WIXLIB

Managing Investment Risk (continued)Changes in the value of a hedginginstrument may not match those of theinvestment being hedged.The Dow Jones-UBS CommodityIndex Total Return is composed offutures contracts on 20 physicalcommodities. Investors cannot investdirectly in an index.Hybrid FundsEach of the Divisions identified as aRussell Investments LifePoints VariableTarget Portfolio Series Fund (“LifePointsFund”) is a fund of funds and diversifiesits assets by investing, at present, inother investment funds (the “UnderlyingFunds”). Each LifePoints Fund seeksto achieve a specific investmentobjective in different combinations ofthe Underlying Funds. The LifePointsFund allocates and reallocates its assetsamong the underlying funds and isexposed to the risks of the underlyingfunds in proportion to its asset allocation.Performance is based upon the actualmix of underlying funds recommendedat a specific point in time, which maydiffer from the current mix. Investmentin a LifePoints Fund involves expensesof both the LifePoints Fund and theUnderlying Funds, which together canbe higher than those incurred wheninvesting directly in an Underlying Fund.However, not all of the Underlying Fundsmay be available for investment underthe Contract.Fixed IncomeInvestors should carefully consider theirability to invest during volatile periods inthe market. With fixed income securitiesand bonds, when interest rates rise, theprice of the assets you own declines,which could negatively affect overallperformance. Bond prices correlateinversely with interest rates and thiseffect is usually more pronounced forlonger-term bonds making their pricesmore volatile. At maturity, the issuerof the bond is obligated to return theprincipal (original investment) to theinvestor. Bond funds (mutual funds andETFs) continuously replace the bondsthey hold as they mature and thus donot usually have maturity dates, andare not obligated to return principal.High yield bonds* present greater creditrisk than bonds of higher quality. Bondinvestors should carefully considerrisks such as interest rate risk, creditrisk, liquidity risk, securities lending risk,repurchase and reverse repurchasetransaction risk. Currently, interestrates are at unprecedented historicallylow levels. A significant rise in interestrates in a short period of time wouldcause losses in the market value of anybonds or bond funds that you own.The potential leverage created by theuse of derivatives by the Long-TermU.S. Government Bond Portfolio maycause the Portfolio to be more sensitiveto interest rate movements and thusmore volatile than other long-term U.S.Government bond funds that do notuse derivatives.You could lose money by investing in theGovernment Money Market Portfolio.Although the Portfolio seeks to preservethe value of your investment at 1.00per share, it cannot guarantee it will doso. An investment in the Portfolio is notinsured or guaranteed by the FederalDeposit Insurance Corporation or anyother government agency. The Portfolio'ssponsor has no legal obligation to providefinancial support to the Portfolio, and youshould not expect that the sponsor willprovide financial support to the Portfolioat any time.OtherThe Government Money Market Divisionyield refers to annualized incomegenerated by the Division over a sevenday period ending on the date shownassuming reinvestment of dividendsand the same treatment of charges andexpenses as in the calculation of returns.It more closely reflects current earningsof the Division than total return.For Government Money Market feewaiver disclosure information, refer topage 43.* Bonds that are less than investment grade are also known as "junk bonds."4

