In This Edition

Building a New Financial Order 1 Monthly Portfolio Disclosure 1 Industry Conferences: Distribution Trends 1

Wealth Management Developments 1 Apple Stock Popularity in Retirement Funds 1 Funds Allocation Regional Comparison 2 Top 20 Favorite Stocks 2

U.S. and European Fund Foreign Assets 3 International fund Reporting Practices 3Building a New Financial Order

An interview with Suzanne L. Duncan, IBM Institute for Business Value By Kathleen Higgins Sanchez – FactSet Global Fund Contribution Which forces are disrupting the financial services industry? What will clients pay for? How should firms prepare for the future? What steps should financial services firms take to ensure future profits? And what do transparency and sustainability really mean to the financial industry? The IBM Institute for Business Value surveyed over 2,750 industry participants worldwide (33% from America, 35% from EMEA and 32% from Asia) over 18 months to find the answers to these tough questions and gain a better understanding of the future of investment management Continued on page 4

U.S. and European Funds’ Foreign Equity Investments

Of the 30,000 funds* surveyed, European domiciled funds have collectively invested USD 1.7 Tril. in foreign equities. The U.S. market is by far the first country of investment for European Mutual funds.

U.S. domiciled mutual funds have invested USD 2.2 Tril. in foreign equities. The UK, Japan, Canada and Switzerland are their first countries of investments.

Regions # Funds Asset M. $

Europe 15 291 2 526 150

North America 10 130 860 923

Asia 6 223 642 050

Pacific 3 162 68 519

Latin America 2 756 118 931

Middle East 2 144 10 493

Africa 1 777 31 203

European Mutual Funds region focus

Regions # Funds Asset M. $

North America 6 278 5 486 663

Europe 5 310 1 205 865

Asia 3 610 738 930

Latin America 2 428 141 541

Middle East 2 066 23 635

Pacific 1 684 84 234

Africa 1 015 47 744

US Mutual Funds region focus

* FactSet Q1 2011 Continued on page 2

June 2011

Monthly Portfolio Disclosure in Europe and U.S. By Olivier de Bellescize – VP, Global Fund Contribution, FactSet The level of sophistication of institutional investors, wealth managers and fund selectors has probably never been so high. The need for more accurate and timely fund data, to run complex risk and performance analysis, has drastically impacted the disclosure practice of the fund management Industry. Continued on page 4

Mutual Fund Industry Conferences: Latest distribution trends Each year our team participates in major fund industry conferences to understand trends in the fund distribution to accommodate both the data needs of the fund buyers and the communication needs of the fund managers. FactSet is one of the major data channels between fund managers and professional fund buyers. FactSet’s Global Fund Contribution team maintains close contacts with hundreds of international asset managers that trust FactSet as their data partner.

Continued on page 5

Wealth Management Thrives in Difficult Market Conditions By Federica Kralj and Michael Medvinsky, FactSet Wealth Management Rising inflation and the volatility of financial markets over the last year has placed banks under an increasing amount of pressure, with the industry experiencing one of the worst crises in decades. Moreover, competition has become tougher and investors have become more sophisticated and have gained a greater global perspective. Demand for wealth advice is thriving and difficult market conditions will make it even more important for investors to assess the performance of their portfolio managers.

Continued on page 6

FactSet Insight: Are you an Apple stockholder? According to the article "Chances Are, You're an Apple Stockholder" by The Wall Street Journal, few stocks affect the performance of so many retirement portfolios as Apple. In recent years, the price of Apple's stock has fluctuated dramatically: at one point losing 66% of its value, at other times it has quadrupled in price. Given the volatility of this growth stock, the popularity of Apple in mutual funds as well as hedge funds may come as a surprise to many.

