Sands Capital Management Named New CUIT Growth Fund Sub-Adviser

CBIS has made a sub-adviser change in the CUIT Growth Fund that will become effective as of September 30, 2004. Following a review of large capitalization growth managers during 2004, we have decided to replace RCM of San Francisco. RCM was hired in June of 2000, and performance was reasonable until 2003 when results proved particularly weak compared to the Fund's Russell 1000 Growth benchmark. As a result, the firm's performance has fallen short of our expectations. While the firm has a strong investment process and significant depth in research, we attribute the performance shortfall primarily to organizational and leadership issues stemming from the firm's purchase by Allianz in 2000. As such qualitative issues are difficult for a firm to remedy, we have decided to make a change.

Sands Capital Management, Inc. We have recently concluded our review of large cap growth managers with the selection of Sands Capital Management, Inc. of Arlington, Virginia to replace RCM.

Sands utilizes a unique approach to growth investing, emphasizing a long-term time horizon and concentrated positions in a focused group of industry leaders demonstrating above-average, sustainable earnings growth.

The firm was founded in 1992 by Frank Sands, Sr., who has assembled a seasoned team of eight portfolio manager/analysts to manage $8.5 billion in assets. The firm is independently owned, and solely offers large cap growth portfolios.

The firm's investment philosophy is characterized by the belief that growth companies, over time, are superior alternatives to stagnating or contracting businesses, and are essential building blocks of wealth creation.

Portfolio companies are typically large, dominant leaders in their respective business spaces, usually operate on a global basis, and demonstrate the following criteria:

• sustainable above-average earnings growth
• a significant competitive advantage or a unique business franchise
• financial strength
• a rational valuation relative to the market and to growth prospects

Because the portfolio is relatively concentrated in 25 to 30 issues and has a long-term investment horizon, portfolio turnover averages 25% or less annually. Investments are sold when the company loses its leadership position, when business fundamentals begin to deteriorate (as demonstrated by slowing unit volume, revenue, earnings growth), or when the company's valuation becomes excessive. This longer-term focus has proven highly successful, perhaps because of its significant contrast to momentum-driven or trading-oriented growth approaches. Sands has outperformed the Russell 1000 Growth Index in each of the past ten years.

In addition, the style and value-added by Sands are relatively uncorrelated with Columbus Circle's earnings surprise and momentum discipline, and thus serve as a good choice for the second sub-adviser for the CUIT Growth Fund.

We expect that the addition of Sands Capital will bolster some of the recent weakness in Fund results, and help to maintain the longer-term success of the Fund compared to its peers.

Should you have further questions about this manager change, please contact your CBIS Investment Advisor.

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