By Rodric E. Cummins, CFA , Senior Vice President and Chief Investment Officer

After a tumultuous 2008 and first quarter of 2009, stocks surged forward in the second quarter with anticipation that the severity of the worst economic downturn in decades is slowing down. The S&P 500® Index posted a 15.93% return for the period, the best quarterly performance since 1998. 

The few “green shoots” that appeared on the barren economic landscape were fueled by renewed optimism. Good news included better than expected quarterly earnings from financial institutions. Also, a smattering of improving economic data indicates global banking is gaining positive traction. These small indications of progress were welcome reliefs for investors who have watched their investments erode under the pressures of an 18-month global financial crisis and an economic recession.

Most economists continue to point to a modest economic recovery beginning in the second half of 2009. The future path of economic growth will hold the key to the direction and magnitude of capital market returns in the periods ahead. Central banks are clearly committed to stimulating the global economic engine, yet financial and economic challenges pose significant future headwinds. As global economies begin the long recovery process, the combination of both periods of excitement and of doubt about economic growth will certainly fuel further market volatility.

You should carefully consider the investment objectives, risks, charges and expenses of GuideStone Funds before investing. For a copy of the prospectus with this and other information about the funds, please call 1-888-98-GUIDE (1-888-984-8433) or download a prospectus. You should read the prospectus carefully before investing.

S&P 500® is a trademark of The McGraw-Hill Companies and has been licensed for use by GuideStone Funds. The Equity Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of purchasing the Equity Index Fund.

All indices are unmanaged and not available for direct investment. Index performance assumes no taxes, transaction costs, fees or expenses. This update is prepared for general information only and it is not to be reproduced.

GuideStone Funds shares are distributed by PFPC Distributors, Inc., a registered broker-dealer and underwriter of the funds, 760 Moore Road, King of Prussia, PA 19406. GuideStone Capital Management, a controlled affiliate of GuideStone Financial Resources, serves as the investment adviser to GuideStone Funds.