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    Understanding_Your_Invest_Opt_12-31-03.DOC Understanding_Your_Invest_Opt_12-31-03.DOC Document Transcript

    • The UMWA Cash Deferred Savings Plan of 1988 As of 12/31/03 Understanding Your Investment Options
    • The UMWA Cash Deferred Savings Plan of 1988 Understanding Your Investment Options About this plan The UMWA Cash Deferred Savings plan of 1988 is a 401(k) plan that offers many advantages not available through other traditional means of saving. You get a break on taxes, because the money you contribute comes out of your pay before most taxes are deducted and the interest your money earns continues to grow tax deferred, until you withdraw it. You have the opportunity to choose how your money is invested, from six different investment options. The Cash Deferred Savings Plan helps you set aside money today, so that you can plan for a secure future. Choosing Your Control of your Cash Deferred Savings Plan investments is an Investments Is important feature of the plan. For that reason, investment Important alternatives with varying degrees of risk and reward are available. You also have the ability to make changes in the way your current and future savings are invested. The purpose of this packet is to give you the information you need to make informed investment decisions. It’s important that you review the performance of your investments and your investment strategy on a regular basis. The Cash Deferred Savings Plan is designed to comply with section 404 ( c ) of the Employee Retirement Income Security Act and Title 29 of the Code of Federal Regulations Section 2550.404c-1. This means that you, not the Board of Trustees or anyone else, control your investments. It also means that the plan fiduciaries may be relieved of liability for any losses that are a direct result of your control. 2
    • What Are Your You may choose from the following six different investments Investment options: Options • Calvert Social Investment Fund Money Market Portfolio; • Guaranteed Investment Contract Fund; • Vanguard GNMA Fund; • UMWA 401(k) Balanced Fund; • Barclays Global Investors S&P 500 Equity Index Fund; and • Fidelity Equity-Income Fund Contained in this packet are descriptions of these investment options, including their: • investment objectives; • relative risk and return characteristics; • type and diversification of assets; • investment managers; and • fees to buy or sell an option and annual operating expenses. What Other Additional information on the investment options is also available Information Is to you upon request. This includes: Available to You • information on the annual investment costs of each investment option and information on the annual administrative expenses of the plan; • current prospectuses on the following investment options, which are publicly available offered mutual funds: Calvert Social Investment Fund Money Market Portfolio; Vanguard GNMA Fund; and Fidelity Equity-Income Fund; • information on the underlying assets in the following investment options, which are not publicly offered mutual funds and which do not publish prospectuses: Guaranteed Investment Contract Fund; UMWA 401 (k) Balanced Fund; and Barclays Global Investors S&P 500 Equity Index Fund; 3
    • • copies of financial statements, reports and any other materials relating to the investment options, to the extent that they are made available to the plan; • information concerning the value of the shares or units in each of the investment options offered by the Cash Deferred Savings Plan, as well as the past and current investment performance of each of the investment options (the plan provides a quarterly statement showing performance information and the value of your account); and • information concerning the value of the shares or units in each of the investment options held in your own account. The Board of Trustees of the Cash Deferred Savings Plan is responsible for providing the above information to you when you request it. If you would like any of this additional information, you can call the Beneficiary Call Center at 1-800-291-1425 or write to: UMWA Cash Deferred Savings Plan of 1988 UMWA Health and Retirement Funds Suite 350 2121 K Street, NW Washington, D.C. 20037 In addition to this information, the Vanguard GNMA Fund, and the Fidelity Equity-Income Fund have share prices listed in many newspapers. Information on these funds can also be found on investment websites (tickers VFIIX and FEQIX, respectively). Voting and Tender Any voting, tender or similar rights in the mutual funds are Rights exercised on behalf of the plan by the plan administrator and do not pass through to the participants. Any voting, tender or similar rights in the non-mutual fund investments are exercised on behalf of the plan by the investment managers and do not pass through to the participants. 4
