BlackRock

100%

Core U.S. stock fund

Russell 3000 Index

Passively Managed

None

A flat asset based fee of 0.02%

Fees and expenses are only one of several factors that should be considered when making investment decisions. More information on fees and expenses can be found in the FAQs on the MyFRS.com website.

BlackRock' (BTC) objective in managing the fund is to deliver a high quality and cost-effective index-based portfolio to institutional investors.

See Security Selection and Portfolio Construction

Each Russell 3000 Index Fund shall be invested and reinvested in a portfolio of equity securities with the objective of approximating as closely as practicable the capitalization weighted total rate of return of the segment of the United States market for publicly traded equity securities represented by the 3000 largest capitalized companies. The criterion for the selection of investments shall be the Russell 3000 Index.

Futures and Options
BTC does not use futures to add value; futures are used only to decrease tracking error. Futures contracts are employed within the collective funds to "equitize" cash flows. These flows are generated from dividends and other cash flows associated with securities in the portfolio. Futures contracts are purchased to provide immediate market exposure proportionate to the size of both cash flows and residual cash within the portfolio. The goal is to reduce the overall portfolio tracking error that would be incurred should cash remain uninvested in the portfolio. Cash in excess of 0.15% would be equitized using futures contracts.

Securities Lending
BlackRock' philosophy on borrower selection is to concentrate their lending to highest credit quality borrowers of those who meet stringent capital, financial and risk requirements and who are able to meet their obligations within the terms of the lending contract. Their risk management controls include:

• Rigorous credit screening of borrowers to determine capital adequacy, liquidity and operations efficiency.
• Collateral requirements that govern receipt and monitoring of collateral received in lieu of securities borrowed. BTC accepts only cash, obligations of the U.S. Government and irrevocable letters of credit.
• A minimum of 102% and 105% of the market value for domestic and international loans is required at the outset, respectively.
• A daily mark-to-market procedure.
• Investment policy controls applied to the investment of cash received as collateral.
• Record-keeping guidelines, written agreements and regulatory reporting managed in compliance with all applicable regulatory controls of the securities lending programs of financial institutions.

As a result of their risk controls, neither BTC nor their clients have ever experienced a loss due to collateral reinvestment, operational negligence or broker default.

Not applicable.