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REYNOLDS FUNDS INC
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false
0000832574
2012-09-30
2013-01-31
2013-01-31
2013-01-31
REYNOLDS BLUE CHIP GROWTH FUND
RBCGX
Portfolio Turnover.
<div align="justify" style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio).  A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account.  These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance.  During the most recent fiscal year, the Fund’s portfolio turnover rate was 99 % of the average value of its portfolio.</font> </div>
0.99
Performance
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The following performance information indicates some of the risks of investing in the Fund.  The bar chart shows changes in the Fund’s performance from year to year.  The table shows how the Fund’s average annual returns for 1, 5 and 10 years compare to the performance of the S&P 500<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">®</font> Index.  For additional information on this index, please see “Index Description” in the Prospectus.  Please keep in mind that the Fund’s past performance, before and after taxes, does not necessarily indicate how it will perform in the future.  Updated performance informa</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">tion is available on the Fund’s website at <font style="DISPLAY: inline; TEXT-DECORATION: underline">www.reynoldsfunds.com</font> or by calling the Fund toll-free at 1-800-773-9665.</font> </div>
REYNOLDS BLUE CHIP GROWTH FUND (Total return per calendar year)
0.4182
-0.0143
-0.0333
0.0137
0.0829
-0.0509
0.4187
0.2457
-0.0614
0.1360
~ http://www.reynoldsfunds.com/20130131/role/ScheduleAnnualTotalReturnsBarChart20004 column dei_LegalEntityAxis compact ck0000832574_S000000865Member row primary compact * ~
highest total return
0.2189
2009-09-30
lowest total return
-0.1983
2011-09-30
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During the ten year period shown on the bar chart, the Fund’s highest total return for a quarter was 21.89% (quarter ended September 30, 2009) and the lowest total return for a quarter was ( 19.83 %) (quarter ended September 30, 2011 ).</font> </div>
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">After-tax returns are calculated using the historical highest individual federal margin income tax rates and do not reflect the impact of state and local taxes.  Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as individual retirement accounts.</font> </div> <br/><div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Fund’s return after taxes on distributions and sale of Fund shares may be higher than its returns before taxes and after taxes on distributions because it may include a tax benefit resulting from the capital losses that would have been incurred.</font> </div>
0.1360
0.1233
0.1025
0.1341
0.1229
0.1022
0.0908
0.1080
0.0917
0.1600
0.0166
0.0710
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After-tax returns are calculated using the historical highest individual federal margin income tax rates and do not reflect the impact of state and local taxes.
The following performance information indicates some of the risks of investing in the Fund.
Please keep in mind that the Fund's past performance, before and after taxes, does not necessarily indicate how it will perform in the future.
(reflects no deductions for fees, expenses and taxes)
The Fund's return after taxes on distributions and sale of Fund shares may be higher than its returns before taxes and after taxes on distributions because it may include a tax benefit resulting from the capital losses that would have been incurred.
1-800-773-9665
www.reynoldsfunds.com
Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as individual retirement accounts.
Average Annual Total Returns (for the periods ending December 31, 2012 )
Investment Objective
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Reynolds Blue Chip Growth Fund seeks long-term capital appreciation.</font> </div>
Fees and Expenses of the Fund
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund.</font> </div>
0.0000
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0.0000
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0.0100
0.0008
0.0045
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ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)
transfer agent charge of $15 for each wire redemption
SHAREHOLDER FEES (fees paid directly from your investment)
Example.
<div align="justify" style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">  This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.  The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods.  The Example also assumes that your investment has a 5% return each year, that dividends and distributions are reinvested, and that the Fund’s operating expenses remain the same.</font></div>
156
483
834
1824
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Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
Principal Risks
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Investors in the Fund may lose money.  There are risks associated with investments in the types of securities in which the Fund invests.  These risks include:</font> </div> <br/><table style="font-size: 10pt; font-family: times new roman; width: 100%;" cellspacing="0" cellpadding="0"> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">Market Risk –</font> The prices of the stocks in which the Fund invests may decline for a number of reasons. These reasons include factors that are specific to one or more stocks in which the Fund invests as well as factors that affect the equity securities markets generally. The price declines may be steep, sudden and/or prolonged.</font> </div> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">Growth Investing Risk –</font> The investment adviser may be wrong in its assessment of a company’s potential for growth and the growth stocks the Fund holds may not grow as the investment adviser anticipates. Finally, there are periods when investing in growth stocks falls out of favor with investors and these stocks may underperform.</font> </div> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">Technology Companies Risk –</font> Technology companies may be subject to greater business risks and may be more sensitive to changes in economic conditions than other companies. The earnings of technology companies may fluctuate more than those of other companies because of short product cycles (technological obsolescence) and competitive pricing. Finally, there are periods when investing in stocks of technology companies falls out of favor with investors and these stocks may underperform.</font> </div> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Consumer Discretionary Companies Risk –</font>The success of consumer product manufacturers and retailers is tied closely to the performance of the overall domestic and international economy, interest rates, competition and consumer confidence. The earnings of such companies may also be closely tied to disposable household income and consumer spending.