Crowley 485(b) Filing dated March 29, 2005

485BPOS 1 crow485b32905.htm Crowley 485(b) Filing dated March 29, 2005

As filed with the Securities and Exchange Commission on March 29, 2005

1933 Act Registration File No. 33-30975
1940 Act Registration File No. 811-05875

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 19 [X]

AND/OR

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 21

THE CROWLEY PORTFOLIO GROUP, INC.
(Exact Name of Registrant as Specified in Charter)

3201-B Millcreek Road
Wilmington, DE 19808
(Address of Principal Executive Offices) (Zip Code)

(302) 994-4700
(Registrant's Telephone Numbers, Including Area Code)

Robert A. Crowley, President
The Crowley Portfolio Group, Inc.
3201-B Millcreek Road
Wilmington, DE 19808
(Name and Address of Agent for Service)

Copies to:

Bruce G. Leto, Esq.
Stradley Ronon Stevens and Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103

As soon as practicable after this Registration Statement is declared effective.
(Approximate Date of Proposed Public Offering)

It is proposed that this filing will become effective (check appropriate box):

[X] immediately upon filing pursuant to paragraph (b).
[ ] on (date) pursuant to paragraph (b).
[ ] 60 days after filing pursuant to paragraph (a)(1).
[ ] on (date) pursuant to paragraph (a)(1).
[ ] 75 days after filing pursuant to paragraph (a)(2).
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

THE CROWLEY PORTFOLIO GROUP, INC.

PROSPECTUS

March 29, 2005

THE CROWLEY INCOME PORTFOLIO
Investing to maximize current income,
consistent with prudent risk

THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
Investing to achieve a high total return,
consistent with reasonable risk

THE CROWLEY PORTFOLIO GROUP, INC.
3201-B Millcreek Road
Wilmington, DE 19808
(302) 994-4700

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

TABLE OF CONTENTS
Page

NOTICE OF PRIVACY POLICY 3
SUMMARY OF THE FUND 4
INVESTMENT OBJECTIVES AND STRATEGIES 4
PRINCIPAL INVESTMENT RISKS 5
PAST PERFORMANCE 6
FEES AND EXPENSES OF THE PORTFOLIOS 9
INVESTMENT OBJECTIVES AND POLICIES 10
MAIN RISKS 13
LOWER-RATED, HIGH-RISK SECURITIES 13
RISKS OF INVESTING IN OTHER INVESTMENT COMPANIES 13
UNDERLYING FUNDS 14
MANAGEMENT OF THE FUND 15
INVESTMENT ADVISOR 15
PORTFOLIO MANAGER 16
GENERAL OPERATIONS 16
SHAREHOLDERS' INFORMATION 17
DISCLOSURE OF PORTFOLIO HOLDINGS 17
PRICING OF PORTFOLIO SHARES 17
PROHIBITED EXCESSIVE TRADING 18
PURCHASING SHARES 18
REDEEMING SHARES 19
REDEMPTION REQUIREMENTS 20
WHEN SIGNATURE GUARANTEES ARE REQUIRED 20
REDEMPTIONS IN-KIND 20
SPECIAL PLANS 21
RETIREMENT PLANS 21
EXCHANGE PRIVILEGE 21
DIVIDENDS, DISTRIBUTIONS AND TAXES 21
FINANCIAL HIGHLIGHTS 23
CROWLEY INCOME PORTFOLIO 23
CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO 24
ADDITIONAL INFORMATION 25

NOTICE OF PRIVACY POLICY

The non-public personal information we have about you generally is provided by
you when you complete an account application or when you request a transaction.
This information includes:

o Information we receive from you on or in applications or other forms,
correspondence, or conversations, including, but not limited to, your name,
address, phone number, social security number, assets, income and date of birth;
and

o Information about your transactions with us, our affiliates, or others,
including, but not limited to, your account number and balance, payment history,
and other financial information.

We do not disclose non-public information about our current or former
shareholders to non-affiliated parties, except as permitted or required by law
for legal, regulatory or other purposes. Your information is used by us or our
service providers primarily to complete transactions that you request and to
service your account. Information we have may be shared with companies that
provide certain services to us, such as transfer agents, custodians or companies
that may assist us in distribution of shareholder materials. The companies that
receive information from us about you are authorized to use that information
only for the services required and are not permitted to share or use this
information for any other purpose. We do not sell your personal information to
anyone.

We limit access of your non-public personal information to individuals who need
access to that information to provide services to you. We maintain physical,
electronic and procedural safeguards that comply with federal standards to guard
your non-public personal information.

In the event that you hold shares of the Fund through a financial intermediary,
including, but not limited to, a broker-dealer, bank, or trust company, the
privacy policy of your financial intermediary would govern how your nonpublic
personal information would be shared with nonaffiliated third parties.

THE CROWLEY PORTFOLIO GROUP, INC.

SUMMARY OF THE FUND

The Crowley Portfolio Group, Inc. (the "Fund") currently offers two portfolios
-- The Crowley Income Portfolio and The Crowley Diversified Management Portfolio
(each a "Portfolio," and collectively, the "Portfolios"). Each Portfolio is
managed by Crowley & Crowley Corp. (the "Investment Advisor") and operates
as a separate mutual fund. Each portfolio has its own investment objective and
policies. There is no assurance that a Portfolio will achieve its objective.

Investment Objectives and Strategies

The Crowley Income Portfolio

Objective: The objective of The Crowley Income Portfolio (the "Income
Portfolio") is to maximize current income, consistent with prudent risk.

Strategy: The Income Portfolio invests primarily in a diversified portfolio of
fixed income securities. The Income Portfolio also may invest its assets in all
classes of securities including dividend paying common stocks which it believes
have better income potential than fixed income securities. The Investment
Advisor selects the Income Portfolio's diversified group of securities for their
high yields relative to risk involved. The Investment Advisor analyzes trends in
economic and market conditions by using a variety of technical and fundamental
indicators. The trends are determined by the Investment Advisor in light of
current and past general economic and market conditions. Some of the factors
used in the analysis include: the direction of interest rates, trends in yields,
fiscal and monetary policy, economic growth, inflation rates, industry trends
and various moving averages.

Fixed income securities are more dependent upon interest rate movements than are
stocks. When a general rising trend in the fixed income market is identified,
the Income Portfolio will position itself in fixed income securities. If a
general rising trend is identified in both the fixed income market and the
equity market, the Income Portfolio will position itself in fixed income
securities, preferred stocks, and high dividend paying stocks. The Income
Portfolio generally manages its average maturity by investing in fixed income
securities that are short to intermediate term (generally 1 to 10 years) when
interest rates are relatively lower and intermediate to long term (generally 10
to 15 years) when interest rates are relatively higher. It is generally expected
that the range of maturities of obligations to be held by the Income Portfolio
will be intermediate to long term (approximately 10 to 15 years). The Income
Portfolio may invest up to 35% of its net assets in fixed income securities that
are rated below investment grade by a nationally recognized statistical rating
organization, such as Moody's Investors Service ("Moody's") or Standard &
Poor's Ratings Group ("S&P(R)") (i.e., rated Baa or lower by Moody's, or BBB
or lower by S&P(R)). Securities rated below Baa or BBB are commonly referred
to as high-yield or "junk bonds."

The Crowley Diversified Management Portfolio

Objective: The objective of The Crowley Diversified Management Portfolio (the
"Diversified Management Portfolio") is high total return consistent with
reasonable risk.

Strategy: The Diversified Management Portfolio concentrates its investments by
investing its assets in shares of other registered investment companies. The
Diversified Management Portfolio may invest up to 25% of assets in the
securities of a single registered investment company and may invest up to 100%
of its assets in the securities of other investment companies. In accordance
with its investment policies, the Diversified Management Portfolio also may
invest in other types of investments, including up to 35% of its net assets in
fixed income securities that are rated below investment grade by a nationally
recognized statistical rating organization, such as Moody's or S&P(R).

The Diversified Management Portfolio uses a variety of investment techniques and
analyzes economic and market trends in an effort to generate a high total
return. In choosing from among the available investment companies, the
Investment Advisor considers among other things, the prior performance of the
underlying investment company, its management, its performance in both up and
down markets, the current composition of its portfolio and current investment
philosophy. To achieve its objective, the Diversified Management Portfolio's
holdings may include investments in open-end investment companies (including
money market mutual funds), closed-end investment companies, cash, cash
equivalents (such as repurchase agreements or certificates of deposit), stocks,
bonds and other debt obligations, as well as a variety of option and futures
transactions. The Diversified Management Portfolio may invest in investment
companies that invest in foreign equity and debt securities and gold and silver
mining companies. To further enhance the performance, the Investment Advisor may
invest in so-called "sector funds," which, in general, concentrate their assets
in one segment of the equity market.

Principal Investment Risks

Investing in securities has inherent risks, which could cause you to lose money.
Some of the risks in investing in the Portfolios are:

o Management Risk. The Investment Advisor makes all decisions regarding
both Portfolios' investments. Therefore, the success of each Portfolio
depends on the success of the Investment Advisor in evaluating,
selecting, and monitoring each Portfolio's investments. Like all
mutual funds, an investment in one of the Portfolios is subject to the
risk that the investments chosen by the Investment Advisor may not
perform as anticipated.

o Market Risk-Equity Securities. Prices of equity securities are subject
to market, economic and business risks, which may influence the value
of the stock. Therefore, there is a risk that equity securities may
decline in value causing an investor to lose money.

o Market Risk-Fixed Income Securities. The Income Portfolio primarily
invests in fixed income securities, such as corporate bonds and other
debt securities. In addition, the underlying funds in which the
Diversified Management Portfolio invests may also invest in
fixed-income securities. The values of the fixed income securities are
affected by changes in interest rates. When interest rates rise, bond
prices fall (interest-rate risk). Conversely, when interest rates
fall, bond prices rise. The length of a debt security's maturity
generally effects its level of risk and amount of yield. Usually, the
longer a bond's maturity, the higher the risk and the higher the yield
(maturity risk). A bond's value may also be affected by changes in an
issuer's financial strength or on changes in the bond's credit rating
(credit-quality risk).

o Lower-Rated, High Risk Fixed income Securities. Both Portfolios may
invest in lower-rated, high risk fixed income securities, which have
speculative characteristics. The underlying funds in which the
Diversified Management Portfolio invests may also invest in these
securities. These securities (commonly referred to as "junk bonds")
are more sensitive to changes in economic and other conditions. Such
changes would more readily affect the issuer's ability to make
principal and interest payments than the issuer of higher-rated
securities. These securities are subject to greater interest-rate risk
and credit-quality risk than higher-rated fixed-income securities.
Economic conditions, such as a period of rising interest rates, could
adversely affect the market for these securities making it difficult
for a Portfolio to sell them (liquidity risk). The absence of a market
to sell these securities could decrease a Portfolio's share price.

o Foreign Securities Risk. The Diversified Management Portfolio
concentrates its investments by investing in shares of registered
investment companies. An underlying fund may invest its assets in
securities of foreign issuers. Investing in foreign securities
typically involves more risks than investing in U.S. securities. These
risks can increase the potential for losses in an underlying fund and
therefore the Portfolio, and may include, among others, currency risks
(fluctuations in currency exchange rates and the new euro currency),
country risks (political, diplomatic, regional conflicts, terrorism,
war, social and economic instability, currency devaluations and
policies that have the effect of limiting or restricting foreign
investment or the movement of assets), different trading practices,
less government supervision, less publicly available information,
limited trading markets and greater volatility. The risks of investing
in foreign securities typically are greater in less developed or
emerging market countries.

o Expenses of Investing in Investment Companies. The Diversified
Management Portfolio concentrates in the shares of registered
investment companies. It is therefore directly affected by their
performance. By investing in registered investment companies, the
Diversified Management Portfolio indirectly pays a portion of the
operating expenses, management expenses and brokerage costs of such
companies as well as the expenses of its own operation. The
Diversified Management Portfolio's investors indirectly may pay higher
total operating expenses and other costs than they might if they owned
the underlying investment companies directly. The Diversified
Management Portfolio has the right to invest in investment companies
that impose a sales load or sales charges. Although the Diversified
Management Portfolio seeks to minimize such charges, to the extent the
Diversified Management Portfolio pays such expenses, they can reduce
its investment results.

PAST PERFORMANCE

The Crowley Income Portfolio

The bar chart and table below show the Income Portfolio's annual return and its
long-term performance. The bar chart shows how the Income Portfolio's return has
changed from year to year over the past ten calendar years. The table shows how
the Income Portfolio's average annual returns for certain periods, both before
and after taxes, compare with those of a broad-based securities market index.
The Income Portfolio is compared to the Lehman Brothers Intermediate
Government/Corporate Index. The bar chart and table assumes that all dividends
and capital gain distributions have been reinvested in new shares of the Income
Portfolio. This information provides some indication of the risks of investing
in the Income Portfolio.

After-tax returns are calculated using the historical highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes. Your actual after-tax returns depend on your particular tax situation and
may differ from those shown.

These after-tax return figures do not apply to you if you hold your Portfolio
shares through a tax-deferred arrangement such as a 401(k) plan or individual
retirement account. Past performance (before and after taxes) is not necessarily
an indication of how the Income Portfolio will perform in the future.

THE CROWLEY INCOME PORTFOLIO
ANNUAL TOTAL RETURNS
FOR EACH YEAR ENDED DECEMBER 31

[Bar Chart Omitted]

1995 10.60%
1996 3.04%
1997 8.42%
1998 7.03%
1999 -0.38%
2000 7.97%
2001 8.20%
2002 2.59%
2003 7.68%
2004 3.50%

Best Quarter: 2nd Quarter 2003 3.85%
Worst Quarter: 2nd Quarter 2004 -1.75%

The Crowley Income Portfolio

Average Annual Total Returns For the Periods Ended
December 31, 2004

1 Year 5 Years 10 Years

Return Before Taxes 3.50% 5.45% 5.46%
Return After Taxes on Distributions 1.91% 3.38% 3.26%
Return After Taxes on Distributions
and Sale of Fund Shares 2.27% 3.39% 3.29%
Lehman Brothers Intermediate
Government/Corporate Index/1/* 3.04% 7.21% 7.15%

* Index reflects no deduction for fees, expenses, or taxes.

/1/ The Lehman Brothers Intermediate Government Corporate
Index is a duration weighted fixed income index comprised of
U.S. Treasury, U.S. agency and U.S. corporate securities
with a range of maturities of five to ten years. The index
is used as a performance benchmark for fixed income
securities portfolios with like duration and diversity.

The Crowley Diversified Management Portfolio

The bar chart and table below show the Diversified Management Portfolio's annual
return and its long-term performance. The bar chart shows how the Diversified
Management Portfolio's return has changed from year to year for the past nine
calendar years. The table shows how the Diversified Management Portfolio's
average annual returns for certain periods, both before and after taxes, compare
with those of a broad-based securities market index. The Diversified Management
Portfolio is compared to Standard & Poor's S&P 500(R) Index ("S&P
500(R)"). The bar chart and table assumes that all dividends and capital gain
distributions have been reinvested in new shares of the Diversified Management
Portfolio. This information provides some indication of the risks of investing
in the Diversified Management Portfolio.

These after-tax return figures do not apply to you if you hold your Portfolio
shares through a tax-deferred arrangement such as a 401(k) plan or individual
retirement account. Past performance is not necessarily an indication of how the
Diversified Management Portfolio will perform in the future.

THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
ANNUAL TOTAL RETURNS
FOR EACH YEAR ENDED DECEMBER 31

[Bar Chart Omitted]

1996* 12.33%
1997 12.96%
1998 7.86%
1999 18.69%
2000 -10.47%
2001 -19.03%
2002 -23.60%
2003 26.08%
2004 9.84%

* Annualized

Best Quarter: 4th Quarter 1999 15.41%
Worst Quarter: 3rd Quarter 2001 -17.72%

The Crowley Diversified Management Portfolio

Average Annual Total Returns For the Periods ended
December 31, 2004
Since
Inception
1 Year 5 Years (4/3/1995)

Return Before Taxes 9.84% -3.36% 4.89%
Return After Taxes on Distributions 9.84% -4.64% 3.33%
Return After Taxes on Distributions 6.40% -3.61% 3.26%
and Sale of Fund Shares
S&P 500(R)/1/* 10.87% -2.29% 11.31%

* Index reflects no deduction for fees, expenses, or taxes.

/1/ The S&P 500(R)is an unmanaged capitalization
weighted index of five hundred large capitalization stocks.
The performance of the S&P 500(R)reflects the
reinvestment of dividends and capital gains but does not
reflect the costs of operating a mutual fund, such as the
costs associated with securities transactions and investment
management fees.

FEES AND EXPENSES OF THE PORTFOLIOS

The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Portfolios.

Shareholder Fees (fees paid directly from your investment): None

Annual Fund Operating Expenses* (expenses deducted from Fund assets):

The Crowley The Crowley Diversified Management
Income Portfolio Portfolio

Management Fees 0.60% 1.00%
Distribution (12b-1) Fees None None
Other Expenses .87% 1.10%
Total Annual Fund Operating
Expenses 1.47% 2.10%

* As a percentage of average annual net assets.

Examples

The Examples below are intended to help you compare the cost of investing in the
Portfolios with the cost of investing in other mutual funds.

The Examples assume that you invest $10,000 in a Portfolio for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each year, that the
Portfolio's operating expenses remain the same, and that all distributions are
reinvested. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

1 Year 3 Years 5 Years 10 Years

The Crowley Income
Portfolio $150 $465 $803 $1,757
The Crowley Diversified
Management Portfolio $213 $658 $1,129 $2,431

INVESTMENT OBJECTIVES AND POLICIES

Set forth below are the investment objectives and policies of each Portfolio.

The Crowley Income Portfolio

The Income Portfolio's objective is to maximize current income, consistent with
prudent risk (i.e., reasonable risk to principal). The Income Portfolio
primarily seeks to earn and pay its shareholders current income while limiting
risk to principal through prudent investing (i.e., achieving maximum current
income with reasonable risk to principal). The Income Portfolio seeks to achieve
this objective by investing in a diversified portfolio of debt securities of
domestic corporations, preferred stock, United States government securities,
bankers' acceptances and certificates of deposit, repurchase agreements and
convertible securities. From time to time, the Income Portfolio may also
purchase dividend paying common stocks which the Investment Advisor believes,
based upon historical returns, have better income potential than fixed income
securities.

Fixed income securities will include debt securities and preferred stocks, some
of which may have a call on common stock by means of a conversion privilege or
attached warrants. Investment in corporate debt securities will meet a minimum
rating of Ca by Moody's or C by S&P(R)or, if not so rated, will have been
issued by a corporation having outstanding indebtedness rated at least Ca or C,
and dollar-denominated obligations of foreign issuers issued in the U.S. Only up
to 35% of the Income Portfolio's assets may be invested in corporate debt
securities rated Baa or below by Moody's or BBB or below by S&P(R), or that
are of comparable quality. The remaining investments by the Income Portfolio in
corporate debt securities must be made in securities rated at least A by Moody's
or A by S&P(R), or be of comparable quality. However, if the rating
attributed to a fixed income security that the Income Portfolio has purchased is
reduced below the minimal accepted rating after being purchased, the Income
Portfolio may nonetheless retain the security. The Income Portfolio may also
invest up to 10% of its assets in sponsored or unsponsored American Depositary
Receipts.

In selecting corporate debt securities for the Income Portfolio, the Investment
Advisor reviews and monitors the creditworthiness of each issuer and issue and
also analyzes interest rate trends and specific developments that may affect
individual issuers.

When the Investment Advisor anticipates a generally declining trend in fixed
income securities markets, the Investment Advisor will begin to move more funds
into cash and cash equivalents (high quality, short-term debt securities or
instruments issued by corporations, financial institutions, or the U.S.
government). If the Investment Advisor anticipates a prolonged or significant
decline, then the Income Portfolio may place most, if not all, of its funds in
cash and cash equivalents. The Income Portfolio may not achieve its objective
during periods when a temporary defensive position is taken.

The Investment Advisor will attempt to monitor and respond to changing economic
and market conditions and then, if necessary, reposition the Income Portfolio's
assets, depending on the trend analysis. Trends are analyzed by using a variety
of technical and fundamental indicators. The trends are determined by the
Investment Advisor in light of current and past general economic and market
conditions. Some of the factors used in the analysis include: the direction of
interest rates, trends in yields, fiscal and monetary policy, economic growth,
inflation rates, industry trends and various moving averages. Fixed income
securities are more dependent upon interest rate movements than are stocks. When
a general rising trend in the fixed income market is identified, the Income
Portfolio will position itself in fixed income securities. If a general rising
trend is identified in both the fixed income market and the equity market, the
Income Portfolio will position itself in fixed income securities, preferred
stocks, and high dividend paying stocks.

The Income Portfolio's policy is to invest in fixed income securities which are
short to intermediate term (generally 1 to 10 years) when interest rates are
historically lower and intermediate to long term (generally 10 to 15 years) when
interest rates are historically higher. It is generally expected that the range
of maturities of obligations to be held by the Income Portfolio will be
intermediate to long term (approximately 10 to 15 years).

The Crowley Diversified Management Portfolio

The Diversified Management Portfolio's objective is high total return consistent
with reasonable risk. The Diversified Management Portfolio seeks to achieve its
investment objective by investing primarily in shares of other open-end
registered investment companies. While it is the Diversified Management
Portfolio's policy to invest primarily in open-end registered investment
companies, it may also utilize other investment vehicles. These include cash or
cash equivalents (such as repurchase agreements or certificates of deposit),
shares of closed-end investment companies, stocks, bonds and other debt
obligations. Further, the Diversified Management Portfolio, under normal
circumstances, will not invest in a registered investment company that has a
stated policy of investing more than 50% of its assets in derivatives, and will
not invest more than 35% of its net assets in any registered investment company
that may invest more than 35% of its net assets in bonds rated lower than Baa by
Moody's or BBB by Standard & Poor's.