Continued on page 7

To access previous editions of the FactSet Fund Center Report, visit: www.factset.com/data/data/lionsharesreport

FactSet 2

Country Focus of Investment

Countries # Funds Asset M. $

United States 8 935 746 453United Kingdom 10 073 582 329

France 10 426 394 436

Germany 9 987 319 424

Sweden 4 446 241 586

Switzerland 8 730 225 506

Japan 3 709 146 971

Netherlands 9 653 136 643

Hong Kong 3 619 109 066

China 3 053 100 036

Brazil 2 344 98 935

Italy 6 853 93 860

Spain 8 343 89 895

Canada 4 107 76 165

South Korea 2 042 75 054

Russian Federation 1 828 73 198

India 1 564 71 383

Australia 3 110 67 483

Finland 5 300 55 096

Taiwan 1 674 53 156

European Mutual Funds Top countries of

investment

With USD 746 Bn. invested in U.S. equities, European funds invest more in U.S. stocks than in any single European country.

Countries # Funds Asset M. $

United States 5 858 5 210 742

United Kingdom 3 489 287 079

Japan 1 737 218 734

Canada 3 722 194 440

Switzerland 3 451 183 489

France 2 020 155 849

Germany 1 846 133 976

Brazil 1 848 122 671

China 2 454 109 796

Hong Kong 2 073 103 099

Netherlands 3 070 101 927

South Korea 1 226 87 368

Australia 1 653 82 583

Taiwan 1 124 68 485

India 1 107 61 017

Ireland 3 077 60 927

South Africa 996 46 706

Mexico 1 162 44 585

Russian Federation 915 43 297

Spain 1 302 39 488

US Mutual Funds Top countries of

investment

Of 6,500 U.S. funds, 3,489 funds invest in UK companies for over USD 287 Bn. The UK equity market is the first country of foreign investments for U.S. funds, followed by Japan and Canada.

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FactSet’s Mutual Funds Global Coverage

Region # Funds Equity Asset M. $ Total Asset M. $

North America 8 637 8 328 958 9 465 517

Europe 16 390 4 196 774 7 565 270

Asia 3 423 678 161 771 777

Pacific 437 117 929 131 913

Latin America 832 55 273 68 183

Africa 342 44 276 62 020

Middle East 607 7 026 9 516

Total 30 668 13 428 397 18 074 196

Analyzed assets

How you can use FactSet Mutual Fund database? The FactSet Mutual Funds database provides portfolio details for over 30,000 equity mutual funds. Fund managers can publish their fund information and their contact details on FactSet’s Mutual Funds platform. Fund buyers, investment advisors and wealth managers can access FactSet's Mutual Fund data through FactSet applications or via an XML-based data feed. Contact our Fund Publishing team: factsetfundcenter@factset.com U.S. +1.212.849.4040 Europe +33.1.72.22.21.24

A large number of mutual funds are invested in the same stocks. Big companies like

Telefonica or Total in Europe or Microsoft, JP Morgan, and Apple in the U.S. are found in

one-third of the funds.

