The Large Cap Growth Fund posted a total return of -12.68% for the quarter, compared with -11.75% for the Fund's benchmark, the Russell 1000 Growth Index. The Fund's tilt toward larger companies with global customer bases led to the underperformance. Stock selection in financials, health care, energy and materials also detracted on a relative basis. Stock selection was strong in the technology and industrial sectors. We added several new technology positions leveraged to "cloud computing" and realized positive results from machinery and engineering holdings.

Some market observers are warning of a "double-dip" recession. Although we remain unconvinced such a scenario will materialize, we acknowledge that leading economic indicators have slowed. We believe this indicates a transition from the early stimulus-fueled phase of economic expansion into a slower-growth phase of the business cycle, where exceptional companies can differentiate themselves from the pack. We are encouraged that market leadership is stabilizing and we remain optimistic about our slight bias toward stocks with good price momentum.

If you fit the profile of a more aggressive investor able to accept greater volatility in exchange for higher potential return than is offered by the Growth Equity Fund, you will want to consider this Fund as a core holding for your portfolio. Because companies with these characteristics often retain their earnings, investors should expect low to no dividends.

• Combine top-down, theme-driven approach with bottom-up fundamental stock selection to construct a portfolio of primarily large-cap growth stocks.
• Select stocks with emphasis on growth potential, quality of earnings and management experience.
• Seek to provide long-term capital appreciation for investors looking to participate in longer-term investment themes, which may contribute to increased volatility.