The Diversified Management Portfolio will invest only in investment companies
that are registered. If a registered investment company in which the Diversified
Management Portfolio invests ceases to remain registered, the Diversified
Management Portfolio will dispose of the securities of the non-registered
investment company.

The Diversified Management Portfolio may invest in registered investment
companies that are closed-end funds. After their initial public offering, the
shares of closed-end funds frequently trade on the open market at a price per
share which is less than the net asset value per share, the difference
representing the "market discount" of such shares. Market discount may be due in
part to the fact that the shares of closed-end funds are not redeemable by the
holder upon demand to the issuer at the next determined net asset value, but
rather are subject to the principles of supply and demand in the market. A
relative lack of secondary market purchasers of closed-end fund shares also may
contribute to such shares trading at a discount to their net asset value.

Although the Diversified Management Portfolio intends primarily to purchase
shares of closed-end funds which trade at a market discount and which the
Investment Advisor believes present the opportunity for capital appreciation or
increased income due in part to such market discount, there can be no assurance
that the market discount on shares of any closed-end fund will ever decrease. In
fact, it is possible that this market discount may increase or that the
Diversified Management Portfolio may experience realized or unrealized capital
losses due to further decline in the market price of the securities held in the
portfolios of such closed-end funds, thereby adversely affecting the net asset
value of the Diversified Management Portfolio's shares. Similarly, there can be
no assurance that the shares of closed-end funds that trade at a premium will
continue to trade at a premium or that the premium will not decrease subsequent
to a purchase of such shares by the Diversified Management Portfolio. Although
no assurances can be given, the Investment Advisor believes that its market
research and analysis and the diversification policies of the Diversified
Management Portfolio will enable the Diversified Management Portfolio to avoid
significant declines in the net asset value of its shares due to losses related
to an individual issuer.

The Diversified Management Portfolio must structure its investments in other
investment company shares to comply with certain provisions of federal and state
securities laws. The Diversified Management Portfolio and its affiliates
currently may not hold more than 3% of an underlying fund's shares. In the event
that the Diversified Management Portfolio holds more than 1% of an underlying
fund's shares, the underlying fund is obligated to redeem only 1% of the
underlying fund's outstanding securities during any period of less than 30 days.
Consequently, any shares of an underlying fund held by the Diversified
Management Portfolio in excess of 1% of the underlying fund's outstanding shares
will be considered illiquid securities that, together with other such
securities, may not exceed 10% of the Diversified Management Portfolio's net
assets. When the Diversified Management Portfolio is more heavily concentrated
in small investment companies, it may not be able to readily dispose of such
investment company shares and may be forced to redeem its shares in-kind to
redeeming Portfolio shareholders by delivering shares of investment companies
that are held by the Diversified Management Portfolio. The Diversified
Management Portfolio may be restricted in its ability to redeem because of the
1% limitation discussed above; however, shareholders who redeem their shares
in-kind would not be so restricted. Applicable fundamental policies are
reflected in the Diversified Management Portfolio's investment restrictions.

To achieve the Diversified Management Portfolio's investment objective, the
Investment Advisor attempts to determine the prevailing trend in the equity
market. The strategy consists of moving into those investments, which would most
benefit from the prevailing trend. In choosing from among the available
investment companies, the Investment Advisor considers among other things, the
prior performance of the underlying investment company, its management, its
performance in both up and down markets, the current composition of its
portfolio and current investment philosophy.

The Investment Advisor attempts to monitor and respond to changing economic and
market conditions as well as monitor the performance of the investments. When
the Investment Advisor has identified a significant upward trend in a particular
industry group, the Diversified Management Portfolio retains the right to invest
in investment companies that concentrate in a particular industry sector. The
Diversified Management Portfolio may invest in these investment companies, which
tend to have greater fluctuations in value when compared to other categories of
investment companies.

When the Investment Advisor anticipates a generally declining trend in equity
securities markets, the Investment Advisor may begin to move more funds into
cash and cash equivalents (high quality, short-term debt securities or
instruments issued by corporations, financial institutions, or the U.S.
government). If the Investment Advisor anticipates a prolonged or significant
decline, then the Diversified Management Portfolio may place most, if not all,
of its funds in cash and cash equivalents. The Diversified Management Portfolio
may not achieve its objective during periods when a temporary defensive position
is taken.

The Diversified Management Portfolio expects that it will select the investment
companies in which it will invest based, in part, upon an analysis of the past
and projected performance and investment structure of the investment companies.
The Diversified Management Portfolio will consider other factors in the
selection of the investment companies, such as the investment company's size,
shareholder services, liquidity, the investment objective and investment
techniques, etc. The Diversified Management Portfolio may be affected by the
losses of such underlying investment companies, and the level or risk arising
from the investment practices of such investment companies (such as repurchase
agreements, quality standards, or lending of securities). The Diversified
Management Portfolio has no control over the risks taken by such investment
companies. In addition, and subject to the 1% limitation discussed above, the
Diversified Management Portfolio can elect to redeem its investment in an
underlying investment company (or, in the case of an investment in a closed-end
fund, the Diversified Management Portfolio can sell or tender its shares) if
that action is considered necessary or appropriate.

MAIN RISKS

Lower-Rated, High-Risk Securities

Each Portfolio may invest up to 35% of its net assets in fixed income securities
that are medium investment grade or lower (rated Baa or lower by Moody's, or BBB
or lower by S&P(R), or are of comparable quality). The Portfolios intend to
invest in such securities in order to take advantage of additional investment
opportunities that come to the attention of the Investment Advisor from time to
time. Medium investment grade securities (those rated Baa by Moody's or BBB by
S&P(R), or, if unrated, are of comparable quality) have speculative
characteristics. Changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity to make principal and interest payments
than is the case with higher-rated fixed income securities. Securities rated Baa
or below by Moody's or BB or below by S&P(R), are considered high-yield,
high-risk securities and are commonly referred to as "junk bonds." These bonds
are predominately speculative and are subject to a substantial degree of credit
risk. As of November 30, 2004, the Income Portfolio did not hold any bonds rated
BB or below. Neither Portfolio will invest in fixed income securities that are
rated or considered lower than C by S&P(R)or Ca by Moody's. However, the
Portfolios may retain a fixed income security whose rating drops below the
minimal acceptable rating after being purchased. Any additional investments in
fixed income securities by the Portfolios must be high investment grade or
better (rated A or better by Moody's and S&P(R), or of comparable quality).

Risks of Investing in Other Investment Companies

The Diversified Management Portfolio, by investing in shares of investment
companies, indirectly pays a portion of the operating expenses, management
expenses and brokerage costs of such companies as well as the expense of
operating the Portfolios. Thus, the Diversified Management Portfolio's investors
may indirectly pay higher total operating expenses and other costs than they
might pay by owning the underlying investment companies directly. The
Diversified Management Portfolio attempts to identify investment companies that
have demonstrated superior management in the past, thus possibly offsetting
these factors by producing better results and/or lower costs and expenses than
other investment companies. There can be no assurance that this result will be
achieved.

Further, the Diversified Management Portfolio may invest in investment companies
which concentrate (invest 25% or more of the value of their assets) in a
particular industry. These companies tend to have greater fluctuation in value
than other more diversified investment companies that have a broader range of
investments. If the industry that a concentrated investment company invests in
experiences a decline, the value of the concentrated investment company may
decline, which may in turn negatively effect the price of the Diversified
Management Portfolio's shares.

Underlying Funds

The Diversified Management Portfolio may invest in underlying funds which may
invest in various obligations and employ various investment techniques. The
following describes some of the most common of such obligations and techniques.

Illiquid and Restricted Securities. An underlying fund may invest up to 15% of
its net assets in illiquid securities for which there is no readily available
market. Illiquid securities may include restricted securities, the disposition
of which would be subject to legal restrictions. During the time it takes to
dispose of illiquid securities, the value of the securities (and therefore the
value of the underlying fund's shares held by the Diversified Management
Portfolio) could decline.

Foreign Securities. An underlying fund may invest its assets in securities of
foreign issuers. There may be less publicly available information about these
issuers than is available about companies in the U.S. and such information may
be less reliable. Foreign securities are subject to heightened political, social
and economic risks, including the possibility of expropriation, nationalization,
confiscation, confiscatory taxation, exchange controls or other foreign
governmental restrictions. There is generally less government regulation and
supervision of foreign stock exchanges, brokers and listed companies. Foreign
companies are not subject to uniform global accounting, auditing and financial
reporting standards, practices and requirements. Securities of some foreign
companies are less liquid and their prices more volatile than securities of
comparable U.S. companies. Securities trading practices abroad may offer less
protection to investors. Settlement of transactions in some foreign markets may
be delayed or may be less frequent than in the U.S., which could affect the
liquidity of the underlying fund's portfolio, and, in turn, the Diversified
Management Portfolio. All of these risks are heightened for investments in
emerging markets.

Foreign Currency Transactions. In connection with its portfolio transactions in
securities traded in a foreign currency, an underlying fund may enter into
forward contracts to purchase or sell an agreed upon amount of a specific
currency at a future date which may be any fixed number of days from the date of
the contract agreed upon by the parties at a price set at the time of the
contract. Although such contracts tend to minimize the risk of loss due to a
change in the value of the subject currency, they tend to limit any potential
gain which might result should the value of such currency change favorably
during the contract period.

Industry Concentration. An underlying fund may concentrate its investments
within one industry. Because investments within a single industry would all be
affected by developments within that industry, a fund which concentrates in an
industry is subject to greater risk than a fund which invests in a broader range
of securities. In addition, the value of the shares of such an underlying fund
may be subject to greater market fluctuation than an investment in a more
diversified fund.

Loans Of Portfolio Securities. An underlying fund may lend its portfolio
securities equal in value up to one-third of its total assets. The loan is
secured continuously; however, loans of securities involve a risk that the
borrower may fail to return the securities or may fail to provide additional
collateral.

Short Sales. An underlying fund may sell securities short. In a short sale, the
fund sells stock, which it does not own, making delivery with securities
"borrowed" from a broker. The fund will incur a loss as a result of the short
sale if the price of the security increases between the date of the short sale
and the date on which the fund replaced the borrowed security. The fund may be
required to pay a premium, dividend or interest.

Risk Factors Regarding Options, Futures and Options on Futures. Successful use
by an underlying fund of options on stock or bond indices, financial and
currency futures contracts and related options, and currency options will be
subject to the investment manager's ability to predict correctly movements in
the direction of the securities and currency markets generally or of a
particular segment. If an underlying fund's investment manager is not successful
in employing such instruments in managing a fund's investments, the fund's
performance will be worse than if it did not employ such strategies. In
addition, a fund will pay commissions and other costs in connection with such
investments, which may increase the fund's expenses and reduce the return. In
writing options on futures, a fund's loss is potentially unlimited and may
exceed the amount of the premium received.

Certain derivative positions may be closed out only on an exchange that provides
a secondary market. There can be no assurance that a liquid secondary market
will exist for any particular option, futures contract or option thereon at any
specific time. Thus, it may not be possible to close such a position and this
could have an adverse impact on a fund. When trading options on foreign
exchanges, or in the over-the-counter market, many of the protections afforded
to exchange participants will not be available and a secondary market may not
exist.

Leverage Through Borrowing. An underlying fund may borrow to increase its
holdings of portfolio securities. The underlying fund is required to maintain
continuous asset coverage of 300% with respect to such borrowings and to sell
(within three days) sufficient portfolio holdings to restore such coverage if it
should decline to less than 300%, even if disadvantageous. Leveraging will
exaggerate the effect of any increase or decrease in the value of portfolio
securities on the fund's net asset value, and money borrowed will be subject to
interest costs and fees which may exceed the interest and gains, if any,
received from the securities purchased with borrowed funds.

MANAGEMENT OF THE FUND

Investment Advisor

The Investment Advisor, a corporation organized on August 28, 1989 under the
laws of the state of Delaware, has its principal offices located at 3201-B
Millcreek Road, Suite H, Wilmington, DE 19808. Since its inception in 1989, the
principal business of the Investment Advisor has been to provide investment
counsel and advice to investors. The Investment Advisor manages each Portfolio
under separate management contracts (each a "Management Contract" and,
collectively, the "Management Contracts"). The Management Contracts provide that
the Investment Advisor shall supervise and manage each Portfolio's investments
and shall determine each Portfolio's portfolio transactions, subject to periodic
review and ratification by the Fund's Board of Directors (the "Board of
Directors" or the "Board"). The Investment Advisor is responsible for selecting
brokers and dealers to execute transactions for the Portfolios.

Pursuant to the Management Contracts, the Investment Advisor will manage the
assets of each Portfolio in accordance with the stated objective, policies and
restrictions of the Portfolio and manage the business affairs of the Fund
(subject to the supervision of the Fund's Board of Directors and the Fund's
officers). The Investment Advisor will also provide administrative and clerical
services, keep certain books and records in connection with its services to the
Fund and supervise the services rendered to the Fund by other persons. The
Investment Advisor has also authorized any of its directors, officers and
employees who have been elected as directors or officers of the Fund to serve in
the capacities in which they have been elected. Services furnished by the
Investment Advisor under the contracts may be furnished through the medium of
any such directors and officers.

As compensation for its services as the investment manager of the Fund, the
Investment Advisor receives a fee, computed daily and payable monthly, at the
annualized rate of 1.00% of the average daily net assets of The Crowley
Diversified Management Portfolio and 0.60% of the average daily net assets of
The Crowley Income Portfolio. The Investment Advisor pays all expenses incurred
by it in rendering management services to the Fund including the costs of
accounting, bookkeeping and data processing services provided in its role as
administrator. Each Portfolio of the Fund bears its costs of operations. These
expenses include, but are not limited to: the fee of the Investment Advisor,
taxes, brokerage fees, fees associated with calculating the net asset value of
each Portfolio daily, legal fees, custodian and auditing fees, and printing and
other expenses which are not expressly assumed by the Investment Advisor under
the Management Contracts. For the fiscal year ending November 30, 2004, The
Crowley Income Portfolio and The Crowley Diversified Management Portfolio
incurred expenses equal to 1.43%, and 2.01%, respectively, of average net
assets.

The Investment Advisor, pursuant to the Management Contracts, also serves as the
Portfolios' administrator. The Management Contracts provide that the Investment
Advisor will furnish each Portfolio with office facilities, with any ordinary
clerical and bookkeeping services not furnished by the custodian, or distributor
and with Portfolio accounting services. Such services include the maintenance of
the Fund's books and records of each Portfolio. The Investment Advisor has not
agreed to perform daily pricing for the Fund.

Portfolio Manager

The portfolio manager for each Portfolio is Mr. Robert A. Crowley, Vice
President of the Investment Advisor. Mr. Crowley has been managing The Crowley
Income Portfolio since its inception in 1989 and The Crowley Diversified
Management Portfolio since its inception in 1995. Mr. Crowley received his law
degree from Widener University School of Law in 1998, his Chartered Financial
Analyst certification in 1990, his Bachelor of Science Degree in Business
Administration from the University of Delaware in 1980 and his Masters Degree in
Business Administration from George Washington University in 1985. In addition
to his responsibilities in managing the Portfolios, Mr. Crowley is a financial
planner for other managed accounts advised by the Investment Advisor. Prior to
managing the Portfolios, Mr. Crowley managed individual securities accounts in
addition to engaging in financial planning activities.

Additional information about the Portfolios' portfolio manager, including
information about the portfolio manager's compensation, other accounts managed
by the portfolio manager and the portfolio manager's ownership of shares of the
Portfolios, is provided in the Fund's SAI.

GENERAL OPERATIONS

Except as indicated elsewhere in the prospectus, each Portfolio of the Fund is
responsible for the payment of its expenses, including: (a) the fees payable to
the Investment Advisor, the Distributor and the Transfer Agent; (b) the fees and
expenses of directors who are not affiliated with the Investment Advisor or the
Distributor; (c) the fees and certain expenses of the Fund's Custodian; (d) the
charges and expenses of the Fund's legal counsel and independent accountants;
(e) brokers' commissions and any issue or transfer taxes chargeable to a
Portfolio in connection with its securities transactions; (f) all taxes and
corporate fees payable by the Fund to governmental agencies; (g) the fees of any
trade association of which the Fund is a member; (h) the cost of stock
certificates, if any, representing shares of the Portfolio; (i) reimbursements
of the organizational expenses of the Fund and the fees and expenses involved in
registering and maintaining registration of the Fund and its shares with the
Securities and Exchange Commission laws, and the preparation and printing of the
Fund's registration statements and prospectuses for such purposes; (j) allocable
communications expenses with respect to investor services and all expenses of
shareholders and directors meetings and of preparing, printing and mailing
prospectuses and reports to shareholders; (k) litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Fund's business; and (l) compensation for employees of the Fund.

SHAREHOLDERS' INFORMATION

Disclosure of Portfolio Holdings

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information.

Pricing of Portfolio Shares

The price for a Portfolio share is determined by the net asset value per share
("NAV") of the Portfolio share. The NAV is calculated separately for each
Portfolio. The NAV for a Portfolio is determined by the Fund as of the close of
regular trading on each day that the New York Stock Exchange is open for
unrestricted trading and on which there is one or more purchase or redemption
transactions that might materially affect the value of the Portfolio's
securities. The net asset value is determined by the Fund by dividing the value
of the Portfolio's securities, plus any cash and other assets, less all
liabilities, by the number of shares outstanding (assets - liabilities/ # of
shares = NAV). Expenses and fees of a Portfolio, including the advisory and the
distributor fees, are accrued daily and taken into account for the purpose of
determining the net asset value.

In calculating the NAV, the value of a Portfolio's securities is determined in
one of several ways depending on the security. Portfolio securities listed or
traded on a securities exchange for which representative market quotations are
available, will be valued at the last quoted sales price on the security's
principal exchange on that day. Listed securities not traded on an exchange that
day, and other securities which are traded in the over-the-counter market, will
be valued at the last reported bid price in the market on that day, if any.
Securities for which market quotations are not readily available, and all other
assets, will be valued at their respective fair market value as determined in
good faith in accordance with the valuation procedures established by the Board
of Directors. With respect to the Diversified Management Portfolio, the NAV is
calculated based upon the net asset values of the underlying funds in which the
Diversified Management Portfolio invests. The prospectuses for these underlying
funds explain the circumstances under which those companies will use fair value
pricing and the effects of using fair value pricing.

The Fund may use fair value pricing (as described below) in order to calculate a
Portfolio's NAV. In addition, the Fund may use independent pricing services to
assist it in calculating the NAV for each Portfolio. The SAI contains additional
information regarding the pricing of the Portfolios' shares.

Prohibited Excessive Trading

While the Fund provides shareholders with daily liquidity, the Fund is designed
for long-term investors and is not intended for investors that engage in
excessive short-term trading activity (including purchases and sales of Fund
shares in response to short-term market fluctuations) that may be harmful to the
Company. Short-term or excessive trading in and out of the Fund can disrupt
portfolio management strategies, harm performance and increase Fund expenses for
all shareholders, including long-term shareholders who do not generate these
costs. Such excessive short-term includes, but is not limited to, market timing
techniques that are intended to exploit possible inefficiencies in pricing
portfolio securities of an investment company, such as the Fund.

The Fund discourages excessive or disruptive trading activities, including
market timing. As described more fully below, the Fund has adopted a policy to
prevent excessive trading and other predatory techniques that may cause harm to
shareholders and directed the Investment Advisor to implement account monitoring
and fair value pricing procedures (when necessary) to discourage and prevent
market timing or excessive short-term trading in the Fund. The Fund may modify
these policies and procedures in response to changing regulatory requirements
imposed by the SEC, to enhance the effectiveness of the policy and to further
restrict predatory trading activities.

Accounting Monitoring. The Investment Advisor and the Fund's compliance
personnel monitor individual shareholder trading activity and aggregate flows of
money in and out of the Fund in an effort to detect excessive short-term trading
activities and to enforce the Fund's policy against excessive trading. The
Investment Advisor and the Fund's compliance personnel review on a routine basis
information relating to shareholder purchase and redemption transactions that
exceed a specified monetary threshold and that are initiated within a certain
period of time in order to evaluate whether any of the Fund's shareholders had
engaged in market timing activity. In particular, the Investment Advisor
monitors shareholder account activity to identify those accounts that exhibit
unusual trading patterns, such as relatively large (positive or negative) net
cash flows and cash flows that appear to be reversals of prior cash flows within
a short time frame. If, as a result of this monitoring, the Fund determines in
its sole discretion that a shareholder has engaged in excessive short-term
trading, the Fund will refuse such shareholder's subsequent purchases orders. In
addition, the Fund may refuse purchase orders for any reason, without prior
notice.

Fair Value Pricing. The Fund's Board of Directors has approved and the Fund has
adopted fair value pricing procedures. By fair valuing a security whose price
may have been affected (i) by events occurring after the close of trading in its
market or (ii) by news after the last market pricing of the security, the Fund
attempts to establish a price that it might reasonably expect to receive upon
its current sale of that security. These methods are designed to help ensure
that the prices at which Fund shares are purchased and redeemed are fair, and do
not result in the dilution of shareholder interests. In view of the types of
securities commonly held by the Fund, the market prices at the time that the
Fund determines its NAV will normally reflect all relevant information and,
therefore, the Fund's securities will generally not require fair value pricing.