Top 20 Favorite Stocks by European and U.S. Mutual Funds

Companies # Funds Asset M. $

Telefonica SA 5 060 19 313Total SA 4 773 32 764

Banco Santander 3 914 14 259

BNP Paribas SA 3 881 25 944

Allianz SE 3 793 19 496

E.ON AG 3 659 15 327

Sanofi 3 588 22 982

Siemens AG 3 549 27 476

France Télécom SA 3 400 12 037

AXA SA 3 350 18 424

Bayer AG 3 192 18 406

Nestlé SA 3 084 33 055

Eni SpA 3 074 13 892

Banco Bilbao Viz. 3 025 7 446

Novartis AG 3 006 22 081

Vodafone Group 2 923 30 768

Roche Holding AG 2 870 19 738

BASF SE 2 859 21 872

Nokia Oyj 2 829 8 391

ArcelorMittal SA 2 817 7 870

European Mutual Funds Top 20 favorite

stocks

Companies # Funds Asset M. $

Microsoft Corp. 1 848 57 872

JPMorgan Chase 1 687 53 569

Apple, Inc. 1 644 92 586

Google, Inc. 1 522 48 882

Chevron Corp. 1 517 56 790

Pfizer, Inc. 1 469 48 332

Wells Fargo & Co. 1 468 47 834

Exxon Mobil Corp. 1 459 70 494

Oracle Corp. 1 451 50 792

IBM 1 430 43 340

Cisco Systems, Inc. 1 411 21 522

Johnson & Johnson 1 407 36 417

Intel Corp. 1 399 27 605

QUALCOMM, Inc. 1 377 31 505

Procter & Gamble 1 367 33 886

Schlumberger Ltd. 1 361 42 289

Hewlett-Packard Co. 1 336 24 652

General Electric Co. 1 314 41 558

Merck & Co., Inc. 1 312 40 350

Occidental Petroleum 1 295 34 544

US Mutual Funds Top 20 favorite stocks

FactSet 3

International Fund Reporting Practices Funds in countries like the U.S., Spain, Portugal and Sweden have been required for several years to publish their full portfolio holdings information on a quarterly basis through regulatory platforms. International reporting standards now favor monthly reporting. Spain has increased its publishing requirement from quarterly to monthly. In countries with a fast-developing mutual fund industry such as India, Brazil, or Israel, Mutual Funds now publish their investment portfolio monthly through central websites.

In most other countries, Fund managers now tend to report beyond the local legal requirements: In the U.S. many fund managers now publish full monthly holdings on their websites. In countries like France, the Netherlands, or Austria, a fast growing number of funds referenced in FactSet’s applications now post full monthly portfolio holdings.

Fund managers often decide to disseminate their full monthly portfolio holdings via FactSet and other publishing platforms as a way to meet the market’s growing expectations for transparency and to answer professional investors’ need for timelier detailed portfolio information.

Fund managers can now promote their funds families to a broad network of professional investors worldwide by joining FactSet’s Contributor Program. To register your funds, please send your monthly portfolio reports to factsetfundcenter@factset.com

Find more details on http://www.factset.com/data/contribution

Finance Sector #1 With 20% of European funds’ and 18% of U.S. funds’ equity assets, the Finance sector is still, by far, the most represented sector. Energy Minerals is in second position in Europe and third in the U.S.

Sectors of Investment

European and U.S. Funds – Foreign Investments

Companies Countries # Funds Asset M. $

Microsoft Corp. United States 2 314 10 890Cisco Systems, Inc. United States 2 069 5 708

Apple, Inc. United States 1 936 16 350

Hewlett-Packard Co. United States 1 830 5 470

Intel Corp. United States 1 825 5 955

Pfizer, Inc. United States 1 808 9 306

Google, Inc. United States 1 686 7 568

General Electric Co. United States 1 645 7 360

Johnson & Johnson United States 1 642 7 648

European Mutual Funds Top 10 favorite foreign stocks

Companies Countries # Funds Asset M. $

Nestlé SA Switzerland 712 20 955

Novartis AG Switzerland 677 17 207

Vodafone Group Plc United Kingdom 676 13 559

Roche Holding AG Switzerland 582 17 011

Total SA France 557 11 343

BNP Paribas SA France 553 8 732

HSBC Holdings Plc United Kingdom 532 11 708

BG Group Plc United Kingdom 532 9 614

Samsung Electronics South Korea 522 15 630

Royal Dutch Shell Plc Netherlands 518 15 924

US Mutual Funds Top 10 favorite foreign stocks

All of the 10 the most frequently held stocks by European funds are U.S.

companies. The ranking sorted by asset size, shows Samsung in third position

with USD 11 Bn. and Taiwan Semiconductor in fifth position with USD 10 Bn.

FactSet 4

Building a New Financial Order: Toward transparency and sustainability Continued from page 1

At the Fund Forum USA, we spoke with Suzanne L. Duncan, Financial

Markets Industry Leader at IBM Institute for Business Value. Suzanne is

responsible for research and thought leadership for the financial markets

industry within IBM’s business research group, the Institute for Business

Value. She has presented her research at over 30 conferences throughout

the world and has won several awards at conferences including the

Economist, SIFMA, China International Banking Convention, Seoul Financial

Forum, among many others. She is the author of several white papers and

has appeared in over 120 media outlets including CNBC, Bloomberg, BBC,

Fox, Financial Times, Economist Magazine, among many others.

FactSet: How has the industry’s market turbulence affected the

global financial markets’ competitive landscape?

