The Age-Based Investment Portfolios offer a diversified group of five Investment Portfolios designed to emphasize total return (and particularly capital appreciation) when the Designated Beneficiary of an Account is younger and increasingly emphasizes preservation of capital and income as the Designated Beneficiary approaches and reaches college age (presumed to be at age 18).
The account will be automatically reallocated among the Portfolios listed in the table below as the age of the beneficiary reaches 5, 9, 14 and 19.
Amounts invested under the Age-Based Investment Portfolios will be allocated among several different mutual funds, as illustrated in the table below.
Allianz RCM Global Resources Fund Investment Objective and Principle Strategies. The Fund seeks to achieve its investment objective by normally investing at least 80% of its net assets (plus borrowings made for investment purposes) in equity securities of companies principally engaged in the research, development, manufacturing, extraction, distribution, or sale of materials, energy, or goods related to cyclical or commodity industries, such as oil & gas, minerals, base metals, precious metals, chemicals, fertilizers, wood products, paper products and steel (the ìnatural resources industriesî). Under normal circumstances, the Fund will invest a minimum of 1/3 of its assets in non-U.S. securities and will invest in companies organized or headquartered in at least four countries including the United States. The Fundís portfolio manager will evaluate the relative attractiveness of individual commodity cycles, including supply-demand fundamentals and pricing outlook. Stock selection and industry allocation will be based on specific commodity, end market and geographic exposure, operational and financial leverage as well as valuation. The portfolio manager evaluates the fundamental value and prospects for growth of individual companies and focuses on those companies that the portfolio manager expects will have higher than average rates of growth and strong potential for capital appreciation. The Fund is ìnon-diversified,î which means it may invest in a relatively small number of issuers, which may increase risk. The Fund may utilize foreign currency exchange contracts, options, stock index futures contracts and other derivative instruments. In response to unfavorable market and other conditions, the Fund may deviate from its principal strategies by making temporary investments of some or all of its assets in high-quality fixed income securities, cash and cash equivalents. The Fund may not achieve its investment objective when it does so.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are (in alphabetical order after the first six risks), market risk, issuer risk, equity securities risk, non-U.S. investment risk, emerging markets risk, smaller company risk, credit risk, currency risk, derivatives risk, focused investment risk, leveraging risk, liquidity risk, management risk, turnover risk.
Allianz NACM Growth Fund Investment Objective and Principal Strategies. This Fund's investment objective is long-term capital appreciation. The Fund seeks to achieve its investment objective by normally investing at least 80% of its assets in stocks the portfolio managers consider to be growth equity securities of U.S. companies with large market capitalizations. The Fund defines large capitalization companies as those with market capitalizations within the upper 90% of the Russell 1000 Growth Index ($2.5 billion and greater as of September 30, 2007). The Fundís portfolio managers attempt to identify the strongest investment opportunities in the U.S. large cap equity universe by applying a multidimensional research process that integrates a proprietary quantitative model overlaid with fundamental analysis. The Fund may utilize foreign currency exchange contracts, options, stock index futures contracts and other derivative instruments. In response to unfavorable market and other conditions, the Fund may deviate from its principal strategies by making temporary investments of some or all of its assets in high-quality fixed income securities, cash and cash equivalents. The Fund may not achieve its investment objective when it does so.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk, equity securities risk, credit risk, derivatives risk, focused investment risk, leveraging risk, liquidity risk, management risk, and turnover risk.
Allianz NFJ International Value Fund Investment Objective and Principal Strategies. The Fund seeks long-term growth of capital and income. The Fund seeks to achieve its investment objective by normally investing at least 65% of its net assets (plus borrowings made for investment purposes) in equity securities of non-U.S. companies with market capitalizations greater than $1 billion. The Fund normally invests a significant portion of its assets in equity securities that the portfolio managers expect will generate income (for example, by paying dividends). The Fund may invest up to 50% of its assets in emerging market securities. The Fund typically achieves its exposure to equity securities through investing in American Depositary Receipts (ADRs), but is not limited to investments in ADRs. The portfolio managers use a value investing style focusing on equity securities of companies whose stocks the portfolio managers believe have low valuations. The Fund may utilize foreign currency exchange contracts, options, stock index futures contracts and other derivative instruments. In response to unfavorable market and other conditions, the Fund may deviate from its principal strategies by making temporary investments of some or all of its assets in high quality fixed income securities, cash and cash equivalents. The Fund may not achieve its investment objective when it does so.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk, equity securities risk, non-U.S. investment risk, emerging markets risk, smaller company risk, credit risk, currency risk, derivatives risk, leveraging risk, liquidity risk, management risk, and turnover risk.
