FIXED INCOME PORTFOLIO REVIEW

At the February 26, 1999 Investment Committee meeting there was discussion regarding possible options for the fixed income portfolio including transferring $20 to $25 million to the FIRMCO Enhanced Bond Market Fund. The action was tabled pending further information regarding the stability and experience of the FIRMCO fixed income portfolio personnel and the comparative fee performance net of fees.

With respect to personnel, the key personnel who established the FIRMCO fixed income strategy remain in senior roles with the firm. Mary Ellen Stanek , Gary Elfe and Charlie Groeschell have worked together as a team for more than 17 years and have an average of over 19 years investment experience.

Included on page 3 is a comparative performance summary including net of fee performance data. On a gross basis FIRMCO has performed better than Capital Guardian. On a net of fee basis Capital Guardian has a slight edge since the Capital Guardian fee is at .18 of 1% versus .30 of 1% for FIRMCO. Both firms are at .30 of 1% for the first $25 million of invested assets but the Capital Guardian fee is lower since the Bradley Foundation's total investment with Capital Guardian exceeds $100 million, which triggers the .18 of 1% fee.

Advantages and disadvantages are summarized below:

Advantages:

1.	FIRMCO offers a fixed income portfolio that provides diversification with low volatility. This investment process allows achievement of competitive returns, while always remaining duration and risk neutral to the portfolio's benchmark.

2.	Page 4 includes a comparative portfolio composition of the Bradley Foundation's fixed income portfolio as managed by Capital Guardian compared to the FIRMCO Enhanced Bond Market Fixed Income Fund. A portion of Capital Guardian's return is associated with a higher concentration of BBB and lower securities (27%) versus FIRMCO's 14%.

3.	FIRMCO was ranked number two in 1998 by Barron's for managing taxable bond funds (page 5).

Disadvantages:

1.	Higher fee.

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We recommend transferring $20 million to FIRMCO to provide additional diversification in the fixed income portfolio that includes lower volatility, higher quality securities and expected returns that exceed the target benchmark.

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