October 2012

Dear Fellow Shareholders: During the third quarter of 2012, the Greenspring Fund registered a positive return of 4.05%, with the Funds equity holdings outperforming the Funds fixed income securities. The financial markets performed in similar fashion, posting generally positive performances, with stocks faring better than bonds. These investment gains occurred during a period that was rife with causes for concern. Domestically, economic growth seems to be decelerating once again, and earnings reports from public companies remain lackluster. Our nations exports, recently a source of economic strength, are now facing a challenging environment as European customers are delaying purchases awaiting resolution of the fiscal difficulties and political turmoil in the European Union. With our Presidential election only weeks away, domestic political uncertainty has also grown, causing many companies and individuals to postpone spending or investment initiatives as they wait for better clarity on taxation, healthcare and budget issues. However, the massive liquidity that the Federal Reserve has been injecting into our financial system has overpowered the many economic uncertainties we face, at least within the arena of the financial markets. If measured by the performance of the stock and bond markets, the Federal Reserve has been very successful in its efforts. However, looking past the performance of the financial markets and focusing more on the health of the broader economy, the success of the Feds efforts is highly debatable. Similarly in Europe, the European Central Bank seems to be taking its cue from its American counterpart and appears to be determined to reflate its way out of economic problems. In hopes of preventing further deterioration of the fragile economies and banking systems of the troubled European countries, the European Central Bank has crafted a plan to purchase their sovereign debt. The goal of this strategy is to reduce the borrowing costs of these overlevered countries in order to lessen their debt burden and attempt to ensure the continued success of their government bond auctions. Although public attention in our

Greenspring Fund
Performance for the Periods Ended September 30, 2012 Quarter Year to Date 1 Year 3 Years* 5 Years* 10 Years* 15 Years* 20 Years* Since inception on 7/1/83* Expense Ratio**
* annualized. **as stated in Prospectus dated 5-1-12. See note on last page of letter.

4.05% 6.25% 13.70% 6.44% 3.34% 8.91% 5.60% 8.38% 9.77% 0.93%

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800366-3863 or visiting the Funds web site. The Fund imposes a 2.00% redemption fee for shares held 60 days or less. Performance data does not reflect the redemption fee. If reflected, total returns would be reduced.

country seems to have recently drifted away from the chronic economic problems of Europe, we are concerned that investors will once again focus on the deleterious impact that a further unraveling of the Eurozone economy could have on the worldwide economy and financial markets.

INFLUENCES on FUND PERFORMANCE

As in the past several quarters, the Funds equities registered a more significant move during the quarter than did the Funds fixed income investments. Gains in the Funds portfolio were widespread, with 36 of the 48 equity positions generating positive performances and 40 of % of Net 46 fixed income securities posting positive Assets total returns. Greenspring Fund as of In order of magnitude, the securities that Top 10 Holdings had the largest impacts on the Funds per9/30/12 formance were j2 Global, Rosetta ReAlcatel-Lucent, Inc. 2.875% 6/15/25 Convertible Bonds 4.3% sources, Cisco Systems, MasTec, Inc., and PartnerRe, Ltd. 3.9% BioScrip, Inc. All of these investments are j2 Global, Inc. 3.1% in common stocks and all generated posiCisco Systems, Inc. 3.0% tive returns during the quarter. As a pertiRepublic Services, Inc. 3.0% nent example of how the Greenspring Fund FTI Consulting, Inc. 2.9% may invest in a variety of asset classes RadioShack Corp. 2.500% 8/1/13 Convertible Bonds-144A 2.9% when we see attractive opportunities, the Rosetta Resources, Inc. 9.500% 4/15/18 2.9% Fund also has invested in the corporate Assurant, Inc. 2.7% bonds of three of these companies RosetLeucadia National Corp. 7.000% 8/15/13 2.6% ta Resources, MasTec, Inc. and BioScrip, Inc. j2 Global,Inc. j2 Global provides a number of cloud-based communication services to individuals, small businesses, and large enterprises across the globe. The stock rose nearly 25% during the third quarter amid growing confidence in the Companys ability to accelerate its growth rate in a shareholder-friendly manner. Second quarter results were reported and substantially exceeded investors expectations due to stronger than expected subscriber growth driven predominately by new users of its voice product line and fewer user cancellations across all products. In addition, strong free cash flow generation enabled the Company to increase its cash balance while still paying out a sizeable dividend and buying back its own stock. The Company took advantage of a low interest-rate environment to raise $250 million in fresh capital through a debt offering. This fresh powder, combined with cash on the balance sheet, gives management over $400 million in excess capital with which to consider acquisitions. All of these factors contributed to the increased enthusiasm over j2s growth prospects. As long-time shareholders of j2 Global, we have confidence in the Companys ability to continue to post solid organic growth and deploy its cash in a shareholder-friendly manner. With a strong track record of successfully making and integrating acquisitions, we trust this management team to deploy its excess cash in a manner that will increase shareholder value. As disciplined value investors, we are always mindful of the valuation of our securities following periods of strong performance, but we continue to believe that j2 represents a strong total return opportunity for its shareholders. Rosetta Resources, Inc. Rosetta Resources develops oil and natural gas properties in North America, primarily in the Eagle Ford region of South Texas. We discussed Rosetta in the Semi-Annual Report after the stock price was negatively impacted during the second quarter by a decline in the price of crude oil and natural gas liquids. The price of the stock rebounded sharply during the third quarter partly due to an increase in commodity prices, particularly crude oil, and partly due to company-specific events. In August, Rosetta announced that it would suspend its drilling activities in a higher risk exploratory play in the Southern Alberta Bakken region and focus all of its resources and efforts on developing its acreage in the Eagle Ford. The Company is also benefitting from lower drilling costs in the Eagle Ford as material and labor costs have declined, and Rosetta continues to gain from increased efficiency as the Company develops its

