Long Horizon Fund

Fund Objective

The Long-Horizon Fund seeks to provide a unique portfolio for members who want a multi-class portfolio but do not want to manage it themselves. The fund is a balanced portfolio that is primarily invested in stocks with a focus on long-term capital appreciation and very little income growth.

Investment Strategy

The portfolio uses a broad market domestic stock index, an international stock index, an actively managed corporate bond portfolio and a short-term investment fund to build a diversified portfolio. It is actively managed to maintain a target mix, rebalancing back to the target level as often as market conditions warrant.

Target Allocations

The domestic stock component is invested in a passive index managed to match the return and characteristics of the Wilshire 5000. The Wilshire 5000 is a broad-based index that measures the performance of all U.S. headquartered stock securities with readily available price data.

The International stock component is invested in a passive index managed to match the return and characteristics of the MSCI EAFE. The MSCI EAFE is currently comprised of large capital stocks of 21 developed countries representing approximately 85 percent of the free float adjusted total market capitalization of those countries.

The fixed income component is actively managed to exceed the return of the Lehman Intermediate Credit Index. The credit index invests in investment grade corporate bonds and currently has an average maturity of about five years. The cash component is invested in an actively managed money market fund.

Investment Risk

This portfolio has a relatively high level of risk and has a higher corresponding rate of return. It is intended for investors who have a higher risk profile and want a diversified portfolio that is rebalanced routinely to the target mix.

Investment Manager

The Horizon Funds are provided by the Washington State Investment Board and managed by:

International Stock Component — State Street Global Advisors
Domestic Stock Component — Barclay’s Global Advisors
Fixed Income Component — Washington State Investment Board
Cash Component — Black Rock Provident Institutional Funds

Investment Restrictions

Once 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.

* 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.

** Total component costs are estimated using a percentage of the cost of the individual components based on the target allocation.

Other expenses are as of March 31, 2008. Expenses include the operating costs associated with portfolio management and items such as custodial fees, audit fees and transfer agent fees. They are usually fixed costs and change in percentage as the fund balance changes.

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