Socially Responsible Balanced Fund

Fund Objective

The Washington State Investment Board (WSIB) Socially Responsible Balanced Fund seeks long-term capital growth through an actively managed portfolio of stocks, bonds and money market instruments.

Investment Strategy

The Socially Responsible Balanced Fund seeks to invest in a portfolio of companies that have demonstrated above average performance in a variety of social criteria. All holdings pass a broadly defined set of social screens, such as product safety and desirability, workplace issues, environmental impacts, international operations and weapons contracting. The portfolio is also actively engaged in promoting corporate change through advocacy.

The fund seeks to participate in rising markets while protecting against losses in falling markets. This is primarily accomplished in two ways. First, the fund actively adjusts the mix of stocks, bonds and cash over time. Second, the fund focuses on investments in the securities of companies with consistently strong histories of profitability and financial strength. The portfolio strives to avoid investments in securities of companies with poor financial performance or excessive market risk. The fund will not invest in junk bonds.

Investment Risk

The fund is intended for participants who seek long-term growth of principal with a moderate level of risk. The fund seeks to replicate a composite of the S&P 500 Index (55%) and the Lehman Brothers Aggregate Index (45%).

Investment Manager

The Socially Responsible Balanced Fund is provided by the Washington State Investment Board and managed by Walden Asset Management, a division of Boston Trust & Investment Management Company.

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.

* Historic 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 and record keeper expenses. All returns are calculated in U.S. dollars.

** 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 decrease in percentage as the fund balance changes.

Fees are calculated based upon your daily account balance.

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