Purchasing Shares

Purchase Price: Shares of each of the Portfolios are offered for sale to the
public through the Fund's distributor, Crowley Securities (the "Distributor")
and selected dealers. The purchase price of the shares is the first NAV computed
after the Distributor receives the purchase order and the Custodian receives
payment in federal funds for the purchased shares. However, the net asset value
per share of a Portfolio is only calculated when there is enough trading in a
Portfolio's securities that the current net asset value of the shares might be
materially affected by the changes in value of these securities.

Minimum Investments: The minimum initial investment in each of the Portfolios is
$5,000, and each subsequent investment must be at least $1,000. The minimum
amount may consist of a single investment in one Portfolio or an aggregate
investment in both of the Portfolios. An investment by a spouse or parent may be
combined with an investment of the other spouse or children to meet the minimum
initial or subsequent investment limit. Further, an investment by a
tax-qualified plan may be combined with a personal investment to meet the
minimum initial or subsequent investment limitations.

How to Purchase Shares: Initial or subsequent investments in a Portfolio may be
made by completing the application form and mailing it together with a check
made payable to The Crowley Portfolio Group, Inc.

Send your checks and completed application forms to:

Crowley Securities
3201-B Millcreek Road
Wilmington, DE 19808

Your purchase will be made in full and fractional shares of a Portfolio
calculated to three decimal places. Shares are normally held in an open account
for shareholders by each Portfolio. The Portfolios will send a statement to
shareholders detailing the amount of shares owned at the time of each
transaction. Share certificates for full shares are available at any time by
written request by, and at no additional cost to, the shareholder. However, no
certificates will be issued for fractional shares.

Each Portfolio reserves the right in its sole discretion: (i) to suspend the
offering of its shares; and (ii) to reject purchase orders when in the best
interest of the Portfolio.

Redeeming Shares

Shareholders may redeem all or a portion of their shares without charge on any
day on which the New York Stock Exchange is open for unrestricted trading.
Redemptions of shares of each Portfolio will be made at the NAV next determined
after the Transfer Agent receives a redemption request that meets the
requirements described below. The Portfolios normally send redemption proceeds
on the next business day, and no later than seven calendar days after receiving
a redemption request in proper form.

If a Portfolio receives a redemption request for shares that have recently been
purchased by check, payment of the redemption may be delayed until the Portfolio
confirms with the Fund's custodian that the purchase check has cleared. This may
take up to 15 days from the purchase date. The Fund's Board may suspend the
right of redemption or postpone the date of payment during any period when: (a)
trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission or such Exchange is closed for other than
weekends and holidays; (b) the Securities and Exchange Commission has by order
permitted such suspension; or (c) an emergency, as defined by rules of the
Securities and Exchange Commission, exists during which time the sale of
Portfolio securities or valuation of securities held by a Portfolio are not
reasonably practicable.

Each Portfolio also reserves the right to redeem a shareholder's account if the
shareholder's aggregate investment in the Fund falls below the minimum initial
investment amount, which is currently $5,000. The Fund will not close out a
shareholder's account without informing the shareholder in writing at least
sixty (60) days before making such redemption. During this time the shareholder
may purchase additional shares in any amount necessary to bring the account back
to $5,000. The Fund will not redeem an investor's account that is worth less
than $5,000 solely due to a market decline.

Redemption Requirements

All redemption requests must be in writing and should be submitted to:

The Crowley Financial Group, Inc.
3201-B Millcreek Road
Suite H
Wilmington, DE 19808.

The redemption request must:

(1) Identify the Portfolio and the shareholder's account number;
(2) State the number of shares to be redeemed; and
(3) Be signed by each registered owner exactly as the
shares are registered.
(4) If the shares to be redeemed were issued in certificate form,
the certificates must be endorsed for transfer (or be
accompanied by an endorsed stock power) and submitted along with
the redemption request.

When Signature Guarantees are Required

A signature guarantee is required for redemption requests: (1) in an amount
greater than $10,000; (2) a redemption to be paid to someone other than to the
shareholder of record, regardless of the dollar amount; or (3) if the proceeds
are to be sent other than to the address of record. The guarantor of a signature
must be a national bank or trust company (not a savings bank), a member bank of
the Federal Reserve System or a member firm of a national securities exchange.
The Transfer Agent may require additional supporting documents for redemptions
requested by corporations, executors, administrators, trustees and guardians. A
redemption request is not considered to be properly received until the Transfer
Agent receives all required documents in proper form. Any questions with respect
to the proper form for redemption requests should be directed to the Transfer
Agent at (302) 994-4700.

Redemptions In-Kind

If the Board determines that it would be detrimental to the best interest of the
remaining shareholders of a Portfolio to make payment in cash, the Portfolio may
pay the amount of the redemption in whole or in part by a "redemption in-kind."
A redemption in-kind is a payment in portfolio securities rather than cash. Such
securities will be valued at the time of the redemption by using the procedures
to determine the Portfolio's net asset value. The shareholder may experience
additional expenses such as brokerage commissions in order to sell the
securities received from the Portfolio. In-kind payments do not have to
constitute a cross section of the securities in the Portfolio. A Portfolio will
not recognize gain or loss for federal tax purposes on the securities used to
complete an in-kind redemption, but the shareholder will recognize gain or loss
equal to the difference between the fair market value of the securities received
and the shareholder's basis in the Portfolio shares redeemed.

Shareholders who have questions about redemption requests should contact the
Transfer Agent at (302) 994-4700.

SPECIAL PLANS

Retirement Plans

Each Portfolio also offers its shares for use in certain Tax Sheltered (such as
IRA, Keogh, 401(k) and 403(b)(7) plans) and Withdrawal Plans. Information on
these Plans is available from the Fund's Distributor or by reviewing the
Statement of Additional Information.

Exchange Privilege

Subject to the Fund's policies prohibiting excessive trading, shareholders of
one Portfolio may exchange all or part of their shares for shares in the other
Portfolio, at NAV. There is no fee for exchanges; however, shareholders may make
no more than two exchanges per calendar year. Shares of a Portfolio are
available only in states where such shares may lawfully be sold. The amount
invested must equal or exceed the required minimum investment of the Portfolio
that is purchased. To exchange shares, shareholders should contact the Fund's
Distributor. A shareholder requesting an exchange will be sent a current
prospectus and an exchange authorization form to authorize the exchange.
Exchanges may not be made by telephone. The Fund retains the right to modify the
terms of its exchange privilege or to terminate the privilege. In all
circumstances, the Fund's exchange privileges are subject to its polices
prohibiting excessive trading.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Portfolio will declare and pay annual dividends to its shareholders of
substantially all of its respective net investment income, if any, earned during
the year from its investments. Each Portfolio will also distribute net realized
capital gains, if any, at least once each year. Expenses of the Portfolios,
including the advisory fee, are accrued each business day. Dividends will be
reinvested and distributions will be made in additional shares of a Portfolio on
the payment date, unless the shareholder has elected in writing to receive
dividends or distributions in cash. The additional shares will be purchased at
the NAV determined on the record date of the dividend or distribution. You may
elect to change the form of your distributions (i.e., cash or shares) by
notifying the Transfer Agent in writing thirty days before the record date.

In general, if you are a taxable investor, distributions from a Portfolio are
taxable to you as either ordinary income or capital gain. This is true whether
you reinvest your distributions in additional shares of the Portfolio or receive
them in cash. Portfolio distributions of short-term capital gains are taxable to
you as ordinary income. Portfolio distributions of long-term capital gains are
taxable to you as long-term capital gain no matter how long you have owned your
shares. A portion of income dividends distributed by a Portfolio may be
qualified dividend income eligible for taxation by individual shareholders at
long-term capital gain rates, provided certain holding period requirements are
met.

If you invest in a Portfolio shortly before the record date of a taxable
distribution, the distribution will lower the value of the Portfolio's shares by
the amount of the distribution, and you will in effect receive some of your
investment back, but in the form of a taxable distribution.

By law, a Portfolio must withhold a portion of your taxable distributions and
redemption proceeds unless you:

o provide your correct social security or taxpayer identification
number;
o certify that this number is correct;

o certify that you are not subject to backup withholding; and
o certify that you are a U.S. person (including a U.S. resident alien).

A Portfolio also must withhold if the IRS instructs it to do so.

Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
December but paid in January are taxable as if they were paid in December.

When you sell your shares of a Portfolio, you may realize a capital gain or
loss. For tax purposes, an exchange of your Portfolio shares for shares of the
other Portfolio are the same as a sale.

Portfolio distributions and gain from the sale or exchange of your shares
generally will be subject to state and local taxes. Non-U.S. investors may be
subject to U.S. withholding and estate tax, and are subject to special U.S. tax
certification requirements. You should consult your tax advisor about the
federal, state, local or foreign tax consequences of your investment in a
Portfolio.

Additional information on tax matters relating to the Portfolios and their
shareholders is included in the section entitled "Dividends, Distributions and
Taxes" in the Statement of Additional Information.

FINANCIAL HIGHLIGHTS

Crowley Income Portfolio

The financial highlights table is intended to help you understand The Crowley
Income Portfolio's financial performance for the past five years. Certain
information reflects financial results of a single Portfolio share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the Income Portfolio (assuming reinvestment of all
dividends and distributions). This information has been audited by Tait, Weller
& Baker, the Fund's independent registered accounting firm, whose report,
along with the Income Portfolio's financial statements, are incorporated by
reference into the Fund's Statement of Additional Information. A copy of the
Fund's Annual Report (including the report of Tait, Weller & Baker) may be
obtained from the Fund upon request at no charge.

Fiscal Year Ended November 30,
--------- --------- --------- ----------
2004 2003 2002** 2001 2000
Net Asset Value,
Beginning of Year $10.50 $10.17 $10.68 $10.38 $10.56
------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income: .44 .51 .58 .65 .71
Net Gains (Losses) on
Securities
(both realized and unrealized) (.06) .38 (.43) .34 (.19)
------ ------ ------ ------ ------
Total from Investment Operations .38 .89 .15 .99 .52
------ ------ ------ ------ ------
Less Distributions:
Dividends (from net investment
income) (.50) (.56) (.66) (.69) (.70)
Distributions (from realized
capital gains) --- --- --- --- ---
------ ------ ------ ------ ------
Total Distributions (.50) (.56) (.66) (.69) (.70)
------ ------ ------ ------ ------
Net Asset Value, End of Year $10.38 $10.50 $10.17 $10.68 $10.38
====== ====== ====== ====== ======

Total Return 3.76% 9.19% 1.45% 10.08% 5.32%

Ratios/Supplemental Data:
Net Assets, End of Year
(000s omitted) $11,268 $11,459 $11,101 $11,242 $10,724
Ratio of Expenses to Average Net
Assets 1.47% 1.43% 1.41% 1.39% 1.37%
Ratio of Net Investment Income
to Average Net Assets 4.68% 4.85% 5.65% 6.20% 6.79%

Portfolio Turnover Rate 34.71% 51.07% 32.28% 30.12% 1.38%

**As required, effective December 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing discount and premium on debt securities. Had the Fund not amortized
discount and premium on debt securities as adjustments to interest income, the
net investment income per share would have been $.57 and the ratio of net
investment income to average net assets would have been 5.59%. Per share and
ratios prior to December 1, 2001 have not been restated to reflect this change
in presentation.

FINANCIAL HIGHLIGHTS

Crowley Diversified Management Portfolio

The financial highlights table is intended to help you understand The Crowley
Diversified Management Portfolio's financial performance for the past five
years. Certain information reflects financial results of a single Portfolio
share. The total returns in the table represent the rate that an investor would
have earned or lost on an investment in the Diversified Management Portfolio
(assuming reinvestment of all dividends and distributions). This information has
been audited by Tait, Weller & Baker, the Fund's independent registered
accounting firm, whose report, along with the Diversified Management Portfolio's
financial statements, are incorporated by reference into the Fund's Statement of
Additional Information. A copy of the Fund's Annual Report (including the report
of Tait, Weller & Baker) may be obtained from the Fund upon request at no
charge.

Fiscal Year Ended November 30,
--------- --------- --------- ----------
2004 2003 2002 2001 2000
Net Asset Value,
Beginning of Year $9.60 $8.30 $10.20 $13.21 $14.40
------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income (.13) (.10) (.09) .12 .06
(Loss)
Net Gains (Losses) on
Securities (both
realized and unrealized 1.10 1.40 (1.81) (2.39) (.91)
------ ------ ------ ------ ------
Total from Investment
Operations .97 1.30 (1.90) (2.27) (.85)
------ ------ ------ ------ ------
Less Distributions:
Dividends (from net
investment income) --- --- --- (.15) (.16)
Distributions (from
realized capital gains) --- --- --- (.59) (.18)
------ ------ ------ ------ ------
Total Distributions --- --- --- (.74) (.34)
------ ------ ------ ------ ------
Net Asset Value, End of
Year $10.57 $9.60 $8.30 $10.20 $13.21
====== ====== ====== ====== ======

Total Return 10.10% 15.66% (18.63%) (18.31%) (6.20%)

Ratios/Supplemental
Data:
Net Assets, End of Year
(000s omitted) $5,612 $5,235 $4,651 $5,495 $6,573
Ratio of Expenses to
Average Net Assets 2.10% 2.01% 1.89% 1.81% 1.86%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (1.30%) (1.19%) (1.06%) .98% .39%
Portfolio Turnover Rate 11.60% 3.76% 1.75% 6.81% 15.36%

ADDITIONAL INFORMATION

You can find more information about The Crowley Portfolio Group, Inc. and its
Portfolios in the Statement of Additional Information ("SAI") and Annual and
Semi-Annual Reports.

The SAI includes expanded information about investment practices, risks and
operations. The SAI supplements, and is incorporated by reference into this
Prospectus.

The Annual and Semi-Annual Reports focus on information about each Portfolio's
investments and performance. In these reports, you will find a discussion of the
market conditions and investment strategies that significantly affected each
Portfolio's performance during the last fiscal year.

Free copies of these materials and other information about the Portfolios may be
obtained by:

o Calling (collect) or writing The Crowley Portfolio Group, Inc. at the phone
number or address listed below. The Fund does not currently maintain a
website, however, information is available via the internet by accessing
the EDGAR Database maintained by the Securities and Exchange Commission
("SEC"), which is available at www.sec.gov.

o Visiting the SEC's Public Reference Room in Washington, DC. Information on
the operation of the Public Reference Room may be obtained by calling the
SEC at (1-202-942-8090).

o Requesting copies of this information by writing to the Public Reference
Section of the SEC, Washington, DC 20549-0102 or by contacting the SEC at
its e-mail address publicinfo@sec.gov (a copying fee may be charged).

o Accessing the EDGAR Database on the SEC's Internet site at www.sec.gov.

THE CROWLEY PORTFOLIO GROUP, INC.
3201-B Millcreek Road
Wilmington, DE 19808
(302) 994-4700

Registrant's Registration File Nos.:
Securities Act of 1933 Registration File No. 33-30975
Investment Company Act of 1940 Act Registration File No. 811-05875

THE CROWLEY PORTFOLIO GROUP, INC.

STATEMENT OF ADDITIONAL INFORMATION

March 29, 2005

The Crowley Income Portfolio
The Crowley Diversified Management Portfolio

This Statement of Additional Information is not a Prospectus. Information about
the Fund and its Portfolios is included in the Prospectus dated March 29, 2005.
No investment in shares of the Portfolios should be made without first reading
the Prospectus. Certain information from the Annual Report has been incorporated
by reference into this Statement of Additional Information. To get a free copy
of the Prospectus or Annual Report, write to the following address or call the
Fund (collect) at (302) 994-4700.

INVESTMENT ADVISOR
AND DISTRIBUTOR
THE CROWLEY PORTFOLIO GROUP, INC.
3201-B Millcreek Road
Wilmington, DE 19808
(302) 994-4700

TABLE OF CONTENTS

FUND HISTORY AND CLASSIFICATION 3
INVESTMENT STRATEGIES AND RISKS 3
FIXED INCOME SECURITIES 3
MONEY MARKET SECURITIES 4
REPURCHASE AGREEMENTS 5
INVESTMENT COMPANY SECURITIES 6
PORTFOLIO TURNOVER 7
FUTURES AND OPTIONS 7
FOREIGN SECURITIES AND CURRENCY CONSIDERATIONS 9
INVESTMENT RESTRICTIONS 10
FUNDAMENTAL INVESTMENT RESTRICTIONS 10
MANAGEMENT OF THE FUND 12
BOARD OF DIRECTORS AND OFFICERS OF THE FUND 12
AUDIT COMMITTEE 14
COMPENSATION 15
EQUITY OWNERSHIP 15
CODE OF ETHICS 16
DISCLOSURE OF PORTFOLIO HOLDINGS 16
PROXY VOTING POLICIES 16
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 18
CONTROL PERSONS 18
PRINCIPAL HOLDERS 18
MANAGEMENT OWNERSHIP 18
INVESTMENT ADVISOR 18
PORTFOLIO MANAGER 20
DISTRIBUTOR 21
ALLOCATION OF PORTFOLIO BROKERAGE 21
TRANSFER AND DIVIDEND DISBURSING AGENT 22
CUSTODIAN 22
PURCHASE, REDEMPTION AND PRICING OF SHARES 22
TAX-SHELTERED RETIREMENT PLANS 23
ANTI-MONEY LAUNDERING PROGRAM 23
CAPITAL STOCK 24
DIVIDENDS, DISTRIBUTIONS AND TAXES 24
GENERAL INFORMATION 29
APPENDIX A - RATINGS 30
APPENDIX B - INVESTMENT POLICIES OF UNDERLYING FUNDS 31

FUND HISTORY AND CLASSIFICATION

The Crowley Portfolio Group, Inc. (the "Fund") is an open-end diversified
investment company. It was organized as a series Maryland corporation on August
15, 1989 and currently offers shares of two series. The Fund's two series are
The Crowley Income Portfolio and The Crowley Diversified Management Portfolio
(each, a "Portfolio" and collectively, the "Portfolios"). Crowley & Crowley
Corp. (the "Investment Advisor") serves as the investment manager each
Portfolio.

INVESTMENT STRATEGIES AND RISKS

The objective of The Crowley Income Portfolio (the "Income Portfolio") is to
maximize current income, consistent with prudent risk. The objective of The
Crowley Diversified Management Portfolio (the "Diversified Management
Portfolio") is high total return consistent with reasonable risk. The
Portfolios' objectives may not be changed without shareholder approval. The
Portfolios will use a variety of investment strategies in an effort to balance
portfolio risks and to hedge market risks. There can be no assurance that the
objectives of the Portfolios will be achieved.

Each Portfolio seeks to achieve its objective by making investments selected in
accordance with the Portfolio's investment restrictions and policies. Each
Portfolio will vary its investment strategy to achieve its objective, as
described in the Portfolio's prospectus. This Statement of Additional
Information contains further information concerning the techniques and
operations of each Portfolio, the securities in which it will invest, and the
policies it will follow.

The Income Portfolio will primarily invest in debt securities, dividend-paying
stocks and preferred stocks. The Diversified Management Portfolio concentrates
its investments in shares of registered investment companies. Each Portfolio may
invest its assets directly in money market securities whenever deemed
appropriate by the Investment Advisor to achieve the Portfolio's investment
objective. Each Portfolio may invest in cash and cash equivalents (high quality,
short-term debt securities or instruments issued by corporations, financial
institutions, or the U.S. government) when the Investment Advisor anticipates a
prolonged or significant decline in market conditions applicable to the
Portfolio. A Portfolio may not achieve its objective during periods when such a
temporary defensive position is taken.

Fixed Income Securities

Lower-Rated, High Risk Securities. Each Portfolio may invest up to 35% of its
net assets in fixed income securities that are medium investment grade or lower,
which means that they have a rating of Baa or lower as determined by Moody's
Investors Service ("Moody's") or BBB or lower by Standard & Poor's Ratings
Group ("S&P(R)") or are of comparable quality. The Portfolios intend to
invest in such securities in order to take advantage of additional investment
opportunities that come to the attention of the Investment Advisor from time to
time. Any additional investments in fixed income securities must be rated A or
better by Moody's and S&P(R), or deemed to be of comparable quality, which
means they are high investment grade or better.

Fixed income securities that are rated Baa by Moody's or BBB by S&P(R)or, if
unrated, are of comparable quality, have speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case with higher
rated fixed income securities. Categories below this level are considered high
yield, high-risk securities (commonly referred to as "junk bonds"). Junk bonds
are predominately speculative and are subject to a substantial degree of credit
risk. See Appendix A (Ratings) to this Statement of Additional Information for
more rating information.

The Portfolios will not invest in fixed income securities which are rated lower
than C by S&P(R), Ca by Moody's or similarly by another rating agency, or,
if unrated, are considered to be of a lower quality than such ratings. However,
the Portfolios may retain a fixed income security whose rating drops below the
minimal acceptable rating after being purchased.

Such lower-rated and unrated securities generally entail greater risk, including
the possibility of default or bankruptcy of the issuers, or loss of principal or
income. Such securities generally involve greater price volatility and may be
more thinly traded, than securities in higher rated categories. This may
adversely affect and cause large fluctuations in the net asset value of a
Portfolio. Also, it may be difficult for the Portfolios to accurately value such
securities at certain times or to sell such securities under certain market
conditions. Adverse publicity and investor perceptions, whether or not based on
a fundamental analysis, may decrease the values and liquidity of junk bonds.
Legislative and regulatory developments also could have a material effect on
junk bonds.

