Capital Preservation Fund adopts new fund yield procedures

Beginning in 2009, GuideStone Financial Resources’ Capital Preservation Fund (“Fund”) will announce the expected compounded annualized yield for the quarter. This yield will be expressed as an estimated percentage range rather than a specific percent as has been the case since the Fund’s inception. For example, the 1st quarter of 2009 yield estimate range has been set at 2.25% to 3.50% (annualized, compounded yield). The severe volatility in the financial markets, along with numerous portfolio construction factors related to fixed income management, has contributed to the change in the expression of the crediting rate.

The Capital Preservation Fund invests primarily in a diversified portfolio of investment grade fixed-income securities. The Fund may also invest to a lesser extent in high yield securities and money market instruments. The Fund may be suitable for investors who want to preserve capital and are seeking higher current income than a money market fund over most time periods.

In addition to the way the crediting rate will be defined, the Fund’s yield in the first quarter of 2009 is expected to materially decline compared to recent periods. As announced in various investment related publications, the financial markets remain under severe pressure from the financial crisis and poor global economic growth. These factors have contributed to a challenging period for fixed income management in general as well as for the Fund. The current fixed income market is one characterized by the lack of liquidity, an imbalance of supply and demand for certain types of securities, concerns over the impact of economic growth on corporate creditworthiness, and sharply lower interest rates. These influences, along with a rapid increase in new contributions into the Fund, have contributed to a reduction in the Fund’s yield in the first quarter 2009.

The portfolio management challenges associated with current market conditions, market volatility, cash flows, and portfolio construction are not unique to GuideStone’s Capital Preservation Fund. These types of challenges are prevalent throughout the fixed income industry. A leading manager of stable value funds indicates that crediting rates throughout the industry are suffering significant declines due to large amounts of money flowing into these types of funds and the inability to quickly invest the new money into higher yielding fixed income securities.

GuideStone’s Capital Preservation Fund is well-positioned to weather the current market volatility. The implementation of a yield estimate range is not due to excessive distress within the Fund. Rather, it is reflective of industry norms and provides the latitude needed to properly manage the Fund’s assets in this challenging market environment.