Suzanne Duncan: Our analysis shows that for the past 20 years, the

financial markets industry has profited by capitalizing on what we term

“pockets of opacity.” In other words, by creating, buying and selling

complex products, often through lightly regulated entities, firms have

generated very high return at the expense of sustainable returns.

FactSet: How can these pockets of opacity be off-set by the call for transparency? Suzanne Duncan: More than ever, the financial industry needs to restore trust. If the industry is to thrive, it must take a different approach. Rather than creating ever more sophisticated financial products, the industry will need to join forces with regulators. By working closer with compliance and regulatory bodies, they will be able to develop a framework that aims to balance the yin and yang tension between stability and innovation. While many of the survey respondents recognized the need for more stringent regulation, there is concern that conflict between politics, policy and practical issues will arise when crafting new frameworks. FactSet: Speaking of conflicts, there appears to be a disconnection between what financial providers perceive as priorities for their clients and what clients are actually seeking (figure 1). Suzanne Duncan: Yes, we found that clients are more willing to pay premiums for unbiased quality advice whereas financial providers placed “best-in-class offerings”, in other words products, at the top of perceived priorities of their clients. For instance, 79 percent of the executives proved to be disconnected from their clients in understanding what they value. Providers think that offering clients "best in class" financial products such as managed mutual funds is the most important thing they can do, followed by a one-stop-shopping type of organization. This is why it is imperative that the industry acquire a better understanding of what its clients really want, including how they behave and what they are prepared to pay for. If not, there are clearly misaligned incentives.

Monthly Portfolio Disclosure: Funds now report full portfolio details Continued from page 1

The acceleration of cross-border Mutual Fund distribution and global competition is also affecting the way asset managers are now choosing to disclose and publish their detailed portfolio data to large groups of fund buyers and prospective investors. This trend is reflected by a fast-growing number of fund managers in Europe and in the U.S. that now publish their Mutual fund full portfolio details on a monthly or quarterly basis. In Europe, over 60% of the mutual funds now publish their full portfolio details on a monthly or quarterly basis. Over 40% are now published on a monthly basis. These portfolio details are usually made available to finance professionals through the main financial data networks and Mutual Fund data providers. Of the top 50 European firms, half of them now disclose full monthly portfolio data. We see the same trend in the major fund markets like UK, France or Germany where half of the top 20 firms publish the full fund data on a monthly basis. This trend constitutes a major shift compared to four or five years ago when most portfolio management teams were considering the full portfolio data as too sensitive to be disclosed even on a quarterly basis. As fund managers are now ready to communicate this information, they usually choose to publish it through the professional financial networks with an embargo period that varies from a few days to 60 to 90 days.

The same trend is also happening in the U.S. Until recent years, most firms would simply comply with the SEC quarterly publication requirements. Today, about 40% of the fund’s full portfolio details are now published monthly through different channels. Major actors like Fidelity, BlackRock or Wells Fargo post their monthly holdings on their websites. While smaller firms seem a bit less open to monthly disclosure. Half of the top 20 U.S. firms now publish some of their Mutual Funds families on a monthly basis.

A word about FactSet Mutual Fund publishing solution FactSet is a highly respected and recognized provider of financial data and portfolio analytics. FactSet’s extensive international Mutual Fund database is an optimal delivery and publishing solution for fund managers to disseminate their Mutual Fund data in a timely manner to a targeted audience of high-level finance professionals and Institutional Investors throughout the world. This service is designed to facilitate the overall Mutual Fund publishing, selection and investment process. We are happy that its success will benefit a large number of Fund industry participants.

Interested in contributing your fund data to FactSet? visit: www.factset.com/contribution

FactSet 5

Continued from page 1

Mutual Fund Industry Conferences: Latest distribution trends

FundForum USA – Boston Fear sells better than greed. Transparency vs opacity. Innovation vs stability. These were just a few of the themes brought forward during FundForum USA 2010 which took place in Boston, November 1-3, 2010. The conference provided a meeting point between the U.S. and global asset management communities to discuss the changing dynamics of fund distribution. Over 250 delegates participated in the forum where speakers addressed essential industry questions and discussed the challenges and opportunities of worldwide asset management. Key sponsors of the event included J.P. Morgan, State Street Global Advisors, BlackRock, and SEI.

