Corporate bond holdings will be analyzed and approved by the Fund’s Adviser.
The Adviser will seek to purchase debt that it believes is unlikely to be subject to material price decline due to real or perceived deterioration in credit quality.
The Fund seeks to invest primarily in companies with:
• Durable business models that produce stable cash flows under a variety of economic scenarios.
• Balance sheets characterized by appropriate leverage and assets that can be monetized.
• Management that takes a long-term, balanced view of protecting their company’s access to all capital markets.
• Securities that are attractively priced relative to instruments of comparable quality.

Asset-backed securities

• The Fund will invest in asset-backed securities (“ABS”), for which the Adviser is able to analyze the fundamental value and performance of the financial assets (typically loans) underlying the security. The Adviser will consider:
• the trends and timing of defaults and recoveries;
• the contractual terms of issue; and
• the financial strength of the sponsor.
• The Adviser will seek to buy issues where the sponsor has a meaningful interest in the health of the securitization and continued access to the ABS markets, and could incur a financial loss along with the bond holders if the underlying assets are of poor quality.
• The Fund seeks to purchase ABS with relatively predictable average lives and avoid those presenting excessive risk of maturity extension.
• The Adviser seeks ABS with a margin of safety, such that the underlying assets of securities purchased will be able to withstand a multiple of our loss estimates without impairing the value of the bond.