Investment Objective/Suitability

The Fund seeks to provide current income and long-term growth of capital.
This fund may be suitable for investors who:

• Seek a single investment that includes both morally responsible stocks and lower-risk bonds
• Have a greater need for current income than capital appreciation

Investment Strategy

The Fund invests approximately 65% of its assets in shares of the Income Fund with the balance of its assets invested in shares of the Growth Fund. Investment decisions made by the Growth Fund and the Income Fund, in which the Balanced Income Fund invests, are consistent with the social-witness principles of the General Assembly of the Presbyterian Church (U.S.A.).

Investment Concerns

Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of the Fund will fluctuate as the value of the securities in the portfolio changes. Common stocks, and funds investing in common stocks,
generally provide greater return potential when compared with other types of investments. International investing involves increased risk and volatility. Bond funds will tend to experience smaller fluctuations in value than stock funds; therefore, fluctuations in price, especially for longer-term issues and in environments of rising interest rates, should be anticipated. Asset-backed and mortgage-backed securities are generally subject to higher prepayment risks than other types of debt securities, which can limit the potential for gain in a declining interest rate environment and increase the potential for loss in a rising interest rate environment.  Mortgage-backed securities may also be structured so that they are particularly sensitive to interest rates.  A high rate of defaults on the mortgages held by a mortgage pool may limit the pool's ability to make payments to the fund if the fund holds securities that are subordinate to other interest in the same mortgage pool; the risk of such defaults is generally higher in mortgage pools that include subprime mortgages.  Other principal risks associated with securities in the Balanced Income Fund are the following: Interest Rate Risk, Call Risk, Credit Risk, Prepayment Risk, Put and Call Option Risk, Foreign Securities Risk, Options and Futures Risk, Government Securities Risk and Rebalancing Risk. For a more complete description of these risks, please consult the prospectus.