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©2015 Morningstar Investment Services, Inc. All rights reserved. The Morningstar name and logo are registered marks of Mornin gstar, 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 Mo rningstar, Inc. The information contained in this presentation is the proprietary material of Morningstar Investment Services. Reproduction, transcription or other use, by an y means, in whole or in part, without the prior written consent of Morningstar Investment Services is prohibited.
Morningstar Investment Services
Peter Dugery, SVP
National Sales and Distribution
For Financial Advisor Use Only-Not for Use With the Public. This presentation is not complete without accompanying disclosures.
Who We Are
Morningstar Investment Management
As part of Morningstar’s Investment Management group, Morningstar Investment Services provides fee-based, discretionary asset management programs that financial advisors can offer their clients.
*Data as of June 30, 2015. Includes Morningstar Associates, Ibbotson Associates, Morningstar Investment Services, Morningstar Investment Management Europe, and Ibbotson Associates Australia. **Ibbotson Associates, Inc. was established in 1977, Morningstar Associates, LLC was established in 1999, and Morningstar Investment Services, Inc. was established in 2001.
$180B Total assets under management
and advisement*
30+ Years of asset allocation and
investment research experience
to draw upon**
100+ Investment professionals within
Morningstar’s Investment
Management division
Our Portfolios
Portfolio availability varies based on relationship.
Who We Are
Our Investment Team
All members of the Morningstar Investment Services investment team are CFA charterholders; they bring an average of 20 years of experience, including investing through significant market cycles.
Morningstar’s Investment Management group includes Morningstar Associates, Ibbotson Associates, and Morningstar Investment Se rvices, which are registered investment advisers and wholly owned subsidiaries of Morningstar, Inc.
Working With Morningstar Investment Services
Our Capabilities
We provide a wide range of innovative solutions to financial advisors and their clients. Our lineup of managed portfolios is designed to be a fundamental part of a long-term investing plan.
Availability of portfolios may vary according to business relationship and services provided. Taxable and tax -deferred options available.
Our Investment Process
Portfolio Construction: Overview
To keep our portfolios well positioned through the market’s ups and downs, we use a time-tested, repeatable process.
For illustrative purposes only. There is no assurance that the techniques and strategies discussed are suitable for all inves tors or will yield positive results.
Highlight: Our Manager Research Process
Manager Selection
Making the Most of Active Management
Morningstar, Inc. has been refining the manager research process for decades. Our investment managers are rooted in this expertise.
Dedicated Portfolio Managers trained in Morningstar’s, Inc. fund analysis
Internally generated qualitative reviews
Proprietary performance screens and rankings
In-house software Manager access Collaborative environment
Our Select Stock Basket Portfolios
Select Stock Basket Portfolios
Depth of Research
Morningstar’s stock analysts are recognized by leading publications like The Wall Street Journal and MarketWatch.
Per Hulbert Financial Digest’s performance rankings from the October 2007 bull-market peak through Jan. 31 of 2015, based on performance of Tortoise and Hare model portfolios featured in StockInvestor. The performance of the Tortoise and Hare portfolios managed by Morningstar Investment Services will be different than the ones featured in the StockInvestor.
× Focus and key tenets of their research:
g Look for what we see are superior businesses that trade at discounts to the Morningstar, Inc. Analyst estimate of their fair values
g Free cash flow is what matters, not reported earnings
g A firm that grows without earning its cost of capital destroys long-term business value
g Shareholder value is created by maximizing the return on invested capital
g Focus on firms whose businesses display “moat-like” characteristics.
g Customized portfolio
of individual equities
g 25 to 35 of our highest
conviction stock ideas
g Tailored to a client’s
needs
g Restrict sector, industry,
or individual stock
exposure
g Combine with a portfolio
of fixed-income mutual
funds or ETFs (80/20,
65/35, 50/50)
g $250,000 minimum
g Accommodate current
client holdings*
g Transfer existing holdings
g Portfolio can be built
around client’s other
holdings
g Actively managed to
help achieve added
value
g Buy and sell discipline
g Optimal balance of risk
and reward
g Mindful of tax and cost
implications
Select Stock Baskets Portfolios
Custom Series
Select Stock Baskets go beyond a ‘one size fits all’ approach. These portfolios offer tax management and customization, combined with our investment management expertise.
*Initial and subsequent funding in the client’s account may be in cash, and/or transfer of positions currently held including common stocks, ETFs and mutual funds; due to liquidity restrictions and trading constraints, any position that is transferred in may be rejected and required to be rem ove from the account.
For Illustrative Purposes only. Data and information is subject to change at anytime without notice.
Portfolio tax management does not take into consideration your entire financial plan and should not be considered tax or financial planning advice. Please consult a tax and/or financial professional for advice specific to your individual circumstances.