The economy and interest rates may affect junk bonds differently than other
securities. Prices are less sensitive to interest rate changes than higher-rated
securities, but more sensitive to adverse economic changes or individual
corporate developments. Also, during an economic downturn or substantial period
of rising interest rates, highly leveraged issuers may experience financial
stress which would adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals and to obtain
additional financing. If the issuer of a junk bond defaults, a Portfolio may
incur additional expenses to seek recovery. Changes by recognized rating
agencies in their rating of any security or its issuer ordinarily have a more
dramatic effect on the values of these junk bonds than on the values of
higher-rated securities. Such changes will affect the Portfolios' net asset
value per share. For more information regarding the risks associated with junk
bonds, see "Junk Bonds" in the "Appendix - Investment Policies of Underlying
Funds."

Money Market Securities

Each Portfolio may invest in money market securities, which include: marketable
securities issued or guaranteed as to principal and interest by the government
of the United States or by its agencies or instrumentalities, domestic bank
certificates of deposit, bankers' acceptances, prime commercial paper and
repurchase agreements (secured by United States Treasury or agency obligations).

Securities issued or guaranteed as to principal and interest by the United
States government ("Government Securities") include a variety of Treasury
securities, which differ in their interest rates, maturities and dates of issue.
U.S. Treasury bills have a maturity of one year or less; U.S. Treasury notes
have maturities of one to ten years; U.S. Treasury bonds generally have a
maturity of greater than five years. The Portfolios will only acquire Government
Securities which are supported by the "full faith and credit" of the United
States. Securities that are backed by the full faith and credit of the United
States include U.S. Treasury bills, U.S. Treasury notes, U.S. Treasury bonds,
and obligations of the Government National Mortgage Association, the Farmers
Home Administration, and the Export-Import Bank. The Portfolios' direct
investments in money market securities will generally favor securities with
shorter maturities (maturities of less than 60 days), which are less affected by
price fluctuations than those with longer maturities.

Cash equivalents will consist of high-quality money market instruments, which
return maximum current income and maintain preservation of capital. These
instruments are considered safe because of their short-term maturities,
liquidity and high-quality ratings.

Certificates of deposit are certificates issued against funds deposited in a
commercial bank or a savings and loan association for a definite period of time
and earning a specified return. Bankers' acceptances are negotiable drafts or
bills of exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Investments in bank certificates of deposit and bankers' acceptances are
generally limited to domestic banks and savings and loan associations that are
members of the Federal Deposit Insurance Corporation or Federal Savings and Loan
Insurance Corporation having a net worth of at least one hundred million dollars
("Domestic Banks") and domestic branches of foreign banks (limited to
institutions having total assets not less than $1 billion or its equivalent).

Investments in prime commercial paper may be made in notes, drafts, or similar
instruments payable on demand or having a maturity at the time of issuance not
exceeding nine months, exclusive of days of grace, or any renewal thereof
payable on demand or having a maturity likewise limited. Commercial paper is
limited to the two highest ratings of Moody's and S&P(R). Firms rate
borrowers differently according to their classifications. S&P(R)rates
companies from A for the highest quality to D for the lowest quality rating. The
A-rated companies are also subdivided into three groups depending on relative
strength. Moody's uses P-1 as their highest rating along with P-2 and P-3.
Commercial Paper may be purchased that is rated P-1 or P-2 by Moody's or A-1 or
A-2 by S&P(R). Instruments such as commercial paper and notes that are
issued by companies having an outstanding debt rated within these two highest
ratings may be purchased.

Repurchase Agreements

Under a repurchase agreement a Portfolio acquires a debt instrument for a
relatively short period (usually not more than one week) subject to the
obligations of the seller to repurchase and of the Portfolio to resell such
instrument at a fixed price. The use of repurchase agreements involves certain
risks. For example, if the seller of the agreement defaults on its obligation to
repurchase the underlying securities at a time when the value of these
securities has declined, a Portfolio may incur a loss upon disposition of them.
If the seller of the agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws, a bankruptcy court may
determine that the underlying securities are collateral not within the control
of the Portfolio and therefore subject to sale by the trustee in bankruptcy.
Finally, it is possible that a Portfolio may not be able to substantiate its
interest in the underlying securities. While management of the Portfolios
acknowledges these risks, it is expected that they can be controlled through
stringent security selection and careful monitoring procedures. The Portfolios
will enter into repurchase agreements only with banks which are members of the
Federal Reserve System, or securities dealers who are members of a national
securities exchange or are market-makers in government securities and report to
the Market Reports Division of the Federal Reserve Bank of New York and, in
either case, only where the debt instrument collateralizing the repurchase
agreement is a U.S. Treasury or agency obligation supported by the full faith
and credit of the U.S. A repurchase agreement may also be viewed as the loan of
money by a Portfolio to the seller. The resale price specified is normally in
excess of the purchase price, reflecting an agreed upon interest rate. The rate
is effective for the period of time a Portfolio is invested in the agreement and
may not be related to the coupon rate on the underlying security. The term of
these repurchase agreements will usually be short (from overnight to one week)
and at no time will a Portfolio invest in repurchase agreements of more than
sixty days. The securities, which are collateral for the repurchase agreements,
however, may have maturity dates in excess of sixty days from the effective date
of the repurchase agreement. A Portfolio will always receive, as collateral,
securities whose market value, including accrued interest, will be at least
equal to 102% of the dollar amount to be paid to the Portfolio under each
agreement at its maturity, and the Portfolio will make payment for such
securities only upon physical delivery or evidence of book entry transfer to the
account of the Custodian. If the seller defaults, the Portfolio might incur a
loss if the value of the collateral securing the repurchase agreement declines,
and might incur disposition costs about liquidation of the collateral. In
addition, if bankruptcy proceedings are commenced with respect to the seller of
the security, collection of the collateral by the Portfolio may be delayed or
limited. A Portfolio may not enter into a repurchase agreement with more than
seven days to maturity if, as a result, more than 10% of the market value of the
Portfolio's net assets would be invested in such repurchase agreements together
with any other illiquid assets.

Investment Company Securities

(Diversified Management Portfolio ONLY) Each investment company in which the
Diversified Management Portfolio invests will be a registered investment
company, and will operate subject to a variety of regulatory constraints. While
such regulation does not guarantee the investment success of an investment
company, or assure that it will not suffer investment losses, the Investment
Advisor believes that such investment companies provide a sound foundation upon
which to base an investment portfolio. By investing in a broad spectrum of such
companies the Diversified Management Portfolio hopes to benefit from the
collective research and analysis of many experienced investment personnel.

There are many types of investment companies. All maintain portfolios, which are
generally liquid, but can be composed of different kinds of securities and
involve different objectives. Such investment companies may seek only income,
only appreciation, or various combinations of these. They may invest in money
market securities, short or long-term bonds, dividend producing stocks,
tax-exempt municipal securities, or a variety of other instruments. They may
seek speculative or conservative investments ranging from securities issued by
new companies to securities issued by "blue-chip" companies. An investment
company which has a policy of holding 80% of its assets in debt securities
maturing in thirteen months or less, or which holds itself out as a "money
market fund," will be treated as a money market fund by the Diversified
Management Portfolio.

The Investment Advisor will be responsible for monitoring and evaluating these
kinds of factors to select investment company fund securities for the
Diversified Management Portfolio in accordance with the policies and techniques
described in the prospectus.

The Diversified Management Portfolio, by investing in shares of investment
companies, indirectly pays a portion of the operating expenses, management
expenses and brokerage costs of such companies as well as the expense of its own
operations. Thus, the Diversified Management Portfolio's investors will
indirectly pay higher total operating expenses and other costs than they would
pay by owning the underlying investment companies directly. The Diversified
Management Portfolio attempts to identify investment companies that have
demonstrated superior management in the past, thus possibly offsetting these
factors by producing better results and/or lower costs and expenses than other
investment companies. There can be no assurance that this result will be
achieved.

Investment decisions by the investment managers of the underlying funds are made
independently of the Diversified Management Portfolio and the Investment
Advisor. Therefore, the investment manager of one underlying fund may be
purchasing shares of the same issuer whose shares are being sold by the
investment manager of another such underlying fund. The result of this would be
an indirect expense to the Diversified Management Portfolio without
accomplishing any investment purpose.

The Diversified Management Portfolio expects that it will select the investment
companies in which it will invest based, in part, upon an analysis of the past
and projected performance and investment structure of the investment companies.
However, the Diversified Management Portfolio must consider other factors in the
selection of investment companies. These other factors include the investment
company's size, shareholder services, liquidity, investment objective and
investment techniques, etc. The Diversified Management Portfolio will be
affected by the losses of its underlying investment companies, and the level of
risk arising from the investment practices of such investment companies (such as
repurchase agreements, quality standards, or lending of securities) and has no
control over the risks taken by such investment companies. The Diversified
Management Portfolio can also elect to redeem (subject to the 1% limitation
discussed in the Portfolio's prospectus) its investment in an underlying
investment company (or sell it if the company is a closed-end one) if that
action is considered necessary or appropriate.

Portfolio Turnover

It is not the policy of the Portfolios to purchase or sell securities for
short-term trading purposes, but each Portfolio may sell securities to recognize
gains or avoid potential for loss. A Portfolio will, however, sell any portfolio
security (without regard to the time it has been held) when the Investment
Advisor believes that market conditions, creditworthiness factors or general
economic conditions warrant such a step. The Fund presently estimates that the
annualized portfolio turnover rates for the Income Portfolio and the Diversified
Management Portfolio generally will not exceed 100% and 200%, respectively. High
portfolio turnover (100% or more) will involve additional transaction costs
(such as higher brokerage commissions or sales charges or adverse tax effects)
which are borne by the respective Portfolio. (See "Dividends, Distributions and
Taxes" in the prospectus.) For the fiscal years ended November 30, 2003 and
2004, the portfolio turnover rates for the Income Portfolio were 51.07% and
34.71%, respectively. For the fiscal years ended November 30, 2003 and 2004, the
portfolio turnovers for the Diversified Management Portfolio were 3.76% and
11.60%, respectively.

Futures and Options

Although they do not currently do so, each Portfolio may seek to protect itself
from anticipated market action by using "hedging" techniques that it expects
will generate gains which would offset losses on other securities owned by the
Portfolio. These hedging techniques could involve combinations of various
techniques, such as the purchase or sale of stocks or the use of stock options,
stock index options, stock index futures and options thereon to seek to achieve
increases in the values of such options and futures which offset decreases in
the values of other securities owned by a Portfolio. The Investment Advisor
would select which specific technique(s) to use based upon analysis of the
holdings of each of the Portfolios, market conditions, relative costs and risks,
tax effects and other factors. There can be variations between the relative
movements of investments and the hedge selected with respect to that investment.
This may increase or decrease the gains or losses each Portfolio achieves by its
hedging relative to losses or gains on the hedged investments. A Portfolio will
limit its investments in futures or options premiums to 5% or less of its
assets. The following descriptions illustrate some of the techniques and risks
involved in such hedging.

Options. Each Portfolio may purchase and/or write ("sell") call and put options
that are traded on U.S. Securities Exchanges. Each Portfolio may enhance its
objective by receiving premiums for writing covered call and put options.
Although each Portfolio would receive premium income from these techniques, any
appreciation realized would be limited by the terms of the option. Each
Portfolio may purchase call options to protect against an increase in the price
of securities that it ultimately wants to buy. It may purchase put options to
protect the securities in its portfolio against a decline in market value.

Stock Index Futures. Each Portfolio may purchase and sell stock index futures
contracts. A Portfolio may sell stock index futures contracts in anticipation
of, or during a market decline to attempt to offset the decrease in market value
of its common stocks that might otherwise result. A Portfolio may also purchase
such contracts in order to offset increases in the cost of common stocks that it
intends to purchase.

Options on Stock Indexes and Stock Index Futures. Each Portfolio may purchase
and/or write call and put options on stock indexes that are traded on U.S.
Exchanges. The Portfolios may also purchase and/or write call and put options on
stock index futures, which are traded on U.S. Exchanges. Options on stock index
futures are similar to options on stocks or options on stock indexes.

If used, the selection of the foregoing techniques or any combination of them to
be used at any particular time will depend upon an assessment of the relative
implementation costs and the liquidity of the particular secondary market in
which such options, stock index futures, and options on stock indexes and stock
index futures are traded.

Risks of Transactions in Stock Options, Stock Index Futures, Options on Stock
Indexes and Options on Stock Index Futures. An option position may be closed out
only on an U.S. Exchange that provides a secondary market for an option of the
same series. Although the Portfolios will generally purchase or write only those
options for which the Investment Advisor believes there is an active secondary
market, there is no assurance that a liquid secondary market on an U.S. Exchange
will exist for any particular option or futures contract. In such event, it
might not be possible to effect closing transactions in particular options or
futures contracts. As a result, a Portfolio would have to exercise its options
in order to realize any profit or allow the option to expire. The inability to
closeout these options or futures could have an adverse effect on a Portfolio's
ability to effectively hedge its securities and could result in a loss to the
Portfolio. If exercised, the Portfolio would incur brokerage commissions upon
the subsequent disposition of underlying securities acquired. An imperfect
correlation exists between the options or futures and securities being hedged.
Success of any hedging position depends on the ability of the Investment Advisor
to predict a stock and interest rate movement. The skills necessary for
successful use of hedges are different than those used in the selection of
equity or fixed income securities. If the Investment Advisor is incorrect in its
forecasts regarding market values, interest rates, and other applicable factors,
a Portfolio utilizing these investment techniques may be in a worse position
than if the investment techniques had never been used. Accordingly, the
Portfolios historically have not significantly engaged in hedging transactions.

In addition, adverse market movements could cause a Portfolio to lose up to its
full investment in a call or option contract and/or to experience substantial
losses on an investment in a futures contract. A Portfolio also risks a loss of
margin deposits in the event of bankruptcy of a broker with whom the Portfolio
has an open position in a futures contract or option.

While the Portfolios have not adopted fundamental limitations on their futures
or options activities, they must comply with certain requirements of the
Securities and Exchange Commission and the Commodities Futures Trading
Commission. For example, these provisions require that each Portfolio shall not
purchase or sell any futures or puts or calls on futures if immediately
thereafter the sum of the amount of the Portfolio's margin deposits (both
initial and variation deposits) and premiums paid for outstanding puts and/or
calls on futures would exceed 5% of the value of its total assets. This
limitation could, however, change if regulatory provisions applicable to the
Portfolios were to be changed. In general, the Portfolios will not engage in
transactions in future contracts or related options for speculation but only as
a hedge against changes resulting from market conditions in the values of
securities held in the Portfolio or which a Portfolio intends to purchase.
Historically, neither Portfolio has significantly engaged in hedging
transactions. Although it is not a fundamental policy, a Portfolio will not
purchase or sell futures contracts or purchase or sell related options if
immediately thereafter more than 30% of its net assets would be so invested.
Shareholders will be notified in advance of any change in this limitation.

By writing a call option, the Portfolio limits its opportunity to profit from
any increase in the market value of the underlying security above the exercise
price of the option. By writing a put option, a Portfolio assumes the risk that
it may be required to purchase the underlying security for an exercise price
higher than its current market value, resulting in a potential capital loss
unless the security subsequently appreciates in value.

Foreign Securities and Currency Considerations

The Diversified Management Portfolio may invest in shares of registered
investment companies that invest in foreign securities. Investments in
securities of foreign issuers may involve greater risks that those of U.S.
issuers. There is generally less information available to the public about
non-U.S. companies and less government regulation and supervision of non-U.S.
stock exchanges, brokers and listed companies. Non-U.S. companies are not
subject to uniform global accounting, auditing and financial reporting
standards, practices and requirements. Securities of some non-U.S. companies are
less liquid and their prices more volatile than securities of comparable U.S.
companies. Securities trading practices abroad may offer less protection to
investors. Settlement of transactions in some non-U.S. markets may be delayed or
may be less frequent than in the U.S., which could affect the liquidity of the
underlying fund's portfolio, and, in turn, the Diversified Management Portfolio.
Additionally, in some non-U.S. countries, there is the possibility of
expropriation or confiscatory taxation, limitations on the removal of
securities, property or other assets of the fund, political or social
instability, or diplomatic developments which could affect U.S. investments in
those countries. The Diversified Management Portfolio intends to invest in such
registered investment companies that diversify broadly among countries, but
reserves the right to invest in investment companies that invest a substantial
portion of assets in one or more countries if economic and business conditions
warrant such investments. The Investment Advisor will consider these factors in
managing the Diversified Management Portfolio's investments.

The U.S. dollar market value of the underlying funds' investments and of
dividends and interest earned by the underlying funds, and in turn, the
Diversified Management Portfolio may be significantly affected by changes in
currency exchange rates. Some currency prices may be volatile, and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets, which could adversely affect the underlying
funds and, in turn, the Diversified Management Portfolio. Although underlying
funds may attempt to manage currency exchange rate risks, there is no assurance
that the underlying funds will do so at an appropriate time or that it will be
able to predict exchange rates accurately. For example, if any of the funds
increase their exposure to a currency and that currency's price subsequently
falls, such currency management may result in increased losses to those funds.
Similarly, if any of the funds decrease their exposure to a currency, and the
currency's price rises, those funds will lose the opportunity to participate in
the currency's appreciation. These events may adversely affect the Diversified
Management Portfolio.

In addition, the Portfolios have the authority to invest (directly) up to 5% of
their respective assets in foreign securities, including sponsored or
unsponsored American Depositary Receipts ("ADRs") for securities of foreign
issuers, and the authority to invest an additional 5% of their respective assets
in sponsored or unsponsored ADRs only. The underlying funds in which the
Diversified Management Portfolio invests may also invest in ADRs. ADRs are
receipts typically issued by a U.S. bank or trust company evidencing ownership
of underlying foreign securities. These securities are not denominated in the
same currency as their underlying securities, but rather in U.S. dollars. The
issuers of unsponsored ADRs are not obligated to disclose material information
in the United States and therefore there may not be a correlation between such
information and the market value of unsponsored ADRs. Investment in foreign
issuers, directly or through ADRs, involves certain risks, which are in addition
to the usual risks inherent in domestic investments. Such risks include the fact
that there may be less publicly available information about foreign companies,
and such companies are generally not subject to uniform accounting, auditing and
financial reporting standards.

INVESTMENT RESTRICTIONS

The Fund has adopted the investment restrictions set forth below for each
Portfolio in addition to those discussed in the Prospectus. Some of these
investment restrictions are fundamental policies of the Portfolios, and cannot
be changed without the approval of a majority of the outstanding voting
securities. As stated in the Investment Company Act of 1940, as amended ("1940
Act"), a "vote of a majority of the outstanding voting securities" means the
affirmative vote of the lesser of:

(i) more than 50% of the outstanding shares; or
(ii) 67% or more of the shares present at a meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by
proxy.

With the exception of investment restriction relating to borrowing (see
sub-paragraph (f) below), so long as percentage restrictions are observed by
each Portfolio at the time it purchases any security, changes in values of
particular Portfolio assets or the assets of a Portfolio as a whole will not
cause a violation of any of the Fund's fundamental investment restrictions.

Fundamental Investment Restrictions

Each Portfolio's investment objective is fundamental and may not be changed
without shareholder approval as described above. In addition, as a matter of
fundamental policy, each Portfolio will not:

(a) as to 75% of the Portfolio's total assets, invest more than 5% of its total
assets in the securities of any one issuer. (This limitation does not apply to
cash and cash items, securities issued by other investment companies and
obligations issued or guaranteed by the United States Government, its agencies
or instrumentalities.)

(b) purchase more than 10% of the voting securities, or more than 10% of any
class of securities of any issuer. For purposes of this restriction, all
outstanding fixed income securities of an issuer are considered as one class.

(c) purchase or sell commodities or commodity futures contracts, provided that
each Portfolio may enter into futures contracts and related options and make
initial and variation margin deposits in connection therewith.

(d) make loans of money or securities, except: (i) by the purchase of fixed
income obligations in which the Portfolio may invest consistent with its
investment objective and policies; or (ii) by investment in repurchase
agreements.

(e) invest in securities of any company if, to the knowledge of the Portfolio,
any officer or director of the Fund or the Investment Advisor owns more than
0.5% of the outstanding securities of such company and such officers and
directors (who own more than 0.5%) in the aggregate own more than 5% of the
outstanding securities of such company.

(f) borrow money, except the Portfolio may borrow from banks: (i) for temporary
or emergency purposes in an amount not exceeding 5% of the Portfolio's assets;
or (ii) to meet redemption requests that might otherwise require the untimely
disposition of portfolio securities, in an amount up to 33 1/3% of the value of
the Portfolio's total assets (including the amount borrowed) valued at market
less liabilities (not including the amount borrowed) at the time the borrowing
was made. While borrowings exceed 5% of the value of the Portfolio's total
assets, the Portfolio will not purchase securities. Interest paid on borrowings
will reduce net income.

(g) pledge, hypothecate, mortgage or otherwise encumber its assets, except in an
amount up to 33 1/3% of the value of its net assets but only to secure
borrowings for temporary or emergency purposes, such as to effect redemptions.

(h) purchase the securities of any issuer, if, as a result, more than 10% of the
value of a Portfolio's net assets would be invested in securities that are
subject to legal or contractual restrictions on resale ("restricted
securities"), in securities for which there are no readily available market
quotations, or in repurchase agreements maturing in more than seven days, if all
such securities would constitute more than 10% of the Portfolio's net assets.

