** Only available to shareholders with account registrations established prior to 5/01/06.

• Asset Type -- Bonds
• Rates Moderate on the Risk Chart
• Fund Fact Sheet - Class A&B (PDF 74 KB) and R1,R2,R3 (PDF 60 KB)

Investor profile: You may want to invest in the Bond Fund if you are seeking higher potential returns than money market funds and are willing to accept the price volatility of bonds with longer maturities, want to diversify your investments, are seeking an income mutual fund for an asset allocation program, or are retired or nearing retirement. You can open an account in this fund with a minimum initial investment of $250 ($50 by automatic investment).

You may not want to invest in the Bond Fund if you are investing for maximum return over a long time horizon, want the greater growth potential of an investment in equity securities, or require stability of your principal.

Investment objective: Seeks to realize over a period of years the highest yield consistent with investing in investment grade bonds.

Investment strategy: The Bond Fund invests primarily in investment grade bonds issued by U.S. companies. Under normal circumstances, the Bond Fund invests at least 80% of its assets in investment grade bonds or in bonds that are not rated, but that the Manager has determined to be of comparable quality. A bond is investment grade if Moody's Investors Service, Inc. ("Moody's") or S&P have rated the bond in one of their respective four highest rating categories. Non-investment grade bonds are commonly referred to as "junk bonds." The Bond Fund may invest in the following instruments:

• Corporate debt securities: investment grade securities issued by domestic and foreign corporations and to a limited extent (up to 20% of its assets), in lower rated securities;
  
  
• U.S. Government debt securities: securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities;
  
  
• Foreign government debt securities: investment grade securities issued or guaranteed by a foreign government or its agencies or instrumentalities, payable in U.S. dollars;
  
  
• Asset backed and mortgage backed securities: investment grade securities backed by mortgages, consumer loans and other assets; or
  
  
• Other issuer debt securities: the Fund may invest up to 20% of its assets in debt securities and preferred stocks that are convertible into common stocks as well as nonconvertible preferred stocks or securities.

Please read the Prospectus for more detailed information on expenses.

Risks

• Interest rate risk
• Prepayment risk
• Credit risk
• Management risk
• Liquidity risk

An investment in the Bond Fund is not a deposit of any bank or other insured depository institution and is not insured or guaranteed by the FDIC or any other government agency. You can lose money by investing in the Fund.

It is important to note that there is market risk involved when investing in mutual funds, including possible loss of principal.

An automatic investment plan does not assure a profit and does not protect against loss in declining markets.  An automatic investment plan involves continuous investment in securities regardless of fluctuating prices.  You should consider your financial ability to continue purchases through periods of high or low price levels.

It is important to note that diversification does not assure a profit or protect against loss in a declining market.

It is important to note all bonds are subject to interest rate risk, including those issued by the U.S. Government.  There is risk that the bonds a fund holds may decline in value due to an increase in interest rates.

State Farm VP Management Corp Risk/Important Disclosures. State Farm Mutual Funds Prospectus. The State Farm College Savings Plan Enrollment Handbook (PDF 553 KB) .

Need Assistance? 1-800-447-4930

AP2009/10/9802