The investment objective of the Fund is to provide a competitive return to shareholders by emphasizing a diversity of domestic instruments for capital preservation, steady income flow, and the opportunity for capital appreciation.
It is the intention of the Fund to invest a portion of its portfolio in liquid and fixed-term deposit accounts, secured debt instruments, or comparable instruments at qualified local financial institutions. Further, in order to provide for contingencies, the liquid portion of the Fund will represent no less than 5% of the portfolio.
The Funds assets may also be invested in Bahamas Government debt obligations such as Registered Stock and Treasury Bills, which provide attractive returns and relative liquidity. Similarly, these securities will allow the Fund to realize a stable income flow, secured by the credit-backing of the Bahamas Government.
The Fund may invest in equities and in commercial paper, such investments being limited to a maximum of 50% of the Fund's portfolio. Further, no more than 5% of the portfolio can be invested in any one equity. These instruments will provide diversification in the mix of instruments, and thereby spread the risk while potentially optimizing returns. Only publicly-held companies may be considered for equity investment of the Fund's assets.
In selecting securities for the portfolio, the Fund Manager will consider such factors as the security, maturity, liquidity, and credit quality as determined by the Fund Manager, as well as its yield and prospects for capital growth. Equity issues and commercial paper will be carefully analyzed to determine their possible contribution to the Fund, either through diversification or through the enhancement of returns.
There can be no assurance that the Fund will achieve its investment objectives, as changes in economic conditions, interest rates, and the mix of securities in the Funds portfolio will affect the return on the Fund's shares. The active management of the portfolio will attempt to maximize returns vis-a-vis any such changes. Further, past performance is no guarantee of future potential or opportunities.
The Fund will not invest directly in real property of any kind. The Fund will neither borrow nor lend long term against securities held. However, the Fund may borrow money from authorized financial institutions for temporary purposes including, but not exclusive to,:(i) borrowing in order to meet redemption requests; and (ii) borrowing in order to fulfill plans to purchase additional securities pending the sale of other portfolio securities or assets in the near future. The Fund Manager may not utilize the assets of the Fund or any interest in the Fund as collateral for borrowing purposes.
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