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Plan 3 Fund Descriptions

 

Who prepared these fund fact sheets?
The fund fact sheets are prepared by Morningstar, Inc., AllianceBernstein, Walden Asset Management and the Washington State Investment Board and are provided to you at the request of DRS. These organizations are not affiliated with Empower Retirement (the retirement services offered through Great-West Life & Annuity Insurance Company). Empower has not reviewed or approved these materials and is not responsible for them or for providing updates to them. For additional information concerning these materials, please contact DRS.

 

Plan 3 Retirement Strategy Funds

To choose a Retirement Strategy Fund, simply start by adding the year you were born to the age at which you expect to retire or withdraw your money. Each fund has a year in its name. Look for the year closest to your target retirement year in the name of the fund. Now find that matching fund.

 

 

Maturity 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

 

Retirement Strategy Funds

Investment type

Asset allocation funds
Investment objectives Each Retirement Strategy Fund seeks to achieve the highest total return over time consistent with its asset mix.
Investment strategy

Retirement Strategy Funds are diversified asset allocation portfolios designed for people who want to leave ongoing investment decisions to an experienced portfolio management team. The Retirement Strategy Fund is designed to correspond with the date closest to your expected target date for retirement.

When you are far from your target date for retirement, most of the assets are invested in globally diversified equity portfolios. As you get closer to the target date for retirement, and continuing for 15 years beyond your target date, the management team gradually adjusts your Retirement Strategy Fund to a more conservative asset mix. That means fewer stocks and more bonds and short-term investments that can help generate income and protect your savings in retirement. The principal value of the fund(s) is not guaranteed at any time, including at the time of the target date and/or withdrawal.

Fund composition The Retirement Strategy Funds' underlying investments include U.S., international, large, midsize and small companies as well as bonds.
Investment manager These funds are provided by the WSIB and managed by AllianceBernstein L.P.
Who may want to invest
May be an appropriate retirement investment if you find you don't have the desire, comfort level and/or time to select your own mix of funds, monitor them and make changes. Each Retirement Strategy Fund is a complete portfolio that automatically adjusts and rebalances as you move closer to your target date. Asset allocation and balanced investment options and models are subject to the risks of the underlying funds, which can be a mix of stocks/stock funds and bonds/bond funds.

 

Plan 3 Self-Directed Build and Monitor Funds

 

Investment type Stable value fund
Investment objective The Short-Term Investment seeks as a high a level of current income as is consistent with liquidity and stability of principal.
Investment strategy The Short-Term Investment Fund is a diversified portfolio of short-term debt securities such as variable amount notes, commercial paper, U.S. government securities, repurchase agreements, certificates of deposits of banks and savings institutions, and other short-term obligations.
Fund composition As an alternative to such short-term debt securities, the fund may enter into repurchase or reverse repurchase agreements or invest in shares of registered investment companies that invest in similar debt securities, provided that such companies' investments are valued at cost and any income earned by such investments is allocated and credited to shareholders daily. The fund's dollar-weighted average portfolio maturity will be 60 days or less and the weighted average life of the fund's portfolio will be no longer than 120 days. In addition, the fund will accrue on a straight-line basis the difference between the cost and anticipated principal receipt on maturity of any assets it holds, and hold assets until maturity under usual circumstances.
Investment manager WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who may want to invest
May be an appropriate alternative for the more conservative investor or for those dollars you wish to protect against the market fluctuations that affect the other funds offered. Also, may be appropriate for the short-term investor. The Short-Term Investment Fund is not federally guaranteed and may lose value.

 

Investment type Income fund
Investment objective The Washington State Bond Fund seeks to provide returns while controlling risk by investing in high-quality corporate bonds. The fund's performance objective is to match or exceed the return of the Barclays Capital Intermediate Credit Index.
Investment strategy Normally invests in a diversified portfolio of intermediate investment grade corporate bonds.
Fund composition The fund invests in corporate obligations with a rating of at least Baa by Moody's Investors Service, Inc. or BBB by Standard and Poor's. The ratings represent the opinions of the rating agencies regarding the financial strength of a company, and the ability to meet ongoing obligations to the stockholders/policyholders. The portfolio is expected to have an average life of approximately five years.
Investment manager Washington State Bond Fund is provided and managed by the WSIB.
Who may want to invest
May be an appropriate retirement investment if you are a conservative investor seeking to build capital gradually through moderate capital appreciation and through compounding of income. It may also be appropriate if you are a more aggressive investor and want to diversify your portfolio. A bond fund's yield, share price and total return change daily and are based on changes in interest rates, market conditions, economic and political news and the quality and maturity of its investments. In general, bond prices fall when interest rates rise and vice versa.

 

Investment type Social fund
Investment objective The Socially Responsible Balanced Fund seeks long-term capital growth through an actively managed portfolio of stocks, bonds, and money market instruments.
Investment strategy At least 30% of the fund's assets are invested in fixed income securities and at most 70% of the Fund's assets invested in foreign and domestic equity securities. The fund's asset allocation will vary based on global economic conditions, current valuations within capital markets, balancing risk and reward, and the relative attractiveness of stocks versus bonds. Equity investments will focus on an opportunity set of domestic and international companies. Fixed income investments are restricted to investment grade securities.
Investment manager This fund is provided by the WSIB and managed by Walden Asset Management, a division of the Boston Trust and Investment Management Company.
Who may want to invest
May be an appropriate investment if you are an investor who seeks long-term growth of principal with a moderate level of risk while satisfying investment social criteria. Asset allocation and balanced investment options and models are subject to the risks of the underlying funds, which can be a mix of stocks/stock funds and bonds/bond funds.

