DFA Short-Term Fixed

Objective And Strategy

Objective
Stable real return in excess of the rate of inflation with minimum risk.

Strategy
The Advisor identifies a diversified universe of eligible securities with defined maturity ranges and credit quality. The Advisor will then seek to purchase a broad and diverse portfolio of securities meeting these credit quality standards. As a non-fundamental policy, under normal circumstances, the Portfolio will invest at least 80% of its net assets in fixed income securities and maintain a dollar-weighted average portfolio maturity that will not exceed one year. The Portfolio may purchase securities maturing in 2 years if larger yields are available. The Portfolio will invest more than 25% of its total assets in obligations of U.S. and/or foreign banks and bank holding companies ("banking industry securities") when the yield as a group exceeds the yield to maturity on all other eligible portfolio investments as a group for a period of 5 consecutive days.
Low Cost Fund

Principal Risks

* Fixed income securities are subject to interest rate risk because the prices of fixed income securities tend to move in the opposite direction of interest rates. When interest rates rise, fixed income security prices fall. When interest rates fall, fixed income security prices rise.

* Credit risk is the risk that the issuer of a security may be unable to make interest payments and/or repay principal when due. A downgrade to an issuer's credit rating or a perceived change in an issuer's financial strength may affect a security's value, and thus, impact the VA Short-Term Fixed Portfolio's performance.

* Income Risk is the risk that falling interest rates will cause the VA Short-Term Fixed Portfolio's income to decline.