MANAGEMENT AGREEMENT



TO:      Diamond Hill Capital Management, Inc.

         1105 Schrock Road, Suite 437

         Columbus, Ohio 43229





Dear Sirs:



     The BSG Funds (the "Trust") herewith confirms our agreement with you.



     The Trust has been organized to engage in the business of an investment

company. The Trust currently offers four series of shares to investors, one of

which is the Diamond Hill Large Cap Fund (the "Fund").



     You have been selected to act as the sole investment adviser of the Fund

and to provide certain other services, as more fully set forth below, and you

are willing to act as such investment adviser and to perform such services under

the terms and conditions hereinafter set forth. Accordingly, the Trust agrees

with you as follows effective upon the date of the execution of this Agreement.



     1.   ADVISORY SERVICES



     You will regularly provide the Fund with such investment advice as you in

your discretion deem advisable and will furnish a continuous investment program

for the Fund consistent with the Fund's investment objectives and policies. You

will determine the securities to be purchased for the Fund, the portfolio

securities to be held or sold by the Fund and the portion of the Fund's assets

to be held uninvested, subject always to the Fund's investment objectives,

policies and restrictions, as each of the same shall be from time to time in

effect, and subject further to such policies and instructions as the Board may

from time to time establish. You will advise and assist the officers of the

Trust in taking such steps as are necessary or appropriate to carry out the

decisions of the Board and the appropriate committees of the Board regarding the

conduct of the business of the Fund.



     2.   ALLOCATION OF CHARGES AND EXPENSES



     You will pay the compensation and expenses of any persons rendering any

services to the Fund who are officers, directors, stockholders or employees of

your corporation and will make available, without expense to the Fund, the

services of such of your employees as may duly be elected officers or trustees

of the Trust, subject to their individual consent to serve and to any

limitations imposed by law. The compensation and expenses of any officers,

trustees and employees of the Trust who are not officers, directors, employees

or stockholders of your corporation will be paid by the Fund.



     The Fund will be responsible for the payment of all operating expenses of

the Fund, including the compensation and expenses of any employees of the Fund

and of any other persons rendering any services to the Fund; clerical and

shareholder service staff salaries; office space and other office expenses; fees

and expenses incurred by the Fund in connection with membership in investment

company organizations; legal, auditing and accounting expenses; expenses of





                                       1



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registering shares under federal and state securities laws, including expenses

incurred by the Fund in connection with the organization and initial

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