Mid-cap stocks performed well during the quarter, as a number of positive factors came together to fuel heightened risk appetite among U.S. investors. A deal in Washington avoiding the most significant portions of the so-called “fiscal cliff” sparked a rally in U.S. markets, and earnings, housing and employment data continued to support more favorable growth expectations. Despite the positive data, central banks maintained their “easy” monetary policies, boosting the performance of risk assets. The Federal Reserve, which had said in December that it would keep its current policies in place until U.S. unemployment reaches 6.5%, maintained its asset purchases. Relative calm in Europe through most of the quarter was also helpful to equity markets. Bailout negotiations in Cyprus briefly roiled the markets in March, but stocks recovered to close the period in record-high territory. While news from Europe may continue to impact U.S. equity returns, crisis fears could be balanced by continued stable growth and monetary stimulus.

The top-performing sector for the MidCap Index was consumer staples, which returned 21.82%. Utilities and industrials also performed well, returning 18.69% and 17.57%, respectively. The telecommunications services sector underperformed, with a return of -2.24%.

If you're a moderate risk investor seeking competitive long-term investment returns through a broadly diversified portfolio, this Fund may be appropriate for you. It offers a high degree of relative predictability in an uncertain stock market by seeking investment results, before expenses, approximating the aggregate price and dividend performance of the securities included in the S&P MidCap 400 Index.

• Passively managed, the Fund seeks to duplicate the investment composition and overall performance of the stocks included in the S&P MidCap 400 Index.
• Invest at least 80% of its net assets in equity securities in the Index, in weightings that approximate the relative composition of the Index.
• Use proprietary quantitative techniques designed to minimize trading costs.