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Six money managers examine portfolio management strategies in the latest issue of The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info550.htm

TWST: Tell us about your firm and your investment responsibilities.

Mr. DeRosa: Badgley, Phelps & Bell has been in business in the Seattle area for the past 35 years. The company started with two founders — Chick Badgley and Pete Phelps — who brought forth the concept of wealth management long before it was considered en vogue. Chick and Pete were dealing with high-net-worth individuals and businesses, and their client base grew over the years solely by referrals. I would say over the past 10 years the firm has increasingly focused its efforts on growing its institutional business in addition to the private capital growth. We have worked over the last decade to create the institutional product that we have today and are continuing to define its role in various investment environments. Of course, marketing our institutional product is a little more important today as institutional clients are less dependent on referrals and more concerned about the concept of good, strong performance. A solid product and excellent client service are, however, still very important to both types of clients, and we make this a top priority. We consider ourselves somewhat of a small boutique shop. Our current assets under management are about 1.5 billion. We have two mutual funds, the Badgley Growth Fund and the Badgley Balanced Fund, that have been up and running for over three years, which gives us several years of track record. We have 11 portfolio managers with an additional 26 in support staff, including our Portland, Oregon, office. My position here at Badgley, Phelps & Bell is Director of Research. I am also part of our three-member Institutional Equity Team.

TWST: What are some of the recent companies that you’ve added to the Fund?

Mr. DeRosa: Our most recent addition to the fund is AFLAC Inc. (NYSE:AFL), a supplemental health insurance company. AFLAC is in the financial sector and has demonstrated an extremely strong brand through effective marketing. When I mention the company to clients, their immediate recognition of the quacking duck is very positive in terms of the company’s ability to market their name. They are making a strong push in the US for their supplemental insurance portfolio, as they have been based primarily in Japan over the past 10 years. AFLAC has grown in the mid double-digit rates, averaging 15%, even through the difficulties of the global economic environment. They’re a very well run insurance company with fairly low efficiency ratios, in that they are underwriting profitable lines of business, which is fairly unique for life or supplemental insurance business. Penetration rates in the US are very low for supplemental insurance, and I believe that AFLAC is at an interesting inflection point, hopefully proving to be a good opportunity to drive growth over the next 10 years. Furthermore, AFLAC is re-establishing some of their distribution methods here in the US. Until recently they’ve been mostly utilizing their direct sales force. However, lately they have been working up some interesting contracts with companies like Wal-Mart and UPS, marketing directly to these companies’ employees for supplemental health insurance. As the dynamics within the insurance industry change and the cost of covering employees becomes greater, we believe there will be a greater need for supplemental health insurance as a stand-alone product, and AFLAC will benefit from that.

This special Investing Strategies Report includes:

1) Peter F. Ganucheau IV, Principal, Portfolio Manager/Analyst with GSB Investment Management, Inc., examines portfolio management strategies in this timely and deeply informative 11,400-word interview from The Wall Street Transcript.

2) William J. DeRosa Jr., Portfolio Manager with Badgley, Phelps and Bell, Inc., examines portfolio management strategies in this timely and deeply informative 4,500-word interview from The Wall Street Transcript.

3)Jonathan W. White, Senior Vice President and Chief Investment Strategist for Banknorth Investment Management Group, examines portfolio management strategies in this timely and deeply informative 3,100-word interview from The Wall Street Transcript.

4) Geoffrey R.B. Carey and Jane W. Korhonen, both Partner and Senior Portfolio Managers at Brown Investment Advisory & Trust Company, examine portfolio management strategies in this timely and deeply informative 3,500-word interview from The Wall Street Transcript.

5) Richard H. Earnest, Director for HighMark Capital Management, examines portfolio management strategies in this timely and deeply informative 4,900-word interview from The Wall Street Transcript.