Allianz NFJ Small-Cap Value Fund Investment Objective and Principal Strategies. The Fund seeks long-term growth of capital and income. The Fund seeks to achieve its investment objective by normally investing at least 80% of its net assets (plus borrowings made for investment purposes) in companies with smaller market capitalizations. The Fund currently considers smaller market capitalization companies to be companies with market capitalizations of between $100 million and $3.5 billion. The Fund normally invests a significant portion of its assets in common stocks of companies that the portfolio managers expect will generate income (for example, by paying dividends). The Fund may also invest a portion of its assets in real estate investment trusts (REITs) and non-U.S. securities, including emerging markets securities. The portfolio managers use a value investing style focusing on companies whose stocks the portfolio managers believe have low valuations. The Fund may utilize foreign currency exchange contracts, options, stock index futures contracts, and other derivative instruments. In response to unfavorable market and other conditions, the Fund may deviate from its principal strategies by making temporary investments of some or all of its assets in high-quality fixed income securities, cash and cash equivalents. The Fund may not achieve its investment objective when it does so.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk, equity securities risk, smaller company risk, credit risk, currency risk, derivatives risk, emerging markets risk, focused investment risk, leveraging risk, liquidity risk, management risk, non-U.S. investment risk, real estate risk, and turnover risk.
Allianz OCC Growth Fund Investment Objective and Principal Strategies. This Fund's investment objective is long-term growth of capital. Income is an incidental consideration. The Fund seeks to achieve its investment objective by normally investing at least 65% of its assets in common stocks of ìgrowthî companies with market capitalizations of at least $5 billion. The portfolio managers consider ìgrowthî companies to include companies they believe to have above-average growth prospects (relative to companies in the same industry or the market as a whole). In addition to investing in common stocks, the Fund may also invest in other kinds of equity securities, such as preferred stocks, convertible securities and warrants. The Fund may also invest in real estate investment trusts (REITs). The Fund may invest up to 15% of its assets in non-U.S. securities, except that it may invest without limit in American Depositary Receipts (ADRs). The Fund may utilize foreign currency exchange contracts, options, stock index futures contracts and other derivative instruments. In response to unfavorable market and other conditions, the Fund may deviate from its principal strategies by making temporary investments of some or all of its assets in high-quality fixed income securities, cash and cash equivalents. The Fund may not achieve its investment objective when it does so.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk, equity securities risk, credit risk, currency risk, derivatives risk, focused investment risk, leveraging risk, liquidity risk, management risk, non-U.S. investment risk, real estate risk, turnover risk.
Allianz OCC Opportunity Fund Investment Objective and Principal Strategies. The Fund seeks capital appreciation, with no consideration given to income. The Fund seeks to achieve its investment objective by normally investing at least 65% of its assets in common stocks of ìgrowthî companies with market capitalizations of less than $2 billion. The portfolio managerís investment process focuses on bottom-up, fundamental analysis. The portfolio manager considers ìgrowthî companies to include companies that he believes to have above-average growth prospects (relative to companies in the same industry or the market as a whole). The portfolio manager seeks to diversify the portfolio among different industries. The Fund may invest in other kinds of equity securities, including preferred stocks, convertible securities and warrants. The Fund may invest up to 15% of its assets in non-U.S. securities, except that it may invest without limit in American Depositary Receipts (ADRs). The Fund may invest a substantial portion of its assets in securities issued in initial public offerings (IPOs). The Fund has in the past invested a significant portion of its assets in technology or technology-related companies, although there is no assurance that it will continue to do so in the future. The Fund may utilize foreign currency exchange contracts, options, stock index futures contracts and other derivative instruments. In response to unfavorable market and other conditions, the Fund may deviate from its principal strategies by making temporary investments of some or all of its assets in high-quality fixed income securities, cash and cash equivalents. The Fund may not achieve its investment objective when it does so.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk, equity securities risk, smaller company risk, credit risk, currency risk, derivatives risk, focused investment risk, IPO risk, leveraging risk, liquidity risk, management risk, non-U.S. investment risk, and turnover risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
The Boston Company Small/Mid Cap Growth Fund Investment Objective and Principal Strategies. The Fund's investment objective is long-term growth of capital. The fund invests, under normal circumstances, at least 80% of net assets (including for this purpose, borrowings for investment purposes) in equity securities of small cap and mid cap U.S. companies. The fund focuses on companies with total market capitalizations equal to or less than the total market capitalization of the largest company included in the Russell 2500 Growth Index. This would correspond to companies with total market capitalization equal to or less than $14.1 billion as of December 31, 2007. The fund may also invest in equity index futures based on the Russell 2000 and S&P Midcap indices, and exchange traded funds based upon the Russell 2500 Growth Index.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk, small cap companies risk, management risk, equity securities risk, index tracking risk, healthcare related risk, technology risk, and sector specific risk.
