Expert Investor - Fund Selector Asset Class Report October 2017 FSACR_Oct17_BOOK.v2

EI research analysis: US vs European fund flows US funds: Net flows ’15 – June ’17 ($bn) ’15 ’16 June ’17 Fixed income Equity Commodities Alternatives Allocation Fixed income Active Equity Commodities Alternatives Allocation -750 -500 -250 0 250 500 750 1000 Europe funds: Net flows ’15 – June ’17 ($bn) ’15 ’16 June ’17 Fixed income Equity Commodities Alternatives Allocation Fixed income Equity With flows into passive funds not showing any signs of slowing down, we wanted to know the big picture in the past two and a half years. So we have taken the broadest categories and divided them up by region of domicile and whether they are actively or passively managed. – At first glance you will notice that there is a lot more money in US-domiciled funds with net flows of over $800bn in passive equity funds in the past two and a half years alone. The equivalent figure for Europe-domiciled funds is roughly $70bn. – Among the broad categories presented here, active equity funds have lost out the most. In the US, passive equity and fixed-income products have been the clear winners. The picture in Europe is more varied: active allocation (multi-asset) funds have shined the brightest enjoying net flows amounting to $140bn while passive equities have only absorbed about half this figure. – Active European alternatives and fixed-income products have also been big beneficiaries - each has seen roughly $50bn of flows in the past 36 months. Commodities Alternatives Allocation -50 0 50 100 150 Sponsored by T. Rowe Price | 11

Expert Investor - Fund Selector Asset Class Report October 2017 FSACR_Oct17_BOOK.v2 | Page 11