acreage more intensely. Rosetta also announced that recent drilling results would allow it to space future wells closer together, increasing the number of potential drilling locations and maximizing the potential oil and gas production from its acreage. We are very encouraged that lower drilling costs, combined with the reallocation of capital from the Southern Alberta Bakken, will accelerate the drilling program in the Eagle Ford and increase near term production. The Companys strong balance sheet and cash flow should allow it to internally fund the development of its existing acreage as well as provide the resources to explore for potential new oil and gas reserves as Rosetta works to build shareholder value. Cisco Systems, Inc. Cisco produces market leading networking equipment sold to customers all over the globe. After disappointing stock market performance in the second quarter of the year, the Company began the third quarter with very low investor expectations. For a number of reasons, this sentiment proved overly pessimistic, and Cisco delivered a 12% total return during the third quarter. First, second quarter earnings results exceeded investors expectations driven by market share gains and cost cutting. Second, management used its cash-rich balance sheet and enviable free cash flow to buy back nearly $2 billion of its own stock and increase its dividend 75%. Finally, global monetary easing and perceived progress in stemming the European debt crisis increased investor optimism towards equities in general, including Cisco.

Greenspring Fund
Portfolio Allocation as of September 30, 2012
Cash 9%

Corporate Bonds 28%

Common Stocks 47%

While we remain very skeptical about the long-term efficacy of global stimulus and European rescue efforts, we remain encourConvertible Bonds aged by the turnaround at Cisco. Management continues to 16% streamline its organization around its core strengths, creating a leaner, more profitable, and more shareholder-friendly corporate structure. We expect continued solid fundamental performance and believe the Company will continue to return significant capital to shareholders, creating the potential for an attractive long-term total return for its shareholders.

INVESTMENT STRATEGY
During this slow, muddle-through type of economic environment, the Greenspring Fund continues to utilize a conservative, fundamentally sound, total return investment strategy. With respect to the Funds fixed income securities, we continue to invest in bonds of short duration, which should reduce the interest rate volatility of our fixed income holdings should interest rates begin to rise in the next year or so. We also are continuing to purchase bonds of companies that are not dependent upon a sharp improvement in their finances in order to retire their maturing debts. The Funds bond investments are in companies that we believe will be able to comfortably address their maturing debts should the economy stay lackluster or even weaken a bit. Yields of many types of fixed income securities, in absolute terms, hover near their lows. It is important to recognize, however, that spreads (the incremental yield above US Treasury rates of similar maturity) of short-term high yield bonds remain well above their lows, so that the yields that we have been achieving in our fixed income investments have been very attractive relative to alternative short-term investments. During the third quarter, we initiated positions in the straight corporate bonds of Albertsons, Inc. (a subsidiary of SUPERVALU, Inc.), American Pacific Corp., GeoEye, Inc., Angiotech Pharmaceuticals, and CONSOL Energy, as well as the convertible bonds of Bill Barrett Corp. We also added to the Funds holdings of the bonds of MasTec, Inc., PetroQuest Energy, Quicksilver Resources, RadioShack Corp, Rosetta Resources and The Scotts Miracle-Gro Co. As for our equitiesat the risk of sounding like a broken recordwe are still focusing on the stocks of companies that have solid financial underpinnings and generate significant amounts of free cash flow, even in the current economic environment. Many of the equities in the Greenspring Fund pay generous dividends, and several of them have been increasing their dividends. Some have been repurchasing a significant amount of their stock in the open market, while others have been pursuing acquisitions that allow them to diversify their product offerings and build a more val-

uable company. Instead of purchasing stocks where success is dependent on the fortunes of the broader economy, we prefer to invest in companies that we believe are better positioned to control their own destinies and have the ability to implement shareholder-enhancing activities that their weaker industry peers may not be able to pursue. Additions to the Funds equity portfolio were made in the common stocks of Clifton Savings Bancorp, GSI Group, Inc., GeoEye, Inc. (subsequently sold during the quarter after being the subject of a takeover proposal), MYR Group, Inc., and Rush Enterprises. Although there are many challenges facing our economy, corporate balance sheets are generally healthy (although the Federal governments balance sheet is ugly and getting uglier every day!). We will continue to adjust the mix of securities in the Greenspring Fund, as developments in the financial markets dictate. As always, we are determined in seeking to provide our shareholders with total return performance that is steadier and more consistent than the major market averages. We look forward to reporting continued progress toward our goal in our next quarterly letter. Respectfully,

Charles vK. Carlson President Co-Chief Investment Officer

Michael J. Fusting Senior Vice President Co-Chief Investment Officer

**Total Annual Fund Operating Expenses for the Fund will not correlate to the Ratio of Expenses to Average Net Assets shown in the Funds most recent Annual Report and in the Financial Highlights section of the Prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses. Mutual fund investing involves risk. Principal loss is possible. Small-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Investments by the Fund in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Opinions expressed are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Current and future portfolio holdings are subject to risk. Free cash flow measures the cash generating capability of a company by adding certain non-cash charges (e.g. depreciation and amortization) to earnings and subtracting recurring capital expenditures. Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration. Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Funds investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectuses contain this and other information about the Fund, and may be obtained by calling 1-800-366-3863 or visiting www.greenspringfund.com. Please read the Funds Prospectus carefully before investing.
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