Dodge and Cox International Stock Fund Investment Objective and Principal Strategies. The Fund seeks long-term growth of principal and income. The Fund invests primarily in a diversified portfolio of equity securities issued by non-U.S. companies from at least three different foreign countries, including emerging markets. The Fund focuses on countries whose economic and political systems appear more stable and are believed to provide some protection to foreign shareholders. The Fund invests primarily in medium-to-large well established companies based on standards of the applicable market. In selecting investments, the Fund invests primarily in companies that, in Dodge & Coxís opinion, appear to be temporarily undervalued by the stock market but have a favorable outlook for long-term growth. The Fund also focuses on the underlying financial condition and prospects of individual companies, including future earnings, cash flow and dividends. Various other factors, including financial strength, economic condition, competitive advantage, quality of the business franchise and the reputation, experience and competence of a companyís management are weighed against valuation in selecting individual securities.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk, management risk, currency risk and foreign investment risk.
Fidelity Advisor Large Cap Fund Investment Objective and Principal Strategies. This Fund's investment objective is long-term growth of capital. Normally investing primarily in common stocks. Normally investing at least 80% of assets in securities of companies with large market capitalizations (which, for purposes of this fund, are those companies with market capitalizations similar to companies in the Russell 1000 Index or the Standard & Poorís 500SM Index (S&P 500)). Investing in domestic and foreign issuers. Investing in either ìgrowthî stocks or ìvalueî stocks or both. Using fundamental analysis of each issuerís financial condition and industry position and market and economic conditions to select investments.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, foreign investment risk, issuer risk, and management risk. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares they may be worth more or less than what you paid for them, which means that you could lose money.
Fidelity Spartan 500 Index Fund Investment Objective and Principal Strategies. The Fund seeks investment results that correspond to the total return (i.e., the combination of capital changes and income) of common stocks publicly traded in the United States, as represented by the Standard & Poorís 500 Index (S&P 500), while keeping transaction costs and other expenses low. The principal investment strategies are: normally investing at least 80% of assets in common stocks included in the S&P 500 and lending securities to earn income for the fund.
Principal Investment Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, issuer risk and management risk. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares they may be worth more or less than what you paid for them, which means that you could lose money.
Marsico 21st Century Investment Objective and Principal Strategies. The Fund's investment objective is long-term growth of capital. The Fund is a ìdiversifiedî portfolio and invests primarily in common stocks that are selected for their long-term growth potential. The Fund may invest in companies of any size, and will normally hold a core position of between 35 and 50 common stocks. The number of securities held by the Fund may occasionally exceed this range at times such as when the portfolio manager is accumulating new positions, phasing out and replacing existing positions, or responding to exceptional market conditions.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, foreign investment, real estate risk, focused investment risk, issuer risk and management risk.
PIMCO All Asset Fund Investment Objective and Principal Investment Strategies. This Fund's investment objective is to maximize real return, consistent with the preservation of real capital and prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class shares of other PIMCO Funds of the Pacific Investment Management Series. The Fund invests its assets in shares of these PIMCO Funds and does not invest directly in stocks or bonds of other issuers. The Fund may invest in any or all of these PIMCO Funds, but will not normally invest in every fund at any particular time. The Fund's investment in a particular PIMCO Fund normally will not exceed 50% of its total assets. The Fund is a "fund of funds," which is a term used to describe mutual funds that pursue their investment objective by investing in other mutual funds. In addition to the PIMCO Funds of the Pacific Investment Management Series, the Fund may invest in additional PIMCO Funds created in the future.
