I asked before, but I still don\'t understand, I have to come up with the Primar

Question

I asked before, but I still don't understand, I have to come up with the Primary Client types and primary focus of each client and tax sensitivity of the top 10 shareholders of AEO. Using Yahoo Finance, I've identified the top shareholders for AEO (includes Massachusets Financial Services Co., BlackRock Fund Advisors, and State Street Corporation), but I don't understand how to find the rest of the information (or what the third column of information indicates).

This is an example using Nordstrom:

Largest Holders hares Primary Client Types and Primary Focus of Each Client (as a percent) TAX SENSITIVE? YES YES NO NO NO YES NO Nordstrom Bruce A 75% >75% 26,952,759 ittinger Anne E Vanguard Group Inc State Street Corp Wellington Management Co LLP Metropolitan West Capital MGMT Blackrock Institutional Trust 15,403,376 8,834,962 6,290,243 5,993,531 4,470 265 75% 75% 26.50% 10% 10% 4470 26ST 4,038,153 51-75% -75%

Explanation / Answer

The primary clients of the shareholders are given in the table above - High Net Worth Individuals, Investment companies(Mutual Funds), Pension & Prof, Charitable Organizations, State or Municipal Gov Entity.

The primary client types and primary focus of these clients and tax sensitivities are explained below:

1. Nordstrom Bruce A: High Net Worth Individuals (>75%) - The high net worth individuals have higher risk appetite and are generally looking to grow their wealth by large amount. They also want an approach which preseves their investment capital. These clients are highly tax sensitivity as at higher level of income tax rates are very high.

2.Gittinger Anne E: Same as 1. above: High Net Worth Individuals (>75%) - The high net worth individuals have higher risk appetite and are generally looking to grow their wealth by large amount. They also want an approach which preseves their investment capital. These clients are highly tax sensitivity as at higher level of income tax rates are very high. So, they would prefer return in form capital gains rather than dividends as tax rate on dividends is in general higher as compared to tax rate on capital gains.

3. Vanguard Group Inc: Mutual Funds (>75%) - Mutual Funds Invest in a number diverese financial instruments such as stocks, corporate bonds, government bonds etc. Their investment objective can be varied depending on their focus like whether it is equity only fund or debt only fund or hybrid. Risk diversification is very high. They also keep certain amount of cash (least risky instrument) in their portfolio. Generally mutual Funds invest do not invest in risky small cap growth companies. Tax sensitivities are low and they look for certain dividend earnings.

4. State Street Corp.: Same as 3 above: Mutual Funds (>75%) - Mutual Funds Invest in a number diverese financial instruments such as stocks, corporate bonds, government bonds etc. Their investment objective can be varied depending on their focus like whether it is equity only fund or debt only fund or hybrid. Risk diversification is very high. They also keep certain amount of cash (least risky instrument) in their portfolio. Generally mutual Funds invest do not invest in risky small cap growth companies. Tax sensitivities are low and they look for certain dividend earnings.

5. Wellington Mgmt. Co. LLP: Pension and Profit Sharing Plans (26-50%) - These clients have an obligation/liability to fund. They need to earn return above a certain minimum threshold in order to remain fully funded i.e. to fulfill the outstanding liabilities using the returns generated on investments. They are risk averse and may have high liquidity needs. These clients have less sensitivity towards tax and need a certain portion of their earnings in dividends.

Charitable Organization (10%): These clients can be clients like endowment funds and have long term horizon. They have fixed requirement in order to fulfill their obligations. Low on risk and low tax sensitivity as these tax exempt. They need a proportion of their earnings in dividends.

State Gov or Municipal Entity (10%): These are guided by certain statutory requirements and have to invest accordingly. Capital preservation is very impo important. They invest in instruments which have active secondary market. State gov. or Mumnicipal Entities have low tax sensitivity.

6. Metropolitan West Capital: High Net Worth Individuals (51-75%)- The high net worth individuals have higher risk appetite and are generally looking to grow their wealth by large amount. They also want an approach which preseves their investment capital. These clients are highly tax sensitivity as at higher level of income tax rates are very high.

7. Blacrock Insititutional Trust: Mutual Funds (>75%) - Mutual Funds Invest in a number diverese financial instruments such as stocks, corporate bonds, government bonds etc. Their investment objective can be varied depending on their focus like whether it is equity only fund or debt only fund or hybrid. Risk diversification is very high. They also keep certain amount of cash (least risky instrument) in their portfolio. Generally mutual Funds invest do not invest in risky small cap growth companies. Tax sensitivities are low and they look for certain dividend earnings.

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