Welcome to Philadelphia Fund

Eagle Growth Shares, Inc. is an open-end, diversified investment company, established under Maryland law in 1969, whose investment objective is to achieve growth of capital. This goal will be sought by investing in securities which appear to have potential for capital appreciation. The Fund’s portfolio will usually be comprised of common stocks of seasoned companies whose prospects are believed by Management to be above average. In addition, the Fund may also own securities of newer, less- seasoned companies, and companies representing so-called ‘‘special situations’’.

Generally, securities are selected solely on the basis of their growth potential. Management considers a company as an investment candidate for the portfolio if it has a substantial growth rate per quarter versus the same quarter one year earlier, commensurate increases in earnings per share or a high probability of such exist, a new product or service innovation is anticipated to impact on sales or earnings, or the price earnings ratio is less than the growth rate of sales and/or earnings. Each of these criteria may indicate that a stock has growth potential. The advisor seeks stocks with as many of these criteria but does not require that all or any are met prior to investment.

Other factors used in selecting investments include expanding demand for a company’s products or services, new product developments, research capability, increasing operating efficiency, the possibility that a disparity exists between the price of a stock and the value of the underlying assets, good management, industry position, business strategy, trading liquidity, trading activity of officers directors, and large stockholders and protection from competition. The effects of general market, economic, and political conditions are also taken into account in the selection of investments.

The Fund may also own securities of new, less-seasoned companies and companies representing so-called ‘‘special situations.’’ The Fund considers ‘‘less-seasoned companies’’ to be those which have a record of less than three years continuous operations, which period may include operations of a predecessor company, and also considers smaller companies to be ‘‘less-seasoned’’ companies. There are no limits on the percentage of total assets that may be invested in special situations. A special situation would involve owning securities that, in the opinion of the Advisor, should enjoy considerably better investor reception in the fairly near future because of an essentially non-recurring development that is either happening or, in the opinion of the Advisor, is likely to happen. Such developments could include, among others:

1	a change in management
2	discovery of a new or unique product or technological advance with sizable market potential
3	an acquisition providing unusual opportunity for market enlargement or for operating savings
4	the adoption of new laws that enhance prospects for an important part of the company’s business
5	takeovers, restructurings, leveraged buyouts, and reorganizations

The Fund’s portfolio will be diversified and usually consists of 20 - 30 different stocks which is less than the amount of stocks held by the typical mutual fund. This strategy stems from the belief that there are a limited number of investment ideas available and allows the advisor to focus on companies with the greatest potential for investment return balanced with minimal risk.

The Fund’s investment advisor takes into consideration the tax implications on shareholders by trying to balance capital gains and losses resulting from portfolio transactions. Unexpected declines in securities prices sometimes cause the Advisor to take capital losses. Unexpected increases in securities prices sometimes cause the Advisor to take capital gains. Both of these actions are taken with full consideration given to the Fund’s current realized and unrealized gain (loss) position and its tax implications to the shareholder.

The Fund may, from time to time, take temporary defensive positions that are inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political or other conditions. Under these conditions, the Fund may place some or all of its assets in cash or cash equivalents in an attempt to preserve capital and avoid potential losses. However, it is possible the Fund may not achieve its investment objective under these circumstances.

Normally, investments in fixed income securities will not be made except for defensive purposes, and to employ temporarily uncommitted cash balances. In those situations, the Fund will only invest in fixed income securities rated at least A by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation.

The Fund’s portfolio usually has a low turnover ratio because securities are bought and held with long-term goals in view and this normally results in the infrequent replacement of the portfolio’s investments. However, the Fund does not regard the frequency of portfolio transactions as a limiting factor in its investment decisions.

The Fund may buy and sell covered (options on securities owned by the Fund) and uncovered (options on securities not owned by the Fund) call and put options which are issued by the Options Clearing Corporation and listed on national securities exchanges. Generally, options would be used either to generate income or to limit the downside risk of a portfolio holding.