Thomson Reuters 2013. All rights reserved.

2013 LIPPERS QUICK GUIDE

TO OE FUND EXPENSES
Thomson Reuters 2013. All Rights Reserved. This report is for informational purposes only, and does
not constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any
entity in any jurisdiction. No guarantee is made that the information in this report is accurate or complete
and no warranties are made with regard to the results to be obtained from its use. In addition, Lipper will
not be liable for any loss or damage resulting from information obtained from Lipper or any of its afliates.
For immediate assistance, feel free to contact Lipper Client Services toll-free at 877.955.4773 or via email at
LipperClientServices@thomsonreuters.com. For more information about Lipper, please visit our website at
www.lipperweb.com.
2013 LIPPERS QUICK GUIDE
TO OE FUND EXPENSES
JUNE 2013
1
INTRODUCTION
1
For more information on Lipper classication/objective, please go to www.lipperweb.com
Please note that the views expressed in this document are
intended as nonconsultative and do not constitute legal advice.
AUTHORED BY:
PETER DE SOUSA BARROTE
FIDUCIARY SERVICES SPECIALIST
FIDUCIARY SERVICES, LIPPER
peter.desousabarrote@thomsonreuters.com
Each year, Lipper produces the Lipper Quick Guide to Fund Expenses. The report
for open-end (OE) funds consists of a table displaying the asset-weighted average
and average total expense ratios by load-type (front-end load/no-load, back-end
load/level-load, and institutional), fund type (actively managed funds, indexed
funds, exchange-traded funds, and funds of funds), and Lipper classication/
objective.
1
The table provides a quick reference to total expense ratios and enables
the reader to compare them between different groupings.
2
2013 LIPPERS QUICK GUIDE TO OE FUND EXPENSES JUNE 2013
OVERALL
Overall total expense ratios on average for actively and passively managed open-
end funds have declined to 1.163%, a 0.7 basis points (bps) reduction from 2011
to 2012. While actively managed funds have, on average, a total expense ratio
decrease of 0.9 bps, indexed funds and exchange-traded funds (ETFs) together
have risen 2.1 bps. The average total expense ratio for ETFs increased from 0.571%
to 0.636%. Both equity and xed income funds, within the actively managed fund
grouping, have dropped their average total expense ratios by 1.3 bps and 0.2 bps,
respectively.
ALL GROUPS
Two patterns concerning total expense ratios are consistent across Lipper
classications/objectives and fund types. The rst demonstrates that asset-
weighted average total expense ratios tend to be lower than average total expense
ratios. While the average total expense ratio computes the simple average for a
set of funds, the asset-weighted average assigns an asset weight based on the
average net assets of a fund. Higher weights are assigned to the expenses of the
larger funds. For each fund, the expense ratio is multiplied by this weight and,
subsequently, its asset-weighted total is summed to obtain the asset-weighted
average for a set of funds. For example, small-cap institutional funds have an
average total expense ratio of 1.204%, compared to an asset-weighted average
ratio of 0.944%. Based on the different calculation methods, the variation between
these two averages stems from economies of scale. Typically, as a fund grows in
asset size xed fund costs are able to be allocated across a larger asset base and
greater operational efciencies may be achieved.

However, economies of scale do not continue indenitely; at a certain asset level
economies of scale decrease at an increasing rate. At some point, large complexes
may even experience scale diseconomies, whereby larger funds cost more to run.
Weighting the expense ratio by the assets of the portfolio tends to equalize the
discrepancy between small funds with higher expenses and larger funds, which
can charge lower expenses.

The second nding concerns load-types. Institutional funds tend to have lower
total expense ratios compared to front-end/no-load funds, while back-end/level-
load funds typically have the highest average and asset-weighted average total
expense ratios. For example, institutional long municipal debt funds average total
FINDINGS
METHODOLOGY
The 2013 Lipper Quick Guide to OE Fund Expenses contains expense ratios for
open-end funds with scal year ends in 2012 and at least six months of operating
expense data. Because Lipper only reports on audited scal expense data derived
from each funds annual report (publicly available two months after the scal year
end for each fund), actual reported fund expenses may appear sluggish in reacting
to market conditions.
3
2013 LIPPERS QUICK GUIDE TO OE FUND EXPENSES JUNE 2013
expense ratio is 0.592%, compared to 0.759% for front-end load/no-load funds.