    • Changing Your You may change your investment options for the future and/or past Investments contributions up to four times each year, effective as of the first payday following January 1, April 1, July 1, or October 1. To make a change, you must complete a form and return it to the UMWA Health and Retirement Funds, no later than the first of the month before the first of the calendar quarter in which you want the change to take effect. Call the Beneficiary Call Center at 1-800-291-1425 to obtain the form, titled Application to Change Investment Option for the Future and/or Past Contributions. The form must be mailed to the following address: UMWA Cash Deferred Savings Plan UMWA Health and Retirement Funds Suite 350 2121 K Street, NW Washington, D.C. 20037 Restrictions on Your investment in the Guaranteed Investment Contract (GIC) Changing Your Fund may not be transferred directly to or from the Calvert Social Investments Investment Fund Money Market Portfolio or the Vanguard GNMA Fund. Direct transfers to the GIC Fund may only be made from the UMWA 401 (k) Balanced Fund, the Barclays Global Investors Equity Index Fund and the Fidelity Equity-Income Fund. Similarly, direct transfers may only be made from the GIC Fund to the UMWA 401 (k) Balanced Fund, the Barclays Global Investors Equity Index Fund and the Fidelity Equity-Income Fund. The insurance companies that offer the GICs impose this restriction. 5
    • Key Terms and There are certain key terms and concepts that are used throughout Concepts this packet to describe your investment options. The following explanations are provided so that you can better understand your options. Bonds – Organizations like the federal government and some private companies borrow money from the public to finance their operations. The loans are called bonds. They are bought by investors who want to receive a steady stream of interest income with repayment of their principal at the end of a certain period of time. That’s why bonds are often referred to as fixed income investments. Capital growth vs. income – These two key investment concepts refer to the different ways in which your investment can grow. Capital growth refers to an increase in the value of the investment (e.g., a share of the stock becomes more valuable just as the market value of your house goes up). Income is the interest or dividends paid on your investment. Over the short term, investments which focus on income are less volatile. Conversely, capital growth investments are more erratic and less certain. Over the long term the picture reverses, however, as investments that focus on capital growth generally provide greater total return than those that emphasize income. Guaranteed Investment Contracts – Guaranteed Investment Contracts (GICs) are investments available primarily on a group basis, issued by life insurance companies. These contracts bear a stated rate of interest for a specified period of time. The principal and interest are guaranteed by the insurance company, subject to the terms of the contract. Money Market Instruments – These are fixed income investments which mature in less than one year. The most common investments are U.S. Treasury Bills, commercial paper (notes) issued by corporations, and large denomination certificates of deposit by banks. 6
    • Risk – Investment risk basically refers to the possibility that the investment will not turn out as expected. There are a number of reasons why this might happen. One possibility is that the “deal could not work out” (e.g. a bond will fail to pay interest or principal, or a company in which you own stock goes out of business) but these events are relatively rare and your investment options each consist of a diversified group of investments. The most important risk is the risk that the value of your investment could go down in the financial markets. In the short run, a stock could increase in value if the company does well, or decline because of other market conditions. Bond prices could go down because interest rates available from new bonds are higher. The key consideration in moderating this type of risk is time. There is yet another element of risk – the risk that your investments will not earn enough money over the long term to keep up with inflation. Investing is a process of balancing these short and long term risks against the expected rewards. Your own needs should dictate how you manage your investments. Most investors have a range of needs and expected possible uses of their money and put parts of their savings in different types of investments. Stocks – A stock is a type of investment that enables you to be a part owner in a business. If the company does well, the price of the stock should increase. If the company’s profits are down, or the company operates at a loss, the value of your investment may reflect this decline or loss. Total Return –Total return is the combination of interest from bonds, dividends from stocks, and changes in the market value of these investments over time. Volatility – Volatility refers to the possibility that your investment 7