(i) issue senior securities;

(j) engage in the underwriting of securities except insofar as the Portfolio may
be deemed an underwriter under the Securities Act of 1933 in disposing of a
portfolio security;

(k) purchase or sell real estate or interests therein, although it may purchase
securities of issuers which engage in real estate operations and securities
which are secured by real estate or interests therein;

(l) invest for the purpose of exercising control or management of another
company;

(m) purchase oil, gas or other mineral leases, rights or royalty contracts or
exploration or development programs, except that the Portfolio may invest in the
securities of companies which invest in or sponsor such programs;

(n) concentrate (invest 25% or more of the value of its assets) its investments
in any industry (this restriction does not apply to The Crowley Diversified
Management Portfolio with respect to registered investment companies);

(o) make purchases of securities on "margin," or make short sales of securities,
provided that each Portfolio may enter into futures contracts and related
options and make initial and variation margin deposits in connection therewith.

For the Crowley Diversified Management Portfolio only

The Crowley Diversified Management Portfolio will not

(a) invest in any investment company if a purchase of its shares would result in
the Portfolio and its affiliates owning more than 3% of the total outstanding
stock of such investment company.

(b) invest in any investment company which itself does not qualify as a
diversified investment company under the Internal Revenue Code.

MANAGEMENT OF THE FUND

Board of Directors and Officers of the Fund

The Board of Directors of the Fund consists of six individuals, four of whom are
not "interested persons" of the Fund as that term is defined in the 1940 Act.
The Directors are fiduciaries for the Fund's shareholders and are governed by
the laws of the state of Maryland in this regard. The Directors, in addition to
functions set forth under sections "Investment Advisor" and "Distributor,"
review the actions of the officers and decide on general policy.

Compensation to officers and Directors of the Fund who are affiliated with the
Investment Advisor or the Distributor is paid by the Investment Advisor or the
Distributor, respectively, and not by the Fund. The names, addresses and
occupational history of the Directors and principal executive officers are
listed below.

Interested Directors/1/
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------
# of
Term of Portfolios
Office/2/ in Fund Other
and Length Complex Directorships
Name, Age, Address Position(s) of Time Principal Occupation During Overseen Held by
(Date of Birth) Held With Fund Served Past Five Years by Director Director
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------
Robert A. Crowley/1/ President, Since Vice President, Crowley & 2 None
3201-B Millcreek Road Treasurer, and Inception Crowley Corp. (financial
Wilmington, DE 19808 Director planning and registered
(March 15, 1958) investment advisor) (formerly
Crowley Planning & Management
Corp.) from November, 1986
until present; Vice President,
The Crowley
Financial Group, Inc.
(financial management firm and
transfer agent) from February,
1990 to present; Vice
President, Crowley Real Estate
Services, Inc. from September,
1986 until present; General
Partner, Crowley Securities
(registered broker-dealer)
from February, 1985 until
present; Partner, Crowley
Insurance, (insurance
brokerage) July, 1986 until
present.
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------
Frederick J. Crowley, Vice Since President, Crowley & Crowley 2 None
Jr./1/ President, Inception Corp. (financial planning and
3201-B Millcreek Road Secretary and registered investment advisor)
Wilmington, DE 19808 Director (formerly Crowley Planning and
(March 30, 1956) Management Corp.) from
November, 1986 until present;
President and Treasurer, The
Crowley Financial Group, Inc.
(financial management firm and
transfer agent) from February,
1990 to present; Vice
President, Crowley Real Estate
Services, Inc. (real estate
brokerage) from September,
1986 until present; General
Partner, Crowley Securities
(registered broker-dealer)
from February, 1985 until
present; Partner, Crowley
Insurance (insurance
brokerage) July, 1985 until
present.

--------------------- ---------------- ------------ -------------------------------- ------------ ----------------

Independent Directors
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------
# of
Term of Portfolios
Office/2/ in Fund Other
and Length Complex Directorships
Name, Age, Address Position(s) of Time Principal Occupation During Overseen Held by
(Date of Birth) Held With Fund Served Past Five Years by Director Director
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------
William O. Cregar Director Since Retired. Formerly Security 2 None
4556 Simon Road Inception Director, E.I. duPont de
Wilmington, DE 19803 Nemours & Co. (manufacturer
(May 2, 1925) of chemicals and related
products), until December,
1990.
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------
Bruce A. Humphries Director Since Operations Senior Manager, 2 None
33 Stonewold Way Inception Dade Behring, Inc.
Greenville, DE 19807 (manufacture of clinical
(August 28, 1947) diagnostic instruments), 1998
to Present; Operations
Planning Manager for Virology
Business, E.I. duPont de
Nemours & Co. (manufacturer of
chemicals and related
products), 1986 to 1997.
---------------------- ---------------- ------------ -------------------------------- ------------ ----------------
Daniel J. Piscitello Director Since Director of Creative Services, 2 None
3933 Branches Lane Inception Lenox Collections
Doylestown, PA 18901 (manufacturer of tableware and
(November 5, 1941) collectibles), 1986 to Present.
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------

--------------------- ---------------- ------------ -------------------------------- ------------ ----------------
Peter Veenema Director Since Senior Research Engineer, 2 None
1211 Norbee Drive Inception E.I. duPont de Nemours
Wilmington, DE 19803 (manufacturer of chemicals and
(May 25, 1949) related products) , 1989 to
Present.
--------------------- ---------------- ------------ -------------------------------- ------------ ----------------

Officers
--------------------- ---------------- ------------ -------------------------------------------------------------
Term of
Office/1/
and Length
Position(s) of Time
Name, Age, Address Held With Fund Served Principal Occupation During Past Five Years
--------------------- ---------------- ------------ -------------------------------------------------------------
Catherine Crowley Asst. Since Officer Manager, Crowley & Crowley Corp. (financial
3201-B Millcreek Road Secretary & Inception planning and advisor) (formerly Crowley Management Corp.);
Wilmington, DE 19808 Asst. Treasurer Secretary, The Crowley Financial Group, Inc. (financial
April 10, 1935 management firm and transfer agent) from February 1990 to
present.
--------------------- ---------------- ------------ -------------------------------------------------------------
___________________

/1/ Robert A. Crowley and Frederick J. Crowley are brothers and are each
considered to be an "interested person" of the Fund, as defined under the 1940
Act, due to their positions as officers of Crowley and Crowley Corp., the Fund's
Investment Advisor, and General Partners of Crowley Securities, which is the
Fund's distributor.
/2/ Each Director and officer shall hold office until his or her successor is
elected and qualified.

Audit Committee

The Fund has an Audit Committee, which assists the Board of Directors in
fulfilling its duties relating to the Fund's accounting and financial reporting
practices, and also serves as a direct line of communication between the Board
of Directors and the independent auditors. The specific functions of the Audit
Committee include recommending the engagement or retention of the independent
auditors, reviewing with the independent auditors the plan and the results of
the auditing engagement, approving professional services provided by the
independent auditors prior to the performance of such services, reviewing the
independence of the independent auditors, reviewing the scope and results of the
Fund's procedures for internal auditing, and reviewing the Trust's system of
internal accounting controls.

The Audit Committee is made up entirely of all of the Independent Directors as
follows: William O. Cregar, Bruce A. Humphries, Daniel J. Piscitello, Peter
Veenema. During the fiscal year ended November 30, 2004, there were two meetings
of the Audit Committee. All of the members of the Audit Committee were present
for the meetings.

Compensation

For his service as Director, each independent director of the Fund receives a
$2,000 annual fee. The interested directors of the Fund receive no compensation
for their service as Directors. The table below details the amount of
compensation received by the Directors from the Fund for the fiscal year ended
November 30, 2004. Presently, none of the executive officers receive
compensation from the Fund.

------------------------ --------------------- ----------------------- --------------------- -------------------
Total Compensation
Aggregate Pension or Retirement Estimated Annual from Fund and Fund
Compensation from Benefits Accrued as Benefits Upon Complex Paid to
Name and Position Fund Part of Fund Expenses Retirement Directors*
------------------------ ---------------------- ----------------------- ---------------------- --------------------
Robert A. Crowley**, None None None None
President, Treasurer
and Director
------------------------ ---------------------- ----------------------- ---------------------- --------------------
Frederick J. Crowley,
Jr.**, Vice President, None None None None
Secretary and Director
------------------------ ---------------------- ----------------------- ---------------------- --------------------
William O. Cregar, $2,000 None None $2,000
Director
------------------------ ---------------------- ----------------------- ---------------------- --------------------
Bruce A.
Humphries, $2,000 None None $2,000
Director
------------------------ ---------------------- ----------------------- ---------------------- --------------------
Daniel J.
Piscitello, $2,000 None None $2,000
Director
------------------------ ---------------------- ----------------------- ---------------------- --------------------
Peter Veenema, $2,000 None None $2,000
Director
------------------------ ---------------------- ----------------------- ---------------------- --------------------
_______________
* The "Fund Complex" presently consists of two investment companies, each an
individual series of the Registrant.
** Deemed to be an "interested person" of the Fund as defined under the 1940
Act.

Equity Ownership

The following tables provide the dollar range of equity securities beneficially owned by the board members of the Fund as of December
31, 2004.

Interested Directors
--------------------- ----------------------------- -------------------------- -----------------------------
Aggregate Dollar Range of
Equity Securities in All
Dollar Range of Equity Registered Investment
Dollar Range of Equity Securities Companies Overseen by
Securities in the Diversified Director in Family of
Name of Director in the Income Portfolio Portfolio Investment Companies
--------------------- ----------------------------- -------------------------- -----------------------------
Robert A. Crowley None $0-10,000 $0-10,000
--------------------- ----------------------------- -------------------------- -----------------------------
Frederick J. Crowley, $10,001-50,000 $10,001-50,000 $50,001-100,000
Jr.
--------------------- ----------------------------- -------------------------- -----------------------------

Independent Directors
---------------------- ---------------------------- -------------------------- -----------------------------
Aggregate Dollar Range of
Equity Securities in All
Dollar Range of Equity Registered Investment
Dollar Range of Equity Securities Companies Overseen by
Securities in the Diversified Director in Family of
Name of Director in the Income Portfolio Portfolio Investment Companies
---------------------- ---------------------------- -------------------------- -----------------------------
William O. Cregar Over $100,000 Over $100,000 Over $100,000
---------------------- ---------------------------- -------------------------- -----------------------------
Bruce A. Humphries None $50,001-100,000 $50,000-100,000
---------------------- ---------------------------- -------------------------- -----------------------------
Daniel J. Piscitello Over $100,000 Over $100,000 Over $100,000
---------------------- ---------------------------- -------------------------- -----------------------------
Peter Veenema $10,001-50,000 $10,001-50,000 $50,001-100,000
---------------------- ---------------------------- -------------------------- -----------------------------

Code of Ethics

The Fund has adopted and approved a joint Code of Ethics for certain access
persons of the Fund, which includes its Directors and certain officers and
employees of the Fund, Investment Advisor and Distributor. The Code of Ethics is
designed to ensure that Fund insiders act in the interest of the Fund and its
shareholders with respect to any personal trading of securities. Under the Code
of Ethics, access persons are prohibited from knowingly buying or selling
securities that are being purchased, sold or considered for purchase or sale by
the Portfolios. The Code of Ethics contains even more stringent investment
restrictions and prohibitions for insiders who participate in the Portfolios'
investment decisions. The Code of Ethics also contains certain reporting
requirements and securities trading clearance procedures.

Disclosure of Portfolio Holdings

The Board of Directors has adopted portfolio holdings disclosure policies and
procedures to govern the disclosure of the portfolio holdings of the Fund. The
Investment Advisor and the Board of Directors considered each of the
circumstances under which the Fund's portfolio holdings may be disclosed to
different categories of persons under the Policies and Procedures. The
Investment Advisor and the Board of Directors also considered actual and
potential material conflicts that could arise in such circumstances between the
interests of the Fund's shareholders and those of the Investment Advisor and its
affiliates.

After giving due consideration to such matters and after the exercise of their
fiduciary duties and reasonable business judgment, the Board of Directors
determined that the Fund has a legitimate business purpose for disclosing
portfolio holdings to the following persons on an ongoing basis: (i) the Fund's
independent public registered accounting firm; (ii) the Fund's legal counsel;
and (iii) the Fund's service providers that are affiliates of the Investment
Advisor. In addition, the Fund may disclose, for legitimate business purposes,
complete portfolio holdings at times the Fund's chief compliance officer deems
appropriate and in the best interest of shareholders, to rating and ranking
organizations, financial printers, proxy voting service providers, pricing
information vendors, third-parties that deliver analytical, statistical or
consulting services and other third parties that provide services to the Fund.
Any such disclosure is conditioned on: (i) the recipient's duty of
confidentiality pursuant to a signed non-disclosure agreement ("NDA"); and (ii)
the release of such information would not otherwise violate the antifraud
provisions of the federal securities laws or the Fund's or Investment Advisor's
fiduciary duties. Such disclosures can be made without a signed NDA if the
information is released to the public at or before the time the information is
released to the third party and the release of the information is consistent
with the Fund's policies and procedures.

Subject to the continuing oversight by the Board of Directors, the Board
delegated to the Fund's chief compliance officer the authority to disclose the
Fund's portfolio holdings provided that any such disclosure is consistent with
the applicable federal securities laws and regulations and the Fund's policies
and procedures. The Board of Directors exercises continuing oversight of the
disclosure of Fund portfolio holdings by: (i) overseeing the implementation and
enforcement of the portfolio holdings disclosure policies and procedures, the
Fund's code of ethics and policies and procedures regarding the misuse of inside
information by the chief compliance officer of the Fund; (ii) considering
reports and recommendations by the chief compliance officer concerning any
material compliance matters (as defined in Rule 38a-1 under the 1940 Act and
Rule 206(4)-7 under the Investment Advisers Act of 1940) that may arise in
connection with any portfolio holdings governing policies; and (iii) considering
whether to approve or ratify any amendment to any portfolio holdings governing
policies. The Fund will not make any elective non-public disclosures to third
parties other than as described above. The Board of Directors reserves the right
to amend the Fund's policies and procedures regarding the disclosure of
portfolio holdings of the Fund at any time and from time to time without prior
notice in its sole discretion.

Pursuant to Rules 30b1-5 and 30b2-1 under the 1940 Act, the Fund must publicly
disclose 100% of its portfolio holdings on a quarterly basis in shareholder
reports or other required SEC filings as of a date approximately 60 days after
quarter end. Accordingly, the Fund shall publicly disclose 100% of its portfolio
holdings in quarterly reports approximately 60 days after each quarter-end as
required by SEC rules cited above. The Fund may publicly disclose 100% of its
portfolio holdings with a shorter delay, but no less than 45 days after each
quarter end, to facilitate timely release of information for legitimate
purposes, as described above.

The Fund's policies and procedures prohibit the Fund and the Investment Advisor,
including any of the Investment Advisor's affiliates, or any other person, to
pay or receive any compensation or other consideration of any type for the
purpose of obtaining disclosure of the Fund's portfolio holdings or other
investment positions. As used herein, "consideration" includes any agreement to
maintain assets in the Fund or in other investment companies or accounts managed
by the Investment Advisor or by any its affiliates.

Proxy Voting Policies

The Income Portfolio invests primarily in a diversified portfolio of fixed
income (non-voting) securities.

The Diversified Management Portfolio concentrates its investments by investing
primarily in securities of other open-end registered investment companies. In
accordance with the federal securities laws that regulate mutual funds, if an
underlying fund submits a matter to shareholders for a vote, the Diversified
Management Portfolio will either vote the shares: (i) in accordance with
instructions received from Diversified Management Portfolio shareholders; or
(ii) in the same proportion as the vote of all other holders of such securities.

The recommendation of management on any issue is a factor that the Fund
considers in determining how proxies should be voted, but is not determinative
of the Fund's ultimate decision. As a matter of practice, the votes with respect
to most issues are cast in accordance with the position of the company's
management. Each issue, however, is considered on its own merits, and the Fund
will not support the position of the company's management in any situation where
it deems that the ratification of management's position would adversely affect
the investment merits of owning that company's shares.

Any vote presenting a conflict of interest between a Portfolio and the
Investment Advisor or Distributor, or their affiliates, will be resolved in the
interests of the Portfolio and its shareholders.

The Fund will attempt to process every proxy it receives. However, there may be
situations in which the Fund cannot process proxies, for example, where a
meeting notice was received too late, or sell orders preclude the ability to
vote. The Fund may abstain from voting under certain circumstances or vote
against items such as "Other Business" when the Fund is not given adequate
information from the company. Copies of the Fund's proxy voting records are
available free of charge by calling the Fund collect at (302) 997-4700. In
addition, copies of the Fund's proxy voting records for the twelve-month period
ending June 30 are posted on the SEC website at www.sec.gov.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

Control Persons

As of January 1, 2005, there were no control persons of the Fund. "Control"
means:
(a) the beneficial ownership, either directly or through one or more
controlled companies, of more than 25% of the voting securities of a
company;
(b) the acknowledgment or assertion by either the controlled or
controlling party of the existence of control; or
(c) a final adjudication under section 2(a)(9) of the 1940 Act that
control exists.

Principal Holders

As of January 1, 2005 the following shareholders were known to own of record
more than 5% of the outstanding shares of the Fund:

Portfolio Shareholder/Address Percentage of the Portfolio
Income Portfolio Ronald E. Cooney 11.89%
Wilmington, DE

Albert R. & Patricia A. Forster 6.38%
Glendale, AZ

William O. Cregar 5.62%
Wilmington, DE

Diversified Management Joyce Boylen 8.09%
Portfolio Wilmington, DE

Management Ownership

As of January 1, 2005 the Fund's officers and directors and members of the
Investment Advisor as a group own 7.13% of the shares outstanding of The Crowley
Income Portfolio and 10.28% of the shares outstanding of The Crowley Diversified
Management Portfolio.

INVESTMENT ADVISOR

The Investment Advisor's principal offices are located at 3201-B Millcreek Road,
Suite H, Wilmington, DE 19808. The Investment Advisor manages each Portfolio
under separate management contracts (each, a "Management Contract" and
collectively, the "Management Contracts"). The Management Contract for The
Crowley Income Portfolio became effective on December 6, 1989 for an initial
term of two years. Shareholders of the Income Portfolio approved its Management
Contract on November 29, 1990. The Management Contract for The Crowley
Diversified Management Portfolio initially became effective on March 31, 1995.
The Management Contracts are initially effective for a two-year term, and,
thereafter, continue in effect from year-to-year only if such continuance is
approved annually by either: (i) the Fund's Board of Directors; or (ii) by a
vote of a majority of the outstanding voting securities of the respective
Portfolio of the Fund and, in either case, by the vote of a majority of the
directors who are not parties to the Management Contract or interested persons
(as such term is defined in the 1940 Act of any party to the Management
Contract, voting in-person at a meeting called for the purpose of voting on such
approval. The Management Contract for each Portfolio may be terminated at any
time without penalty by the Fund's Board of Directors, or by a majority vote of
the outstanding shares of the Portfolio; or by the Investment Advisor, in each
instance on not less than 60 days' written notice and shall automatically
terminate in the event of its assignment.

At the meeting of the Board of Directors held on December 1, 2004, the Board,
including a majority of the Independent Directors, considered and approved the
renewal of each Portfolio's management agreement for an additional one-year
period. In approving the continuation of each management agreement, the Board
considered a number of factors including: the nature and quality of the
Investment Advisor's management services; the experience and qualifications of
the Investment Advisor's personnel; the proposed fee structures, the existence
of any fee waivers, and each Portfolio's anticipated expense ratios in relation
to those of other investment companies having comparable investment policies and
limitations; the fees charged by the Investment Advisor and other investment
advisers to similar clients; the direct and indirect costs which may be incurred
by the Investment Advisor and its affiliates in performing services for the
Portfolios; possible economies of scale arising from the Portfolios' size and/or
anticipated growth; other possible benefits to the Investment Advisor and its
affiliates arising from its relationships with the Fund; and possible
alternative fee structures or bases for determining fees.

The Board reviewed information that had been furnished to each Director,
including the Portfolios' performance information (unaudited) for the fiscal
year ended on November 30, 2004 and the Investment Advisor 's Form ADV. The
Board evaluated each Portfolio's performance in comparison to other funds in
each Portfolio's respective peer group. The Board also reviewed and discussed
the fees, expenses and expense ratios of each Portfolio. The Board evaluated the
fees the Investment Advisor received from each Portfolio, as compared to the
fees paid to other investment companies with similar investment objectives and
strategies, as well as the breadth of services, including administrative
services that the Investment Advisor provides to the Fund. The Board also
compared the fees and expenses incurred by each Portfolio with the fees and
expenses paid by other funds in each Portfolio's respective peer group. The
Board also reviewed the experience, performance and financial condition of the
Investment Advisor and the performance and experience of Mr. Robert A. Crowley,
the Fund's portfolio manager. The Board also reviewed the overall portfolio
management process, including the effect of each Portfolio's strategies on its
performance.

The Board, including the Independent Directors, determined that the management
fee and total expenses of each Portfolio, were reasonable in relation to other
funds in each Portfolio's respective peer groups of funds, and concluded that
the management fees were fair, both on an absolute basis and in comparison with
other funds in each Portfolio's peer group and the industry at large. The Board
determined that the performance results of the Portfolios were reasonable, as
compared with relevant performance standards and appropriate market indexes, and
that shareholders had received reasonable value in return for paying the fees
and expenses of the Portfolios. The Board, including the Independent Directors,
therefore concluded that the continuation of the management agreement for each
Portfolio was in the best interests of the Portfolio and its shareholders.

Both Frederick J. Crowley, Jr. and Robert A, Crowley are affiliates of both the
Fund and the Investment Advisor. Frederick J. Crowley, Jr., Vice President,
Secretary and Director of the Fund, and Robert A. Crowley, President, Treasurer
and Director of the Fund, each own 50% of the voting common stock of the
Investment Advisor. The Investment Advisor was organized in 1986 and principally
provides investment advice to individuals. The Investment Advisor does not
provide investment advice to any other investment companies.