Back-end load/level-load long municipal debt funds average total expense ratio is
higher still at 1.484%. The expense differences between funds of different load-
types can be partly attributed to 12b-1 and non-12b-1 service fees incurred based
on the method and type of distribution of the fund. Additionally, institutional funds
may only be available to specic investors and, therefore, incur fewer advertising
costs than their retail counterparts.
FUND TYPESINDEX FUNDS AND EXCHANGE-TRADED FUNDS
The table also displays several interesting ndings across fund types. Index funds
and indexed exchange-traded funds (ETFs) are less expensive than actively managed
open-end funds. For example, US diversied equity (USDE) institutional index
funds and USDE ETFs have asset-weighted average total expense ratios of 0.176%
and 0.195%, respectively, versus actively managed USDE institutional funds with
expense ratios of 0.759%. The difference is mostly due to the operating structure of
the funds. Index funds and indexed ETFs are designed to track an underlying index
and index tracking is inherently less expensive than active management.

While not true in all cases, the impact of weighting total expense ratios by asset
level generally produces signicant variations in numbers for index funds due to
the economies of scale. Often, nonmanagement expenses, such as transfer agent
and custodian, more heavily drive economies of scale. In the case of index funds,
these nonmanagement expense components make up a signicant portion of the
total expense ratio, as management fees are already at a minimum due to the
passive management style of the funds. Therefore, weighting the expense ratio by
assets impacts index funds total expense ratio more than actively managed funds.
For example, when considering actively managed front-end load/no-load sector
equity funds, the asset-weighted average represents about 68% of the average
total expense ratio, compared to approximately 48% for front-end load/no-load
sector index funds.
FUNDS OF FUNDS
The asset-weighted average and average total expense ratios for funds of
funds are difcult to compare to non-funds of funds due to differing expense
structures. The fund of funds total expense ratios (displayed in the last lines of
the table) contain expenses known as underlying fund expenses or acquired
fund fees and expenses (AFFE). Underlying fund expenses are incurred from a
funds investments in its underlying funds. Comparing the total expense ratios
for funds of funds and non-funds of funds entails comparing expenses containing
different components. However, mixed-asset non-funds of funds do have similar
average and asset-weighted average total expense ratios to lifestyle funds of
funds and lifecycle funds of funds. This is most likely because they invest in a
similar allocation mix of equity and xed income investments, despite the different
expense components.
4
2013 LIPPERS QUICK GUIDE TO OE FUND EXPENSES JUNE 2013
ACTIVELY MANAGED FUNDS
Average and asset-weighted average total expense ratios for actively managed
funds vary by Lipper classication/objective. Equity funds are divided into ve
groups: US diversied equity, balanced/mixed equity, other domestic equity,
sector equity, and all world equity. These groups are further split into smaller
sub-groups. Across load-types, other domestic equity, sector equity, and all world
equity groups have the highest average and asset-weighted average total expense
ratios. Within equity, the groupings are not consistently more expensive than
one another; however, equity funds are more expensive than xed income funds.
The asset-weighted average for front-end and no-load equity funds is 0.872%,
while the asset-weighted average for front-end and no-load xed income funds is
0.474%.
Fixed income funds are divided into three groups: taxable xed income, money
market, and municipal debt. Across all three load-types, money market funds have
the lowest average and asset-weighted average total expense ratios, ranging from
0.147% to 0.220%. The taxable xed income group has the highest average and
asset-weighted average total expense ratios among the three groupings of funds.
The 2013 Lipper Quick Guide to OE Fund Expenses shows that expense differences
exist across load-types, fund types, and Lipper classications/objectives. Though
the actual expense amounts for funds have changed from year-to-year, the general
trends discussed in this paper have held true over parallel spans of time, indicating
that while actual expenses have changed, the trends underlying them have not.
