Investment Objective

The investment objective of the Portfolio is to provide investors with long-term
capital growth by investing in a diversified compilation of equity securities considered to be in compliance with Shari’ah principles.

2. Principal Investment Strategies

The assets of the Portfolio are fully invested, under normal market conditions,
in securities that are included in the Dow Jones Islamic Market Index (DJIMI)
investable universe, the selection criteria for which are set forth below.
Uninvested cash is maintained in the smallest amount reasonably possible and is
invested in a manner compliant with Shari’ah principles, including non-interest
earning deposits.

Shari’ah Selection Criteria

Dow Jones’ selection process begins by excluding those firms that do not meet
specific business line and financial requirements. The selection criteria and
key features for inclusion of a company in the DJIMI and, in turn, the Portfolio
are as follows:

Specifically, the DJIMI and the Portfolio exclude firms with the following
product lines. These incompatible lines of business are removed from the
“universe” of stocks considered for the DJIMI.

o Alcohol
o Pork related products
o Financial services (banking, insurance, etc.)
o Entertainment (hotels, casinos/gambling, cinema, pornography, music,
o Tobacco
o Defense/weapons

Other companies classified in other industry groups may also be excluded if they
are deemed by the Dow Jones Shari’ah Supervisory Board to have a material
ownership in or revenues from prohibited business activities. After removing
companies with unacceptable primary business activities, the remaining universe
is tested by three financial-ratio “filters”. The purpose is to remove companies
with unacceptable financial ratios.

The filters exclude companies if:

o Total debt divided by trailing 12-month average market capitalization
is equal to or greater than 33%. (Note: total debt = short term debt +
current portion of long-term debt + long-term debt);

o Accounts receivables divided by total assets is equal to or greater
than 45%. (Note: accounts receivables = current receivables + long-term
receivables); or

o The sum of cash and interest bearing securities divided by trailing
12-month average market capitalization is equal to or greater than 33%.

Companies that pass these screens are included in the DJIMI’s investable
universe, from which DJIMI components are selected.

Shari’ah Supervisory Board

Dow Jones’ Shari`ah Supervisory Board has approved of the above criteria and any
changes in the Dow Jones’ Shari’ah Supervisory Board or the selection criteria
are at the sole discretion of Dow Jones. Changes by Dow Jones in the selection
criteria or the composition of the DJIMI are reflected in the composition of the
Portfolio within a reasonable period of time, which under normal circumstances
is within several days after the changes are implemented in the DJIMI.


The Portfolio seeks to provide a return consistent with the Dow Jones Islamic
Market Extra Liquid Indexsm (Index) by matching as closely as possible the
return and volatility of the Index. The Index is comprised of the 100 most
liquid securities in the DJIMI. There is no guarantee that the Portfolio will
achieve the same return as the Index. The Portfolio may purchase a sub-group of
equities from those contained in the Index that the Investment Manager believes
will best track the Index. When purchasing a sub-group of equities, the
Investment Manager considers the cost of acquiring and holding a security as
well as the effect on the Fund’s total return of not holding that security.

The approximate geographic distribution of the market capitalization of the
Index is: Americas (67%), Europe (27%), and Asia (6%).

The following sectors are represented in the Index: Health Care (24%);
Technology (26%); Telecommunication (14%); Energy (14%); Consumer Cyclical (7%);
Non-Consumer Cyclical (6%); Industrial (5%); Others (3%). The above composition
is estimated and will change over time.


Shari’ah Investment Risk.

It is possible that the Shari’ah selection criteria used by Dow Jones to
create the Index may result in the Portfolio performing less well than
portfolios with similar investment objectives that are not subject to
Shari’ah selection criteria. In addition, unlike portfolios that are not
subject to Shari’ah governance, the impure portion of any dividends
received by the Portfolio are segregated from the assets of the Portfolio
and are donated to charitable causes.


4. Investment Manager and Investment Adviser

The Investment Manager is Brown Brothers Harriman & Co., Private
Bankers, 59 Wall Street, New York, NY 10005, a New York limited partnership
established in 1818. The firm is subject to examination and regulation by the
Superintendent of Banks of the State of New York and by the Department of
Banking of the Commonwealth of Pennsylvania. The firm is also subject to
supervision and examination by the Commissioner of Banks of the Commonwealth of

Brown Brothers Harriman & Co. provides portfolio management services to
the Portfolio. Subject to the general supervision of the Portfolio’s Trustees
and based upon advice given by Wafra Investment Advisory Group, Inc. (the
“Investment Adviser”), Brown Brothers Harriman & Co. makes the day-to-day
investment decisions for the Portfolio, places the purchase and sale orders for
portfolio transactions, and generally manages the Portfolio’s investments. Brown
Brothers Harriman & Co. provides a broad range of investment management services
for customers in the United States and abroad. At June 30, 2001, it managed
total assets of approximately $38 billion.

The Portfolio is managed on a day to day basis by a team of individuals,
which includes Mr. Jeffrey A. Schoenfeld and Mr. G. Scott Clemons. Mr.
Schoenfeld holds a B.A. from the University of California, Berkeley and a M.B.A.
from the Wharton School of the University of Pennsylvania. He joined Brown
Brothers Harriman in 1984. Mr. Clemons holds an A.B. from Princeton University
and is a Chartered Financial Analyst. He joined Brown Brothers Harriman in 1990.

The Investment Adviser of the Portfolio is Wafra Investment Advisory
Group, Inc., 345 Park Avenue, New York, NY 10154, a U.S. registered investment
adviser. Founded in 1985, the Investment Adviser together with its affiliate
companies manages in excess of $3 billion, specializing in global fund
management, securities portfolio management, direct equity investment, real
estate investment and private asset management to major financial institutions
from the Gulf as well as other companies and high net worth individuals. The
Investment Adviser acts as U.S. investment adviser for numerous investment funds and managed accounts, including other Islamic funds and products.

For the services provided and the expenses borne pursuant to the
Investment Management Agreement and the Investment Advisory Agreement, the
Investment Manager and the Investment Adviser jointly will receive from the
Portfolio as full compensation therefrom an aggregate fee at an annual rate
equal to 0.40% of the Portfolio’s average daily net assets. This fee will be
computed based on net assets at 4:00 P.M. New York time on each day the New York
Stock Exchange is open for trading, will be paid monthly during the succeeding
calendar month and will be shared between the Investment Manager and the
Investment Adviser as from time to time may be agreed upon by the Investment
Manager and the Investment Adviser.


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