U.S. Small Stock Index Fund

Fund Objective

The U.S. Small Stock Index Fund seeks to replicate the returns and characteristics of the Russell 2000 Index.

Investment Strategy

The Russell 2000 Index is comprised of the smallest 2,000 U.S. stocks in the Russell 3000 Index and is an excellent proxy for the small-capitalization sector of the U.S. equity market. The U.S. Small Stock Index Fund employs an optimized replication approach to construct a fund with returns that track those of the index. In addition to tight tracking, replication results in low turnover and transaction costs.

To provide 100 percent exposure to the equity market and increase tracking accuracy, the fund may hold a combination of S&P MidCap 400 and Russell 2000 Index futures contracts in lieu of cash.

Investment Risk

The U.S. Small Stock Index Fund is intended for members who want an investment designed to parallel the returns of the Russell 2000. It is intended as a long-term investment vehicle due to the higher volatility of returns on small-capitalization common stocks over short-term periods.

Investment Manager

The U.S. Small Stock Index Fund is provided by Washington State Investment Board and managed by Barclays Global Investors.

Investment Restrictions

Once a member has transferred money out of the fund, he or she will not be allowed to transfer money back into the same fund for thirty calendar days. The thirty day window will be based on the last time the member made a transfer out of the fund. This restriction will not affect the member’s regular contribution or the ability to leave state service and withdraw from Plan 3. For additional information, please refer to page 2 of the Plan 3 Investment Guide.

* Historical performance is not necessarily indicative of actual future investment performance, which could differ substantially. All performance figures contained herein are provided net of management fees and other expenses but before the WSIB expenses and record keeping fees. All returns are calculated in U.S. dollars.

Please note: totals may not equal 100% due to rounding.

** Other expenses are as of March 31, 2007. Expenses include the operating costs associated with portfolio management and items such as custodial fees, audit fees and transfer agent fees. They are usually fixed costs and change in percentage as the fund balance changes.

Fees are calculated based upon your daily account balance.

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