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

• Asset Type -- Bonds
• Rates Moderate on the Risk Chart (PDF 20 KB)
• Fund Fact Sheet (PDF 85 KB)
  

Investor profile: You may want to invest in the Tax Advantaged Bond Fund if you want regular tax-free dividends or to reduce taxes on your investment income. 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 Tax Advantaged Bond Fund if you are seeking long term growth of capital, want the greater growth potential of an investment in equity securities, require stability of your principal., or if you are investing through an IRA, 401(k) plan or some other kind of tax-deferred account.

Investment objective: Seeks as high a rate of income exempt from federal income taxes as is consistent with prudent investment management.

Investment strategy: The Tax Advantaged Bond Fund invests primarily in a diversified selection of municipal bonds with maturities of one to thirty years. A majority of the Fund's investments are in bonds with maturities longer than five years.

The Fund normally invests so that either (1) 80% or more of the Fund's net investment income is exempt from regular federal income tax or (2) 80% or more of the Fund's net assets is invested in securities that produce income exempt from regular federal income tax.

The Fund normally invests at least 80% of its total assets in municipal bonds within the highest four rating categories of Moody's or S&P, meaning that the Fund may invest up to 20% of the Fund's total assets in medium and lower-quality bonds

Risks

• Interest rate risk
• Income risk
• Credit risk
• Management risk
• Liquidity risk
• Municipal bond risk

An investment in the Tax Advantaged 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) .

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AP2009/10/9801