Washington’s deal in early January to bypass the most worrisome aspects of the so-called “fiscal cliff” sparked a rally in U.S. markets, and earnings, housing, and employment data continued to support growth expectations as the quarter progressed. Stocks were also boosted by the Federal Reserve’s statement that would it would maintain its stimulative monetary policies. While concern over instability in Cyprus sparked volatility toward quarter end, the markets were largely able to shrug off concerns that the European debt crisis would lead to another sell-off for stocks.

For the quarter, the top-performing sectors in the Index were health care and consumer staples, which returned 15.81% and 14.58%, respectively. Amid a favorable environment for equities overall, investors continued to gravitate toward stocks with reliable earnings and above-average dividends. The worst-performing market segments were information technology and materials, with returns of 4.59% and 4.79%, respectively. And despite improving U.S. growth, materials stocks lagged in an environment characterized by falling commodity prices and concern over slowing demand from China.

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 500 Stock Index.

• Passively managed, the Fund seeks to duplicate the investment composition and overall performance of the stocks included in the S&P 500® 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.