A Word About the Prospectus, Performance and Industry BenchmarksVariable contracts have limitations.This publication is authorized fordistribution only when preceded oraccompanied by the appropriatecurrent Contract prospectus (oroffering circular) and underlying fundprospectuses. Before investing in theContract, you should carefully considerthe investment objectives, risks, andcharges associated with its investmentoptions. Read the prospectusescarefully before you invest.Performance shown represents pastperformance and is no guarantee offuture results. Investment returnsand the principal value of a variableannuity will fluctuate so that theaccumulation value may be more orless than original investment. Currentperformance may be lower or higherthan the performance data shown.For the most current month-endperformance, please visit our websiteat ry/BenchmarksTwo industry benchmarks usedthroughout this book are Morningstarand Lipper. Morningstar Ratings andLipper Rankings are assessments of theperformance of the fund in comparisonto other funds in the same category.This information can help you identifythose funds that have consistentlyoutperformed their peers.The Morningstar Style Box reveals afund’s investment strategy. For equityfunds, the vertical axis shows the marketcapitalization of the stocks owned andthe horizontal axis shows investmentstyle (value, blend or growth). Forfixed income funds, the vertical axisshows the credit quality of the bondsowned and the horizontal axis showsinterest rate sensitivity as measuredby a bond’s effective duration. Seepage 45 for fixed income style boxdisclosure. For each fund with at leasta three-year history, Morningstarcalculates a Morningstar Rating basedon a Morningstar Risk-Adjusted ReturnMeasure that accounts for variation in afund’s monthly performance (includingthe effects of sales charges, loadsand redemption fees), placing moreemphasis on downward variations andrewarding consistent performance.The top 10% of funds in each categoryreceive 5 stars, the next 22.5% receive4 stars, the next 35% receive 3 stars,the next 22.5% receive 2 stars and thebottom 10% receive 1 star. Each shareclass is counted as a fraction of one fundwithin this scale and rated separately,which may cause slight variations in thedistribution percentages.Morningstar Return is an assessmentof a fund’s excess return over a risk-freerate (the return of the 90-day Treasurybill) in comparison to similar funds, afteradjusting for all applicable loads andsales charges.Lipper rankings compare a fund’sperformance with that of others in thesame category. Investment categoriesare based on Lipper classificationsand funds are ranked by total returnexclusive of sales charges. Lipper fundindices are equally weighted indices ofthe largest funds within their respectiveInvestment Objective Class, adjustedfor the reinvestment of capital gainsdistributions and income dividends.Standard & Poor’s defines the followingindexes:The S&P SuperComposite 1500 Indexcombines the S&P 500 , S&P MidCap400, and S&P SmallCap 600 indices toform an unmanaged benchmark of theU.S. equity market.The S&P 500 Index is a widelyrecognized, unmanaged index ofcommon stock prices of 500 large U.S.companies.The S&P MidCap 400 Index is acapitalization-weighted, unmanagedindex that measures the performance ofpublicly traded securities in the midrange sector of the U.S. equity market.Morningstar risk is an assessment of thevariations in a fund’s monthly returnsin comparison to similar funds, withan emphasis on downward variation.5

A Word About the Prospectus, Performance and Industry Benchmarks(continued)The S&P SmallCap 600 Index is anunmanaged index of 600 selectedcommon stocks that measures theperformance of publicly traded securitiesin the small-capitalizations sector of theU.S. equity market.The S&P/Citigroup World ex-U.S.BMI is a an unmanaged, broad marketindex of the world’s entire universeof institutionally investable securities,excluding the U.S.Russell 3000 Index measures theperformance of the largest 3000 U.S.companies representing approximately98% of the investable U.S. equity market.An investor may not invest directlyin an index.The Lipper Large-Cap Value Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies withmarket capitalizations (on a three-yearweighted basis) above the weighted70th percentile of total capitalization ofthe Russell 3000 Index floor. Large-capvalue funds typically have a belowaverage price-to-earnings ratio, priceto-book ratio, and three-year sales-pershare growth value, compared to theS&P 500 Index. Source: Lipper, Inc.6The Lipper Multi-Cap Value Indexconsists of funds that, by portfoliopractice, invest in a variety of marketcapitalization ranges withoutconcentrating 75% of their equityassets in any one market capitalizationrange over an extended period of time.Multi-cap value funds typically have abelow-average price-to-earnings ratio,price-to-book ratio, and three-yearsales-per-share growth value, comparedto the S&P SuperComposite 1500 Index.Source: Lipper, Inc.The Lipper Equity Income Indexconsists of funds that, by prospectuslanguage and portfolio practice, seekrelatively high current income andgrowth of income by investing at least65% of their portfolio in dividend-payingequity securities. Source: Lipper, Inc.The Lipper S&P 500 Index ObjectiveFunds consists of funds that arepassively managed and commit byprospectus language to replicate theperformance of the S&P 500 Index(including reinvested dividends). Inaddition, S&P 500 Index objective fundshave limited expenses (advisor fee nohigher than 0.50%). Source: Lipper, Inc.The Lipper Large-Cap Core Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies withmarket capitalizations (on a three-yearweighted basis) above the weighted70th percentile of total capitalization ofthe Russell 3000 Index floor. Large-capcore funds have more latitude in thecompanies in which they invest. Thesefunds typically have an average price-toearnings ratio, price-to-book ratio, andthree-year sales-per-share growth value,compared to the S&P 500 Index.Source: Lipper, Inc.The Lipper Multi-Cap Core Indexconsists of funds that, by portfoliopractice, invest in a variety of marketcapitalization ranges withoutconcentrating 75% of their equity assetsin any one market capitalization rangeover an extended period of time. Multicap core funds typically have an averageprice-to-earnings ratio, price-to-bookratio, and three-year sales-per-sharegrowth value, compared to the S&PSuperComposite 1500 Index.Source: Lipper, Inc.