    • THE UMWA CASH DEFERRED SAVINGS PLAN OF 1988 INVESTMENT OPTION: Calvert Social Investment Fund Money Market Portfolio _______________________________________________________________________ _ Objective The Calvert Social Investment Fund Money Market Portfolio seeks to provide current income, preservation of capital, and liquidity by investing in money market instruments. Selection of investments is guided by the Fund's "social criteria" of investing in the securities of companies that have good records of labor relations, including strong equal employment opportunity programs, and deliver safe products and services in ways that sustain our natural environment. Investment Type The Calvert Social Investment Fund Money Market Portfolio is a mutual fund which invests in short-term money market instruments and pays daily interest to investors. The Fund attempts to maintain its share price at $1.00 per share. Investment Risk The Fund emphasizes stability of principal while paying a varying and Return level of income based on current market interest rates. Stability of principal reduces risk to minimal levels. Strategy The Fund invests in high-quality money market instruments such as U.S. Government securities, certificates of deposit, commercial paper, and other short-term corporate obligations. Portfolio Composition Current Yield (Annualized) (as of 09/30/03) (as of 12/31/03) Taxable Variable Rate Notes 76.9% 0.49% US Government Agencies 18.9 Deposit of Receipts 2.3 Agency Variable Rate Notes 0.9 Certificates of Deposit 0.5 Other 0.5 TOTAL 100.0% 8
    • Fund Manager Calvert Asset Management Company is the Fund's investment advisor and is a leader in socially responsible investment vehicles with over two decades of experience in socially-concerned portfolio management. Calvert Asset Management Company has a total of $8 billion under management. Performance The chart below shows the annual total return of the Calvert Social Investment Fund Money Market Portfolio over each of the past 10 years. Total Return 7.0% 5.8% 6.0% 5.3% 4.8% 5.0% 4.9% 4.7% 5.0% 4.0% 3.6% 3.6% 3.0% 2.0% 1.3% 1.0% 0.5% 0.0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Over the past 10 years, a hypothetical investment of $1,000 in the Calvert Social Investment Fund's Money Market Portfolio would have grown to approximately $1,471 assuming reinvestment of all distributions. Future results, however, may be different than past performance. Comparison To Calvert Social Investment Fund's Money Market Portfolio is Other Plan Funds considered to be a low risk investment option offering short-term interest rates with the stability of principal similar to the GIC Fund. The Fund offers less return potential than the Vanguard GNMA Fund, the UMWA 401(k) Balanced Fund, the Fidelity Equity- Income Fund, and the BGI Equity Index Fund. Investment Costs An investor in the Fund pays no commissions or sales load. The money market portfolio of the Calvert Social Investment Fund does incur investment management and expense fees based on the average assets of the Fund. For the year ending December 31, 2003, total fund operating expenses were 0.875% of average assets or $8.75 per $1,000 invested. Plan administrative expenses are not included in these fund expenses. 9
    • THE UMWA CASH DEFERRED SAVINGS PLAN OF 1988 INVESTMENT OPTION: Guaranteed Investment Contract (GIC) Fund _______________________________________________________________________ _ Objective The Guaranteed Investment Contract (GIC) Fund seeks to provide a fixed rate of return over a specific period of time without subjecting the investment to any fluctuation in value. Investment Type The Fund is comprised of a group of individual Guaranteed Investment Contracts each of which guarantees a fixed rate of interest for a specific period of time. The interest rate credited to Fund participants is a blended rate representing all of the contracts in place during a participant's term of investment. Investment Risk The Fund's return, which is fixed for a specified time, is guaranteed and Return by the issuers of the underlying investment contracts, usually insurance companies, which are selected on the basis of financial strength and credit quality. Strategy The Guaranteed Investment Contract (GIC) Fund seeks to provide current income based upon a group of GICs from the largest and strongest insurance companies. The Fund's return is a blend of the separate rates on each of the investment contracts within the plan at the time. Insurance Contracts (as of 12/31/03) Blended Rate (Annualized) Provider Rate Maturity 1. Protective Life Insurance 4.46% 9/30/04 2.67%* 2. New York Life 2.39% 9/30/04 3. John Hancock Financial 2.10% 9/30/05 4. Prudential Insurance Co. 2.75% 9/30/06 *payable during the period 5. Principal Life Insurance 2.75% 9/30/06 Oct. 1, 2003 to Dec. 31, 2003 10
