U.S. equities performed well in the first quarter, as robust corporate earnings, rising housing prices and an improved labor market helped to support growth expectations and buoy investor sentiment. Despite the positive data, central banks continued their “easy” monetary policies and the U.S. Federal Reserve maintained the bond-buying program known as quantitative easing. Markets were also aided by the relative calm that prevailed in Europe through most of the quarter. While developments in Cyprus briefly roiled global markets in March, stocks recovered to close the period in record-high territory. Headlines from Europe may continue to impact U.S. equity returns in the months ahead, but crisis fears could also be balanced by continued stable growth and monetary stimulus.

Health care and industrials were the top-performing sectors in the Index, returning 14.34% and 14.07%, respectively. The bottom-performing market segments were telecommunications services and materials, which returned 1.16% and 9.38%, respectively. And despite improving economic growth in the United States, materials stocks lagged in an environment characterized by falling commodity prices and concern over slowing demand from China.

If you are an aggressive investor seeking competitive long-term investment returns through a broadly diversified portfolio, this Fund may be appropriate for you. It seeks to offer investment results, before expenses, approximating the aggregate price and dividend performance of the securities included in the Russell 2000 Index.

• Passively managed, the Fund seeks to duplicate the investment composition and overall performance of the stocks included in the Russell 2000® 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.