aggressainvdeincome over ten to 20 years. Aims to suppoMrtoam5%enatnunmual

4 Real Estate REITS Growthdistribution over this time horizon without fully2d0e/p8le0ting

48 Taxable Bonds

the account's assets.

18 Alternatives

5 Short Term Reserves

ge -Range

MCoinds-Rearvnagteive

LInoRScnheogotmir-rtRee-mRa&anennggteeIncome Growth

Mo73deraUInt.tSee.rnSatoticoknsal Stocks Growth AforstceaapdiytarlaatpeporfecreiatutAirongngdorrvieveesrnstwibvoyeitnoc1o0myeewarist.hAsiommsetopostuepnptoiarlt a

Gro0wthReal Estate REITS

6% annual distributiGonroowvetrhthis time horizon without fully

69 Taxable Bonds

depleting the account's assets.

13 Alternatives

8 Short Term Reserves

Short-Range

Retirement Income

MUidlt-rRa aSnhgoert-Range

0 U.S. Stocks

Capital preservation and a steady rate of return driven by

Lon0g-RaInntegrenational StocksConservaitnivcoeme over one toInficvoemyeear&s. Aims to support aM7%odaenrnautael

0 Real Estate REITS

distribution over thGisrtoimwethhorizon without fully dGeprolewtintgh

75 Taxable Bonds

the account's assets.

0 Alternatives

25 Short Term Reserves

U.S. Stocks

International Stocks

Real Estate REITS

Taxable Bonds

Alternatives

Ultra Short-Range Short-Range

Mid-Range

Long-Range

Short Term Reserves

Conservative

Income & Growth

Conservative

Figures are based on a recent allocation, and are subject to change. Asset classes shown are Morningstar, Inc. category groups. Allocation of portfolios at the individual account level may vary.

22 West Washington Street Chicago Illinois 60602 USA

+1 877 626?3227 global.mis mis@

About Morningstar Investment Services We're committed to helping financial advisors create better outcomes for investors like you.

Together, we offer the professional guidance and access to strategies that can help you achieve your goals. Our model portfolios are designed to be part of a long-term investing plan that helps meet your needs at each stage of your lifetime.

Important Information It is important to note that investments in securities (e.g., mutual funds, exchange-traded funds, common stocks) involve risk and will not always be profitable.

Neither diversification nor asset allocation ensure a profit or guarantee against a loss.

Morningstar Investment Services does not guarantee that the results of its advice, recommendations, or the objectives of your portfolio will be achieved. Morningstar Investment Services does not guarantee that negative returns can or will be avoided in any of its portfolios. An investment made in a security may differ substantially from its historical performance and as a result, you may incur a loss. Past performance is no guarantee of future results.

The Program includes various strategies available to individuals and institutions primarily through arrangements Morningstar Investment Services has with various unaffiliated registered investment advisors. Within the Program, Morningstar Investment Services or its investment advisory affiliate provides discretionary investment advisory services.

In addition to the Program, Morningstar Investment Services also offers model portfolios to third-party advisory programs ("Advisory Program") of financial institutions on a non-discretionary basis as a strategist. Under a strategist arrangement, the Advisory Program has full discretion to invest the Advisory Program client accounts in accordance with the model or deviate from the model provided by Morningstar Investment Services.

The Morningstar Managed Portfolios program ("Program") is offered by Morningstar Investment Services and is intended for citizens or legal residents of the United States or its territories. This Program can only be offered by a registered investment advisor or investment advisor representative.

?2015 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. TAMP-205-010915

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