Each Management Contract also identifies the right of the Investment Advisor to
the use of the name "Crowley," and the Fund may be required to change its name
if the Investment Advisor ceases to act as advisor to the Portfolios.

Fees Paid to the Investment Advisor. The management fees for each Portfolio are
paid monthly at the annual rate of 0.60% and 1.00% of the average daily net
assets of The Crowley Income Portfolio and The Crowley Diversified Management
Portfolio, respectively. For the fiscal years ended November 30, 2002, 2003 and
2004, the Investment Advisor received fees of $66,307, $68,722 and $68,505,
respectively, under the Management Contract for the Income Portfolio. With
regard to the Diversified Management Portfolio, for the fiscal years ended
November 30, 2002, 2003 and 2004 the Investment Advisor received fees under the
Management Contract of $48,926, $45,761 and $54,526, respectively.

The Investment Advisor has committed to the Fund to offset the management fees
payable by The Crowley Diversified Management Portfolio by the fees that Crowley
Securities, the Fund's Distributor and an affiliate of the Investment Advisor,
receives in connection with the purchase and sale of investment company
securities for the Diversified Management Portfolio for which Crowley Securities
is the dealer of record and which have an associated sales charge, 12b-1 or
shareholder servicing fee. The Investment Advisor will offset management fees on
a monthly basis, consistent with its receipt of such fees.

Portfolio Manager. The portfolio manager for each Portfolio is Mr. Robert A.
Crowley, Vice President of the Investment Advisor. Mr. Crowley has been managing
the Income Portfolio since its inception in 1989 and the Diversified Management
Portfolio since its inception in 1995. Mr. Crowley received his law degree from
Widener University School of Law in 1998, his Chartered Financial Analyst
certification in 1990, his Bachelor of Science Degree in Business Administration
from the University of Delaware in 1980 and his Masters Degree in Business
Administration from George Washington University in 1985. Prior to managing the
Portfolios, Mr. Crowley managed individual securities accounts in addition to
engaging in financial planning activities.

In addition to managing the Portfolios, Mr. Crowley serves as the portfolio
manager for other individual managed accounts advised by the Investment Advisor
(the "Managed Accounts"). As of November 30, 2004, Mr. Crowley served as the
portfolio manager for 349 Managed Accounts that had approximately $40,000,000 in
total assets. With respect to each of the Managed Accounts, the advisory fees
received by the Investment Advisor are based on a percentage of assets. Neither
the Investment Advisor nor Mr. Crowley charges investment advisory fees based on
account performance.

The Investment Advisor does not believe any material conflicts of interest exist
as a result of Mr. Crowley acting as the portfolio manager for the Portfolios
and the Managed Accounts. There may be times when the Investment Advisor may
recommend purchases and/or sales of the same portfolio securities for the
Portfolios and the Managed Accounts. In such circumstances, it will be the
policy of the Investment Advisor to allocate purchases and sales among the
Portfolios and its Managed Accounts in a manner consistent with the Investment
Advisor's code of ethics and which the Investment Advisor deems equitable,
taking into consideration such factors as the size of the accounts,
concentration of holdings, investment objectives, tax status, cash availability,
purchase costs, holding periods and other pertinent factors relative to each
account.

Mr. Crowley receives a fixed salary from the Investment Advisor. In addition,
Mr. Crowley is one of the two beneficial owners of the common stock of the
Investment Advisor. Accordingly, Mr. Crowley's total remuneration received in
connection with his services with the Investment Advisor is based upon: (i) the
advisory fees paid to the Advisor by the Fund and the Managed Accounts; (ii) the
Investment Advisor's retained earnings with respect to such advisory fees; (iii)
the Advisor's expenses and liabilities related to the advisory and
administrative services provided to the Fund and the Managed Accounts; and (iv)
Mr. Crowley's ownership of fifty per centum of the common stock of the
Investment Advisor.

As of November 30, 2004, Mr. Crowley beneficially owned less than $10,000 of
shares issued by the Diversified Management Portfolio and did not beneficially
own any shares of the Income Portfolio. As used herein, beneficial ownership is
determined in accordance with Rule 16a-1(a)(2) of the Securities Exchange Act of
1934. Mr. Crowley's primary personal investment objectives differ from the
investment objectives of the Diversified Management Portfolio and the Income
Portfolio.

DISTRIBUTOR

Crowley Securities (the "Distributor"), located at 3201-B Millcreek Road, Suite
H, Wilmington, DE 19808, is distributor under separate Distribution Agreements
for each Portfolio dated December 6, 1989 for The Crowley Income Portfolio and
March 31, 1995 for The Crowley Diversified Management Portfolio (each an
"Agreement"). Each Distribution Agreement is renewed annually by either the
Fund's Board of Directors or by a vote of a majority of the outstanding voting
securities of the respective Portfolio of the Fund and, in either case, by the
vote of a majority of the Fund's disinterested directors, voting in-person at a
meeting called for the purpose of voting on such approval. Each Agreement will
terminate automatically in the event of its assignment. Pursuant to each
Agreement, the expenses of printing all sales literature, including prospectuses
used as sales material, are to be borne by the Distributor. The Distributor is
also the exclusive agent for the Portfolios' shares, and has the right to select
selling dealers to offer the shares to investors. Frederick J. Crowley, Jr. and
Robert A. Crowley, officers of the Investment Advisor, are also equal general
partners and registered representatives of the Distributor, which is, therefore,
an affiliated person of the Fund. The Distributor's offices are at 3201-B
Millcreek Road, Suite H, Wilmington, DE 19808.

ALLOCATION OF PORTFOLIO BROKERAGE

The Crowley Portfolio Group, Inc., in effecting the purchases and sales of
portfolio securities for the account of the Portfolios, will seek execution of
trades either: (i) at the most favorable and competitive rate of commission
charged by any broker, dealer or member of an exchange; or (ii) at a higher rate
of commission charges if reasonable in relation to brokerage and research
services provided to the Portfolios or the Investment Advisor by such member,
broker, or dealer. Such services may include, but are not limited to, any one or
more of the following: (i) information as to the availability of securities for
purchase or sale; (ii) statistical or factual information; or (iii) opinions
pertaining to investments. The Investment Advisor may use research and services
provided to it by brokers and dealers in servicing all of its clients, however,
not all such services will be used by the Investment Advisor in connection with
a Portfolio.

The Investment Advisor is responsible for making the investment decisions for
each Portfolio subject to instructions described in the prospectus. The Board of
Directors may, however, impose limitations on the allocation of portfolio
brokerage. For the fiscal years ended November 30, 2002, 2003 and 2004,
aggregate brokerage commissions for The Crowley Income Portfolio, were $400,
$575 and $1,250 for each of those years, respectively. There were no brokerage
commissions paid by The Crowley Diversified Management Portfolio for each of the
fiscal years ended November 30, 2002, 2003 and 2004.

TRANSFER AND DIVIDEND DISBURSING AGENT

The Crowley Financial Group, Inc. ("CFG") serves as the Fund's transfer agent,
dividend disbursing agent and redemption agent for redemptions, performing all
the usual or ordinary services required, including: receiving and processing
orders and payments for purchases of shares, opening stockholder accounts,
preparing annual stockholder meeting lists, mailing proxy material, receiving
and tabulating proxies, mailing stockholder reports and prospectuses,
withholding certain taxes on nonresident alien accounts, disbursing income
dividends and capital distributions, preparing and filing U.S. Treasury
Department Form 1099 (or equivalent) for all stockholders, preparing and mailing
confirmation forms to stockholders for all purposes and redemption of the
Portfolios' shares and all other confirmable transactions in stockholders'
accounts, recording reinvestment of dividends and distributions of the
Portfolios' shares and causing redemption of shares for and disbursements of
proceeds to withdrawal plan stockholders. CFG will also be responsible for the
Fund's compliance with anti-money laundering regulations. CFG is under common
control with the Investment Advisor and the Distributor and, as compensation for
its services, receives an asset-based fee.

CUSTODIAN

Wilmington Trust Company, Rodney Square North, Wilmington, DE, 19890, acts as
the Custodian of the securities and cash of each Portfolio.

PURCHASE, REDEMPTION AND PRICING OF SHARES

The shares of each Portfolio of the Fund are continuously offered by the
Distributor. Orders will not be considered complete until the Distributor
receives a completed account application form and payment for the shares
purchased. Once both are received, such orders will be confirmed at the next
determined net asset value (based upon valuation procedures described in the
prospectus) as of the close of business of the business day on which the
completed order is received, normally 4:00 p.m. Eastern Standard Time. Completed
orders received after 4:00 p.m., Eastern Standard Time will be confirmed at the
next day's price.

Investments in any Portfolio may also be made through investment dealers that
have sales agreements with the Distributor. Such dealers should send the
investor's Investment Application and payment for the shares of a Portfolio to
the Distributor. Payment should be made by check. Purchase and redemption orders
placed by dealers will be confirmed at the public offering price calculated next
after receipt of the properly completed Investment Application and receipt of
payment for shares by the Custodian. It is the responsibility of dealers to
transmit purchase orders so that they will be received by the Custodian by 4:00
p.m. Eastern standard time. Orders received after 4:00 p.m. Eastern standard
time will be priced at the public offering price in effect at 4:00 p.m. Eastern
Standard Time on the next business day. To date, Crowley Securities has not
retained any selling dealers.

Money market securities with less than sixty days remaining to maturity when
acquired by a Portfolio will be valued on an amortized cost basis by a
Portfolio, excluding unrealized gains or losses thereon from the valuation. This
is accomplished by valuing the security at cost and then assuming a constant
amortization to maturity of any premium or discount. If a Portfolio acquires a
money market security with more than sixty days remaining to its maturity, it
will be valued at current market value until the 60th day prior to maturity, and
will then be valued on an amortized cost basis based upon the value on such date
unless the Board determines during such 60 day period that this amortized cost
value does not represent fair market value.

Tax-Sheltered Retirement Plans

Shares of each Portfolio of the Fund are available to all types of tax-deferred
retirement plans including IRA's, Keogh Plans and tax-sheltered custodial
accounts described in Section 403(b)(7) of the Internal Revenue Code. Qualified
investors benefit from the tax-free compounding of income dividends and capital
gains distributions.

Individual Retirement Accounts (IRA) -- Individuals, who are not active
participants (and, when a joint return is filed, who do not have a spouse who is
an active participant) in an employer maintained retirement plan are eligible to
contribute on a deductible basis to an IRA account. The IRA deduction is also
retained for individual taxpayers and married couples with adjusted gross
incomes not in excess of certain specified limits. All individuals who have
earned income may make nondeductible IRA contributions to a separate account to
the extent that they are not eligible for a deductible contribution. Income
earned by an IRA account will continue to be tax deferred. A special IRA program
is available for employers under which the employers may establish IRA accounts
for their employees in lieu of establishing tax qualified retirement plans.
Known as SEP-IRAs (Simplified Employee Pension- IRA), they free the employer of
many of the record keeping requirements of establishing and maintaining a
tax-qualified retirement plan trust.

If you have received a lump sum distribution from another qualified retirement
plan, you may rollover all or part of that distribution into the Fund's IRA.
Your rollover contribution is not subject to the limits on annual IRA
contributions. By acting within applicable time limits, you can continue to
defer Federal income taxes on your lump sum contribution and on any income that
is earned on that contribution.

Keogh Plans for Self-Employed -- If you are a self-employed individual, you may
establish a Self-Employed Retirement (Keogh) Plan and contribute up to the
maximum amounts permitted for your plan under current tax laws. Under a Defined
Benefit Keogh Plan, you may establish a program with a specific amount of
retirement income as your objective. The annual contributions needed to achieve
this goal are calculated actuarially and can sometimes exceed the tax-deductible
contributions allowed under a regular Keogh Plan.

Tax-Sheltered Custodial Accounts -- If you are an employee of a public school,
state college or university, or a nonprofit organization exempt from tax under
Section 501(c)(3) of the Internal Revenue Code, you may be eligible to make
contributions into a custodial account (pursuant to section 403(b)(7) of the
IRC) which invests in Fund shares. Such contributions, to the extent that they
do not exceed certain limits, are excludable from the gross income of the
employee for federal income tax purposes.

How to Establish Retirement Accounts -- All the foregoing retirement plan
options require special plan documents. Please call us to obtain information
regarding the establishment of retirement plan accounts. In the case of IRA and
Keogh Plans, Delaware Charter Guarantee and Trust Company acts as the plan
custodian with regard to plan establishment and maintenance. You should consult
with your attorney or other tax advisor for specific advice prior to
establishing a plan.

ANTI-MONEY LAUNDERING PROGRAM

The Fund has established an Anti-Money Laundering Compliance Program (the
"Program") as required by the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA
PATRIOT Act"). The U.S. Department of Treasury allows mutual funds to
contractually delegate the implementation and operation of anti-money laundering
programs to affiliated or unaffiliated service providers, such as a fund's
transfer agent.

Procedures to implement the Program include, but are not limited to, determining
that the Fund's transfer agent has established proper anti-money laundering
procedures, reports suspicious and/or fraudulent activity, checks shareholder
names against designated government lists, including Office of Foreign Asset
Control ("OFAC"), and does a complete and thorough review of all new opening
account applications. In addition, the transfer agent will provide to
appropriate federal and state examination authorities information and records
relating to the Fund's Program and will submit to any examination or inspection
with regard to such Program. Finally, the transfer agent will provide reports to
the Fund's Board concerning compliance with the Program on at least an annual
basis and at such other times as may be reasonably necessary or requested by the
Board. However, please be aware that the Fund will not transact business with
any person or entity whose identity cannot be adequately verified under the
provisions of the USA PATRIOT Act.

CAPITAL STOCK

The authorized capital stock of The Crowley Portfolio Group, Inc. consists of
500,000,000 shares of common stock with a par value of $0.01 each. At the
present time, 150,000,000 shares of such stock have been allocated to each of
The Crowley Income Portfolio and The Crowley Diversified Management Portfolio.
Each share has equal dividend, voting, liquidation and redemption rights. There
are no conversion or preemptive rights.

Shares, when issued, will be fully-paid and non-assessable. Fractional shares
have proportional voting rights. Shares of the Portfolios do not have cumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of Directors can elect all of the Directors if they
choose to do so and, in such event, the holders of the remaining shares will not
be able to elect any person to the Board of Directors. The shareholders of the
Portfolios will vote together to elect directors and on other matters affecting
the entire Fund. However, each Portfolio's shareholders will vote separately by
Portfolio on matters specific to a Portfolio, such as changing the investment
objective or restrictions governing a Portfolio.

Shareholder inquiries should be made directly to the Distributor at (302)
994-4700.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Distributions of net investment income. The Portfolios receive income generally
in the form of dividends and interest on their investments. This income, less
expenses incurred in the operation of a Portfolio, constitutes the Portfolio's
net investment income from which dividends may be paid to you. The Diversified
Management Portfolio's income consists primarily of dividends it receives from
underlying funds less the estimated expenses of the Diversified Management
Portfolio. If you are a taxable investor, any distributions by a Portfolio from
such income (other than qualified dividends) will be taxable to you as ordinary
income. A portion of the income dividends paid to you may be qualified dividends
eligible to be taxed at reduced rates.

Distributions of qualified dividend income. Under the Jobs and Growth Tax Relief
Reconciliation Act of 2003 (2003 Tax Act), dividends earned on the following
income sources will be subject to a maximum rate of tax of 15% for individuals
(5% for individuals in the 10% and 15% federal rate bracket):

o dividends paid by domestic corporations, and
o dividends paid by qualified foreign corporations, including:

- corporations incorporated in a possession of the U.S.,
- corporations eligible for benefits of a comprehensive income tax
treaty with the United States that the Treasury Department determines
is satisfactory (including an exchange of information program), and
- corporations whose stock is readily tradable on an established
securities market in the United States.

For individuals in the 10% and 15% tax brackets, the rate for qualified
dividends received in calendar year 2008 is further reduced from 5% to 0%.

Dividends from corporations exempt from tax, dividends from foreign personal
holding companies, foreign investment companies and passive foreign investment
companies (PFICs), and dividends paid from interest earned by a Portfolio (or
the Diversified Management Portfolio's underlying funds) on debt securities
generally will not qualify for this favorable tax treatment.

Both a Portfolio (and, in the case of the Diversified Management Portfolio, its
underlying funds) and the investors must each separately meet certain holding
period requirements to qualify Portfolio dividends for this treatment.
Specifically, a Portfolio (and the Diversified Management Portfolio's underlying
funds) must hold the stock for at least 61 days during the 121-day period
beginning 60 days before the stock becomes ex-dividend. Similarly, investors
must hold their Portfolio shares for at least 61 days during the 121-day period
beginning 60 days before the Portfolio distribution goes ex-dividend. The
ex-dividend date is the first date following the declaration of a dividend on
which the purchaser of stock is not entitled to receive the dividend payment.
When counting the number of days you held your Portfolio shares, include the day
you sold your shares but not the day you acquired these shares.

While the income received in the form of a qualified dividend is taxed at the
same rates as long-term capital gains, such income will not be considered as a
long-term capital gain for other federal income tax purposes. For example, you
will not be allowed to offset your long-term capital losses against qualified
dividend income on your federal income tax return. Any qualified dividend income
that you elect to be taxed at these reduced rates also cannot be used as
investment income in determining your allowable investment interest expense. For
other limitations on the amount of or use of qualified dividend income on your
income tax return, please contact your personal tax advisor.

After the close of its fiscal year, a Portfolio will designate the portion of
its ordinary dividend income that meets the definition of qualified dividend
income taxable at reduced rates. If 95% or more of a Portfolio's income is from
qualified sources, it will be allowed to designate 100% of its ordinary income
distributions as qualified dividend income. This designation rule may have the
effect of converting small amounts of ordinary income or net short-term capital
gains, that otherwise would be taxable as ordinary income, into qualified
dividend income eligible for taxation at reduced rates.

Distributions of capital gain. The Portfolios and any underlying funds of the
Diversified Management Portfolio may realize capital gain or loss in connection
with sales or other dispositions of their portfolio securities. The Diversified
Management Portfolio may also realize capital gain or loss in connection with
sales or other dispositions of its interests in underlying funds. For
shareholders of the Portfolios, distributions from net short-term capital gain
will be taxable to you as ordinary income, and distributions from net long-term
capital gain will be taxable to you as long-term capital gain, regardless of how
long you have held your shares in a Portfolio. For shareholders of the
Diversified Management Portfolio, distributions from an underlying fund's net
short-term capital gain will be taxable to the Diversified Management Portfolio
and, in turn, to you as ordinary income. Distributions from an underlying fund's
net long-term capital gain will be taxable to the Diversified Management
Portfolio and, in turn, to you as long-term capital gain, regardless of how long
you have held your shares in the Diversified Management Portfolio. Any net
capital gain realized by a Portfolio generally will be distributed once each
year, and may be distributed more frequently, if necessary, to reduce or
eliminate excise or income taxes on the Portfolio.

Capital gain dividends and any net long-term capital gains you realize from the
sale of Portfolio shares are subject to a maximum rate of tax of 15% for
individuals (5% for individuals in the 10% and 15% federal income tax brackets).
For individuals in the 10% and 15% tax brackets, the rate for net long-term
capital gains realized in calendar year 2008 is further reduced from 5% to 0%.

Effect of foreign investments on distributions. Most foreign exchange gain
realized on the sale of debt securities by the Portfolios or by an underlying
fund of the Diversified Management Portfolio is treated as ordinary income.
Similarly, foreign exchange loss realized on the sale of debt securities
generally is treated as ordinary loss.

With respect to either Portfolio, this gain when distributed will be taxable to
you as ordinary income, and any loss will reduce the Portfolio's ordinary income
otherwise available for distribution to you. This treatment could increase or
decrease the Portfolio's ordinary income distributions to you, and may cause
some or all of the Portfolio's previously distributed income to be classified as
a return of capital. A return of capital generally is not taxable to you, but
reduces the tax basis of your shares in the Portfolio. Any return of capital in
excess of your basis, however, is taxable as capital gain. The Portfolio may be
subject to foreign withholding taxes on income from certain foreign securities.
This, in turn, could reduce ordinary income distributions to you.

With respect to the Diversified Management Portfolio, foreign exchange gain when
distributed by an underlying fund to the Diversified Management Portfolio will
be taxable to the Diversified Management Portfolio as ordinary income, and any
loss will reduce an underlying fund's ordinary income otherwise available for
distribution to the Diversified Management Portfolio. This treatment could
increase or decrease an underlying fund's ordinary income distributions to the
Diversified Management Portfolio and, in turn, to you, and may cause some or all
of the underlying fund's previously distributed income to be classified as a
return of capital to the Diversified Management Portfolio. A return of capital
generally is not taxable to the Diversified Management Portfolio, but reduces
the Diversified Management Portfolio's tax basis in its shares of the underlying
fund. Any return of capital in excess of Diversified Management Portfolio's tax
basis is taxable to the Diversified Management Portfolio as a capital gain.
Certain underlying funds may be subject to foreign withholding taxes on income
from certain foreign securities. This could reduce such an underlying fund's
ordinary income distributions to the Diversified Management Portfolio and, in
turn, to you.

Information on the amount and tax character of distributions. Each Portfolio
will inform you of the amount of your ordinary income and capital gain dividends
at the time they are paid, and will advise you of their tax status for federal
income tax purposes shortly after the end of each calendar year. If you have not
held Portfolio shares for a full year, the Portfolio may designate and
distribute to you, as ordinary income or capital gain, a percentage of income
that may not be equal to the actual amount of this type of income earned during
the period of your investment in the Portfolio.

