The Plumb Balanced Fund

          The Plumb Equity Fund

Plumb Balanced Fund

Investment Objective.  The Plumb Balanced Fund (Balanced Fund) seeks a high to­tal return through capital appreciation while attempting to preserve principal, and secon­darily seeks current income.

Principal Strategies.  The Fund invests in a diversified portfolio of common stocks and fixed-income securities.  We select securities that, in our judgment, will result in the highest total return consistent with preservation of principal, and we vary the mix of com­mon stocks and bonds from time to time.  More than 50% of the Fund's assets are normally invested in common stocks.  In allocating the Fund's assets between stocks and bonds, we assess the relative return and risk of each asset class, analyzing several factors, including general economic conditions, anticipated future changes in interest rates, and the outlook for stocks generally.  We invest in common stocks that possess most of the following characteristics:

  ►     Leading market positions
  ►     High barriers to market entry & competitive or technological advantages
  ►     High returns on equity and assets
  ►     Good growth prospects
  ►     Strong management
  ►     Relatively low debt burdens

To achieve a better risk-adjusted return on its equity investments, the Fund invests in many types of stocks, including a blend of large company stocks, small company stocks, growth stocks and value stocks.  We believe that holding a diverse group of stocks will provide competitive returns under different market environments, as opposed to more nar­row investment styles.  Our flexible approach to equity investing enables us to adapt to changing market trends and conditions and to invest where we believe opportunity exists.  We also normally invest at least 25% of the Fund's assets in fixed-income senior se­curities.

The fixed-income securities in which the Fund may invest include corporate bonds and other debt instruments, mortgage-related securities, asset-backed securities, debt securities issued or guaranteed by the U.S. Government (including its agencies and instru­mentalities), convertible debt securities and preferred stock that is convertible into com­mon stock.  The Fund generally invests in investment grade fixed income securities, although it may invest up to 5% of its total assets in securities rated below investment grade.  The dollar-weighted average portfolio maturity of the fixed income securities held by the Fund will normally not exceed 10 years.

Plumb Equity Fund

Investment Objective.  The Plumb Equity Fund (Equity Fund) seeks long-term capital appreciation.

Principal Strategy.  To pursue this objective, the Equity Fund normally invests at least 80% of total assets in a diversified portfolio of common stocks.  The Fund generally invests in higher quality companies that are trading at significant discounts to portfolio managers' estimates of their intrinsic value.  These companies may include large, medium and smaller sized companies.  The portfolio managers typically look for companies that possess the following characteristics:
          

►     Leading market positions           
►     High barriers to market entry & other competitive or technological advantages
►     High return on equity and invested capital           
►     Consistent operating history           
►     Capable management           
►     Solid balance sheets           
►     Good growth prospects

In selecting securities for the Fund, the portfolio managers analyze a company's in­trinsic value (the present value of the cash that can be taken out of a company in the future) and attempt to determine the price that a knowledgeable investor would be willing to pay for the entire company, given its financial characteristics, management, industry position and growth potential.  Then the portfolio managers compare the company's market valua­tion relative to its intrinsic business value.  The Fund's portfolio managers employ a blended investment style, which they gen­erally characterize as "growth at a reasonable price."  However, the portfolio managers may prefer a certain investment style and look for growth stocks or value stocks when war­ranted by market conditions and other factors.

The Fund seeks to provide investors with competitive after-tax investment returns by holding quality securities for the long term, which is designed to promote greater tax-efficiency.  The Fund anticipates that capital growth will be accompanied by dividend in­come and growth of dividend income over time.  The Fund typically sells securities in companies when their market valuations rise significantly above the portfolio managers' estimates of intrinsic business values, long-term economic fundamentals significantly deteriorate, or better opportunities are presented in the marketplace.

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