NMFN: IP, LI, Small Cap Value

Fund Overview

Adviser:	Mason Street Advisors, LLC
Sub-adviser:	T. Rowe Price Associates, Inc.
Objective:	Long-term Capital Growth
Focus:	Invests in the stocks of companies whose current stock prices do not appear to adequately reflect their underlying values as measured by assets, earnings, cash flow, or business franchises. Normally the fund will invest at least 80% of its total assets in companies with a market capitalization of less than the largest company in the S&P 600 Index.
Asset Class:	Small-Cap Stocks
Style:	Value

Investing in small company stocks involves a greater degree of risk than investing in medium or large company stocks.

Fund Facts as of 03-31-2008

Fund Inception	07-31-2001
First Available for Variable Annuity	07-31-2001
First Available for Variable Life	07-31-2001
Net Assets	$321.65 Million

Top Ten Holdings (% of Net Assets)

Landstar System, Inc.	2.2%
FTI Consulting, Inc.	1.8%
Penn Virginia Corp.	1.8%
Kirby Corp.	1.8%
ProAssurance Corp.	1.5%
Matthews International Corp. - Class A	1.4%
Owens & Minor, Inc.	1.4%
Sims Group, Ltd., ADR	1.3%
AptarGroup, Inc.	1.3%
Whiting Petroleum Corp.	1.2%

Total % of Net Assets	15.7%

Download Publicly Disclosed Holdings pdf* (26k)

Sector Weightings (% of Equities)

Industrials	24.3%
Financials	19.2%
Information Technology	11.7%
Consumer Discretionary	11.0%
Energy	10.1%

Investment Strategy:

Reflecting a value approach to investing, the Portfolio will seek the stocks of companies whose current stock prices do not appear to adequately reflect their underlying value as measured by assets, earnings, cash flow, or business franchises. Normally, the Portfolio will invest a majority of its total assets in companies with market capitalizations that do not exceed the maximum market capitalization of any security in the S&P SmallCap 600® Index at the time of purchase. The stock of small capitalization companies may experience substantial price volatility. The market cap of companies in the Portfolio and the Index will change over time due to market forces and period rebalancing of the Index. However, the Portfolio will not sell a stock just because the company has grown to a market capitalization of more than the largest company in the S&P SmallCap 600® Index and, on occasion, may purchase companies with a market capitalization of more than the largest company in the Index.

The in-house research team at T. Rowe Price seeks to identify companies that appear to be undervalued by various measures, and may be temporarily out of favor, but have good prospects for capital appreciation. In selecting investments, management generally looks for some of the following:

Low price/earnings, price/book value, or price/cash value ratios relative to various benchmarks, the company's peers, or its own historic norm.
Low stock price relative to a company's underlying asset values.
Above average dividend yield relative to a company's peers or its own historic norm.
A plan to improve the business through restructuring.
A sound balance sheet and other positive financial characteristics.

The Portfolio may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

Portfolio Managers:

The portfolio is managed by Ned Notzon, chairman of the firm's Asset Allocation Committee. Mr. Notzon has been with T. Rowe Price since 1989 and tactically allocates the underlying Small Cap Value and Mid Cap Value proponents of the Portfolio. The Small Cap Value portion is managed by Preston Athey and the Mid Cap Value portion is managed by David Wallack.

You should carefully consider the investment objectives, risks, expenses and charges of the investment company before you invest. Your Northwestern Mutual Investment Services Registered Representative can provide you with a contract and fund prospectus that will contain the information noted above, and other important information that you should read carefully before you invest or send money.