The McNelski-Fortune Fund is a small, but rapidly growing, Index Fund designed to match the performance of the S&P 500.  The Fund engages in the limited use of derivative securities solely to hedge future cash inflows and outflows to account for management's market outlook.  The Fund is currently experiencing unprecedented growth due to the continuing surge in the index and the stock market in general.

The S&P 500 Index is replicated using an average portfolio of 40 stocks that are representative of the industry and capitalization of the underlying index.    Large inflows and outflows of cash make it difficult for the Fund to stay fully invested while the market fluctuates.  The Fund's management, therefore, has discretion to engage in derivative securities to counter this risk.