Unique Approach

Recent turbulent times have reminded investors that the market does go up and down. Market volatility is something no one can predict. Many investors have forgotten that investment styles rotate in and out of favor over time. Unfortunately, these investors often abandon their long-term plan as they attempt to react to each change in the market, sometimes taking on greater risk.

Over time, our sub-advisers specializing in the value style haven't abandoned the investment process, which has served them so well over the long-term. As growth styles have recently rotated out of favor, our value sub-advisers were richly rewarded for their perseverance.

We at American Beacon Advisors believe that the implementation of a value style of long-term investing can help minimize the impact of stock market declines. That's why we maintain a consistent, disciplined approach with our Funds. We take a long-term view with our stock funds and don't just chase the latest market fad. Value funds search for growing companies that are selling at relatively low prices as compared to their earnings or corporate assets, as compared to many growth funds that look for companies that are growing but may not be selling at a low price.

What most people don't realize is that from the beginning of 1975 through the end of 2003, value investing outperformed growth investing over time. By the end of this period, a $10,000 investment would have grown to $529,169 for the consistent value investor while the growth investor would have only $314,700 (assuming all dividents were reinvested).

The chart depicts the total returns of a hypothetical $10,000 initial investment for the S&P500/BARRA Growth Index and the S&P 500/BARRA Value Index from January 1975 to December 2003 calculated by BARRA using a monthly buy and hold strategy. Please note that these indices are unmanaged and cannot be invested in directly. Past performance is not indicative of future results.