Principal Risks. The principal risks presented by an investment in the Fund include market risk, issuer risk, selection risk, small cap and medium cap companies risk, liquidity risk, derivatives risk, foreign investment risk, emerging markets risk, currency risk, focused investment risk and issuer non-diversification risk, leveraging risk, management risk, credit risk, interest rate risk, high yield risk, mortgage risk, commodity risk, real estate risk, and underlying fund risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO High Yield Fund Investment Objective and Principal Strategies. This Fund's investment objective is to maximize total return, consistent with the preservation of capital and prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in a diversified portfolio of high yield securities ("junk bonds") rated below investment grade but rated at least B by Moody's or S&P, or, if unrated, determined by the Fund to be of comparable quality. The remainder of the Fund's assets may be invested in investment grade fixed income instruments. The average portfolio duration of this Fund normally varies within a two- to six-year time frame based on the Fund's forecast for interest rates. The Fund may invest up to 15% of its assets in euro-denominated securities and may invest without limit in U.S. dollar-denominated securities of foreign issuers. The Fund normally will hedge at least 75% of its exposure to the euro to reduce the risk of loss due to fluctuations in currency exchange rates. The Fund may invest up to 25% of its assets in derivative instruments, such as options, futures contracts or swap agreements. The Fund may invest all of its assets in mortgage- or asset-backed securities. The Fund may lend its portfolio securities to brokers, dealers, and other financial institutions to earn income.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, high yield risk, market risk, issuer risk, derivatives risk, liquidity risk, mortgage risk, foreign investment risk, currency risk, leveraging risk, and management risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO Real Return Fund Investment Objective and Principal Strategies. This Fund's investment objective is to maximize real return, consistent with the preservation of real capital and prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities, and corporations. The Fund invests primarily in investment grade debt securities, but may invest up to 10% of its assets in high yield securities ("junk bonds") rated B or higher by Moody's or S&P, or, if unrated, determined by the Fund to be of comparable quality. The Fund may also invest up to 30% of its assets in securities denominated in foreign currencies, and may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers. The Fund will normally hedge at least 75% of its exposure to foreign currency to reduce the risk of loss due to fluctuations in currency exchange rates. The Fund is non-diversified, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. The Fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions to earn income.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, market risk, issuer risk, derivatives risk, liquidity risk, issuer non-diversification risk, foreign investment risk, currency risk, leveraging risk, management risk, and mortgage risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO Commodity Real Return Strategy Fund Investment Objective and Principal Strategy. The Fund seeks maximum real return consistent with prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances in commodity-linked derivative instruments backed by a portfolio of inflation-indexed securities and other Fixed Income Instruments. The Fund invests in commodity-linked derivative instruments, including commodity index-linked notes, swap agreements, commodity options, futures and options on futures, that provide exposure to the investment returns of the commodities markets, without investing directly in physical commodities. The Fund may also invest in common and preferred stocks as well as convertible securities of issuers in commodity-related industries. The Fund will seek to gain exposure to the commodity markets primarily through investments in leveraged or unleveraged commodity index-linked notes, which are derivative debt instruments with principal and/or coupon payments linked to the performance of commodity indices, and through investments in the PIMCO Cayman Commodity Fund I Ltd., a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the ìSubsidiaryî). Assets not invested in commodity-linked derivative instruments or the Subsidiary may be invested in inflation-indexed securities and other Fixed Income Instruments, including derivative Fixed Income Instruments. The Fund is non-diversified, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. In addition, the Fund may concentrate its assets in particular sectors of the commodities market. The average portfolio duration of the fixed income portion of this Fund will vary based on PIMCOís forecast for interest rates and under normal market conditions is not expected to exceed ten years. The Fund may invest up to 10% of its total assets in high yield securities (ìjunk bondsî) rated B or higher by Moodyís, or equivalently rated by S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality. The Fund may invest up to 30% of its total assets in securities denominated in foreign currencies and may invest beyond this limit in U.S. dollar denominated securities of foreign issuers. The Fund may invest up to 10% of its total assets in securities and instruments that are economically tied to emerging market countries. The Fund will normally limit its foreign currency exposure (from non-U.S. dollar-denominated securities or currencies) to 20% of its total assets. The Fund may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy back or dollar rolls).