CONCLUSION
2013 LIPPERS QUICK GUIDE TO OE FUND EXPENSES
FRONT-END LOAD / NO-LOAD BACK-END LOAD / LEVEL-LOAD INSTITUTIONAL
ALL 2012 Total Expense Ratios
Asset-Weighted
Average Average
Asset-Weighted
Average Average
Asset-Weighted
Average Average
A
C
T
I
V
E
L
Y

M
A
N
A
G
E
D

F
U
N
D
S
ALL ACTIVELY MANAGED FUNDS 0.718 1.117 1.097 1.779 0.479 0.912
ALL EQUITY 0.872 1.314 1.703 2.055 0.828 1.126
ALL US DIVERSIFIED EQUITY (USDE) 0.864 1.232 1.694 1.971 0.759 1.057
Large-Cap 0.759 1.110 1.570 1.880 0.686 0.955
Multi-Cap 0.912 1.256 1.869 1.975 0.745 1.023
Mid-Cap 1.005 1.269 1.791 2.009 0.896 1.102
Small-Cap 1.103 1.343 1.786 2.082 0.944 1.204
BALANCED/MIXED EQUITY 0.690 1.152 1.587 1.858 0.769 0.994
OTHER DOMESTIC EQUITY 0.968 1.593 1.726 2.165 0.968 1.301
Equity Income 0.832 1.164 1.645 1.886 0.759 0.997
Specialty Diversied 1.295 1.828 1.811 2.321 1.110 1.465
SECTOR EQUITY 0.911 1.342 1.942 2.144 0.872 1.168
ALL WORLD EQUITY 1.020 1.441 1.900 2.225 0.913 1.245
Global 1.010 1.367 1.815 2.132 0.907 1.215
International 0.949 1.363 1.866 2.166 0.847 1.167
Precious Metals 0.950 1.300 1.893 1.981 0.974 1.001
Other World Equity 1.294 1.623 2.180 2.408 1.059 1.418
ALL FIXED INCOME 0.474 0.730 0.702 1.323 0.284 0.553
ALL TAXABLE FIXED INCOME 0.646 0.890 1.521 1.619 0.542 0.763
ALL DOMESTIC TAXABLE FIXED INCOME 0.616 0.860 1.527 1.592 0.520 0.733
Short/Intermediate Taxable Fixed Income 0.547 0.751 1.435 1.441 0.472 0.642
Long Taxable Fixed Income 0.682 0.936 1.600 1.688 0.634 0.818
WORLD TAXABLE FIXED INCOME 0.937 1.062 1.482 1.780 0.695 0.923
ALL MONEY MARKET 0.212 0.193 0.220 0.198 0.147 0.171
Taxable Money Market 0.220 0.177 0.219 0.185 0.144 0.157
Tax Exempt Money Market 0.187 0.218 0.222 0.232 0.199 0.211
ALL MUNICIPAL DEBT 0.518 0.731 1.329 1.470 0.516 0.569
Short/Intermediate Municipal Debt 0.407 0.674 1.308 1.426 0.485 0.535
Long Municipal Debt 0.595 0.759 1.338 1.484 0.573 0.592
I
N
D
E
X
E
D

F
U
N
D
S
ALL INDEXED FUNDSINCLUDES ETFs 0.163 0.894 1.579 1.989 0.262 0.595
ALL EQUITY 0.167 0.926 1.550 1.996 0.274 0.640
ALL US DIVERSIFIED EQUITY (USDE) 0.164 0.783 1.447 1.787 0.176 0.413
Large-Cap 0.276 0.846 1.794 1.985 0.179 0.364
Multi-Cap 0.125 0.890 1.274 1.708 0.131 0.473
Mid-Cap 0.204 0.569 1.445 1.703 0.168 0.426
Small-Cap 0.211 0.751 1.300 1.745 0.250 0.403
BALANCED/MIXED EQUITY 0.285 0.748 1.909 1.831 0.370 0.492
ALL OTHER DOMESTIC EQUITY 0.140 1.261 1.572 2.160 0.161 1.097
S&P 500 Index 0.123 0.464 1.090 1.289 0.081 0.411
SECTOR EQUITY 0.259 0.544 2.002 1.981 0.393 0.637
ALL WORLD EQUITY 0.212 0.814 1.930 1.881 0.414 0.586
ALL FIXED INCOME 0.147 0.625 1.795 1.904 0.207 0.349
ALL ETFs --- --- --- --- 0.306 0.636
ETFs - USDE --- --- --- --- 0.195 0.350
ETFs - Sector Equity --- --- --- --- 0.397 0.629
ETFs - World Equity --- --- --- --- 0.424 0.583
ETFs - Other Equity --- --- --- --- 0.220 1.301
ETFs - Fixed Income --- --- --- --- 0.268 0.381
ALL FUNDSACTIVE & INDEXED 0.651 1.102 1.100 1.791 0.417 0.859
2013 LIPPERS QUICK GUIDE TO OE FUND EXPENSES
Thomson Reuters 2013. All Rights Reserved. This report is for informational purposes only, and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any
security of any entity in any jurisdiction. No guarantee is made that the information in this report is accurate or complete and no warranties are made with regard to the results to be obtained from
its use. In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its afliates.