    • Fund Manager The Trustees of the Cash Deferred Savings Plan are responsible for the selection, management, and administration of the Guaranteed Investment Contract Fund. The investment contracts are selected through competitive bidding. Performance The chart below shows the annual total return of the Guaranteed Investment Contract (GIC) Fund over each of the past 10 years. Total return consists entirely of interest earned from the portfolio of investment contracts. Total Return 8.0% 6.8% 6.7% 7.0% 6.3% 6.2% 6.4% 6.3% 6.6% 6.6% 6.3% 6.0% 4.7% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Over the past 10 years, a hypothetical investment of $1,000 in the Guaranteed Investment Contract (GIC) Fund would have grown to approximately $1,840 assuming reinvestment of all distributions. Future results, however, may be different than past performance. Comparison To The GIC Fund is considered to be a low risk investment option Other Plan Funds offering income with stability of principal similar to the Calvert Social Investment Fund's Money Market Portfolio. The Fund offers less return potential than the Vanguard GNMA Fund, the UMWA 401(k) Balanced Fund, the Fidelity Equity-Income Fund, and the BGI Equity Index Fund. Investment Costs An investor in the Fund pays no commissions or sales load. There are no fund operating expenses incurred by the Guaranteed Investment Contract (GIC) Fund. Plan administrative expenses are not included in any fund expenses. 11
    • THE UMWA CASH DEFERRED SAVINGS PLAN OF 1988 INVESTMENT OPTION: Vanguard GNMA Fund _______________________________________________________________________ _ Objective The Vanguard GNMA Fund seeks a high and sustainable level of current income while seeking to maintain account principal and liquidity by investing in Government National Mortgage Association (GNMA) mortgage-backed certificates. Investment Type The Vanguard GNMA Fund is a mutual fund which invests at least 80% of its assets in the securities of the Government National Mortgage Association. These are fixed income securities representing part ownership in a pool of mortgage loans backed by the U.S. government. The balance of its assets may be invested in U.S. Treasury or other U.S. government securities. The Fund’s average maturity normally falls within an intermediate-term range of 5-10 years. Investment Risk The Fund expects to yield a higher level of income than short-term and Return bond funds due to the longer maturity of its investments. However, the Fund can experience share price fluctuation due to changes in interest rates. The Fund's yield level and asset value will vary depending upon market conditions. Although the Fund invests in obligations issued or guaranteed by the U.S. Government, a plan participant's investment in Vanguard is not guaranteed by the U.S. Government. Strategy The Fund buys and sells government securities to maximize current income to the shareholder while potential capital gains resulting from changes in interest rates are not a major investment consideration. Such changes in interest rates can cause wide fluctuations in share prices. Portfolio Composition: Current Yield (Annualized) (as of 12/31/03) (as of 12/31/03) GNMA* Securities 100% 4.70% *Government National Mortgage Association 12
    • Fund Manager The Vanguard GNMA Fund, started in 1980, is managed by Vanguard Funds, one of the largest investment management firms in the country with assets under management as of December 31, 2003 of over $550 billion. Performance The chart below shows the annual total return of the Vanguard GNMA Fund over each of the past 10 years. Total return is the combination of interest from bonds in the portfolio and the changes in market value over time. Total Return 20.0% 17.0% 15.0% 9.5% 10.5% 9.7% 10.0% 7.1% 7.9% 5.2% 5.0% 2.5% -1.0% 0.8% 0.0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 -5.0% Over the past 10 years, a hypothetical investment of $1,000 in the Vanguard GNMA Fund would have grown to approximately $1,931 assuming reinvestment of all distributions. Future results, however, may be different than past performance. Comparison To The Vanguard GNMA Fund offers higher return potential, but Other Plan Funds carries with it greater volatility or "risk" than the Calvert Social Investment Money Market Portfolio or the GIC Fund. The Fund offers less return potential and volatility than the UMWA 401(k) Balanced Fund, the Fidelity Equity-Income Fund, and the BGI Equity Index Fund. A participant’s investment in this option can be subject to wide fluctuations in both yield and market value. Investment Costs An investor in the Vanguard GNMA Fund pays no commissions or sales load. The Fund does incur investment management and expense fees based on the average assets of the Fund. For the year ending December 31, 2003, total fund operating expenses were 0.22% of average assets or $2.20 per $1,000. Plan administrative expenses are not included in these fund expenses. 13