Election to be taxed as a regulated investment company. Each Portfolio has
elected to be treated as a regulated investment company under Subchapter M of
the Internal Revenue Code (the "Code"). Each Portfolio has qualified as a
regulated investment company for its most recent fiscal year, and intends to
continue to qualify during the current fiscal year. As a regulated investment
company, a Portfolio generally pays no federal income tax on the income and gain
it distributes to you. The Board reserves the right not to maintain the
qualification of a Portfolio as a regulated investment company if it determines
such a course of action to be beneficial to shareholders. In such a case, a
Portfolio will be subject to federal, and possibly state, corporate taxes on its
taxable income and gain, and distributions to you will be taxed as ordinary
dividend income to the extent of the Portfolio's earnings and profits.

Excise tax distribution requirements. To avoid federal excise taxes, the Code
requires a Portfolio to distribute to you by December 31 of each year, at a
minimum, the following amounts: 98% of its taxable ordinary income earned during
the calendar year; 98% of its capital gain net income earned during the
twelve-month period ending October 31; and 100% of any undistributed amounts
from the prior year. Each Portfolio intends to declare and pay these
distributions in December (or to pay them in January, in which case you must
treat them as received in December), but can give no assurances that its
distributions will be sufficient to eliminate all taxes.

Redemption of Portfolio shares. Redemptions (including redemptions in kind) and
exchanges of Portfolio shares are taxable transactions for federal and state
income tax purposes. If you redeem your Portfolio shares, or exchange your
Portfolio shares for shares of the other Portfolio, the IRS will require that
you report any gain or loss on your redemption or exchange. If you held your
shares as a capital asset, the gain or loss that you realize will be capital
gain or loss and will be long-term or short-term, generally depending on how
long you held your shares.

Redemptions at a loss within six months of purchase. Any loss incurred on a
redemption or exchange of shares held for six months or less will be treated as
long-term capital loss to the extent of any long-term capital gain distributed
to you by a Portfolio on those shares.

Wash sales. All or a portion of any loss that you realize on a redemption of
Portfolio shares is disallowed to the extent that you buy other shares of the
Portfolio (through reinvestment of dividends or otherwise) within 30 days before
or after your share redemption. Any loss disallowed under these rules is added
to your tax basis in the new shares.

U.S. government securities. The income earned on certain U.S. government
securities is exempt from state and local income taxes if earned directly by
you. States also grant tax-free status to dividends paid to you from interest
earned on these securities, subject in some states to minimum investment or
reporting requirements that must be met by a Portfolio. The income on Portfolio
investments in certain securities, such as repurchase agreements, commercial
paper and federal agency-backed obligations (e.g. Government National Mortgage
Association (GNMA) or Federal National Mortgage Association (FNMA) securities),
generally does not qualify for tax-free treatment. The rules on exclusion of
this income are different for corporations. Dividends paid by the Diversified
Management Portfolio may not be exempt from state and local taxes in certain
states by virtue of the fact that the Diversified Management Portfolio invests
in U.S. government securities only indirectly by investing in underlying funds.

Dividends-received deduction for corporations. If you are a corporate
shareholder, a percentage of the dividends paid by a Portfolio for the most
recent fiscal year may have qualified for the dividends-received deduction. You
may be allowed to deduct these qualified dividends, thereby reducing the tax
that you would otherwise be required to pay on these dividends. The
dividends-received deduction will be available only with respect to dividends
designated by the Portfolio as eligible for such treatment. All dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculation.

Non-U.S. Investors. Taxation of an investor who, as to the United States, is a
nonresident alien individual, non-U.S. trust or estate, non-U.S. corporation, or
non-U.S. partnership ("non-U.S. investor"), depends on whether the income from a
Portfolio is "effectively connected" with a U.S. trade or business carried on by
such shareholder. If the income from a Portfolio is not effectively connected
with a U.S. trade or business carried on by a non-U.S. investor, dividends paid
to such non-U.S. investor from investment company taxable income generally will
be subject to a U.S. withholding tax at the rate of 30% (or lower treaty rate)
upon the gross amount of the dividend. Such a non-U.S. investor generally would
be exempt from U.S withholding tax on gains realized on the sale or redemption
of Portfolio shares and dividends paid by the Portfolio from long-term capital
gains, unless the investor is a nonresident alien individual present in the
United States for a period or periods aggregating 183 days or more during the
taxable year. Special U.S. withholding tax rules apply to disposition of "United
States real property interests."

Also, U.S withholding taxes are no longer imposed on dividends paid by regulated
investment companies to the extent the dividends are designated as
"interest-related dividends" or "short-term capital gain dividends." Under these
exemptions, interest-related dividends and short-term capital gain dividends
generally represent distributions of interest from U.S. sources and short-term
capital gains that would not have been subject to U.S. withholding tax at the
source if they had been received directly by a foreign person, and that satisfy
certain other requirements. These exemptions apply to dividends with respect to
taxable years of regulated investment companies beginning after December 31,
2004 and before January 1, 2008. Ordinary dividends paid by a Portfolio to
non-U.S. investors on the income earned on portfolio investments in (i) the
stock of domestic and foreign corporations, and (ii) the debt of foreign issuers
continue to be subject to U.S. withholding tax.

If the income from a Portfolio is effectively connected with a U.S. trade or
business carried on by a non-U.S. investor, then the Portfolio's dividends and
distributions and any gains realized upon the sale or redemption of Portfolio
shares will be subject to the U.S. federal income tax on a net income basis at
the rates applicable to U.S. citizens or domestic corporations.

Special U.S. tax certification requirements apply to non-U.S. investors to avoid
U.S. back up withholding imposed at a rate of 28%, obtain the benefits of any
treaty between the United States and the shareholder's country of residence, and
obtain the benefits of exemption from withholding on interest-related and
short-term capital gain dividends. In general, a non-U.S. investor must provide
a Form W-8 BEN (or other applicable Form W-8) to establish that you are not a
U.S. person, to claim that you are the beneficial owner of the income and, if
applicable, to claim a reduced rate of, or exemption from, withholding as a
resident of a country with which the United States has an income tax treaty. A
Form W-8BEN provided without a U.S. taxpayer identification number will remain
in effect for a period beginning on the date signed and ending on the last day
of the third succeeding calendar year unless an earlier change of circumstances
makes the information on the form incorrect.

A partial exemption from U.S estate tax may apply to stock in a Portfolio (or,
in the case of the Diversified Management Portfolio, its underlying funds) held
by the estate of a nonresident decedent. The amount treated as exempt is based
upon the proportion of the assets held by the Portfolio (or the Diversified
Management Portfolio's underlying funds) at the end of the quarter immediately
preceding the decedent's death that are debt obligations, deposits, or other
property that would generally be treated as situated outside the United States
if held directly by the estate. This provision applies to decedents dying after
December 31, 2004 and before January 1, 2008.

You should consult your tax advisor about the federal, state, local or foreign
tax consequences of an investment in the Fund.

Investment in complex securities. A Portfolio, or an underlying fund of the
Diversified Management Portfolio, may invest in complex securities that may be
subject to numerous special and complex tax rules. These rules could affect
whether gain or loss recognized by the Portfolio, or an underlying fund of the
Diversified Management Portfolio, is treated as ordinary or capital, or as
interest or dividend income. These rules could also accelerate the recognition
of income to the Portfolio or to the underlying fund of the Diversified
Management Portfolio (possibly causing the Portfolio or underlying fund to sell
securities to raise the cash for necessary distributions). These rules could
defer the Portfolio's or underlying fund's ability to recognize a loss, and, in
limited cases, subject the Portfolio or underlying fund to U.S. federal income
tax on income from certain foreign securities. These rules could, therefore,
affect the amount, timing, or character of the income distributed to you by the
Portfolio or distributed by an underlying fund to the Diversified Management
Portfolio and, in turn, to you.

GENERAL INFORMATION

Audits and Reports. The accounts of each Portfolio are audited each year by
Tait, Weller & Baker of Philadelphia, PA, independent certified public
accountants. Shareholders receive semi-annual and annual reports of the
Portfolios including the annual audited financial statements and a list of
securities owned.

Financial Statements. The Fund's audited financial statements, related notes and
the report of Tait, Weller & Baker for the fiscal year ended November 30,
2004, as set forth in the Fund's Annual Report to Stockholders, are incorporated
herein by reference. A shareholder may obtain a copy of the Annual Report to
Shareholders upon request and without charge by contacting the Fund at the
address or telephone number appearing on the cover of the Statement of
Additional Information.

APPENDIX A

Ratings

General Rating Information

Bonds

Excerpts from Moody's description of its bond ratings: Aaa - judged to be the
best quality. They carry the smallest degree of investment risk; Aa - judged to
be of high quality by all standards; A - possesses favorable attributes and are
considered "upper medium" grade obligations; Baa - considered as medium grade
obligations. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time; Ba - judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B - generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa - are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca - represent obligations which are speculative in a high degree.
Such issues are often in default or have other marked shortcomings; C - the
lowest rated class of bonds and issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing.

Excerpts from S&P(R)'s description of its bond ratings: AAA - highest grade
obligations. They possess the ultimate degree of protection as to principal and
interest. AA - also qualify as high grade obligations, and in the majority of
instances differ from AAA issues only in a small degree. A - strong ability to
pay interest and repay principal although more susceptible to changes in
circumstances. BBB - regarded as having an adequate capacity to pay interest and
repay principal. BB, B, CCC, CC - regarded, on balance, as predominately
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. C - reserved
for income bonds on which no interest is being paid. D - in default, and payment
of interest and/or repayment of principal is in arrears.

APPENDIX B

INVESTMENT POLICIES OF UNDERLYING FUNDS

Convertible Securities

Certain preferred stocks and debt securities that may be held by an underlying
fund have conversion features allowing the holder to convert securities into
another specified security (usually common stock) of the same issuer at a
specified conversion ratio (e.g., two shares of preferred for one share of
common stock) at some specified future date or period. The market value of
convertible securities generally includes a premium that reflects the conversion
right. That premium may be negligible or substantial. To the extent that any
preferred stock or debt security remains unconverted after the expiration of the
conversion period, the market value will fall to the extent represented by that
premium.

Foreign Investments

The Crowley Diversified Management Portfolio (the "Portfolio") may invest in
certain underlying funds which invest all or a portion of their assets in
foreign securities. Investing in securities of non-U.S. companies, which are
generally denominated in foreign currencies, and utilization of forward foreign
currency exchange contracts and other currency hedging techniques involve
certain considerations comprising both opportunity and risk not typically
associated with investing in U.S. dollar-denominated securities. Risks unique to
international investing include: (1) restrictions on foreign investment and on
repatriation of capital; (2) fluctuations in currency exchange rates; (3) costs
of converting foreign currency into U.S. dollars; (4) price volatility and less
liquidity; (5) settlement practices, including delays, which may differ from
those customary in U.S. markets; (6) exposure to political and economic risks,
including the risk of nationalization, expropriation of assets, and war; (7)
possible imposition of foreign taxes and exchange control and currency
restrictions; (8) lack of uniform accounting, auditing, and financial reporting
standards; (9) less governmental supervision of securities markets, brokers and
issuers of securities; (10) less financial information available to investors;
(11) difficulty in enforcing legal rights outside the U.S.; and (12) higher
costs, including custodial fees. These risks are often heightened for
investments in emerging or developing countries.

Foreign Currency Transactions

Foreign securities in which the underlying funds invest are subject to currency
risk, (i.e., the risk that the U.S. dollar value of these securities may be
affected favorably or unfavorably by changes in foreign currency exchange rates
and exchange control regulations.) To manage this risk and facilitate the
purchase and sale of foreign securities, these underlying funds may engage in
foreign currency transactions involving the purchase and sale of forward foreign
currency exchange contracts. Although foreign currency transactions will be used
primarily to protect the underlying funds from adverse currency movements, they
also involve the risk that anticipated currency movements will not be accurately
predicted and the underlying funds' total return could be adversely affected.

Futures Contracts

An underlying fund may enter into futures contracts for the purchase or sale of
debt securities and stock indexes. A futures contract is an agreement between
two parties to buy and sell a security or an index for a set price on a future
date. Futures contracts are traded on designated "contract markets" which,
through their clearing corporations, guarantee performance of the contracts.

Generally, if market interest rates increase, the value of outstanding debt
securities declines (and vice versa). Entering into a futures contract for the
sale of securities has an effect similar to the actual sale of securities,
although sale of the futures contract might be accomplished more easily and
quickly. For example, if a fund holds long-term U.S. Government securities and
it anticipates a rise in long-term interest rates, it could, in lieu of
disposing of its portfolio securities, enter into futures contracts for the sale
of similar long-term securities. If rates increased and the value of the fund's
portfolio securities declined, the value of the fund's futures contracts would
increase, thereby protecting the fund by preventing the net asset value from
declining as much as it otherwise would have. Similarly, entering into futures
contracts for the purchase of securities has an effect similar to the actual
purchase of the underlying securities but permits the continued holding of
securities other than the underlying securities. For example, if the fund
expects long-term interest rates to decline, it might enter into futures
contracts for the purchase of long-term securities so that it could gain rapid
market exposure that may offset anticipated increases in the cost of securities
it intends to purchase while continuing to hold higher-yield short-term
securities or waiting for the long-term market to stabilize.

A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to a
specific security. A stock index futures contract does not require the physical
delivery of securities but merely provides for profits and losses resulting from
changes in the market value of the contract to be credited or debited at the
close of each trading day to the respective accounts of the parties to the
contract. On the contract's expiration date, a final cash settlement occurs.
Changes in the market value of a particular stock index futures contract reflect
changes in the specified index of equity securities on which the future is
based.

There are several risks in connection with the use of futures contracts. In the
event of an imperfect correlation between the futures contract and the portfolio
position that is intended to be protected, the desired protection may not be
obtained, and the fund may be exposed to risk of loss. Further, unanticipated
changes in interest rates or stock price movements may result in a poorer
overall performance for the fund than if it had not entered into futures
contracts on debt securities or stock indexes.

In addition, the market prices of futures contracts may be affected by certain
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin
deposit requirements, investors may close futures contracts through offsetting
transactions, which could distort the normal relationship between the securities
and futures markets. Second, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market. Therefore, increased participation by speculators in the
futures market may also cause temporary price distortions.

Finally, positions in futures contracts may be closed out only on an exchange or
board of trade that provides a secondary market for such futures. There is no
assurance that a liquid secondary market on an exchange or board of trade will
exist for any particular contract or at any particular time.

Options on Futures Contracts

A fund also may purchase and sell listed put and call options on futures
contracts. An option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the option period. When an option
on a futures contract is exercised, delivery of the futures position is
accompanied by cash representing the difference between the current market price
of the futures contract and the exercise price of the option. The fund may
purchase put options on futures contracts in lieu of, and for the same purpose
as, a sale of a futures contract. It also may purchase such put options in order
to hedge a long position in the underlying futures contract in the same manner
as it purchases "protective puts" on securities.

As with options on securities, the holder of an option may terminate a position
by selling an option of the same series. There is no guarantee that such closing
transactions can be effected. The fund is required to deposit initial margin and
maintenance margin with respect to put and call options on futures contracts
written by it pursuant to brokers' requirements similar to those applicable to
futures contracts described above, and, in addition, net option premiums
received will be included as initial margin deposits.

In addition to the risks that apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
this market will develop. Compared to the use of futures contracts, the purchase
of options on futures contracts involves less potential risk to the fund,
because the maximum amount at risk is the premium paid for the options (plus
transaction costs). However, there may be circumstances when the use of an
option on a futures contract would result in a loss to the fund when the use of
a futures contract would not, such as when there is no movement in the prices of
the underlying securities. Writing an option on a futures contract involves
risks similar to those arising in the sale of futures contracts as described
above.

Options Activities

An underlying fund may write (i.e., sell) listed call options ("calls") if the
calls are "covered" throughout the life of the option. A call is "covered" if
the fund owns the optioned securities. When a fund writes a call, it receives a
premium and gives the purchaser the right to buy the underlying security at any
time during the call period (usually not more than nine months in the case of
common stock) at a fixed exercise price regardless of market price changes
during the call period. If the call is exercised, the fund will forgo any gain
from an increase in the market price of the underlying security over the
exercise price.

A fund may purchase a call on securities only to effect a "closing purchase
transaction" which is the purchase of a call covering the same underlying
security and having the same exercise price and expiration date as a call
previously written by the fund on which it wishes to terminate its obligation.
If the fund is unable to effect a closing purchase transaction, it will not be
able to sell the underlying security until the call previously written by the
fund expires (or until the call is exercised and the fund delivers the
underlying security).

An underlying fund also may write and purchase put options ("puts"). When a fund
writes a put, it receives a premium and gives the purchaser of the put the right
to sell the underlying security to the fund at the exercise price at any time
during the option period. When a fund purchases a put, it pays a premium in
return for the right to sell the underlying security at the exercise price at
any time during the option period. An underlying fund also may purchase stock
index puts which differ from puts on individual securities in that they are
settled in cash based on the values of the securities in the underlying index
rather than by delivery of the underlying securities. Purchase of a stock index
put is designed to protect against decline in the value of the portfolio
generally rather than an individual security in the portfolio. If any put is not
exercised or sold, it will become worthless on its expiration date.

A fund's option positions may be closed out only on an exchange that provides a
secondary market for options of the same series, but there can be no assurance
that a liquid secondary market will exist at a given time for any particular
option. In this regard, trading in options on certain securities (such as U.S.
Government securities) is relatively new so that it is impossible to predict to
what extent liquid markets will develop or continue.

The underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent for the securities on which the fund has written
puts or calls or for other securities acceptable for such escrow, so that no
margin deposit is required of the fund. Until the underlying securities are
released from escrow, they cannot be sold by the fund.

In the event of a shortage of the underlying securities deliverable on exercise
of an option, the Options Clearing Corporation has the authority to permit
other, generally comparable securities to be delivered in fulfillment of option
exercise obligations. If the Options Clearing Corporation exercises its
discretionary authority to allow such other securities to be delivered, it may
also adjust the exercise prices of the affected options by setting different
prices at which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the Options Clearing
Corporation may impose special exercise settlement procedures.

Hedging

An underlying fund may employ many of the investment techniques described in
this APPENDIX not only for investment purposes, but also for hedging purposes.
For example, an underlying fund may purchase or sell put and call options on
common stocks to hedge against movements in individual common stock prices or
purchase and sell stock index futures and related options to hedge against
market wide movements in common stock prices. Although such hedging techniques
generally tend to minimize the risk of loss that is hedged against, they also
may limit commensurately the potential gain that might have resulted had the
hedging transaction not occurred. Also, the desired protection generally
resulting from hedging transactions may not always be achieved.

Junk Bonds

Bonds which are rated BB and below by Standard & Poor's and Ba and below by
Moody's are commonly known as "junk bonds." Investing in junk bonds involves
special risks in addition to the risks associated with investments in higher
rated debt securities. Junk bonds may be regarded as predominately speculative
with respect to the issuer's continuing ability to meet principal and interest
payments.

Junk bonds may be more susceptible to real or perceived adverse economic and
competitive industry conditions than higher-grade securities. The prices of junk
bonds have been found to be less sensitive to interest rate changes than more
highly rated investments but more sensitive to adverse economic downturns or
individual corporate developments. A projection of an economic downturn or of a
period of rising interest rates, for example, could cause a decline in junk
bonds prices, because the advent of a recession could lessen the ability of a
highly leveraged company to make principal and interest payments on its debt
securities. If the issuer of junk bonds defaults, a fund may incur additional
expenses to seek recovery. In the case of junk bonds structured as zero coupon
or payment-in-kind securities, the market prices of such securities are affected
to a greater extent by interest rate changes and, therefore, tend to be more
volatile than securities which pay interest periodically and in cash.

The secondary markets on which junk bonds are traded may be less liquid than the
market for higher-grade securities. Less liquidity in the secondary trading
markets could adversely affect and cause large fluctuations in the daily net
asset value of a fund's shares. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may decrease the values and
liquidity of junk bonds, especially in a thinly traded market. There may be
special tax considerations associated with investing in junk bonds structured as
zero coupon or payment-in-kind securities. Please see the section on "DIVIDENDS,
DISTRIBUTIONS AND TAXES."

The use of credit ratings as the sole method of evaluating junk bonds can
involve certain risks. For example, credit ratings evaluate the safety of
principal and interest payments, not the market value risk of junk bonds. Also,
credit rating agencies may fail to change credit ratings in a timely fashion to
reflect events since the security was last rated.

Illiquid and Restricted Securities

An underlying fund may invest not more than 15% of its net assets in securities
for which there is no readily available market ("illiquid securities") including
securities the disposition of which would be subject to legal restrictions
(so-called "restricted securities") and repurchase agreements having more than
seven days to maturity. A considerable period of time may elapse between an
underlying fund's decision to dispose of such securities and the time when the
fund is able to dispose of them, during which time the value of the securities
(and therefore the value of the underlying fund's shares held by the Portfolio)
could decline.

Industry Concentration

An underlying fund may concentrate its investments within one industry. Because
the scope of investment alternatives within an industry is limited, the value of
the shares of such an underlying fund may be subject to greater market
fluctuation than an investment in a fund which invests in a broader range of
securities.