</font> </div> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">Medium Capitalization Companies Risk –</font> There is a risk that the securities of medium capitalization companies may have limited liquidity and greater price volatility than securities of large capitalization companies, which can negatively affect the Fund’s ability to sell these securities at quoted market prices.</font> </div> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">Smaller Capitalization Companies Risk –</font>Small capitalization companies typically have relatively lower revenues, limited product lines and lack of management depth, and may have a smaller share of the market for their products or services, than large and medium capitalization companies.  There is a risk that the securities of small capitalization companies may have limited liquidity and greater price volatility than securities of large and medium capitalization companies, which can negatively affect</font></font> <font style="display: inline; font-family: times new roman; font-size: 10pt;">the Fund’s ability to sell these securities at quoted market prices.  Finally, there are periods when investing in small capitalization company stocks falls out of favor with investors and these stocks may underperform.</font> </div> </td> </tr> </table> <br/><table style="font-size: 10pt; font-family: times new roman; width: 100%;" cellspacing="0" cellpadding="0"> <tr> <td style="text-align: right;" valign="top" width="3%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">Foreign Securities Risk –</font> There are specific risks associated with investing in the securities of foreign companies , whether directly or in ADRs, not typically associated with investing in domestic companies.  Risks include fluctuations in the exchange rates of foreign currencies that may affect the U.S. Dollar value of a security, and the possibility of substantial price volatility as a result of political and economic instability in the foreign country.   The value of foreign securities and ADRs may change materially at times when U.S. markets are not open for trading. Further, with regard to the Fund’s investments in ADRs, ADRs may not track the price of the underlying securities.</font> </div> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> </tr> <tr> <td style="text-align: right;" valign="top" width="3%"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <font style="display: inline; font-family: times new roman; font-size: 10pt;">•</font> </div> </td> <td valign="top" width="1%"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font> </td> <td valign="top" width="97%"> <div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;" align="justify"> <font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">Portfolio Turnover Risk –</font> High portfolio turnover necessarily results in greater transaction costs, such as brokerage commissions, which the Fund must pay and short - term capital gains (or losses) to investors.  Greater transaction costs may reduce Fund performance.  Distributions to shareholders of short-term capital gains are taxed as ordinary income under current federal income tax laws.</font> </div> </td> </tr> </table> <br/><div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Because of these risks the Fund is a suitable investment only for those investors who have long-term investment goals and who are comfortable with an investment that will fluctuate in value.</font> </div>
Investors in the Fund may lose money.
Principal Investment Strategies
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Fund under normal market conditions invests at least 80% of its net assets in the common stocks of “growth” companies that, in the view of the Fund’s investment adviser, are well-established in their industries and have a minimum market capitalization of at least $1 billion (these companies are commonly referred to as “blue chip” companies).  The Fund invests in securities of both domestic and foreign “blue chip” growth companies, with the Fund’s investments in foreign companies generally being effected through American Depositary Receipts or “ADRs,” which are dollar-denominated securities of foreign issuers traded in the U.S.  The Fund may invest in ADRs through both sponsored and unsponsored arrangements.</font> </div> <br/><div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Fund’s investment adviser bases investment decisions on company-specific factors (bottom-up investment approach) and general economic conditions (top-down approach).  When purchasing “blue chip” growth companies for the Fund, the Fund’s investment adviser looks for companies that have some or all of the following attributes:</font> </div> <br/><table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a presence in expanding industries</font> </div> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a superior and pragmatic growth strategy</font> </div> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">proprietary products, processes or services</font> </div> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a potential for above-average unit and earnings growth</font> </div> </td> </tr> </table> <br/><div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In pursuing its investment objective, the Fund has the discretion to purchase some securities that do not meet its normal investment criteria.  In particular, the Fund may invest in companies that are not now “blue chip” companies, but which the Fund’s investment adviser believes have the potential to become “blue chip” companies.  These include:</font> </div> <br/><table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">leading companies in smaller industries</font> </div> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">lesser known companies moving from a lower to a higher market share position within their industry group</font> </div> </td> </tr> </table> <br/><div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Fund’s investment adviser will generally sell a portfolio security when the investment adviser believes:</font> </div> <br/><table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">the security has achieved its value potential</font> </div> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">changing fundamentals signal a deteriorating value potential</font> </div> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> </tr> <tr> <td valign="top" width="3%" style="TEXT-ALIGN: right"> <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">•</font> </div> </td> <td valign="top" width="1%"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font> </td> <td valign="top" width="97%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">other securities have a better performance potential</font> </div> </td> </tr> </table> <br/><div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">While this sell discipline may result in higher annual portfolio turnover rates for the Fund, it also causes the Fund to keep seeking better alternatives.</font> </div>