Participants heard how the asset management industry is evolving and what the global fund flow projections would be for 2011. Over the next five years, 70% of the U.S. market will be looking beyond the U.S. as observed by Bob Doll, Vice Chairman and Chief Equity Strategist for Fundamental Equities at BlackRock.

During a panel discussion, Paul Hatch, Head of Investment Strategy and Client Solutions at Morgan Stanley Smith Barney (MSSB), commented that the majority of MSSB’s growth comes from beyond U.S. borders, yet fewer than 10% of their advisors are outside of the U.S. For this reason, he continued, it is strategically important that their asset management partners think and work globally.

Fund Manager Selection (FMS) – London

The FMS London 2011 conference offered interesting presentations from a wide variety of speakers from Nordea Savings Asset Management, Architas MultiManager, Skandia, Towers Watson and PFA Pension. Several speakers insisted on the importance of having access to quality data and lamented the lack of reliable data on individual portfolio manager’s track record as they move from firm to firm. Specifically, several speakers expressed their frustration with the lack of consistent information on funds’ fees.

Il salone del Risparmio – Milan

The Salone della Gestione del Risparmio is the most important Italian event that focuses on the asset management industry. The first two days were attended by over 2000 people.

An impressive panel of European and U.S asset managers exemplified the growing importance of global competition and the acceleration of cross border fund distribution. Participating firms included BlackRock, J.P. Morgan, Amundi, Pictet, Financière de l’Echiquier

Fonds Kongress – Mannheim, Germany

The 10th

annual Fonds Kongress took place in Mannheim, Germany in January 2011. Record attendance numbers were noted with nearly 6,000 visitors a day and over 200 exhibitors.

Emerging markets were a hot topic during the Fonds Kongress. Nick Price of Fidelity International focused on sales opportunities in emerging markets. He unequivocally rejected the idea that emerging markets are yet another investment bubble. Mr. Price pointed to statistics showing that emerging markets make up the majority of the world’s evolving resources, in addition to creating jobs.

CONGRESS Fonds – Zurich, Switzerland

The 13th

edition of the most important Swiss Finance Conference – Congress FONDS ’11 – took place February 2-4, 2011, in Zurich. On the first day of the conference, qualified investors had the opportunity to meet with top investment managers in the region. This year, there were over 100 investment managers and more than 2,300 professional investors. The conference was a great opportunity for FactSet Fund

Contribution team to meet with fund managers and fund sponsors.

Over 30 Swiss asset managers already publish 1 000 funds monthly

through FactSet Mutual Fund database. Several new firms decided to

make their fund data available on FactSet.

FactSet 6

Continued from page 1

Wealth Management Developments The need for a wide range of market data, analytical tools, portfolio monitoring features, and comprehensive fund and ownership data are critical requirements to support the wealth management industry in their advisory process. As the investment process within the wealth management industry becomes more institutional, we continue to witness similarities in the needs of wealth managers and traditional institutional investors to support their processes.

For over 30 years, FactSet’s mission has been to provide global investment professionals with integrated access to financial information. In recent years, FactSet has significantly expanded the depth and breadth of global content suitable to wealth managers, and integrated this data within the newly released FactSet Wealth Management Workstation.

FactSet’s solution for Wealth Managers includes a comprehensive desktop workstation that supports the wealth management process in all its complexity.

This comprehensive solution integrates real-time news and quotes into a single powerful platform to bring users a complete solution for researching and analyzing fundamental data, company, fund and investable universes alongside real-time and historical equity, debt and fund data.

Flexibility and Unique Functionality

FactSet integrates hundreds of commercial content sets, including sell-side analyst research reports. Because the investment management process depends heavily on a firm’s proprietary information and portfolio holdings, FactSet lets users centrally manage all of their clients’ portfolios and corresponding positions while providing access to the portfolios’ streaming intra-day performance. Bringing together the client’s proprietary data and daily portfolio holdings alongside internal commentary and research, the FactSet Workstation provides endless flexibility and unique functionality combined with in-depth security- and portfolio-level monitoring and analytics.

