Share with Clients Unpredictable Style Show clients how style performance varies year to year and that picking a winning category isn’t easy. 1998 Highest returns 51.2% LG 17.9 LV 9.5 MG 5.9 MV –3.7 SV Lowest returns –6.5 SG 1999 52.5 MG 46.8 SG 42.6 LG 0.6 LV –5.2 SV –6.8 MV 2000 24.6 MV 18.7 SV 5.7 LV –11.1 MG –12.1 SG –33.5 LG 2001 18.6 SV 5.1 MV –3.4 LV –12.9 SG –21.6 MG –29.1 LG 2002 –8.2 SV –10.0 MV –15.0 LV –32.5 MG –33.2 LG –36.9 SG 2003 52.6 SG 48.9 SV 40.0 MG 35.9 MV 30.6 LG 26.3 LV 2004 24.3 MV 24.0 SV 15.5 MG 14.0 LV 13.5 SG 0.2 LG 2005 16.3 MG 11.5 MV 7.0 LV 5.8 SG 5.1 SV 3.4 LG 2006 25.8 LV 20.0 SV 18.8 MV 10.0 SG 9.6 MG 5.7 LG 2007 19.7 MG 12.3 LG 11.1 SG –0.4 LV –5.5 MV –8.1 SV Large Growth (LG) Large Value (LV) Mid Growth (MG) Mid Value (MV) Small Growth (SG) Small Value (SV) This data is for illustrative purposes only and is not indicative of any investment. The data presented herein are Morningstar indexes, not fund category averages. Please visit http://indexes. morningstar.com for more information. Full disclosure appears on the image after downloading. When investing with style categories, longterm plays can be difficult to call. Many investors are influenced by short-term performance, and advisors can use this image when addressing the risk of overweighting specific style categories with their clients. In general, value stocks had been strong since the early 2000s, but individual size groupings are scattered. Investors standing in 2006 might have seen a need for an overweighting in value, but they would have seen a significant resurgence in growth in 2007. This analysis shows that the performance pattern across style categories can be difficult to predict. It also reinforces the relative calming effect a diversified portfolio could have--softening the highs and lows of trying to pick the winning style. To download this image, go to http://morningstaradvisor.com/handout. You are free to make as many copies as you wish to use with your clients. 52 Morningstar Advisor Winter 2008http://indexes.morningstar.com http://indexes.morningstar.com http://morningstaradvisor.com/handout http://morningstaradvisor.com/handout