Please see www.lipperweb.com for further information regarding Lipper calculation methodologies and Lipper fund classications. For immediate assistance, feel free to contact Lipper Client
Services toll-free at 877.955.4773 or via email at LipperClientServices@thomsonreuters.com.
For institutional use only.
Asset-weighted averages represent the total expenses of each fund in the asset class weighted by the average net assets of each fund. More
weight is assigned to the expenses of the larger funds. The asset-weighted average is intended to represent the expense ratio that is charged
to the average dollar invested in the asset class. The simple average represents the average expenses of all funds in the asset class. Under
this calculation, each fund is assigned equal weight and the value reects the average expense ratio that is charged by the average fund in
the asset class. All funds that invest primarily in other investment companies (funds of funds) have been excluded from the data with the
exception of the Lifecycle and Lifestyle funds. Total expense ratios for these funds include any estimated underlying fund expenses from each
fund of funds most recent prospectus.
FRONT-END LOAD / NO-LOAD BACK-END LOAD / LEVEL-LOAD INSTITUTIONAL
ALL 2012 Total Expense Ratios
(Including Underlying Fund Expenses)
Asset-Weighted
Average Average
Asset-Weighted
Average Average
Asset-Weighted
Average Average
LIFECYCLE (TARGET DATE) FUNDS 0.525 0.991 1.114 1.660 0.721 0.912
Today 0.436 0.953 1.267 1.630 0.721 0.838
2010-2019 0.460 0.908 1.020 1.551 0.656 0.865
2020-2029 0.522 0.974 1.086 1.642 0.702 0.903
2030-2039 0.566 1.015 1.127 1.691 0.748 0.927
2040-2049 0.582 1.039 1.156 1.714 0.770 0.944
2050+ 0.571 1.031 1.162 1.726 0.789 0.956
LIFESTYLE (TARGET ALLOCATION) FUNDS 0.615 1.118 1.582 1.903 0.738 1.029
Conservative 0.515 1.094 1.868 1.903 0.798 1.045
Moderate 0.734 1.168 1.447 1.891 0.787 1.029
Growth 0.567 1.188 1.676 1.956 0.704 1.060
Retirement Income 0.545 0.838 1.840 1.603 0.755 0.726
MANAGEMENT TOTAL EXPENSES
Asset-Weighted
Average Average
Asset-Weighted
Average Average
L
E
V
E
R
A
G
E
D
ALL CE LEVERAGED FUNDS 1.054 1.026 1.224 1.290
ALL EQUITY 1.327 1.325 1.498 1.600
Domestic Equity 1.077 1.190 1.271 1.523
Other Domestic Equity 1.154 1.287 1.356 1.581
Sector Equity 1.440 1.357 1.588 1.581
World Equity 1.439 1.398 1.630 1.719
ALL FIXED INCOME 0.949 0.950 1.119 1.212
Taxable Fixed Income 1.026 1.043 1.213 1.350
Municipal Debt Fixed Income 0.857 0.875 1.004 1.103
World Fixed Income 1.121 1.145 1.332 1.449
ALL CE NON-LEVERAGED FUNDS 0.832 0.883 1.020 1.323
N
O
N
-
L
E
V
E
R
A
G
E
D
ALL EQUITY 0.851 0.936 1.045 1.475
Domestic Equity 0.741 0.798 1.037 2.099
Other Domestic Equity 0.953 0.934 1.056 1.083
Sector Equity 0.574 0.897 0.755 1.223
World Equity 1.033 1.017 1.375 1.614
ALL FIXED INCOME 0.770 0.746 0.937 0.934
Taxable Fixed Income 0.744 0.732 0.933 0.952
Municipal Debt Fixed Income 0.574 0.585 0.684 0.715
World Fixed Income 0.880 0.946 1.022 1.103
ALL CE FUNDSLEVERAGED & NON-LEVERAGED 0.986 0.985 1.161 1.299
2013 LIPPERS QUICK GUIDE TO CE FUND EXPENSES
Thomson Reuters 2013. All Rights Reserved. This report is for informational purposes only, and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any
security of any entity in any jurisdiction. No guarantee is made that the information in this report is accurate or complete and no warranties are made with regard to the results to be obtained from
its use. In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its afliates.
