The Third Quarter in Review

1
The Third Quarter in Review
3
Source Transamerica Investment Management,
Manager CommentaryThird Quarter 2007.
3

2
Third Quarter Highlights

• Bond Market
• Lehman Brothers Aggregate Bond Index increased
  2.84
• Stock Market
• SP 500 Index increased 2.03

Source Morningstar, Inc. Data as of September
30, 2007.
One cannot invest directly in an index. An index
is unmanaged and does not take into account the
fees and expenses associated with an actively
managed fund, so performance may differ. Past
performance is not a guarantee of future
performance.
3
Annual Stock Market Returns vs. Long-Term Averages
Long-term average is approximately 10, not the
20 to 30 returns we experienced in the late
90s, nor the negative returns we experienced the
years prior to 2003.
Source Morningstar, Inc. Stock market
represented by SP 500 Index. The long-term
average is based on the average annual total
returns of the SP 500 Index between the years of
December 1997-September 2007.
One cannot invest directly in an index. An index
is unmanaged and does not take into account the
fees and expenses associated with an actively
managed fund, so performance may differ. Past
performance is not a guarantee of future
performance. Data as of September 30, 2007
4
Stock Index Returns
More Conservative
More Aggressive

Source Morningstar, Inc. Value based on Russell
1000 Value Index, growth based on Russell 1000
Growth Index, large-cap based on Russell 1000
Index, and small-cap based on Russell 2000
Index. Data as of September 30, 2007.
One cannot invest directly in an index. An index
is unmanaged and does not take into account the
fees and expenses associated with an actively
managed fund, so performance may differ. Past
performance is not a guarantee of future
performance.
5
Bond Index Returns
More Conservative
More Aggressive
Source for all index information is Morningstar,
Inc. Data as of September 30, 2007. The indices
used to represent each investment style are as
follows 3-Month Treasury Citigroup 3-Month
Treasury Bill Index Short-term Government Bond
Merrill Lynch 1-3 Year Treasury Index
Intermediate Government Bond Lehman Brothers
Intermediate Government Bond Index Investment
Grade Bond Lehman Brothers Aggregate Bond
Index High Yield Bond Credit Suisse First
Boston Global High Yield Index.
One cannot invest directly in an index. An index
is unmanaged and does not take into account the
fees and expenses associated with an actively
managed fund, so performance may differ. Past
performance is not a guarantee of future
performance.
6
Lehman Brothers Aggregate Bond IndexReturns
vs. Long-Term Averages
Long-term historical average for bonds is
approximately 9, higher than what were seeing
today.
Source Morningstar, Inc. Data as of September
30, 2007. The Lehman Brothers Aggregate Bond
Index is used to represent the returns of the
investments that make up the Lehman Brothers
Government/Corporate Bond Index, Mortgage-Backed
Securities Index, and Asset-Backed Securities
Index. The Lehman Brothers Aggregate Bond Index
is unmanaged, assumes reinvestment of all
distributions and does not account for fees or
other charges. The long-term average is based on
the average annual total returns of the Lehman
Brothers Aggregate Bond Index between the years
of December 1997- September 2007.
One cannot invest directly in an index. An index
is unmanaged and does not take into account the
fees and expenses associated with an actively
managed fund, so performance may differ. Past
performance is not a guarantee of future
performance.
7
Outlook

• Unemployment rate is expected to remain stable,
  with some concerns from low housing activity
• Home prices are expected to remain soft with a
  slight but continued decline
• Recession signals are mixed

Source Transamerica Investment
Management, Fourth Quarter 2007 Outlook."