Disclosures:
Exhibit 1: In US dollars. Global electronic order book (largest 50 exchanges). Source: World Federation of Exchanges.
Exhibit 2: Beginning sample includes US equity mutual funds as of the beginning of the 15-year period ending December 31, 2015.
Survivors are funds that were still in existence as of December 31, 2015. Non-survivors include funds that were either liquidated or
merged. Outperformers are funds that survived and beat their respective benchmarks over the period.
Exhibit 3: The graph shows the proportion of US equity mutual funds that outperformed and underperformed their respective
benchmarks (i.e., winners and losers) during the initial 10-year period ending December 31, 2010. Winning funds were re-
evaluated in the subsequent five-year period from 2011 through 2015, with the graph showing winners (outperformers) and
losers (underperformers). Fund count and percentages may not correspond due to rounding.
Data Source (Exhibits 2 and 3): Analysis conducted by Dimensional Fund Advisors using data on US-domiciled mutual funds
obtained from the CRSP Survivor-Bias-Free US Mutual Fund Database, provided by the Center for Research in Security Prices,
University of Chicago. Sample excludes index funds. Benchmark data provided by MSCI, Russell, and S&P. MSCI data © MSCI 2016,
all rights reserved. Russell data © Russell Investment Group 1995–2016, all rights reserved. The S&P data are provided by Standard
& Poor’s Index Services Group. Benchmark indices are not available for direct investment. Their performance does not reflect the
expenses associated with the management of an actual portfolio. Mutual fund investment values will fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Diversification neither assures a profit nor guarantees against a loss in
a declining market.
Exhibit 4: In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses
associated with the management of an actual portfolio. US Small Cap Index is the Fama/French US Small Cap Index; US Large Cap
Index is the Fama/French US Large Cap Index; Long-Term Government Bonds Index is 20-year US Government Bonds; Treasury Bills
are One-Month US Treasury bills; Inflation is the Consumer Price Index. Fama/French data provided by Fama/French. Eugene Fama
and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP. Bonds,
T-bills, and inflation data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by
Roger G. Ibbotson and Rex A. Sinquefield). Past performance is no guarantee of future results.
Exhibit 5: Relative price is measured by the price-to-book ratio; value stocks are those with lower price-to-book ratios.
Profitability is a measure of current profitability, based on information from individual companies’ income statements.
Exhibit 6:
Number of holdings for the S&P 500 and MSCI All Country World Index–Investable Market Index (MSCI ACWI IMI) as of
December 31, 2015. Indices are not available for direct investment and their performance does not reflect the expenses associated
with the management of an actual portfolio. International investing involves special risks such as currency fluctuation and political
instability. Investing in emerging markets may accentuate these risks. Past performance is not a guarantee of future results. The S&P
data are provided by Standard & Poor‘s Index Services Group. MSCI data © MSCI 2016, all rights reserved.
Exhibit 7: In US dollars. Chart is for illustrative purposes only. Index descriptions for asset groups: US Large Cap is the S&P 500
Index, provided by Standard & Poors Index Services Group. US Large Cap Value is the Russell 1000 Value Index. US Small Cap is
the Russell 2000 Index. US Small Cap Value is the Russell 2000 Value Index. Russell data © Russell Investment Group 1995–2016,
all rights reserved. US Real Estate is the Dow Jones US Select REIT Index, provided by Dow Jones Indexes. International Large Cap
Value data provided by Fama/French from Bloomberg and MSCI securities data. International Small Cap Value data compiled by
Dimensional from Bloomberg and Style Research securities data. Emerging Markets is the MSCI Emerging Markets Index (gross
dividends), © MSCI 2016, all rights reserved. Five-Year US Government Fixed is the Barclays Capital Treasury Bond Index 1−5
Years, formerly Lehman Brothers, provided by Barclays Bank PLC. Indices are not available for direct investment. Index performance
does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of
future results.
Past performance is no guarantee of future results. This information is provided for educational purposes only and should not be
considered investment advice or a solicitation to buy or sell securities. OpenCircle Wealth Partners is an investment advisor
registered with the State of Connecticut
Pursuing a Better
Investment Experience
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Focus on what you can control
A financial advisor can create a plan tailored to your
personal financial needs while helping you focus on
actions that add value. This can lead to a better
investment experience.