    • THE UMWA CASH DEFERRED SAVINGS PLAN OF 1988 INVESTMENT OPTION: UMWA 401(k) Balanced Fund _______________________________________________________________________ _ Objective The UMWA 401(k) Balanced Fund seeks to achieve capital growth comparable to the total return of the S&P 500 stock index but with lower risk than the stock market through actively managing a portfolio of stocks, bonds and money market instruments. The Fund will not invest in companies that do not meet certain standards for labor relations, occupational safety and other social issues. Investment Type The UMWA 401(k) Balanced Fund is a separate account managed by Boston Trust & Investment Management Company. The Fund's investments are balanced between stocks and fixed income securities. Investment Risk The Fund balances risk and return expectations through ownership and Return of both stocks and bonds. The Fund can be suitable for those willing to assume a moderate level of risk (associated with both the stock and bond market) in search of long-term investment rewards. Strategy The Fund follows a diversified and balanced program of investing in bonds and common stocks for both income and growth. The Fund allocates investments among asset classes and sectors in order to participate in rising markets and avoid losses in falling markets. Portfolio Composition (as of 12/31/03) Ten Largest Stock Holdings (as of 12/31/03) Stocks 63% 1. American Int’l Group Bonds 36 2. BP PLC ADR Money Markets 1 3. Donaldson Inc. Total 100% 4. Illinois Tool Works Inc. 5. Intel Corp 6. Johnson & Johnson 7. Pfizer Inc. 8. T. Rowe Price Group Inc. 9. Sycso Group 10. Wilmington Trust 14
    • Fund Manager Boston Trust & Investment Management Company specializes in the management of balanced funds and is a leader in the management of socially responsible investment portfolios. Boston Trust & Investment Management Company has a total of $3.6 billion under management. Performance The chart below shows the annual total return of the UMWA 401(k) Balanced Fund over each of the past 10 years. Total return is the combination of interest from bonds, dividends from stocks and changes in market value over time. Total Return Over the past 10 years, a hypothetical investment of $1,000 in the 30.0% 26.3% UMWA 401(k) Balanced Fund would have grown to approximately 25.1% 25.0% $2,829 assuming reinvestment of all distributions. Future results, 19.4% however, may be different than past performance. 16.5% 20.0% 13.5% 15.0% Comparison To The UMWA 401(k) Balanced Fund is considered to have a lower 10.0% 6.0% 7.0% Other Plan Funds risk and return potential than the Fidelity Equity-Income Fund and the BGI Equity Index Fund but more risk 1.1% return potential than 5.0% and -0.5% -0.6% the Vanguard GNMA Fund, the GIC Fund, or the Calvert Social 0.0% Investment Fund Money Market Portfolio. 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 -5.0% Investment Costs An investor in the Fund pays no commissions or sales load. The UMWA 401(k) Balanced Fund does incur investment management and expense fees based on the average assets of the Fund. For the year ending December 31, 2003, total fund operating expenses were 0.45% of average assets or $4.50 per $1,000. Plan administrative expenses are not included in these fund expenses. THE UMWA CASH DEFERRED SAVINGS PLAN OF 1988 INVESTMENT OPTION: Barclays Global Investors Equity Index Fund _______________________________________________________________________ _ Objective The Barclays Global Investors (BGI) Equity Index Fund seeks to match the total return performance of the Standard & Poor's 500 Composite Stock Price Index, a widely-accepted benchmark for equity performance. 15
    • Investment Type This option is a separate account which invests in a stock fund managed by Barclays Global Investors. The Fund maintains a portfolio of 500 stocks and seeks long-term growth in value. Investment Risk The BGI Equity Index Fund can experience high price volatility or and Return "risk" in exchange for potentially greater long-term investment returns. Because the Fund invests totally in common stocks, the fund's share price, yield, and total return can fluctuate more widely than the other savings plan's options. Strategy This Fund's portfolio invests in all the stocks which comprise the S&P 500 Index in the same proportions as they are represented in the Index. The S&P 500 Index is designed to reflect the industrial composition of the U.S. economy and represents approximately 75% of the total market value of all U.S. common stocks. Percentage of Market Value (as of 12/31/03) Ten Largest Stock Holdings (as of 12/31/03) Basic Materials 2.9% 1. General Electric Communications 11.2 2. Microsoft Consumer Cyclical 9.8 3. Exxon Mobil Consumer Non-Cyclical 22.4 4. Pfizer Energy 6.0 5. Citigroup Inc. Financial 20.6 6. Wal-Mart Stores Industrials 10.7 7. Intel Corp Technology 13.8 8. American Intl Group Utilities 2.6 9. Cisco Systems Inc. TOTAL 100.0% 10. IBM Fund Manager Barclays Global Investors is one of the largest equity fund manager in the securities industry and is a leader in managing equity-based "index funds". Performance The chart below shows the annual total return of the BGI Equity Index Fund over each of the past 10 years. Total return is the combination of dividends from stocks and changes in market value over time. Total Return 50.0% 37.3% 33.4% 40.0% 28.6% 23.0% 28.8% 30.0% 21.1% 20.0% 10.0% 1.3% 0.0% -10.0% -9.1% -11.9% -20.0% -30.0% -22.1% 16 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
