Before you spend your hard-earned money on a product or service, you like to know what you’ll be getting. The same holds true when you’re investing in a mutual fund. You probably want to learn what you can about a particular fund before agreeing to write a check. And that’s where the prospectus comes in.

What Is A Prospectus?

A prospectus, or statutory prospectus, is a formal document, filed with the Securities and Exchange Commission that provides the information an investor needs to make a decision. A prospectus can be quite large, with some spanning more than 100 pages. However, each State Farm® fund has a summary prospectus, which provides important information specific to that fund.

What Is A Summary Prospectus?

A summary prospectus will be only a few pages long. This quick read will provide you with fund information that includes:

  • The fund’s investment objective
  • A fee table and example
  • Risks and returns
  • Information on the fund portfolio managers

What Is A Fund Investment Objective Statement?

An objective statement is usually found near the front of the prospectus. The statement is a summary of the mutual fund, detailing the goals of the fund and how it plans to reach the goals. Included in the objective statement are the risks involved in investing in a particular fund. By carefully reading this objective statement, the investor is better able to determine if the risks of investing in the fund are in line with risks he or she is willing to accept.

What Is A Fee Table?

A prospectus also includes a Fees and Expenses section. Mutual funds exist to provide an investment vehicle where individuals pool their assets to purchase securities. Fund companies offer professional management of the money and are paid for their services. The management fee is paid to the fund manager and is based on a percentage of the value of the fund’s assets.

Another fee found in many funds is the 12b-1 fee that is collected by the broker/dealer to pay for marketing and distribution expenses. The amount of the fee can range from 0.25 to 0.75 percent of the fund's assets. An additional 0.25 percent of the average net assets may be paid as compensation to sales professionals for providing ongoing services to investors. A table showing these fees is included in the prospectus.

How Do I Determine Risks And Returns From A Prospectus?

The prospectus includes a section on Performance. Contained in this section is the information about how well the fund has performed during the most recent 1-, 5-, and 10-year period. The information is important because it shows how well a fund has done in the past. However, past performance is no indication of how well a fund will do in the future. All funds are subject to risks that may adversely affect returns.

The Performance section may also include a small sub-section showing how a $10,000 investment may perform over time. You can get a general idea of how well your investment may perform, but the numbers may not include taxes and inflation and, therefore, may not necessarily reflect your actual investment returns.

The prospectus also contains a Risks section. Investors who purchase shares of funds are subject to various risks, and it’s possible to lose money by investing in the funds. An investment in a fund is not like a deposit in any bank or other depository institution and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or another government agency. Various types of risks investors may face are detailed in the prospectus.

Who Are Portfolio Managers And Shareholders?

Portfolio managers are those who manage the investments within a fund. A page containing the name(s) of all portfolio managers may be found in the prospectus. Shareholders are those individual investors, like you, who purchase shares in the fund.

These sections detail who manages the fund and how individual investors may purchase shares and how to redeem them. In the Shareholder Information section you’ll find out the minimum amount that may be invested. you’ll also learn about different ways to make that investment, such as writing a check, automatic withdrawals, or wire transfers. you’ll also determine ways to redeem your shares, such as by phone, wire transfer, or written request.

Have Questions About Investing?

The answer is an easy one: Talk with your registered State Farm Agent who will discuss your current needs and opportunities and help you develop a plan to fit your goals. Simply click, call, or stop by an office in your neighborhood today!

Risk Disclosures

Investing involves risk, including potential for loss.

Additional Disclosures

Mutual Funds Disclosures

Before investing, consider the funds' investment objectives, risks, charges and expenses. Contact State Farm VP Management Corp (1-800-447-4930) for a prospectus or summary prospectus containing this and other information. Read it carefully.

General

Automatic investment plans do not assure a profit or protect against loss.

Neither State Farm nor its agents provide investment, tax, or legal advice.

It is not possible to invest directly in an index.

State Farm VP Management Corp. is a separate entity from those State Farm entities which provide banking and insurance products.

As of June 2nd, 2010, additional fees may apply to certain accounts with balances less than $5000.

Each State Farm LifePath Fund invests all of its assets in a corresponding LifePath Master Portfolio under a master/feeder structure. BlackRock Fund Advisors (“BFA”) is the investment advisor to the LifePath Master Portfolios. State Farm Investment Management Corp. (SFIMC) is the investment advisor to the State Farm LifePath Funds. State Farm VP Management Corp. (SFVPMC) is the distributor of the State Farm LifePath Funds. Neither SFIMC or SFVPMC, or their affiliates, are affiliated with BFA or its affiliates.

BlackRock Investors Services (BIS) provides marketing support to the LifePath Master Portfolios. BFA and BIS are wholly owned subsidiaries of BlackRock Institutional Trust Company, N.A. (“BTC”). Neither BTC or its affiliates are affiliated with State Farm. BTC is located at 400 Howard Street, San Francisco, CA 94105.

BlackRock Fund Advisors (“BFA”) is the investment sub-advisor to the S&P 500 Index Fund.

Ascensus provides recordkeeping and administrative services for retail 401(k) retirement plans offered by State Farm Investment Management Corp.

Net Asset Value (NAV) is calculated by adding all of the assets of a Fund, subtracting the Fund’s liabilities, then dividing by the number of outstanding shares.

Money market mutual fund data is not available for funds other than the State Farm Money Market Fund.

Indices

The Russell 2000® Index tracks the common stock performance of the 2,000 smallest U.S. companies in the Russell 3000® Index.

The Russell 2500 Index tracks the 2,500 smallest companies in the Russell 3000 Index.