Principal Risks. Under certain conditions, generally in a market where the value of both commodities and fixed income securities are declining, the Fund may experience substantial losses. The principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, high yield risk, market risk, issuer risk, liquidity risk, leveraging risk, derivative risk, commodity risk, mortgage-backed or other asset-backed risk, foreign (non-U.S.) investment risk, emerging markets risk, currency risk, issuer non-diversification risk, management risk, tax risk, subsidiary risk, and short sale risk.
PIMCO Diversified Income Fund Investment Objective and Principle Strategy. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 65% of its total assets in a diversified portfolio of Fixed Income Instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements. The average portfolio duration of this Fund normally varies from three to eight years, based on PIMCOís forecast for interest rates. The Fund may invest in a diversified pool of corporate fixed income securities of varying maturities. The Fund may invest all of its assets in high yield securities (ìjunk bondsî) subject to a maximum of 10% of its total assets in securities rated below B by Moodyís, or equivalently rated by S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality. In addition, the Fund may invest, without limitation, in fixed income securities that are economically tied to emerging market countries. The Fund may invest, without limitation, in securities denominated in foreign currencies and in U.S. dollar-denominated securities of foreign issuers. The Fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls).
Principal Risks. The principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are, interest rate risk, credit risk, high yield risk, market risk, issuer risk, liquidity risk, derivatives risk, mortgage-related and other asset-backed risk, foreign (non-U.S.) investment risk, emerging markets risk, currency risk, leveraging risk, management risk, short sale risk.
PIMCO Foreign Bond Fund Investment Objective and Principal Strategies. This Fund's investment objective is to maximize total return, consistent with the preservation of capital and prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in fixed income instruments of issuers located outside of the U.S., representing at least three foreign countries, which may be represented by futures contracts (including related options) with respect to such securities, and options on such securities. Such securities normally are denominated in major foreign currencies or baskets of foreign currencies (such as the euro).The Fund will normally hedge at least 75% of its exposure to foreign currency to reduce the risk of loss due to fluctuations in currency exchange rates. The Fund selects its foreign country and currency compositions based on an evaluation of various factors, including, but not limited to relative interest rates, exchange rates, monetary and fiscal policies, trade and current account balances. The average portfolio duration of this Fund normally varies within a three- to seven-year time frame. The Fund invests primarily in investment grade debt securities, but may invest up to 10% of its assets in high yield securities ("junk bonds") rated B or higher by Moody's or S&P, or, if unrated, determined by the Fund to be of comparable quality. The Fund is non-diversified, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. The Fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may also lend its portfolio securities to brokers, dealers and other financial institutions to earn income.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, market risk, issuer risk, foreign investment risk, currency risk, issuer non-diversification risk, liquidity risk, mortgage risk, derivatives risk, leveraging risk, and management risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO StocksPLUS Total Return Fund
Investment Objective and Principal Strategies. This Fund's primary investment objective is total return which exceeds that of the S&P 500. The Fund seeks to exceed the total return of the S&P 500 by investing under normal circumstances substantially all of its assets in S&P 500 derivatives, backed by a portfolio of Fixed Income Instruments. The Fund may invest in common stocks, options, futures, options on futures and swaps. The Fund uses S&P 500 derivatives in addition to or in place of S&P 500 stocks to attempt to equal or exceed the performance of the S&P 500. The value of S&P 500 derivatives closely track changes in the value of the index. However, S&P 500 derivatives may be purchased with a fraction of the assets that would be needed to purchase the equity securities directly, so that the remainder of the assets may be invested in Fixed Income Instruments. PIMCO actively manages the Fixed Income Instruments held by the Fund with a view toward enhancing the Fund's total return, subject to an overall portfolio duration which normally varies within a one- to six-year timeframe based on PIMCO's forecast for interest rates. The S&P 500 is composed of 500 selected common stocks that represent approximately two-thirds of the total market value of all U.S. common stocks. The Fund is neither sponsored by nor affiliated with S&P. The Fund seeks to remain invested in S&P 500 derivatives or S&P 500 stocks even when the S&P 500 is declining. Though the Fund does not normally invest directly in S&P 500 securities, when S&P 500 derivatives appear to be overvalued relative to the S&P 500, the Fund may invest all of its assets in a "basket" of S&P 500 stocks. Individual stocks are selected based on an analysis of the historical correlation between the return of every S&P 500 stock and the return on the S&P 500 itself. PIMCO may employ fundamental analysis of factors such as earnings and earnings growth, price to earnings ratio, dividend growth, and cash flows to choose among stocks that satisfy the correlation tests. The Fund also may invest in exchange traded funds based on the S&P 500, such as Standard & Poor's Depositary Receipts. Assets not invested in equity securities or derivatives may be invested in Fixed Income Instruments. The Fund may invest up to 10% of its total assets in high yield securities ("junk bonds") rated B or higher by Moody's or S&P, or, if unrated, determined by PIMCO to be of comparable quality. The Fund may invest up to 30% of its total assets in securities denominated in foreign currencies and may invest beyond this limit in U.S. dollar denominated securities of foreign issuers. The Fund will normally hedge at least 75% of its exposure to foreign currency to reduce the risk of loss due to fluctuations in currency exchange rates.
