Portfolio Manager's Commentary
March 31st, 2008

Croft Value Fund (CLVFX)

For the quarter, the Croft Value Fund returned -8.1 percent versus -9.5 percent for the S&P 500 benchmark. The fund outperformed the S&P 500 by more than 1.4 percent in the first quarter of 2008. The Croft Value Fund returned 19.0 percent in 2007 versus 5.5 percent for the S&P 500. The Croft Value Fund outperformed its benchmark by more than 13.0 percent in 2007. The fund has a 3-year annualized return of 12.8 percent and 5-year annualized return of 18.0 percent. Since inception, the fund has an annualized return of 10.3 percent.

Annualized Return	YTD	1 Year	3 Year	5 Year	10 Year	Inception
CLVFX	-8.1%	5.8%	12.8%	18.0%	6.2%	10.3%
S&P 500	-9.5%	-5.2%	5.8%	11.3%	3.5%	9.3%

Performance based on 3/31/2008. Performance data quoted represents past performance, and not current performance. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost.

Market Environment

We continued to experience considerable volatility in the markets during the first quarter of 2008. Most broad-based indices, such as the Dow Jones Industrial Average and the S&P 500 were in negative territory and the U.S. economy still faces strong head winds with housing and credit issues looming. Federal Reserve Chairman Ben Bernanke has shown the willingness to intervene with aggressive action in order to protect the financial system.

Volatility is a natural occurrence in the markets. There will always be periods of volatility and uncertainty.

We are optimistic though, with global growth continuing to be relatively strong, unemployment remaining low in historical terms domestically, and the health of corporate balance sheets. Also at the end of quarter, the S&P is trading at a very reasonable 14 X 2008 earnings.

Positioning the Fund: Generating Ideas

At the Croft Value Fund, we are value oriented with a contrarian bent. Through extensive research, we generate hundreds of ideas from a variety of sources - both internal and external. From over 1000 stocks, we continually monitor about 200, building a portfolio of approximately 60- 80 companies. We are classic stock pickers who look at stocks from the bottom-up.

A patient investment strategy is our hallmark. We look for gaps between a company's business value and its current stock price, then carefully evaluate its strengths and risks, investing in those whose stock prices don't fully reflect their true value. We typically hold these stocks for at least 3-5 years. We believe this approach offers our investors the potential for higher returns with lower risk. Striving to reduce risk is inherent in our investment philosophy.

Our multi-cap approach allows us to opportunistically take advantage of market rotations. During these market cycles, we apply our proven investment process to companies of all sizes and sectors, identifying what we believe are undervalued small-, mid- and large-capitalization stocks.

The research-based, bottom-up investment process often leads to prominent themes in the portfolio. One theme currently developing is companies that stand to benefit from improving the US/INTL electric transmission and distribution grid efficiency, along with addressing current growing demand.

Electric Transmission and Distribution Grid Efficiency

North America's electric system is facing several serious challenges. Major questions exist about its ability to continue providing relatively clean, reliable, and affordable energy services. Furthermore, the "information economy" requires a reliable, secure, and affordable electric system to grow and prosper. Unless substantial capital are invested over the next several decades in new generation, transmission, and distribution facilities, service quality will degrade and costs will go up. These investments will involve new technologies that improve the existing electric system and possibly advanced technologies that could revolutionize the electric grid.

Until 2005, investment in the U.S. electric transmission and distribution grid had been in decline for over 30 years. Today, 1 million miles of the grid's 2.2 million miles was constructed between 1948 and 1970. This equipment has a 40-50 year life and has been failing increasingly since the start of the decade, the worst failure being the massive blackout in August of 2004.

The Energy Act of 2005 was designed to correct this situation with three relevant changes to policy. First was the repeal of PUHCA, which allowed private capital to enter the sector. Second, new reliability standards effectively mandate upgrade and refurbishment to the grid with financial penalties for blackouts. Third, the act created "energy corridors" via eminent domain that will override "not in my backyard" concerns to allow for new transmission routes.

Another reason grid spending was so depressed for so long was that regulatory commissions allowed very low returns on Transmission and Distribution (T&D) investment for regulated utilities so as to encourage generation spending, which was allowed much higher rates of return. This has changed across the country and most commissions are now allowing 13-14% returns on grid spending, a very attractive level for regulated utilities. We expect that this will be a major factor in driving increased T&D spending over the next several years. Utilities will have the financial capacity to spend, as 23 of 50 states currently have caps, all of which expire in 2007 and 2008. Additionally, in the aggregate, regulated utilities have the lowest debt to capital ratios and the lowest payout ratios in 30 years.

We also expect new generation capacity to drive grid spending. There has been very little new electric generation built since 2002, when the rapid build-out of natural-gas fired plants led to a glut. This glut is rapidly being absorbed and by 2009 new generation will be under construction. This will lead to additional spending to connect the new capacity to the grid. This will be particularly true in the case of wind power, which requires proportionately more T&D infrastructure than conventional power sources due to their remote locations.

Companies we expect to benefit from increased grid spending include General Cable Corp. (BGC), Quanta Services (PWR), and ABB Ltd. (ABB). General Cable is the largest domestic produce of electric utility cables. Quanta Services provides design, engineering, and construction services for grid projects. ABB is an international firm that manufactures all manner of equipment for electric transmission and distribution grids.

Mutual Fund Ratings and Awards

Morningstar Rating
The Croft Value Fund has a 5-star Overall Morningstar Rating. The fund has a 5-star rating for the 3- and 5-year periods and is ranked in the top 1 percentile of its Morningstar category for the 3-year period and in the top 3 percentile for the 5-year period.

Lipper Awards

The Croft Value Fund is recognized as a "Lipper Leader" in the following categories its "Multi-Cap Value" peer group:

• Total Return
• Consistent Return
• Preservation

This is the highest attainable score meaning it outperforms at least 80% of the 1209 different funds in the peer group in the "Mid-Cap Value" category.