If you prefer to construct your own asset allocation, or supplement other options, you may select among the following large-cap funds:
|U.S. Large-Cap Equity|
|AllianzGI Best Styles U.S. Equity|
|TIAA US Large Cap Equity Portfolio|
AllianzGI Best Styles Global Equity Fund
Investment Objective and Principal Strategies. The Fund seeks long-term capital appreciation. The Fund seeks to achieve its investment objective by creating a diversified portfolio of global equities. The Fund will normally invest at least 80% of its net assets (plus borrowings made for investment purposes) in equity securities and equity-related instruments. The Fund normally invests at least 40% of its assets in non-U.S. securities, including emerging market securities. The portfolio managers intend to diversify the Fund's investments across geographic regions and economic sectors. The Fund may invest in issuers of any size market capitalization, including smaller capitalization companies.
The Fund's investment strategy centers on the portfolio managers' belief that individual investment styles (as described below) carry long-term "risk premiums" that are largely independent of the current economic or market environment and that can be captured using a disciplined investment approach.
The investment process begins with a broad investment universe containing at least 4,000 equity securities. Next, individual securities are evaluated based on quantitative "investment style" research and may also be evaluated by the Sub-Adviser's fundamental research team. Investment style research categorizes companies through a proprietary quantitative model that scores each company along several investment style categories, described below (Value, Earnings Change, Price Momentum, Growth, and Quality). Fundamental research evaluates each company identified as an investment candidate through the quantitative "investment style" research process using a wide range of company-specific information gathered by in-house analysts and external sources. In selecting individual stocks with attractive fundamental characteristics, the portfolio managers seek to diversify the mix of investment styles represented across the whole portfolio (i.e., by making sure high-scoring issuers from all of the investment styles are among the final holdings). The portfolio managers attempt to control for risk factors (such as over- and under-weights relative to the MSCI All Country World Index and the portfolio's sensitivity to broader market movements (or "beta")). The portfolio is managed with reference to the MSCI All Country World Index and the portfolio managers intend, under normal circumstances, to have at least 300 equity securities in the Fund's portfolio. The Fund may and intends to hold stocks that are not included in the MSCI All Country World Index.
The Value investment style selects equity securities that the portfolio managers believe have attractive valuations based on metrics including dividend yield and price-to-earnings, price-to-cash flow and price-tobook ratios, as compared to other equity securities in the investable universe. The Earnings Change investment style is designed to capture shorter-term, trend-following investment opportunities and generally selects equity securities with positive earnings revisions, announcements or surprises. The Price Momentum investment style is also trend-following and generally selects equity securities with positive price momentum and relative strength within the investable universe. The Growth investment style generally selects equity securities with expected and historical earnings growth and dividend growth. The Quality investment style generally emphasizes equity securities with strong profitability and historical earnings stability, and considers additional factors, such as whether a company has improving margins, positive net income, positive operating capital, decreasing long-term debt and high-quality earnings, among others. The Fund's research suggests that, while each of the investment styles described above can be individually successful over the long-term and during certain periods, each investment style may also experience "downswings" (i.e., during certain market, economic, or other conditions an individual investment style may underperform compared to the relevant broad equity market). Building a portfolio with a diversified mix of investment styles is the Fund's attempt to mitigate what the portfolio managers believe to be the cyclical nature of the individual investment styles. The Fund's diversified mix of investment styles is expected to remain fairly stable over time.
The Fund may participate in initial public offerings (IPOs). The Fund may also utilize foreign currency exchange contracts, stock index futures contracts, warrants and other derivative instruments.
Principal Risks. The principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are equity securities risk, market risk, issuer risk, non-U.S. investment risk, emerging markets risk, smaller company risk, credit and counterparty risk, currency risk, derivatives risk, focused investment risk, IPO risk, leveraging risk, liquidity risk, management risk and turnover risk.
TIAA US Large Cap Equity Portfolio
Investment Objective and Principal Strategies. Investment Objective and Principal Strategies. The Fund seeks a favorable long-term total return, mainly through capital appreciation, by investing primarily in a portfolio of equity securities of large domestic companies selected to track U.S. equity markets based on a market index.
Principal Risks. In addition to the investment risks applicable to all of the Index Funds, the S&P 500 Index Fund is subject to large cap risk.