Principal Risks. Under certain conditions, generally in a market where the value of both S&P 500 derivatives and fixed income securities are declining or in periods of heightened market volatility, the Fund may experience greater losses or lesser gains than would be the case if it invested directly in a portfolio of S&P 500 stocks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are Interest Rate Risk, Credit Risk, High Yield Risk, Market Risk, Issuer Risk, Liquidity Risk, Derivatives Risk, Equity Risk, Mortgage Risk, Foreign (Non-U.S.) Investment Risk, Currency Risk, Leveraging Risk and Management Risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
Royce Value Fund Investment Objective and Principal Strategies. The Fund's investment goal is long-term growth of capital. Royce invests the Fundís assets primarily in the equity securities of small- and mid-cap companies, those with stock market capitalizations from $500 million to $5 billion, that it believes are trading significantly below its estimate of their current worth. The Fund generally invests in securities of companies that Royce believes have excellent business strengths, high internal rates of return and low leverage. W. Whitney George and Jay Kaplan co-manage the Fund, assisted by Lauren Romeo. Normally, the Fund invests at least 80% of its net assets in equity securities of such small- and/or mid-cap companies. Although the Fund normally focuses on the securities of U.S. companies, it may invest up to 25% of its net assets in foreign securities.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, small- and mid-cap companies risk, foreign investments risk, currency risk, issuer risk and management risk. Investments in the Fund are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other government agency.
RS Value Fund Investment Objective and Principal Strategies. The Fund seeks long-term capital appreciation. The Fund invests principally in equity securities that RS Investments believes are undervalued, of companies with market capitalizations between $1.0 billion and 120% of the market capitalization of the largest company included in the Russell Midcap Index on the last day of the most recent quarter (currently, approximately $54.6 billion, based on the size of the largest company on March 31, 2008). In evaluating investments for the Fund, RS Investments employs a return-on-capital analysis, combining balance sheet and cash flow analysis. The Fund typically invests most of its assets in securities of U.S. companies but may also invest any portion of its assets in foreign securities. Since its inception, the Fund frequently has held a substantial portion of its assets, at times equaling or exceeding 25%, in cash and cash equivalents. The Fund may, but will not necessarily, do so in the future.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, equity securities risk, small- and mid-cap companies risk, overweighting risk, underweighting risk, credit risk, interest rate risk, foreign investment risk, currency risk, turnover risk, liquidity risk, and sector risk.
Thornburg International Value Fund Investment Objective and Principal Strategies. The Fund seeks long-term capital appreciation by investing in equity and debt securities of all types. This goal is a fundamental policy of the Fund and may be changed only with shareholder approval. The secondary, non-fundamental goal of the Fund is to seek some current income. The Fund may not achieve its investment goals. The Fund invests primarily in foreign securities, and under normal market conditions, invests at least 75% of its assets in foreign securities or depository receipts of foreign securities. The Fund may invest in developing countries. The Fund ordinarily invests in stocks that may be depressed or reflect unfavorable market perceptions of company or industry fundamentals. The Fund may invest in companies of any size, but invests primarily in the large and middle range of public company market capitalizations. The Fund may also invest in partnership interests. Debt obligations will be considered for investment when Thornburg believes them to be more attractive than equity alternatives. The Fund may purchase debt obligations of any maturity and of any quality.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are market risk, interest rate risk, issuer risk, management risk, foreign investment risk, currency risk, emerging markets risk, small- and mid-cap companies risk, and high yield risk. An investment in the Fund is not a deposit in any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
Mutual Shares Fund (Franklin-Templeton) Investment Goals and Main Investment Strategies. This Fund's principal investment goal is capital appreciation, which may occasionally be short-term. Its secondary goal is income. Under normal market conditions, the Fund invests mainly in equity securities of companies that the manager believes are available at market prices less than their value based on certain recognized or objective criteria (intrinsic value). Following this value-oriented strategy, the Fund invests primarily in undervalued stocks, restructuring companies and distressed companies. The Fund invests primarily in mid- and large-cap companies with market capitalization values greater than $1.5 billion. The Fund may invest a substantial portion (up to 35%) of its assets in foreign securities and also may invest a significant portion of its assets in small-cap companies. The Fund generally seeks to protect against currency risks, largely using forward currency exchange contracts. The Fund may invest in debt securities to a lesser extent than its investments in equity securities. The Fund may invest in debt securities in any rating category established by an independent rating agency, including lower-rated (or comparable unrated) or defaulted debt securities ("junk bonds").