    • Over the past 10 years, a hypothetical investment of $1,000 in the BGI Equity Index Fund would have grown to approximately $2,856 assuming reinvestment of all distributions. Future results, however, may be different than past performance. Comparison To The BGI Equity Index Fund offers the potential for the highest Other Plan Funds capital growth return over a long period of time. It has more return potential and volatility than the UMWA 401(k) Balanced Fund, Vanguard GNMA Fund, the GIC Fund or the Calvert Social Investment Fund Money Market Portfolio. Over short periods of time, however, the Fund can be more "risky" or volatile than other plan options because the fund may experience wide and unpredictable movements in the price of shares. Investment Costs An investor in the BGI Equity Index Fund pays no commissions or sales load. This fund does incur investment management and expense fees based on the average assets of the fund. For the year ended December 31, 2003 total fund operating expenses were 0.02% of average assets or $0.20 per $1,000 invested. Plan administrative expenses are not included in these fund expenses. THE UMWA CASH DEFERRED SAVINGS PLAN OF 1988 INVESTMENT OPTION: Fidelity Equity-Income Fund _______________________________________________________________________ _ Objective The Fidelity Equity-Income Fund seeks to obtain income by investing primarily in a portfolio of high yielding equity securities which provide a dividend yield greater than the Standard & Poor's 500 Composite Stock Price Index (the S&P 500). In pursuing this objective, the fund also considers the stocks' potential for capital appreciation. 17
    • Investment Type The Fidelity Equity-Income Fund is a mutual fund, managed by Fidelity Investments, which invests primarily in income-producing common and preferred stocks, and to a lesser degree, debt securities of corporations. While seeking long-term growth, its emphasis is to produce a higher income yield than the S&P 500. Investment Risk The Fidelity Equity-Income Fund has moderate-to-high price and Return volatility and return expectations as it seeks a higher income yield than the S&P 500 and long-term growth at the same time. Therefore, since the Fund invests mostly in common and preferred stocks, the Fund's share price, yield, and total return can fluctuate widely. Strategy The Fidelity Equity-Income Fund seeks to provide a steady stream of quarterly dividends by investing primarily in high-yielding stocks. By following an "income-driven" strategy, capital appreciation is not expected to be comparable to funds whose primary objective is growth. The Fund will also invest in various debt obligations, such as convertible bonds, high grade bonds and high yield bonds. Portfolio Composition (as of 12/31/03) Ten Largest Stock Holdings (as of 12/31/03) Stocks 96.1% 1. Exxon Mobil 6. Bank of America Bonds 0.2 2. Citigroup 7. Viacom Inc. Convertible 3. Amer. Intl. Group 8. Schlumberger Securities 2.0 4. Total Fina Elf 9. Verizon Communications 5. Fannie Mae 10. BellSouth Corp Money Market, etc. 1.7 TOTAL 100.0% Fund Manager Fidelity Investments, the Fund's manager, is one of America's largest investment management organizations. Founded in 1946, Fidelity has nearly $1 trillion in assets currently under management and is a pioneer in "equity-income" investing. Performance The chart below shows the annual total return of the Fidelity Equity- Income Fund over each of the past 10 years. Total return is the combination of dividends from stocks, interest from bonds and the changes in market value over time. 18
    • Total Return 40.0% 31.8% 30.0% 30.0% 21.0% 20.0% 12.5% 14.38% 7.2% 8.5% 10.0% 0.2% 0.0% -10.0% -5.0% -20.0% -17.2% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Over the past 10 years, a hypothetical investment of $1,000 in the Fidelity Equity-Income Fund would have grown to approximately $2,446 assuming reinvestment of all distributions. Future results, however, may be different than past performance. Comparison To The Fidelity Equity-Income Fund offers the return potential and Other Plan Funds volatility or "risk" usually associated with stock funds whose primary objective is growth, such as the Barclays Global Investors Equity Index Fund. It has more return potential and volatility than the UMWA 401(k) Balanced Fund, Vanguard GNMA Fund, the GIC Fund, or the Calvert Social Investment Fund Money Market Portfolio. Over short periods of time, however, the Fund can be more “risky” because it can experience wide and unpredictable movements in the price of its shares based on market fluctuations. Investment Costs An investor in the Fidelity Equity-Income Fund pays no commissions or sales load. This fund does incur investment management and expense fees based on the average assets of the fund. For the year ended December 31, 2003, total fund operating expenses were 0.72% of average assets or $7.20 per $1,000 invested. Plan administrative expenses are not included in these fund expenses. 19