Objective

The objective of the International Blended Equity Fund is to provide long-term growth of capital and to keep pace with or exceed the rate of inflation over time by investing in companies located outside of the United States. There is no guarantee that these objectives will be met.

Strategy

The International Blended Equity Fund is actively managed, meaning that it attempts to outperform its benchmark, the EAFE Index. The EAFE Index is broadly representative of the stock markets of Europe, Australia and the Far East. The net return will be the result of the broad international markets' performance, plus or minus the ability of the fund managers to outperform the market, minus investment and administration fees.

Assets are allocated among several active managers who diversify their stock selections using different approaches, including, but not limited to:

• Value-based investing, which seeks to identify stocks that are selling at a price believed to be lower than fair value and which may enjoy capital appreciation when they begin to sell at a higher value
• Growth-oriented investing, which seeks to identify stocks with strong future earnings growth
• Investing across the spectrum of company sizes, from large, well established companies, to smaller companies that usually have less market recognition
• Investing across the spectrum of country development, from mature economies and markets to those in more embryonic stages

Opportunities

Historically, over long periods of time, global equity (stock) markets have tended to provide higher returns than other investments, such as bonds or money market instruments. While there is no guarantee that this will be the case in the future, investment theory suggests that higher returns over the long term are a key reason investors would select an option like this one.

Because this fund is actively managed, the portfolio managers make conscious decisions about which stocks to include due to their favorable prospects, and which to exclude due to unfavorable prospects. These decisions are made in an attempt to produce even higher returns than the equity market performance alone as measured by the EAFE Index.

The International Blended Equity Fund engages a variety of managers with contrasting investing styles. When one manager is performing less well there is the possibility that another will be performing better. This can provide a smoother investment experience than being concentrated in a single manager or style. In addition, because this fund covers the full capitalization range from stocks of large companies to smaller ones, it has a broader range of choices from which to access good investments.

The International Blended Equity Fund provides an opportunity for investors to access good investments outside of the United States. This recognizes that the world is becoming increasingly global, and that the U.S. is only one part of the world economy. This fund is well diversified among various regions of the world and also diversified among industries.

It is possible that during times when the U.S. equity market is in decline non-U.S. markets may decline less or even be positive; this is sometimes true, but not always.

This fund may hold a portion of its investments in emerging markets, such as China, Russia and South Korea. These economies may provide opportunities for higher returns than in developed countries, such as England or Japan.

Risks

All securities investments risk the loss of capital. Since this fund is invested entirely in stocks, the chance of losing a percentage of your original investment is much higher than with some other investment options.

All stock markets can be volatile. Although, over long periods of time, investors in stocks may enjoy higher returns than investors in other options receive, they can also lose more money than those investing in other options. Sharp and unpredictable changes in value, either positive or negative, can be especially acute over shorter periods of time.

The active decisions that the portfolio managers make with respect to which stocks to include and which to exclude may not turn out as expected and may detract from total fund return rather than enhancing it. On a short-term (year-to-year) basis this fund's return may vary meaningfully from its benchmark.

International investing carries certain additional risks. Currency risk is one of the primary risks for investors in international equities. Currency risk refers to the possibility that the foreign currencies in which investments are denominated will fall in relation to the US dollar. (Conversely, foreign currencies could rise in relation to the dollar and benefit the investment return.)

Political, social and economic developments in foreign countries can reduce investment returns. Thisincludes the establishment of foreign exchange controls or other government-imposed investment restrictions.

The International Blended Equity Fund may be expected to have some percentage of investments in emerging markets, such as China, Russia and Brazil. In contrast to developed countries, such as England and Japan, emerging markets may be especially volatile, rising or falling even more sharply than the U.S. or developed non-U.S. stock markets. Emerging markets are typically less liquid, as well. This means that a portfolio manager deciding to sell some shares of emerging market companies may not find ready buyers. As a result, the portfolio manager may not be able to sell their shares until buyer(s) come forward. Should this occur at a time when prices are declining, the shareholder's loss may be greater than if the manager were able to sell immediately. Circumstances in emerging markets are constantly changing, and some of the other issues that portfolio managers contend with are corporate governance, accounting standards and the local conventions of doing business.

If you are not comfortable with any of these risks, we suggest you choose another option.

			TOTAL RETURN AS OF FEBRUARY 5, 2010
FUND	Price		1 Day	Year to Date	1 Year	3 Years	5 Years	Since Inception*
International Blended Equity Fund	$11.44		-1.82%	-7.19%	34.61%	-8.33%	1.83%	1.36%
			*The inception date is February 1, 2000.

The International Blended Equity Fund is managed by a small group of independent money managers under the direction of the finance committee:

• Artisan Partners

• Capital Guardian

• MS International Equity Fund

• MS Iternational Small Cap