Clyde McGregor

Target Manager Allocation: 20%

Size of Company: All sizes, but mostly large- and mid-sized

Stock-Picking Style: Value

McGregor employs Harris' value investment philosophy and process. This investment philosophy is based upon the belief that, over time, a company's stock price converges with the company's intrinsic or true business value. By "true business value," Harris means an estimate of the price a knowledgeable buyer would pay to acquire the entire business. In making its investment decisions, Harris uses a "bottom-up" approach focused on individual companies, rather than focusing on specific economic factors or specific industries.

The chief consideration in the selection of stocks is the size of the discount of a company's stock price compared to the company's perceived true business value. In addition, Harris looks for companies with the following characteristics, although not all companies will have all of these attributes: free cash flows and intelligent investment of excess cash, earnings that are growing and are reasonably predictable, and a high level of management ownership in the company. Once Harris determines that a stock is selling at a significant discount and that the company has some of the aforementioned attributes, Harris generally will consider buying that stock for a strategy. Harris usually sells a stock when the price approaches its estimated worth. This means Harris sets specific "buy" and "sell" targets for each stock held in its clients' discretionary accounts. Harris also monitors each holding and adjusts those price targets as warranted to reflect changes in a company's fundamentals. Harris attempts to manage some of the risks of investing in stocks of companies by purchasing stocks whose prices it considers low relative to the companies' intrinsic value. In addition, Harris seeks companies with solid finances and proven records and continuously monitors each portfolio holding.Manager bio.

Target Manager Allocation: 30%

Size of Company: All sizes

Stock-Picking Style: Value

Mason Hawkins is the lead portfolio manager for the portion of the Value Fund's assets run by Southeastern Asset Management, Inc. ("Southeastern"). Hawkins has been in the investment business since 1972 and was one of the original founders of Southeastern, which was founded in 1975 and of which he is now the majority owner. He has managed the Longleaf Partners Fund since its inception in 1987 and Longleaf Partners International Fund since its inception in 1998. Southeastern has been a sub-advisor to the Value Fund since the Value Fund's inception in 2000.

Approximately 30% of the Value Fund's assets are managed by Southeastern. Southeastern considers companies of all sizes, although most of its portion of the Value Fund's assets is expected to be invested in mid- and large-sized companies.

Southeastern focuses on securities of companies believed to have unrecognized intrinsic value and the potential to grow their economic worth. Southeastern believes that superior long-term performance can be achieved when positions in financially strong, well-managed companies are acquired at prices significantly below their business value and are sold when they approach their corporate worth. Corporate intrinsic value is determined through careful securities analysis and the use of established disciplines consistently applied over long periods of time. Securities that can be identified and purchased at a price significantly discounted from their intrinsic worth not only protect investment capital from significant loss but also facilitate major rewards when the true business value is ultimately recognized. Seeking the largest margin of safety possible, Southeastern requires at least a 40% market value discount from its appraisal of an issuer's intrinsic value before purchasing a security.

To determine intrinsic value, current publicly available financial statements are carefully scrutinized, and two primary methods of appraisal are applied. The first assesses what Hawkins believes to be the real economic value of an issuer's net assets; the second examines the issuer's ability to generate free cash flow after required or maintenance capital expenditures. After free cash flow is determined, conservative projections about its rate of future growth are made. The present value of that stream of cash flow plus its terminal value is then calculated using a discount rate based on expected interest rates. If the calculations are accurate, the present value would be the price at which buyers and sellers negotiating at arm's length would accept for the whole company. In a concluding analysis, the asset value determination and/or the discounted free cash flow value are compared with business transactions of comparable corporations. Other considerations used in selecting potential investments include the following: indications of shareholder-oriented management, evidence of financial strength, and potential earnings improvement.  Manager bio.

Bill Nygren

Target Manager Allocation: 20%

Size of Company: All sizes but mostly large and mid-sized

Stock-Picking Style: Value

Nygren employs Harris' value investment philosophy and process. This investment philosophy is based upon the belief that, over time, a company's stock price converges with the company's intrinsic or true business value. By "true business value," Harris means an estimate of the price a knowledgeable buyer would pay to acquire the entire business. In making its investment decisions, Harris uses a "bottom-up" approach focused on individual companies, rather than focusing on specific economic factors or specific industries.

The chief consideration in the selection of stocks is the size of the discount of a company's stock price compared to the company's perceived true business value. In addition, Harris looks for companies with the following characteristics, although not all companies will have all of these attributes: free cash flows and intelligent investment of excess cash, earnings that are growing and are reasonably predictable, and a high level of management ownership in the company. Once Harris determines that a stock is selling at a significant discount and that the company has some of the aforementioned attributes, Harris generally will consider buying that stock for a strategy. Harris usually sells a stock when the price approaches its estimated worth. This means Harris sets specific "buy" and "sell" targets for each stock held in its clients' discretionary accounts. Harris also monitors each holding and adjusts those price targets as warranted to reflect changes in a company's fundamentals. Harris attempts to manage some of the risks of investing in stocks of companies by purchasing stocks whose prices it considers low relative to the companies' intrinsic values. In addition, Harris seeks companies with solid finances and proven records and continuously monitors each portfolio holding.Manager bio.

Peter Langerman

Philippe Brugere-Trelat

Target Manager Allocation: 30%

Size of Company: All sizes

Stock-Picking Style: Value

Langerman and Brugere-Trelat manage approximately 30% of the Value Fund's assets. They work closely with the Franklin Mutual team of research analysts who employ a value approach to investing that seeks to invest in securities selling at a substantial discount to their intrinsic value, taking into consideration, among other factors, the ratios of price-to-cash flow, price-to-free cash flow, price-to-earnings, and price-to-book value. Franklin Mutual considers companies of all sizes, although most of its investments are in mid- and large-sized companies. Franklin Mutual determines what a company would be worth if it were put up for auction and sold and then seeks to invest in companies at significant discounts. Consistent with this value approach, Franklin Mutual generally invests in three areas: (1) cheap stocks based on asset values, (2) arbitrage, and (3) bankruptcy situations. Investments in the latter two categories do not necessarily track broader market moves and, therefore, may tend to mitigate volatility in overall performance.

Franklin Mutual's research process is bottom-up, with new ideas often coming from news about a company such as corporate restructurings, spin-offs, tender offers, 13D filings and proxy fights. Franklin Mutual also analyzes companies whose share prices have suffered significant declines for reasons such as earnings disappointments and adverse legal judgments. After identifying a new investment possibility, Langerman, Brugere-Trelat and the analysts engage in intensive fundamental research of the company, which often includes meetings with company management, visits to facilities, and discussions with competitors and others knowledgeable about the business. In addition, Franklin Mutual sometimes takes an activist approach in its investments to try to influence management to create value for all shareholders. Manager bio.