Notes On Principal Investment Strategies

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Summary of Principal Investment Strategies The mutual fund is seeking to attain its objective by investing in a mix of stocks, bonds, and financial derivatives to hopefully maintain decently stable money inflows with securable low risks. The fund might not invest more than 20% in derivatives as a major tool to secure profits, as the rest of its assets in bonds and stocks with a 3-to-1 ratio to hedge away the risks. The fixed income securities the Fund invests in will generally have a maturity range from 1 year to 30 years. The fund may invest in fixed income securities of any credit quality, but primarily invests in securities with AA/A bonds to avoid the potential of the default risk. The total amount invested in securities that are…show more content…
You may lose money on your investment because the risk that the bond’s issuer will be unable to pay the contractual interest or principal payments on the bond Interest Risk. The most well-known risk in the bond market is interest rate risk, which the market value of bonds will go down as the interest rate go up. If you need to sell a bond before its maturity date, you wil lose money if interest rates are higher when you sell the bond, than they were when you bought it. Inflation Risk. The bondholder will lose money on the investment due to the diminsihing of the purchasing power of the proceeds. The rate of price increases in the economy deteriorates the returns associated with the bond, which has the greatest effect on fixed bonds. Market Risk. Also known as systematic risk, this is a potential for the entire market to decline. A fall in prices of stocks or periods of below-average performance in the stock market or due to specific conditions that effect particular industries or issues will result losing money on your investment. Company/Industry-Specific Risk. The risk is inherent in each investment, however, can be reduced through diversification. The Fund’s focus on the specific sompany or industry to the exclusion of other sectors exposes the Fund to greater market risk and potential monetary losses than if the Fund’s assets were diversified among various types of stocks by owning stocks in different companies and in different
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