Please see www.lipperweb.com for further information regarding Lipper calculation methodologies and Lipper fund classications. For immediate assistance, feel free to contact Lipper Client
Services toll-free at 877.955.4773 or via email at LipperClientServices@thomsonreuters.com.
For institutional use only.
Asset-weighted averages represent the total expenses of each fund in the asset class weighted by the average net assets of each fund. More
weight is assigned to the expenses of the larger funds. The asset-weighted average is intended to represent the expense ratio that is charged
to the average dollar invested in the asset class. The simple average represents the average expenses of all funds in the asset class. Under
this calculation, each fund is assigned equal weight and the value reects the average expense ratio that is charged by the average fund in
the asset class. All funds that invest primarily in other investment companies (funds of funds) have been excluded from the data with the
exception of the Lifecycle and Lifestyle funds. Total expense ratios for these funds include any estimated underlying fund expenses from each
fund of funds most recent prospectus.
2013 LIPPERS QUICK GUIDE TO FUND EXPENSES
MANAGEMENT TOTAL EXPENSES
Asset-Weighted
Average Average
Asset-Weighted
Average Average
A
C
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I
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E
L
Y
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M
A
N
A
G
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F
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ALL VIP FUNDS 0.611 0.679 0.772 0.925
ALL EQUITY 0.666 0.735 0.836 0.994
ALL US DIVERSIFIED EQUITY (USDE) 0.641 0.719 0.802 0.958
Large-Cap 0.570 0.660 0.733 0.894
Multi-Cap 0.680 0.689 0.830 0.943
Mid-Cap 0.779 0.776 0.944 1.016
Small-Cap 0.815 0.827 0.974 1.058
BALANCED/MIXED EQUITY 0.634 0.655 0.811 0.939
OTHER DOMESTIC EQUITY 0.632 0.659 0.743 0.890
SECTOR EQUITY 0.781 0.765 0.997 1.087
ALL WORLD EQUITY 0.763 0.823 0.959 1.102
Global 0.704 0.792 0.882 1.046
International 0.745 0.787 0.942 1.069
Other World Equity 1.014 1.022 1.260 1.339
ALL FIXED INCOME 0.483 0.490 0.623 0.694
ALL TAXABLE FIXED INCOME 0.527 0.548 0.675 0.768
ALL DOMESTIC TAXABLE FIXED INCOME 0.520 0.530 0.662 0.754
Short/Intermediate Taxable Fixed Income 0.520 0.518 0.665 0.715
Long Taxable Fixed Income 0.520 0.538 0.659 0.777
WORLD TAXABLE FIXED INCOME 0.628 0.681 0.847 0.880
ALL MONEY MARKET 0.157 0.163 0.239 0.271
ALL VIP FUNDS 0.611 0.679 0.772 0.925
2013 LIPPERS QUICK GUIDE TO VIP FUND EXPENSES
Thomson Reuters 2013. All Rights Reserved. This report is for informational purposes only, and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any
security of any entity in any jurisdiction. No guarantee is made that the information in this report is accurate or complete and no warranties are made with regard to the results to be obtained from
its use. In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its afliates.
Please see www.lipperweb.com for further information regarding Lipper calculation methodologies and Lipper fund classications. For immediate assistance, feel free to contact Lipper Client
Services toll-free at 877.955.4773 or via email at LipperClientServices@thomsonreuters.com.
For institutional use only.
Asset-weighted averages represent the total expenses of each fund in the asset class weighted by the average net assets of each fund. More
weight is assigned to the expenses of the larger funds. The asset-weighted average is intended to represent the expense ratio that is charged
to the average dollar invested in the asset class. The simple average represents the average expenses of all funds in the asset class. Under
this calculation, each fund is assigned equal weight and the value reects the average expense ratio that is charged by the average fund in
the asset class. All funds that invest primarily in other investment companies (funds of funds) have been excluded from the data with the
exception of the Lifecycle and Lifestyle funds. Total expense ratios for these funds include any estimated underlying fund expenses from each
fund of funds most recent prospectus.