The Lipper Multi-Cap GrowthIndex consists of funds that, byportfolio practice, invest in a variety ofmarket capitalization ranges withoutconcentrating 75% of their equityassets in any one market capitalizationrange over an extended period of time.Multi-cap growth funds typically havean above-average price-to-earningsratio, price-to-book ratio, and three-yearsales-per-share growth value, comparedto the S&P SuperComposite 1500 Index.Source: Lipper, Inc.The Lipper Mid-Cap Value Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies with marketcapitalizations (on a three-year weightedbasis) below the weighted 70thpercentile of total capitalization of theRussell 3000 Index floor. Mid-cap valuefunds typically have a below-averageprice-to-earnings ratio, price-to-bookratio, and three-year sales-per-sharegrowth value, compared to the S&PMidCap 400 Index. Source: Lipper, Inc.The Lipper Large-Cap Growth Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies withmarket capitalizations (on a three-yearweighted basis) above the weighted70th percentile of total capitalizationof the Russell 3000 Index floor. Largecap growth funds typically have anabove-average price-to-earnings ratio,price-to-book ratio, and three-year salesper-share growth value, compared to theS&P 500 Index. Source: Lipper, Inc.The Lipper Mid-Cap Growth Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies withmarket capitalizations (on a three-yearweighted basis) below the weighted70th percentile of total capitalizationof the Russell 3000 Index floor. Midcap growth funds typically have anabove-average price-to-earnings ratio,price-to-book ratio, and three-yearsales-per-share growth value, comparedto the S&P MidCap 400 Index. Source:Lipper, Inc.The Lipper Mid-Cap Core Index consistsof funds that, by portfolio practice, investat least 75% of their equity assets incompanies with market capitalizations(on a three-year weighted basis) belowthe weighted 70th percentile of totalcapitalization of the Russell 3000 Indexfloor. Mid-cap core funds have morelatitude in the companies in which theyinvest. These funds typically have anaverage price-to-earnings ratio, priceto-book ratio, and three-year salesper-share growth value, compared tothe S&P MidCap 400 Index. Source:Lipper, Inc.The Lipper Small-Cap Core Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies with marketcapitalizations (on a three-year weightedbasis) below the weighted 85thpercentile of total capitalization of theRussell 3000 Index ceiling. Small-capcore funds have more latitude in thecompanies in which they invest. Thesefunds typically have an average price-toearnings ratio, price-to-book ratio, andthree-year sales-per-share growth value,compared to the S&P SmallCap 600Index. Source: Lipper, Inc.The Lipper Small-Cap Growth Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies withmarket capitalizations (on a three-yearweighted basis) below the weighted85th percentile of total capitalization ofthe Russell 3000 Index ceiling. Smallcap growth funds typically have anabove-average price-to-earnings ratio,price-to-book ratio, and three-yearsales-per-share growth value, comparedto the S&P SmallCap 600 Index. Source:Lipper, Inc.The Lipper International Value Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies strictlyoutside of the U.S. Value funds typicallyhave a below-average price-to-cash flowratio, price-to-book ratio, and three-yearsales-per-share growth value comparedto the S&P/Citigroup World ex-U.S. BMI.Source: Lipper, Inc.7