Select Stock Baskets Portfolios
Our Portfolios
Custom Series
Strategist Series
Global Equity Equity Income Capital Appreciation Small/Mid-Cap Equity Foreign Equity
Tortoise Portfolio Hare Portfolio Dividend Portfolio U.S. Wide Moat Focus
Fee Information
Mutual Fund Portfolios
× Account Minimum: $50,000 (lower in family plan)
× Client fee does not include the mutual funds’ expenses
× Advisor fee can be discounted in 5 bps increments
Competitive Fee Structure
*MIS Minimum Annual Fee is $200 for those accounts not held at BNY.
**Please note that fees may vary based on business relationships.
Mutual Fund Portfolios Up to $500,000 Next $500,000 Next $1MM Over $2MM
Morningstar Investment Services* 0.40% 0.35% 0.30% 0.20%
Advisory Firm** 1.10% 1.05% 1.00% 0.90%
Total Annual Fee 1.50% 1.40% 1.30% 1.10%
ETF Portfolios
× $50,000 account minimum
× Client fee does not include the underlying ETF’s expenses
× Client fee does not include costs associated with custody/clearing/execution
× Advisor fee can be discounted in 5 bps increments
Competitive Fee Structure
*MIS Minimum Annual Fee is $150.
**Please note that fees may vary based on business relationships.
ETF Portfolios Up to $1MM Next $4MM Thereafter
Morningstar Investment Services* 0.30% 0.25% 0.20%
Advisory Firm** 1.10% 1.10% 1.10%
Total Annual Fee 1.40% 1.35% 1.30%
Select Stock Baskets
× Account minimums: Custom Series $250,000, Strategist Series all-equity $100,000, Strategist with fixed-income allocation (80/20, 65/35, 50/50) $250,000
× Client fee does not include costs associated with custody/clearing/execution
× Client fee does not include the underlying mutual fund or ETF expenses, if added to the portfolio
× Advisor fee can be discounted in 5 bps increments
Competitive Fee Structure
*MIS Minimum Annual Fee is $550 for Strategist Series and $1375 for Custom Series.
**Please note that fees may vary based on business relationships.
Select Stock Baskets Up to $1MM Next $4MM Thereafter
Morningstar Investment Services* 0.55% 0.50% 0.45%
Advisory Firm** 1.10% 1.10% 1.10%
Total Annual Fee 1.65% 1.60% 1.55%
Resources for You
Website Tour
Dedicated Web Platform
For illustrative purposes only.
Website Tour
Tools to Help You Analyze Portfolios
For illustrative purposes only.
Website Tour
Risk Tolerance Questionnaire and Co-Branded Proposal
For illustrative purposes only.
Website Tour
Robust Reports for Current Clients
For illustrative purposes only.
Website Tour
Supplementary Marketing Material
For illustrative purposes only.
Working With Morningstar Investment Services
Your Sales Team
Reach our sales team members at +1 877 626-3224
General Information
+1 877 626-3227
Internal Service Representatives
www.mp.morningstar.com
Peter Dugery
National Director
+1 312 696-6040
Region 1—Aaron Peterson
Region 2—Justin Stender
Region 3—Steven Geiger
Region 4—Brad Murphy
Region 5—Mike Reeves
Region 6—John Green
Region 7—Todd Schaul
Region 8—Tracy Unger
Region 9—Adam Herakovich
Region 10—Andy Justice
Region 11—Matthew Ochoa
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Disclosure
The opinions expressed herein are those of Morningstar Investment Services, are as of the date written and are subject to cha nge without notice, do not constitute investment advice and are provided solely for informational purposes and therefore are not an offer to buy or sell a security; and are not warr anted to be correct, complete or accurate. Morningstar Investment Services shall not be responsible for any trading decisions, damages, or other loses resulting from, or related to , the information data, analyses or opinions or their use. The Morningstar Investment Management division is a division of Morningstar and includes Morningstar Associates, Ibbotson Ass ociates, and Morningstar Investment Services, all registered investment advisors and wholly owned subsidiaries of Morningstar, Inc. Ibbotson Associates is a registered investment advisor and wholly-owned subsidiary of Morningstar and serves as a sub-advisor to the Morningstar Managed Portfolios program. Past performance is no guarantee of future results. Neither diversification nor asset allocation ensure a profit or guarantee against a loss. Portfolio The portfolio returns presented are derived from seeded portfolios. For inception dates, please refer to our Websit e for a complete list. Each model portfolio is similar to the investment strategies managed for clients on a discretionary basis under the Morningstar Managed Portfolios program (‘Program ’). Each model portfolio is designed to achieve a certain strategy and consists primarily of mutual funds (‘MF’), exchange -traded funds (‘ETF’) and equity securities (‘Equity’) (each a ‘Strategy Portfolio’, collectively ‘Strategy Portfolios’) Each Strategy Portfolio will invest in one or a combination of the aforementioned securities. The Strategy Portfolios have similar investment objectives and strategies as the portfolios recommended to individual clients . The purpose in presenting Strategy Portfolio performance is to provide a historical indication of the performance of the Strategy Portfolio. The Strategy Portfolio may not have containe d and/or currently contain the same holdings as the holdings currently underlying this Strategy Portfolio.