Main Risks. The main risks presented by an investment in the Fund include market risk, value securities risk, foreign investment risk, restructuring and distressed companies risk, small cap and medium cap companies risk, credit risk, high yield risk, and management risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO Low Duration Fund Investment Objective and Principal Strategies. This Fund's investment objective is to maximize total return, consistent with the preservation of capital and prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 65% of its assets in a diversified portfolio of fixed income instruments of varying maturities. The average portfolio duration of this Fund normally varies within a one- to three-year time frame based on the Fund's forecast for interest rates. The Fund invests primarily in investment grade debt securities, but may invest up to 10% of its assets in high yield securities ("junk bonds") rated B or higher by Moody's or S&P, or, if unrated, determined by the Fund to be of comparable quality. The Fund may also invest up to 30% of its assets in securities denominated in foreign currencies, and may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers. The Fund will normally hedge at least 75% of its exposure to foreign currency to reduce the risk of loss due to fluctuations in currency exchange rates. The Fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions to earn income.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, market risk, issuer risk, derivatives risk, liquidity risk, mortgage risk, foreign investment risk, currency risk, leveraging risk, and management risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO Money Market Fund Investment Objective and Principal Strategies. This Fund's investment objective is to maximize current income, consistent with the preservation of capital and daily liquidity. The Fund seeks to achieve its investment objective by investing at least 95% of its assets in a diversified portfolio of money market securities that are in the highest rating category for short-term obligations. The Fund may also invest up to 5% of its assets in money market securities that are in the second-highest rating category for short-term obligations. The Fund may only invest in U.S. dollar-denominated securities that mature in 397 days or fewer from the date of purchase. The dollar-weighted average portfolio maturity of the Fund may not exceed 90 days. The Fund may invest in the following: obligations of the U.S. Government (including its agencies and instrumentalities); short-term corporate debt securities of securities of domestic and foreign corporations; obligations of domestic and foreign commercial banks, savings banks, and savings and loan associations; and commercial paper. The Fund may invest more than 25% of its total assets in securities or obligations issued by U.S. banks. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions in order to earn income.
The PIMCO Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; although the issuer seeks to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, management risk, market risk, and issuer risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
Allianz NACM International Fund Investment Objective and Principal Strategies. This Fund's primary investment objective is maximum long-term capital appreciation. The Fund seeks to achieve its investment objective by investing primarily in companies located in the developed countries represented in the Fund's benchmark, the MSCI EAFE Index. The Fund normally invests at least 75% of its net assets in equity securities. The Fund also spreads its investments among countries, with at least 80% of its net assets invested in securities of companies located outside the U.S. The Fund may invest up to 20% of its assets in U.S. companies. The portfolio managers' "international systematic" investment approach uses a quantitative process to make individual security, industry sector, country and currency selection decisions and to integrate those decisions. The portfolio managers aim to exceed the returns of the benchmark through a strategy that combines dynamic quantitative factors with an actively managed stock selection process. The portfolio managers believe that their investment process results in a clearly defined buy and sell discipline that will continually drive the Fund's portfolio toward new excess return opportunities. The portfolio managers expect a high portfolio turnover rate of between 125% and 175%. The Fund may utilize foreign currency exchange contracts, options and other derivative instruments (for example, forward currency exchange contracts and stock index future contracts). In response to unfavorable market and other conditions, the Fund may make temporary defensive investments of some or all of its assets in high-quality fixed income securities, cash and cash equivalents. This would be inconsistent with the Fund's investment objective and principal strategies.