 

Investment type Income fund
Investment objective This is an index fund that seeks to match the performance of the S&P 500® Index by investing in stocks that make up the index. The S&P 500® Index, considered a large-capitalization benchmark, comprises a sample of leading U.S. companies in leading industries, and accounts for more than 75% of the market value of all publicly traded stocks in the U.S.
Investment strategy This fund uses a "passive" or indexing approach to achieve the fund's objective. Unlike many funds, this fund does not try to outperform the index it seeks to track and does not seek temporary defensive positions when markets decline or appear overvalued.
Fund composition This fund invests invests in a diversified sample of publicly traded common stocks throughout the U.S.
Investment manager WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who may want to invest
This fund is intended for long-term investors seeking to capture the earnings and growth potential of large U.S. companies. S&P 500® Index is a registered trademark of Standard & Poor's Financial Services LLC and is an unmanaged index considered indicative of the domestic Large-Cap equity market.

 

Investment type Index fund
Investment objective This is an index fund that seeks to match the performance of the MSCI ACWI Investable Market Index (ACWI IMI), which represents approximately 99% of the world's total market capitalization. Covering large-, mid- and small-capitalization securities across 45 developed and emerging market countries, the ACWI IMI provides broad global equity market exposure.
Investment strategy Investing in foreign markets may offer additional diversification benefits to an investment portfolio. Diversification is not a guarantee against loss, it can be an effective strategy to help you manage investment risk.
Fund composition Invests in a broadly diversified portfolio of small, medium, and large companies in developed and emerging markets.
Investment manager WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who may want to invest
This fund is intended for long-term investors seeking to capture the earnings and growth potential of domestic and foreign companies in both developed and emerging markets. Foreign investments involve special risks, including currency fluctuations, taxation differences and political developments.

 

Investment type Index fund
Investment objective This is an index fund that seeks to match the return of the Russell 2000® Value Index by investing in a diversified sample of the stocks in the Index. The Index comprises small-cap U.S. companies that have high dividend yields and low prices relative to their earnings or book value. These stocks are a subset of the Russell 2000® Index, which measures the performance of the 2000 smallest companies in the Russell 3000® Index. The Russell 3000® Index represents 98% of the total U.S. equity market capitalization.
Investment strategy Value investing focuses on long-term gains through a portfolio of stocks that experience lower volatility than higher growth stocks.
Fund composition Invest in a diversified sample of publicly traded common stocks throughout the U.S. It is an index fund that invests in the 2000 smallest companies in the Russell 3000® Index from every sector and industry of the U.S. equity market.
Investment manager WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who may want to invest
This fund is intended for long-term investors seeking growth of capital. The risk level for this fund is high, as small capitalization stocks tend to exhibit more volatility than larger capitalization stocks. Equity securities of small and mid-sized companies may be more volatile than securities of larger, more established companies.

 

Investment type Index fund
Investment objective This is an index fund that seeks to match the perfomance of the MSCI Emerging Markets Investable Markets Index (IMI), comprising large-, mid- and small-capitalization securities in 26 emerging markets.
Investment strategy This fund invests in a portfolio of international equity securities, depositary receipts, registered investment companies, and derivatives with the objective of providing returns which approximate as closely as practicable the capitalization weighted total rates of return of the markets in certain countries for equity securities traded outside of the United States.
Fund composition Invest in a broadly diversified portfolio of small-, medium- and large-sized companies in Emerging Markets.
Investment manager WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who may want to invest
This fund is intended for long-term investors seeking to capture the earnings and growth potential of foreign companies in emerging market countries. Equity securities of companies located in emerging markets involve greater risks than investments in more established markets, including currency fluctuations, political developments and share illiquidity.

 

Plan 3 WSIB Investment Program


 

Investment type Index fund
Investment objective The Total Allocation Portfolio (TAP) is a diversified portfolio that is intended for long-term investors. TAP assets are invested globally across five major asset classes and broadly among industries and countries to maximize returns at a prudent level of risk.
Investment strategy TAP assets are invested in public equities, fixed income products, private equity funds, real estate, and tangible assets such as timber and infrastructure.
Fund composition The TAP's public equity program is structured to reflect the globalization of capital markets. Investment managers for this program are selected by the WSIB for their insights and long-term convictions. They seek to achieve risk adjusted returns by finding the most attractive opportunities wherever they are in the world. All investments are in broad market-based domestic and non-U.S. passive index funds and global and emerging markets active mandates.
Investment manager Under the direction and oversight of the Washington State Investment Board (WSIB), TAP assets are primarily managed by external investment professionals and partners. The fixed income portfolio for the TAP is internally managed by WSIB staff.
Who may want to invest
This fund is intended for long-term investors seeking to capture the earnings and growth potential of foreign companies in emerging market countries. Foreign investments involve special risks, including currency fluctuations, taxation differences and political developments.

 

For credit quality, the credit rating information provided by the fund company may include ratings from A.M. Best Company, Inc., Fitch Ratings, Moody's Investors Service, and Standard & Poor's Ratings Services. For further information about the rating agency methodology, please visit the following websites: www.ambest.com/ratings, www.fitchratings.com, www.moodys.com and www.standardandpoors.com/aboutcreditratings .