Objectives of the Fund

The Fund seeks to preserve the purchasing power of the funds under management while maximizing returns through a combination of current income and capital appreciation. The Fund invests primarily in large, well-established companies, but may also hold mid-sized and small cap firms, fixed income securities and stocks of foreign issuers.

Risks 

Even with diversified funds, there is exposure to weakness in the broad market, a particular industry, or specific holdings. The market as a whole can decline for many reasons, including adverse political or economic developments in the U.S. or abroad, changes in investor psychology, or heavy institutional selling. Likewise, the prospects for an industry or a company may also deteriorate. Among the principal risks to which the Fund is exposed are market risk, industry/sector risk, capitalization risk, interest rate risk and credit risk. Investments in foreign securities have foreign risk, country/geographic risk and currency risk.

Investment Strategy 

The assets managed by Osprey Financial Group shall be invested and reinvested only in securities that comply with the guidelines for equity and fixed income securities contained in the University of North Florida Foundation, Inc. Statement of Investment Policies and Objectives. Within those parameters, the Fund has incorporated the following equity and fixed income strategy for 2003-2004:

Equity Component of the Fund 

1. The Fund generally matches the sector weights within the S&P 500 with the flexibility to underweight or overweight any given sector up to 10% in order to position the portfolio for maximum gains in advancing sectors or to protect capital from sectors in decline.
2. The Fund is blended across capitalizations, but mostly has a large cap (>$5 billion) focus. Actual positions within these parameters are based on fund management's expectations of market conditions. The allowable range of exposure within size classifications is as follows:

Large Cap 60% - 100%
Mid Cap 0% - 40%
Small Cap 0% - 5%

(Mid Cap + Small Cap < 40%)

3. In pursuing the investment objective, the fund's management has the flexibility to purchase securities that do not meet its normal investment criteria, as described above, when it perceives an unusual opportunity for gain. These special situations might arise when the fund's management believes a security could increase in value for a variety of reasons, including a change in management, an extraordinary corporate event, or a temporary imbalance in the supply of or demand for the securities. The maximum allocation for special situations positions is 5%.

Fixed Income Component
The Fixed Income allocation of the Fund is fully invested among various U.S. instruments, including Government Securities, Agency Issues, and investment grade (BBB-rated and above) Corporate Bonds. No single Corporate issue represents more than one full position (10 bonds). There is no limit on Government positions.