Leverage through Borrowing

An underlying fund may borrow up to 33 1/3% of the value of its net assets on an
unsecured basis from banks to increase its holdings of portfolio securities.
Under the 1940 Act, a fund is required to maintain continuous asset coverage of
300% with respect to such borrowings and to sell (within three days) sufficient
portfolio holdings to restore such coverage if it should decline to less than
300% due to market fluctuations or otherwise, even if disadvantageous from an
investment standpoint. Leveraging will exaggerate the effect of any increase or
decrease in the value of portfolio securities on a fund's net asset value, and
money borrowed will be subject to interest costs (which may include commitment
fees and/or the cost of maintaining minimum average balances) which may or may
not exceed the interest and option premiums received from the securities
purchased with borrowed funds.

Loans of Portfolio Securities

An underlying fund may lend its portfolio securities provided that: (1) the loan
is secured continuously by collateral consisting of U.S. Government securities
or cash or cash equivalents maintained on a daily mark-to-market basis in an
amount at least equal to the current market value of the securities loaned; (2)
the fund may at any time call the loan and obtain the return of the securities
loaned; (3) the fund will receive any interest or dividends paid on the loaned
securities; and (4) the aggregate market value of securities loaned will not at
any time exceed one-third of the total assets of the fund. Loans of securities
involve a risk that the borrower may fail to return the securities or may fail
to provide additional collateral.

Master Demand Notes

Although the Portfolio itself will not do so, underlying funds (particularly
money market mutual funds) may invest up to 100% of their assets in master
demand notes. Master demand notes are unsecured obligations of U.S. corporations
redeemable upon notice that permit investment by a fund of fluctuating amounts
at varying rates of interest pursuant to direct arrangements between the fund
and the issuing corporation. Because they are direct arrangements between the
fund and the issuing corporation, there is no secondary market for the notes.
However, they are redeemable at face value plus accrued interest at any time.

Repurchase Agreements

Underlying funds, particularly money market funds, may enter into repurchase
agreements with banks and broker-dealers under which they acquire securities
subject to an agreement with the seller to repurchase the securities at an
agreed upon time and price. These agreements are considered under the 1940 Act
to be loans by the purchaser collateralized by the underlying securities. If the
seller should default on its obligation to repurchase the securities, the
underlying fund may experience delay or difficulties in exercising its rights to
realize upon the securities held as collateral and might incur a loss if the
value of the securities should decline.

Short Sales

An underlying fund may sell securities short. In a short sale, a fund sells
stock that it does not own, making delivery with securities "borrowed" from a
broker. The fund is then obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. This price may not
be less than the price at which the security was sold by the fund. Until the
security is replaced, the fund is required to pay to the lender any dividends or
interest which accrue during the period of the loan. In order to borrow the
security, the fund may also have to pay a premium, which would increase the cost
of the security sold. The proceeds of the short sale will be retained by the
broker to the extent necessary to meet margin requirements until the short
position is closed out.

The fund also must deposit in a segregated account an amount of cash or U.S.
Government securities equal to the difference between: (a) the market value of
the securities sold short at the time they were sold short; and (b) the value of
the collateral deposited with the broker in connection with the short sale (not
including the proceeds from the short sale). While the short position is open,
the fund must maintain daily the segregated account at such a level that: (1)
the amount deposited in it plus the amount deposited with the broker as
collateral equals the current market value of the securities sold short; and (2)
the amount deposited in it plus the amount deposited with the broker as
collateral is not less than the market value of the securities at the time they
were sold short. Depending upon market conditions, up to 80% of the value of a
fund's net assets may be deposited as collateral for the obligation to replace
securities borrowed to effect short sales and allocated to a segregated account
in connection with short sales.

The fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
fund replaces the borrowed security. The fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased and the amount of any loss increased by the amount of any premium,
dividends, or interest the fund may be required to pay in connection with a
short sale.

A short sale is "against the box" if at all times when the short position is
open the fund owns an equal amount of the securities or securities convertible
into, or exchangeable without further consideration for, securities of the same
issue as the securities sold short. Such a transaction may have certain federal
income tax implications, such as the deferral of gain or loss. Please consult
the see the section on "Investment in complex securities."

Warrants

An underlying fund may invest in warrants, which are options to purchase equity
securities at specific prices valid for a specific period of time. The prices do
not necessarily move parallel to the prices of the underlying securities.
Warrants have no voting rights, receive no dividends, and have no rights with
respect to the assets of the issuer. If a warrant is not exercised within the
specified time period, it will become worthless and the fund will lose the
purchase price and the right to purchase the underlying security.

INVESTMENT ADVISOR
Crowley & Crowley Corp.
3201-B Millcreek Road
Wilmington, DE 19808

DISTRIBUTOR
Crowley Securities
3201-B Millcreek Road
Wilmington, DE 19808

TRANSFER AGENT
Crowley Financial Group
3201-B Millcreek Road
Wilmington, DE 19808

CUSTODIAN
Wilmington Trust Company
Rodney Square North
Wilmington, DE 19890

LEGAL COUNSEL
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Tait, Weller & Baker
1818 Market Street
Suite 2400
Philadelphia, PA 19103

THE CROWLEY PORTFOLIO GROUP, INC.

PART C
OTHER INFORMATION

Item 23. EXHIBITS.

(a) Articles of Incorporation.
Registrant's Articles of Incorporation dated August 14, 1989 are
incorporated herein by reference to Item 24.(b)(1) of Post-Effective Amendment
No. 8 to the Registrant's Registration Statement on Form N-1A (File Nos.
33-30975 and 811-05875) as filed with the Securities and Exchange Commission
("SEC") on April 1, 1996.

(1) (AUTHORIZATION/CLASSIFICATION OF "THE CROWLEY DIVERSIFIED
MANAGEMENT PORTFOLIO").

Articles Supplementary dated March 16, 1995 as filed with the
Maryland State Department of Assessments and Taxation on March 22, 1995 are
incorporated herein by reference to Item 24.(b)(1)(a) of Post-Effective
Amendment No. 8 to the Registrant's Registration Statement on Form N-1A (File
Nos. 33-30975 and 811-05875) as filed with the SEC on April 1, 1996.

(2) (CHANGE OF NAME OF "THE CROWLEY GROWTH PORTFOLIO" AS "THE
CROWLEY GROWTH AND INCOME PORTFOLIO").
Articles of Amendment dated March 7, 1996 to the Registrant's
Articles of Incorporation dated August 14, 1989 as filed with the Maryland State
Department of Assessments and Taxation on March 29, 1996 are incorporated herein
by reference to Item 24.(b)(1)(b) of Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-30975 and
811-05875) as filed with the SEC on April 1, 1996.

(3) (CHANGE OF ADDRESS OF RESIDENT AGENT).
Change of Address of Resident Agent effective November 17,
1997 as filed with the Maryland Department of Assessments and Taxation on
September 15, 2004 is incorporated by reference to Item 23.(a)(3) of
Post-Effective Amendment No. 13 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on February
29, 2000.

(4) (DELETION OF THE CROWLEY GROWTH AND INCOME PORTFOLIO/
RECLASSIFICATION OF SHARES).
Articles Supplementary dated November 23, 1998 to the
Registrant's Articles of Incorporation dated August 14, 1989 as filed with the
Maryland Department of Assessments and Taxation on November 25, 1998 is
incorporated by reference to Item 23.(a)(4) of Post-Effective Amendment No. 13
to the Registrant's Registration Statement on Form N-1A (File Nos. 33-30975 and
811-05875) as filed with the SEC on February 29, 2000.

(5) (CORPORATION REVIVAL).
Articles of Revival dated September 8, 2004 as filed with the
Maryland Department of Assessments and Taxation on September 20, 2004 is
incorporated by reference to Item 23(a)(5) of Post-Effective Amendment No. 18 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-30975 and
811-05875) as filed with the SEC on January 28, 2005.

(b) By-Laws
By-Laws of the Registrant are incorporated herein by reference
to Item 24.(b)(2) of Post-Effective Amendment No. 8 to the Registrant's
Registration Statement on Form N-1A (File Nos. 33-30975 and 811-05875) as filed
with the SEC on April 1, 1996.

(c) Instruments Defining the Rights of Security Holders:
(1) Specimens.
a. The Crowley Income Portfolio.
Specimen certificate is incorporated herein by reference
to Item 24.(b)(4)(b) of Post-Effective Amendment No. 8 to the Registrant's
Registration Statement on Form N-1A (File Nos. 33-30975 and 811-05875) as filed
with the SEC on April 1, 1996.
b. The Crowley Diversified Management Portfolio.
Specimen certificate is incorporated herein by reference
to Item 24.(b)(4)(c) of Post-Effective Amendment No. 8 to the Registrant's
Registration Statement on Form N-1A (File Nos. 33-30975 and 811-05875) as filed
with the Securities and Exchange Commission ("SEC") on April 1, 1996.

(2) Articles of Incorporation.
a. Articles of Incorporation dated April 14, 1989
effective August 15, 1989.
Article FIFTH;
Article SEVENTH;
Article NINTH; and
Article TENTH
b. Articles Supplementary dated March 16, 1995 effective
March 22, 1995.
Article SECOND - The Crowley Diversified Management
Portfolio.
c. Articles Supplementary dated November 23, 1998.
Article FOURTH -The Crowley Diversified Management
Portfolio and The Crowley Income Portfolio.

(3) By-Laws.
a. Article II, "Stockholders and Stock Certificates;"
Article III, "Meetings of Stockholders;"
Article IV, "Directors," Sections 2. and 4.;
Article X, "Dividends";
Article XII, "Notices;" and
Article XIII, Amendments.

(d) Investment Advisory Contracts.
(1) Management Contract dated December 6, 1989 between Crowley
& Crowley Corp. and the Registrant on behalf of The Crowley Income Portfolio
is incorporated herein by reference to Item 24.(b)(5)(b) of Post-Effective
Amendment No. 8 to the Registrant's Registration Statement on Form N-1A (File
Nos. 33-30975 and 811-05875) as filed with the SEC on April 1, 1996.

(2) Management Contract dated March 31, 1995 between Crowley &
Crowley Corp. and the Registrant on behalf of The Crowley Diversified Management
Portfolio is incorporated herein by reference to Item 24.(b)(5)(c) of
Post-Effective Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on April 1,
1996.

(e) Underwriting or Distribution Contract Between the Registrant and a
Principal Underwriter.
(1) Distribution Agreement dated December 6, 1989 between Crowley
Securities and the Registrant on behalf of The Crowley Income Portfolio is
incorporated herein by reference to Item 24.(b)(6)(b) of Post-Effective
Amendment No. 8 to the Registrant's Registration Statement on Form N-1A (File
Nos. 33-30975 and 811-05875) as filed with the SEC on April 1, 1996.
(2) Distribution Agreement dated March 31, 1995 between Crowley
Securities and the Registrant on behalf of The Crowley Diversified Management
Portfolio is incorporated herein by reference to Item 24.(b)(6)(c) of
Post-Effective Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on April 1,
1996.
(3) FORM OF Selling Dealer Agreement between Crowley Securities
and Selected Dealers is incorporated herein by reference to Item 24.(b)(6)(d) of
Post-Effective Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on April 1,
1996.

(f) Bonus of Profit Sharing Contracts.
Not Applicable.

(g) Custodian Agreements.

(1) Custodian Agreement dated November 29, 1989 between the
Registrant and Wilmington Trust Company on behalf of The Crowley Income
Portfolio is incorporated herein by reference to Item 24.(b)(8)(b) of
Post-Effective Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on April 1,
1996.
(2) Custodian Agreement dated March 31, 1995 between the
Registrant and Wilmington Trust Company on behalf of The Crowley Diversified
Management Portfolio is incorporated herein by reference to Item 24.(b)(8)(c) to
Post-Effective Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on April 1,
1996.

(h) Other Material Contracts.
(1) Shareholder Services Agreement dated August 1, 1993 between
the Registrant and The Crowley Financial Group, Inc. (the "Agreement") on behalf
of The Crowley Income Portfolio is incorporated herein by reference to Item
24.(b)(9) to Post-Effective Amendment No. 8 to the Registrant's Registration
Statement on Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC
on April 1, 1996.
(a) Amendment I dated March 31, 1995 to the Agreement on
behalf of The Crowley Diversified Management Portfolio is incorporated herein by
reference to Item 24.(b)(9)(a) of Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-30975 and
811-05875) as filed with the SEC on April 1, 1996.

(b) Amendment II dated November 25, 1998 to the Agreement
regarding the deletion of The Crowley Growth and Income Portfolio from the
Agreement is incorporated by reference to Item 23(h)(1)(b) of Post-Effective
Amendment No. 18 to the Registrant's Registration Statement on Form N-1A (File
Nos. 33-30975 and 811-05875) as filed with the SEC on January 28, 2005.

(i) Opinion and Consent of Counsel.
Opinion of Stradley, Ronon, Stevens & Young, LLP dated March 29,
1999 is herein incorporated by reference to Item 23.(i) of Post-Effective
Amendment No. 12 to the Registrant's Registration Statement on Form N-1A (File
Nos. 33-30975 and 811-05875) as filed with the SEC on March 30, 1999.

(j) Other Opinions and Consents.
Consent of Tait, Weller & Baker, Independent Public Accountants
dated January 28, 2005 is incorporated by reference to Item 23(j) of
Post-Effective Amendment No. 18 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on January
28, 2005.

(k) Omitted Financial Statements.
Not Applicable.

(l) Initial Capital Agreements.

(a) Letter of Initial Capital dated December 1, 1989 from William
O. and Elynor K. Cregar is incorporated herein by reference to Item 24.(b)(13)
of Post-Effective Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on April 1,
1996.

(m) Rule 12b-1 Plan.
Not Applicable.

(n) Rule 18f-3 Plan.
Not Applicable.

(o) Reserved.

(p) Code of Ethics.
(1) The Code of Ethics of the Registrant, the Investment Adviser,
and the Underwriter, are incorporated by reference to Item 23.(p) of
Post-Effective Amendment 14 to the Registrant's Registration Statement on Form
N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC on March 28, 2001.

(2) Code of Ethics for the Principal Executive Officer and Principal
Financial Officer of the Registrant is incorporated by reference to Item
23(p)(2) of Post-Effective Amendment No. 18 to the Registrant's Registration
Statement on Form N-1A (File Nos. 33-30975 and 811-05875) as filed with the SEC
on January 28, 2005.

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
None.

Item 25. INDEMNIFICATION.
Under the terms of the Maryland General Corporation Law and Article
EIGHTH of the Registrant's Articles of Incorporation, the Registrant shall
indemnify any person who was or is a director, officer or employee of the
Registrant to the maximum extent permitted by the Maryland General Corporation
Law; provided however, that any such indemnification (unless ordered by a court)
shall be made by the Registrant only as authorized in the specific case upon a
determination that indemnification of such persons is proper in the
circumstances. Such determination shall be made:
(i) by the Board of Directors by a majority vote of a quorum which
consists of the directors who are neither "interested persons" of the Registrant
as defined in Section 2(a)(19) of the 1940 Act, nor parties to the proceedings;
or
(ii) if the required quorum is not obtainable or if a quorum of such
Directors so directs, by independent legal counsel in a written opinion.
No indemnification will be provided by the Registrant to any Director
or officer of the Registrant for any liability to the Registrant or shareholders
to which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of duty.
As permitted by Article EIGHTH of the Registrant's Articles of
Incorporation dated August 14, 1989:

(a) To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law, no
director or officer of the Corporation shall have any liability to the
Corporation or its stockholders for money damages. This limitation on liability
applies to events occurring at the time a person serves as a director or officer
of the Corporation whether or not such person is a director or officer at the
time of any proceeding in which liability is asserted.

(b) The Corporation shall indemnify and advance expenses to its
currently acting and its former directors to the fullest extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The Corporation shall indemnify and advance expenses to its officers to the
same extent as its directors and to such further extent as is consistent with
law. The Board of Directors may by Bylaw, resolution or agreement make further
provisions for indemnification of directors, officers, employees and agents to
the fullest extent permitted by the Maryland General Corporation Law.

(c) No provision of this Article shall be effective to protect or
purport to protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

Item 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR.
The principal business of Crowley & Crowley Corp. is to
provide investment counsel and advice to individual investors.

Item 27. PRINCIPAL UNDERWRITERS.
(a) Crowley Securities, the only principal underwriter of the
Registrant, does not act as principal underwriter, depositor or investment
advisor to any other investment company.
(b) Herewith is the information required by the following table with
respect to each director, officer or partner of the only underwriter named in
answer to Item 20 of Part B:

Name and Principal Business Positions and Offices Position and Offices
Address with Underwriter with Fund

Robert A. Crowley General Partner President, Treasurer
3201-B Millcreek Road and Director
Suite H
Wilmington, DE 19808

Frederick J. Crowley, Jr. General Partner Vice President,
3201-B Millcreek Road Secretary and
Suite H Director
Wilmington, DE 19808

Item 28. LOCATION OF ACCOUNTS AND RECORDS.
All records described in Section 31(a) [15 U.S.C. 80a-30(a)] of the
Investment Company Act of 1940, as amended, and the Rules under that Section,
are maintained by the Registrant's Investment Advisor, Crowley & Crowley
Corp., 3201-B Millcreek Road, Suite H, Wilmington, DE 19808, except for those
maintained by the Registrant's custodian, Wilmington Trust Company, Rodney
Square North, Wilmington, DE 19890, and the Registrant's administrator,
transfer, redemption, dividend disbursing and accounting agent, The Crowley
Financial Group, Inc., 3201-B Millcreek Road, Suite H, Wilmington, DE 19808.

Item 29. MANAGEMENT SERVICES.
All management services are covered in the management agreement between the
Registrant and Crowley & Crowley Corp., as discussed in Parts A and B.

Item 30. UNDERTAKINGS.
(1) Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to Directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a Director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such Director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(2) Registrant hereby undertakes, if requested to do so by the holders of
at least 10% of the Registrant's outstanding shares, to call a meeting of
shareholders for the purpose of voting upon the question of removal of a trustee
or trustees and to assist in communication with other shareholders, as directed
by Section 16(c) of the Investment Company Act of 1940.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness under Rule 485(b) under the Securities Act of
1933 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, duly authorized, in the City of Wilmington and State of
Delaware on the 29th day of March, 2005.

THE CROWLEY PORTFOLIO GROUP, INC.

By: /s/ Robert A. Crowley
Robert A. Crowley, President

Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the capacities and on the
date(s) indicated.

Signature Title Date

/s/ Robert A. Crowley President, Treasurer
Robert A. Crowley and Director March 29, 2005

/s/ Frederick J. Crowley, Jr. Vice President, Secretary
Frederick J. Crowley, Jr. and Director March 29, 2005

/s/William O. Cregar
William O. Cregar Director March 29, 2005

/s/ Bruce A. Humphries
Bruce A. Humphries Director March 29, 2005

/s/ Daniel J. Piscitello
Daniel J. Piscitello Director March 29, 2005

/s/ Peter Veenema
Peter Veenema Director March 29, 2005

EXHIBIT INDEX

---------------- -------------------------------------------------- ------------
EXHIBIT NO. DESCRIPTION LOCATION
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------

---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(a) Articles of Incorporation dated August 14, 1989 *
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(a)(1) Articles Supplementary dated March 16, 1995 *
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(a)(2) Articles of Amendment dated March 7, 1996 *
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(a)(3) Change of Address of Resident Agent effective *
November 12, 1997
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(a)(4) Articles Supplementary dated November 23, 1998 *
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(a)(5) Articles of Revival *
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(b) By-Laws *
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(c)(1)(a) The Crowley Income Portfolio - Specimen Certificate *
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(c)(2)(b) The Crowley Diversified Management Portfolio - *
Specimen Certificate
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(d)(1) Management Contract dated December 6, 1989 *
between Crowley & Crowley Corp. and the
Registrant on behalf of The Crowley Income Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(d)(2) Management Contract dated March 31, 1995 *
between Crowley & Crowley Corp. and the
Registrant on behalf of The Crowley Diversified
Management Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(e)(1) Distribution Agreement dated December 6, 1989 *
between Crowley Securities and the Registrant
on behalf of The Crowley Income Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(e)(2) Distribution Agreement dated March 31, 1995 *
between Crowley Securities and the Registrant
on behalf of The Crowley Diversified Management
Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(e)(3) Form of Selling Dealer Agreement between Crowley *
Securities and Selected Dealers
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(g)(1) Custodian Agreement dated November 29, 1989 *
between the Registrant and Wilmington Trust Company
on behalf of The Crowley Income Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(g)(2) Custodian Agreement dated March 31, 1995 between *
the Registrant and Wilmington Trust Company on
behalf of The Crowley Diversified Management
Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(h)(1) Shareholder Services Agreement dated August 1, 1993 *
between the Registrant and The Crowley Financial
Group, Inc. (the "Agreement") on behalf of The
Crowley Growth and Income Portfolio (f/k/a "The
Crowley Growth Portfolio") and The Crowley Income
Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(h)(1)(a) Amendment I dated March 31, 1995 to the Agreement *
on behalf of The Crowley Diversified Management
Portfolio
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(h)(1)(b) Amendment II dated November 25, 1998 to the *
Agreement regarding the deletion of The Crowley
Growth and Income Portfolio from the Agreement
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(i) Opinion of Stradley, Ronon, Stevens & Young, *
LLP dated March 29, 1999
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(j) Consent of Tait, Weller & Baker, Independent *
Public Accountants dated January 28, 2005
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(l) Letter of Initial Capital dated December 1, 1989 *
from William O. and Elynor K. Cregar
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(p)(1) Code of Ethics of the Registrant, the Investment *
Adviser, and the Underwriter
---------------- -------------------------------------------------- ------------
---------------- -------------------------------------------------- ------------
EX-99.(p)(2) Code of Ethics for the Principal Executive Officer *
& Principal Financial Officer of the Registrant
---------------- -------------------------------------------------- ------------

* Incorporated by reference