Domestic Investment Process

We make no attempt to model our small and mid cap portfolios after any outside index or other benchmark. For purposes of client measurement we generally use the Russell 2000 Growth Index and the Russell 2500 Growth Index, respectively.

Our domestic portfolios purchase the majority of their positions in the capitalization range appropriate to each portfolio. However, we may, on occasion, purchase shares of larger or smaller companies with capitalizations outside the range that we believe will enhance the overall portfolio. We are not restricted by a sell discipline based on market capitalization - we can hold a position within our portfolio even if it has appreciated beyond ranges.

We do not sector rotate. Our concentration is on stocks we believe show the best growth fundamentals confirmed by strong price and volume movement. In practice, however, this often means that our portfolios are more concentrated in those sectors with companies displaying the best fundamental and current market characteristics.

Driehaus Capital Management LLC's primary interest is in active securities. These are often just beginning to attract institutional interest. We assess the overall quality of a stock, gauge the near-term appreciation potential, as well as the long-term outlook, and monitor price fluctuations daily. The securities we buy are often of companies that are undergoing significant change. These securities can be volatile in their behavior. While we are aggressive in our portfolio structure, we also strive to be consistent.