Principal Risks. The principal risks presented by an investment in the Fund include Market Risk, Issuer Risk, Value Securities Risk, Growth Securities Risk, Turnover Risk, Liquidity Risk, Currency Risk, Credit Risk, Derivatives Risk, Foreign (non-U.S.) Investment Risk, Leveraging Risk, Management Risk and Smaller Company Risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
Allianz NFJ Dividend Value Fund Investment Objective and Principal Strategies. This Fund's primary investment objective is current income, and its secondary objective is long-term growth of capital. The Fund seeks to achieve its investment objective by normally investing at least 80% of its assets in equity securities. In addition, the Fund invests at least 80% of its assets in securities that pay or are expected to pay dividends. The Fund will invest a significant portion of its assets in common stocks of companies with market capitalizations of more than $2 billion at the time of investment. The Fund may utilize options and other derivative instruments (such as stock index futures contracts) primarily for risk management and hedging purposes. In response to unfavorable market and other conditions, the Fund may make temporary investments of some or all of its assets in investment-grade debt securities, cash and cash equivalents.
Principal Risks. The principal risks presented by an investment in the Fund include market risk, issuer risk, value securities risk, derivatives risk, focused investment risk, leveraging risk, management risk, and credit risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO Short-Term Fund Investment Objective and Principal Strategies. This Fund's investment objective is to maximize current income, consistent with the preservation of capital and daily liquidity. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 65% of its assets in a diversified portfolio of fixed income instruments of varying maturities. The average portfolio duration of this Fund will vary based on the Fund's forecast for interest rates and will normally not exceed one year. The Fund invests primarily in investment grade debt securities, but may invest up to 10% of its assets in high yield securities ("junk bonds") rated B or higher by Moody's or S&P, or, if unrated, determined by the Fund to be of comparable quality. The Fund may invest up to 10% of its assets in securities denominated in foreign currencies, and may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers. The Fund will normally hedge at least 75% of its exposure to foreign currency to reduce the risk of loss due to fluctuations in currency exchange rates. The Fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions to earn income.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, market risk, issuer risk, derivatives risk, mortgage risk, leveraging risk, and management risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
PIMCO Total Return Fund Investment Objective and Principal Strategies. This Fund's investment objective is to maximize total return, consistent with the preservation of capital and prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 65% of its assets in a diversified portfolio of fixed income instruments of varying maturities. The average portfolio duration of this Fund normally varies within a three- to six-year time frame based on the Fund's forecast of interest rates. The Fund invests primarily in investment grade debt securities, but may invest up to 10% of its assets in high yield securities ("junk bonds") rated B or higher by Moody's or S&P, or, if unrated, determined by the Fund to be of comparable quality. The Fund may invest up to 30% of its assets in securities denominated in foreign currencies, and may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers. The Fund will normally hedge at least 75% of its exposure to foreign currency to reduce the risk of loss due to fluctuations in currency exchange rates. The Fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions to earn income.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its
net asset value, yield and total return, are interest rate risk, credit risk, market risk, issuer risk, derivatives
risk, liquidity risk, mortgage risk, foreign investment risk, currency risk, leveraging risk, and management
risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.
Purchases of Class SD-D Units of any of the Age-Based Investment Portfolios must correspond to the Beneficiary's age. Purchases of any of the Age-Based Investment Portfolios made through a financial need not correspond to the Beneficiary's age. See the Plan Disclosure Statement for details.
Certain of the investment management firms that manage underlying mutual Funds in the Program — Nicholas-Applegate, Oppenheimer Capital, Pacific Investment Management Company (PIMCO) and RCM — are affiliated with the Program Manager, Allianz Global Investors Distributors, LLC.
NOTICE: CollegeAccess 529 Plan accounts are not
insured by any state, and neither the principal deposited nor any
investment return is guaranteed by any state. Furthermore, the accounts
are not insured, nor the principal or any investment return guaranteed,
by the federal government or any federal agency.
Before investing, investors should consider whether their state of residency — or their intended Designated Beneficiary's state of residency — offers any benefit, such as a state tax deduction, or any other benefits that are only available for investments in that state's 529 savings program.
CollegeAccess 529 Plan is a Section 529 college savings plan
sponsored by the State of South Dakota, and managed and distributed by Allianz Global Investors Distributors LLC,
1345 Avenue of the Americas, New York, NY 10105-4800, 1-866-529-7462.