Look beyond the headlines
Daily market news and commentary can challenge
your investment discipline. Some messages stir
anxiety about the future while others tempt you to
chase the latest investment fad. When tested, consider
the source and maintain a long-term perspective.
Manage your emotions
Many people struggle to separate their emotions
from investing. Markets go up and down. Reacting
to current market conditions may lead to making
poor investment decisions at the worst times.
Embrace market pricing
The market is an effective, information-processing
machine. Millions of participants buy and sell
securities in the world markets every day, and the
real-time information they bring helps set prices.
World Equity Trading in 2015
Daily
Average
Number
of Trades
Dollar
Volume
$447.3
billion
98.6
million
Don’t try to outguess the market
The market’s pricing power works against mutual
fund managers who try to outsmart other participants
through stock picking or market timing. As evidence,
only 17% of US equity mutual funds have survived
and outperformed their benchmarks over the past
15 years.
US Equity Mutual Fund Performance
43%
Survive
17%
Outperform
15 Years
2,758 funds at beginning
Resist chasing past performance
Some investors select mutual funds based on past
returns. However, funds that have outperformed
in the past do not always persist as winners. Past
performance alone provides little insight into
a fund’s ability to outperform in the future.
Consider the drivers
of returns
Academic research has identified
these equity and fixed income
dimensions, which point to
differences in expected returns.
These dimensions are pervasive,
persistent, and robust and can be
pursued in cost-effective portfolios.
Dimensions of Expected Returns
EQUITIES FIXED INCOME
Market
Equity premium—stocks vs. bonds
Company Size
Small cap premium—small vs. large companies
Term
Term premium—longer vs. shorter maturity bonds
Credit
Credit premium—lower vs. higher credit quality bonds
Relative Price
Value premium—value vs. growth companies
Profitability
Profitability premium—high vs. low profitability companies
Practice smart diversification
Diversification helps reduce risks that have no
expected return, but diversifying within your home
market is not enough. Global diversification can
broaden your investment universe.
Reactive Investing in a Market Cycle
HIGHER PRICES
LOWER PRICES
Optimism
Elation
Fear
Optimism
Nervousness
Creating an
investment plan to fit
your needs and risk tolerance
Structuring a portfolio along
dimensions of expected returns
Diversifying broadly
Reducing expenses and turnover
Minimizing taxes
Avoid market timing
You never know which market segments will
outperform from year to year. By holding a globally
diversified portfolio, investors are well positioned
to seek returns wherever they occur.
Let markets work for you
The financial markets have
rewarded long-term investors.
People expect a positive return
on the capital they supply and,
historically, the equity and bond
markets have provided growth
of wealth that has more
than offset inflation.
Tech Funds
on the Rise
The Five
Best Funds
Buy Gold!
DOW DIVES 500 POINTS
Housing Market Booming!
GOLD
MARKET
BUST
Do Outperforming US Equity Mutual Funds Persist?
2001–2010
2,758 funds at beginning
2011–2015
20% Outperformed
541
funds
37%
Diversification does not eliminate the risk of market loss. There is no guarantee investment strategies will be successful.
This information is for illustrative purposes only. See back page for additional exhibit information and important disclosures.
Past performance is no guarantee of future results. Indices are not available for direct investment. Their performance does not reflect the
expenses associated with the management of an actual portfolio.
S&P 500
1 country, 500 stocks
MSCI All Country
World Index (IMI)
46 countries, 8,716 stocks
Home Market
Index Portfolio
Global Market
Index Portfolio
Annual Returns by Market Index
2001 2003 2005 2007 2009 2011 2013 2015
US Large Cap
US Large Cap
Value
US Small Cap
US Small Cap
Value
US Real Estate
Intl Large Cap
Value
Intl Small Cap
Value
Emerging
Markets
Five-Year US
Govt Fixed
HIGHER
RETURN
LOWER
RETURN
Growth of a Dollar, 1926–2015 (Compounded monthly)
1926 1956 1976 1996 2015
$10,000
$1,000
$100
$10
$1
$5,386
US Large Cap Index
$16,743
US Small Cap Index
$13 US Inflation (CPI)
$135 Long-Term
Government Bonds Index
$21 Treasury Bills