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The Fund pursues its investment objectives by investing primarily in a global portfolio of investment grade fixed income securities. The Fund will normally invest at least 65% of its net assets in investment grade fixed income securities which are rated, at the time of purchase, BBB or better by Standard & Poor's Ratings Group ("S&P"), Baa or better by Moody's Investors Service, Inc. ("Moody's") or, if unrated, are determined by the Investment Manager to be of comparable quality. The Fund may also invest up to 35% of its assets in fixed income securities rated BB, B, or CCC by S&P or Ba, B, or Caa by Moody's or, if unrated, securities determined by the Investment Manager to be of comparable quality and may invest in other securities (including common stocks, warrants, options and securities convertible into common stock), when such investments are consistent with its investment objectives or are acquired as part of a unit consisting of a combination of fixed income securities and other securities.
The Fund may also pursue its investment objectives by investing in shares of closed end management investment companies ("Portfolio Funds") selected by CEF Advisers, Inc. (the "Investment Manager") that invest significantly in income producing securities. This strategy will be limited by provisions of the Investment Company Act of 1940, as amended (the "Act"), that limit the amount the Fund can invest in any one Portfolio Fund to 3% of the Portfolio Fund's total outstanding stock. As a result, the Fund may hold a smaller position in a Portfolio Fund than if it were not subject to this restriction. To comply with provisions of the Act, on any matter upon which Portfolio Fund stockholders are solicited to vote, the Investment Manager will vote Portfolio Fund shares in the same general proportion as shares held by other stockholders of the Portfolio Fund. The Fund will not invest in any closed end funds managed by the Investment Manager. Under this strategy, the Fund may own shares of open end management investment companies ("open end funds") as a result of a Portfolio Fund's conversion from a closed end fund or for short term liquidity. The Fund will not own open end funds as a strategic investment over the long term, and the Investment Manager will generally redeem its investment in open end funds within a time period deemed reasonable by the Investment Manager taking into account the circumstances surrounding each such fund (excepting investments in short term liquidity funds).
The Fund will normally invest in at least three different countries, but may invest in fixed income securities of only one country for temporary defensive purposes. The Fund may use leverage from time to time to purchase or carry securities. Such leverage is speculative and increases both investment opportunity and investment risk.
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