A Word About the Prospectus, Performance and Industry Benchmarks(continued)The Lipper Emerging Markets DebtIndex consists of funds that seeklong-term capital appreciation byinvesting at least 65% of total assetsin emerging market equity securities,where “emerging market” is definedby a country’s GNP per capita or othereconomic measures. Source: Lipper, Inc.The Lipper International Core Indexconsists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies strictlyoutside of the U.S. Core funds typicallyhave an average price-to-cash flow ratio,price-to-book ratio, and three-year salesper-share growth value compared to theS&P/Citigroup World ex-U.S. BMI. Source:Lipper, Inc.The Lipper International GrowthIndex consists of funds that, by portfoliopractice, invest at least 75% of theirequity assets in companies strictlyoutside of the U.S. Growth funds typicallyhave an above-average price-to-cashflow ratio, price-to-book ratio, andthree-year sales-per-share growth valuecompared to the S&P/Citigroup Worldex-U.S. BMI. Source: Lipper, Inc.The Lipper Mixed-Asset TargetAllocation Moderate Index consists offunds that, by portfolio practice, maintaina mix of between 40%-60% equitysecurities, with the remainder investedin bonds, cash, and cash equivalents.Source: Lipper, Inc.8The Lipper Mixed-Asset TargetAllocation Growth Index consists offunds that, by portfolio practice, maintaina mix of between 60%-80% equitysecurities, with the remainder investedin bonds, cash, and cash equivalents.Source: Lipper, Inc.The Lipper Short-IntermediateInvestment-Grade Debt Indexconsists of funds that invest primarily ininvestment-grade debt issues (rated inthe top four grades) with dollar-weightedaverage maturities of one to five years.Source: Lipper, Inc.The Lipper Global Core Index consistsof funds that, by portfolio practice,invest at least 75% of their equity assetsin companies both inside and outsideof the U.S. Core funds typically have anaverage price-to-cash flow ratio, priceto-book ratio, and three-year sales-pershare growth value compared to theS&P/Citigroup World BMI.Source: Lipper, Inc.The Lipper A-rated Bond Index consistsof funds that invest primarily in corporatedebt issues rated “A” or better, orgovernment issues. Source: Lipper, Inc.The Lipper Real Estate Index consistsof funds that invest primarily in equitysecurities of domestic and foreigncompanies engaged in the real estateindustry. Source: Lipper, Inc.The Lipper General U.S. GovernmentIndex consists of funds that investprimarily in U.S. government and agencyissues. Source: Lipper, Inc.The Lipper High Yield Bond Indexconsists of funds that aim for high(relative) current yield from fixed incomesecurities, have no quality or maturityrestrictions, and tend to invest in lowergrade debt issues. Source: Lipper, Inc.The Lipper General Bond Index consistsof funds that do not have any qualityor maturity restrictions. These fundsintend to keep the bulk of their assets incorporate and government debt issues.Source: Lipper, Inc.The Lipper Corporate Debt FundsBBB-rated Bond Index consists of fundsthat invest primarily in corporate andgovernment debt issues rated in the topfour grades. Source: Lipper, Inc.The Lipper Money Market Indexconsists of funds that invest in highquality financial instruments rated in thetop two grades with dollar-weightedaverage maturities of less than 90 days.These funds intend to keep constant netasset value. Source: Lipper, Inc.

The Select Variable AnnuityFront-Load vs. Back-LoadUnlike most variable annuities in themarketplace, Northwestern Mutualoffers you a choice between a front-loador back-load contract design.*With the “front-load” design, you havethe option of paying the sales charge upfront. As a result, you benefit from lowerannual expenses and can access yourfunds without withdrawal charges.**With the “back-load” design, you canput 100% of your money to workimmediately with no upfront salescharge. However, unlike the front-loaddesign, withdrawals may be subject towithdrawal charges and the contractwill be subject to higher ongoing annualexpenses.**The back-load design Select VariableAnnuity enhances long-term valuewhen Class B assets convert to Class Aassets. Purchase payments that reachthe 0% withdrawal charge category,

Table of Contents The Northwestern Mutual Select Variable Annuity Overview 2 Quarter-End Return Summaries 12 Morningstar Ratings 20 Asset Allocation Guide 23 Style Boxes 24 Profiles and Quarter-End Returns Value Large Company Value (MSA/American Century) 25 Domestic Equity (MSA/Delaware) 25 Equity Income (MSA/T. Rowe Price) 26 Blend