The Portfolio View and Market Watch displays allow the monitoring of portfolio holdings, watch lists, and coverage universes in real-time, while allowing the user to display items such as last price, volume, percent change, news headline counts, and intra-day performance on an absolute and relative basis. It is also possible to build custom items that reference streaming data, such as columns that dynamically compare a price target to a security’s last trade.

Real-time Capabilities

In-depth portfolio analysis can be performed or dynamically updated, and approved buy-lists and models can be monitored, all on a single platform. FactSet’s advanced portfolio integration helps Wealth Managers to monitor their holdings and the market with the insight needed to perform more complex tasks, including isolating active bets versus passive bets and comparing intra-day gainers versus losers within a portfolio. It is easy to isolate active positions from passive positions in real-time when comparing portfolios to a benchmark or to a fund.

The diversification benefits associated with Mutual Funds and ETFs have encouraged Wealth Managers to go beyond picking stocks to make space for these instruments within their clients’ portfolios. While the idea of increasing a client’s exposure to various sectors, asset classes and geographic segments appeals to many Wealth Managers, they first need to equip themselves as well as their clients with the necessary information about the composition of these funds.

Mutual Funds and ETF Ownership

FactSet’s Mutual Fund and ETF holdings database allows users to take a deeper dive into these securities in order to understand the exposure that new product enhancements will generate for their investors. By right-clicking on a Mutual Fund or an ETF from Market Watch, the Wealth Manager can get instant insight on the underlying constituents of that fund, identify the sector, asset class and global distribution of the fund holdings as well as analyze the fund-level characteristics.

To help prepare for client meetings through the review of account performance, FactSet’s Account Review documents leverage the Mutual Fund and ETF ownership content. With access to the underlying fund constituents and weights, the Wealth Manager can generate reports which go well beyond listing the funds that a client holds. Using the underlying fund constituents, a Wealth Manager can illustrate their clients’ true exposure to sectors, asset classes, styles and capitalization ranges which ultimately allows the wealth manager to address their clients’ needs for maximum transparency.

FactSet 7

Continued from page 6

With virtually limitless customization, Wealth Managers can tailor their workspace to fit their exact needs.

Create custom columns with any data you access through

FactSet and your firm’s proprietary data, such as price targets, rankings, or ratings

Group your list of securities by sector, industry, or custom method, and sort groups and securities on any data column you choose

Monitor intraday performance for multiple client accounts and benchmarks in a single display

Monitor absolute and relative intra-day performance at the portfolio, group, and security level

Include portfolio- and group-level statistics for any data column

Find news for companies in your portfolio and determine its significance with filters and alerts.

Access to the FactSet Wealth Management workstation is possible from the office, at home, or on the road with FactSet wireless capabilities. FactSet delivers the market to Wealth Managers, anywhere, anytime.

Michael A. Medvinsky Vice President, FactSet Real-Time & Research Management Solutions - Americas MMedvinsky@factset.com T +1.617.757.1105

Federica Kralj Vice President FactSet Real-Time & Research Management Solutions – International fkralj@factset.com T +44.(0)203.009.8920

Continued from page 1

Are You an Apple Stockholder?

The Wall Street Journal used FactSet Mutual Fund data to research the 4,100 mutual funds that hold stock in Apple. As stated in the article, many of these funds holding Apple are making very big bets in the stock: more than 750 funds have invested at least 5% of their entire portfolio in Apple.

Use FactSet to research funds that hold Apple:

Within the summary tab of FactSet's mutual fund ownership report, view more than 4,100 mutual funds that hold stock in Apple

Sort by the percentage of the portfolio to view the funds that have invested at least 5%

Download results to Excel for a closer look at the data.

To learn more about FactSet for Wealth Managers visit: www.factset.com/products/wealth

To learn more about FactSet Ownership data visit: www.factset.com/data/data/ownership

Interested in contributing your fund data to FactSet? Visit: www.factset.com/contribution Or, contact our Fund Publishing team: factsetfundcenter@factset.com

U.S. +1.212.849.4040 - Europe +33.1.72.22.21 .24