Fund Descriptions
Growth Fund

This Fund is managed by RE Advisers Corporation and subadvised by T. Rowe Price Associates ("T. Rowe Price"), a global investment manager with a number of growth-oriented funds.

The Growth Fund seeks long-term capital appreciation through investments in common stocks of growth companies. In taking a growth approach to investment selection, the Fund will normally invest at least 65% of net assets in the common stocks of large companies. A large company is defined as one whose market cap is larger than the median market cap of companies in the Russell 1000 Growth Index, a widely used benchmark of the largest domestic growth stocks. However, because the market capitalization of the companies in the Fund's portfolio and the Russell Index will change over time, the Fund will not automatically sell or stop buying stock of a company it already owns just because the company's market capitalization changes.

"We generally look for companies with an above-average rate of earnings and cash flow growth and a lucrative niche in the economy that gives them the ability to sustain earnings momentum even during times of slow economic growth. As a growth investor, T. Rowe Price believes that when a company increases its earnings faster than both inflation and the overall economy, the market will eventually reward it with a higher stock price," portfolio manager Robert Sharps explains.

In pursuing the Fund's investment objective, Mr. Sharps has the discretion to purchase some securities that do not meet its normal investment criteria, when he finds an unusual opportunity for gain. These special situations might arise when Mr. Sharps believes a security could increase in value for a variety of reasons, including a change in management, an extraordinary corporate event or a temporary imbalance in the supply of or demand for the securities.

Performance

The tables below show the Fund’s average annual and year-to-date total returns for various holding periods compared to its benchmark index. An index is a collection of securities intended to represent some slice of the total securities market.

The bar chart shows the Fund's annual return in each of the last 10 years or for each year since the Fund's inception. This indicates how widely performance has varied year-by-year.

Growth Fund Historical Annual Total Returns

The total returns shown above represent past performance which does not guarantee future results. Investment return and principal value of an investment will fluctuate. An investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. *Performance information for the Growth Fund (formerly the Nasdaq-100 Index Tracking Stock (SM) Fund) reflects its previous investment strategy of matching, as closely as possible, before expenses, the performance of the Nasdaq-100 Index. On November 18, 2008, by the approval of shareholders, the Fund revised its investment objective and this change became effective on December 5, 2008.

Portfolio Composition

The following tables show how the Growth Fund is diversified and what its top holdings are.

GROWTH FUND Industry Diversification

on 12/31/11 Information technology 38.2% Consumer discretionary 18.0% Industrials 13.8% Health care  13.7% Energy  8.2% Telecommunication services  2.6% Materials  2.4% Financials  1.6% Consumer staples  0.7% Short-term and other assets  0.8% Total  100%

Growth fund Top Ten Holdings
% of Total Investment at 12/31/11 Apple Inc. 8.3% Google Inc. (Class A) 5.3% Amazon.com, Inc. 3.4% Danaher Corp. 3.2% priceline.com, Inc. 3.0% Juniper Networks, Inc. 2.9% QUALCOMM, Inc.  2.9% MasterCard Inc.  2.7% Crown Castle International Corp.  2.7% McKesson Corp.  2.5% Total  36.9%

Fund assets on 12/31/11

$32,434,000

Comparison of Growth

This line graph is a comparison of the change in value of a $10,000 investment in the Fund, the Russell 1000 Growth Index and the Standard & Poor's 500 Stock Index.

GROWTH FUND Growth of $10,000

The Growth Fund's average annual total returns are net of any fee waivers and reimbursements. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares.

Distributions

If this Fund has declared income or capital gains distributions in the current year, they will be listed in the table below.  See Track Earnings Distributions for the Fund's distribution schedule.

GROWTH FUND 2012 Earnings Distributions   Distribution Type Declaration Date $/Per Share                  N/A N/A N/A GROWTH FUND 2011 Earnings Distributions
Distribution Type Declaration Date $/Per Share Long-Term Capital Gains 06/30/11 $0.0979 Long-Term Capital Gains 12/31/11 $0.4174

 

Share Price History This table shows how widely the Fund’s share price has fluctuated over time. GROWTH FUND Share Price History 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year End $5.50 $3.40 $5.44 $5.44 $5.06 $5.22 $5.87 $3.31 $5.02 $5.80 $5.17 Year High $10.31 $7.60 $5.02 $5.46 $5.38 $5.53 $6.53 $5.78  $5.06  $5.84  $6.29 Year Low $4.08 $4.08 $3.31 $4.41 $4.47 $4.43 $5.08 $2.90  $2.88  $4.52  $4.95