The Russell 1000 Index is a stock market index that represents the highest-ranking 1,000 stocks in the Russell 3000 Index.

The Russell Midcap Index measures the performance of the mid-cap segment of the US equity market and is a subset of the Russell 1000 Index.

The Dow Jones Industrial Average is an unmanaged average of 30 actively traded stocks.

The NASDAQ Composite is an unmanaged market capitalization weighted index that is designed to represent the performance of the National Market System.

The S&P 500® Index tracks the common stock performance of 500 large U.S. companies.

The S&P 1500 Index is a stock market index of U.S. stock that includes all stocks in the large cap S&P 500 Index, the mid cap S&P 400 Index, and the small cap S&P 600 Index.

The Morgan Stanley Capital International Europe, Australasia and Far East Free (EAFE® Free) Index currently measures the performance of stock markets of Europe, Australia, New Zealand, and the Far East.

The Morgan Stanley Capital International Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe.

The Barclays 1-5 Year U.S. Treasury Index measures the performance of short-term U.S. Treasury Securities maturing within one to five years.

The Barclays U.S. Aggregate Bond Index represents debt securities in the U.S. investment grade fixed rate bond market.

The Barclays Municipal Bond Index is an unmanaged index representative of the tax-exempt bond market.

The Barclays High Yield Index includes all fixed income securities having a maximum quality rating from Moody’s Investor Service of Ba1, a minimum amount outstanding of $100 million, and at least one year to maturity.

The Barclays TIPS Index measures the performance of the US Treasury Inflation-Protected Securities (TIPS) market.

The Citigroup 3 Month T-Bill Index is an average of the last 3-month Treasury bill issues (excluding the current month-end bill).

The FTSE EPRA/NAREIT Developed REIT and Non-Reit Index is a subset of the Developed Index, which is designed to track the performance of listed real estate companies and REITS worldwide.

The MSCI ACWI (All Country World Index) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.

The Nikkei 225 Index is a price-weighted index comprised of Japan’s top 225 blue-chip companies on the Tokyo Stock Exchange.

The Credit Suisse High Yield Index is designed to mirror the investible universe of the $U.S. – Denominated high yield debt market.

The New York Stock Exchange is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities.

The CBOE 10-Year Treasury Note (TNX) is based on 10 times the yield-to-maturity on the most recently auctioned 10-year Treasury note. The notes are usually auctioned every three months following the refunding cycle: February, May, August and November. The expiration period of these notes is three near-term months plus three additional months from the March quarterly cycle. The aggregate position and exercise limits are 25,000 contracts on the same side of the market.

The Blended Benchmark for the Equity and Bond Fund is a combination of 60% of the S&P 500 Index and 40% of the Barclays U.S. Aggregate Bond Index, rebalanced monthly.

The Blended Benchmark for the LifePath Funds is a combination of the holdings in the Barclays U.S Aggregate Bond Index, Russell 1000 Index, MSCI ACWI ex-U.S. Index, FTSE EPRA/NAREIT Developed Real Estate Index and Barclays TIPS Index. The weightings of the indices are adjusted quarterly to reflect the funds' changing asset allocations over time.

Trademarks

iShares and LifePath®, LifePath 2020®, LifePath 2030®, LifePath 2040®, and LifePath 2050® are all registered trademarks of BlackRock Institutional Trust Company, N.A. All other trademarks, service marks or registered trademarks are the property of their respective owners.

“Standard & Poor’s®”, “S&P®”, “S&P 500®”, “Standard and Poor’s 500”, and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by State Farm Life Insurance Company, State Farm Life and Accident Assurance Company and the State Farm Variable Product Trust. Neither the Large Cap Equity Index Fund nor the Stock and Bond Balanced Fund is sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the Large Cap Equity Index Fund or the Stock and Bond Balanced Fund.

The Russell 2000® Index is a trademark/service mark, and Russell™ is a trademark of the Frank Russell Company. The Small Cap Equity Index Fund is not sponsored, endorsed, sold or promoted by, nor in any way affiliated with the Frank Russell Company. Frank Russell Company is not responsible for and has not reviewed the Small Cap Equity Index Fund nor any associated literature or publications and Frank Russell Company makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise.

The EAFE® Free Index is a trademark, service mark and the exclusive property of Morgan Stanley Capital International, Inc. (“MSCI”) and its affiliates and has been licensed for use by the State Farm Variable Product Trust (the “Trust”). The International Equity Index Fund (the “Fund”), based on the EAFE® Free Index, has not been passed on by MSCI as to its legality or suitability, and is not issued, sponsored, endorsed, sold or promoted by MSCI. MSCI makes no warranties and bears no liability with respect to the Fund. MSCI has no responsibility for and does not participate in the management of the Fund assets or sale of the Fund shares. The Trust’s Prospectus contains a more detailed description of the limited relationship MSCI has with the Trust and the Fund.

Non-US Residents

Each of the investment products and services referred to on the State Farm Mutual Funds web site is intended to be made available to customers or prospective customers residing in the United States. The customer’s U.S. permanent residence address must be a street address. This web site shall not be considered a solicitation or offering for any investment product or service to any person in any jurisdiction where such solicitation or offer would be unlawful.

Business Continuity Plan

State Farm VP Management Corp. has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, download this information (PDF 27 KB) on our business continuity plan.

Need Assistance?

1-800-447-4930 Mutual Funds
1-888-702-2307 Variable Products

AP2012/02/0277

Not FDIC Insured
  • No Bank Guarantee
  • May Lose Value

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