Fund ObjectiveThe objective for each Retirement Strategy Fund is to achieve the highest total return over time consistent with its asset mix.
Investment StrategyRetirement Strategy Funds are diversified asset allocation portfolios designed for members who want to leave ongoing investment decisions to an experienced portfolio management team. All you have to do is pick the Retirement Strategy Fund with the date closest to your expected target date for retirement (2050, 2045, 2040, 2035, etc). The management team adjusts the asset mix of your Retirement Strategy Fund over time to the allocation it deems appropriate for your age.
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 for retirement, 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.
Investment RiskBefore investing for retirement, there are many factors to consider, including your time horizon, retirement needs, goals and assets (income and investments outside of Plan 3). You should view the Retirement Strategy Funds as one part of your entire plan for retirement income.
The Retirement Strategy Funds’ underlying investments include international companies, which involve such risks as currency fluctuations, economic instability and political developments. The portfolios also invest some of their assets in small and midsize companies. Such investments increase the risk of greater price fluctuations. In addition, the portfolios have a portion of their assets in bonds. Investments in bonds are subject to interest-rate risk, credit risk and inflation risk. As with all investments, there is a risk of not meeting your retirement income needs. Because the Retirement Strategy Funds are managed to specific retirement dates, you may be taking on greater risk if your actual year of retirement differs dramatically from what you estimated.
Past performance does not guarantee future results. You should consider the investment objectives, risks, charges and expenses of the Retirement Strategy Funds carefully before investing. The Retirement Strategy Funds are a customized product, not a registered investment company, and interests in the funds
have not been registered with the Securities Exchange Commission. Therefore, there is no prospectus for these funds. For more information, please refer to the Plan 3 Investment Guide. Please see Risks of Investing in the Funds for additional information.
Investment ManagerThe Retirement Strategy Funds are provided by the Washington State Investment Board (WSIB) and managed by AllianceBernstein L.P. under contract to the WSIB. AllianceBernstein designs and implements the asset allocation and manages the majority of the investment components of the strategy.
The WSIB also provides two components not managed by AllianceBernstein for the Retirement Strategy Funds. The U.S. Large Cap Stock component is managed by Barclays Global Investors (BGI) and the Intermediate-Term Bond component is managed by the WSIB’s internal fixed income staff.
Investment RestrictionsOnce a member has transferred money out of the fund, he or she will not be allowed to transfer money back into the same fund for thirty calendar days. The thirty day window will be based on the last time the member made a transfer out of the fund. This restriction will not affect the member’s regular contribution or the ability to leave state service and withdraw from Plan 3. For additional information, please refer to page 2 of the Plan 3 Investment Guide. The fund inception date is October 3, 2008. Historic performance is not necessarily indicative of actual future investment performance, which could differ substantially. All performance figures contained herein are provided net of management fees and other expenses but before the WSIB and record keeper expenses. All returns are calculated in U.S. dollars.
Asset Allocation
As ofJune 30, 2009| U.S. Small/Mid Cap Value Stocks | 5.38% |
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| U.S. Small/Mid Cap Growth Stocks | 5.37% |
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| International Value Stocks | 22.42% |
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| International Large Cap Growth Stocks | 22.49% |
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| Global Real Estate Investment Trusts (REITs) | 4.96% |
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| WSIB Bond Fund | 5.01% |
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| Equity Index Fund | 34.38% |
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| Total* | 100.01% |
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Annual Fees
As ofJuly 1, 2009| Management Fee and Expenses1 | 0.4300 |
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| WSIB Expenses | 0.0265 |
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| ICMA-RC Record-Keeping Fee | 0.1100 |
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| Total | 0.5665 |
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