Investing in Market Opportunities
The Market Opportunities Fund seeks to achieve its investment objective by investing all of its investable assets in the Portfolio. Under normal circumstances, the Market Opportunities Portfolio invests at least 65% of its net assets in common stocks, convertible securities, warrants and other equity securities having the characteristics of common stocks (such as American Depositary Receipts (“ADRs”)) of U.S. and foreign companies involved in capital markets or related to capital markets, as well as companies involved in the gaming industry. Capital markets includes companies that are engaged in or derive a substantial portion of their revenue from activities with a publicly traded securities exchange, such as equity exchanges and commodity exchanges, including but not limited to clearing firms and brokerage houses. The Market Opportunities Portfolio may also write and sell options on securities in which it invests for hedging purposes and/or direct investment.
The Market Opportunities Portfolio may invest in convertible and non-convertible debt securities, including debt securities that are rated below investment grade, also known as junk bonds, or unrated securities which the Investment Adviser has determined to be of comparable quality. No more than 20% of the Market Opportunities Portfolio’s total assets may be invested in such non-investment grade debt securities.
The Market Opportunities Portfolio securities will be selected by the Investment Adviser from companies that are engaged in public exchanges, as well as derivative exchanges and companies that derive at least twenty percent (20%) of their revenue from such exchanges or from the gaming industry. These companies may be large, medium or small in size if, in the Investment Adviser’s opinion, these companies meet the Market Opportunities Portfolio’s investment criteria. Such companies include, but are not limited to, the following:
Exchanges: Companies that are organized as public exchanges where debt and equity securities are traded, including derivative exchanges.
Financial Services: Companies that engage in financial service transactions relating to capital markets such as banking, credit cards and investment services.
Business Services: Companies that provide business-to-business products and services involving capital markets or the gaming industry.
Gaming: Companies engaged in casino entertainment, including casino resorts and other leisure activities.
Although the Market Opportunities Portfolio intends to focus its investments in the capital markets and gaming sectors, the Market Opportunities Portfolio may also purchase the securities of companies such as auction houses and payroll and other processing companies, that, due to the fixed costs of their operations, benefit from an increase in the volume of sales/transactions.
The Investment Adviser selects portfolio securities by evaluating a company’s balance sheets, corporate revenues, earnings and dividends.
The Market Opportunities Portfolio may invest up to 35% of its assets in high quality, U.S. short-term debt securities and money market instruments to maintain liquidity. Some of these short-term instruments include commercial paper, certificates of deposit, demand and time deposits and banker’s acceptances, U.S. government securities (i.e. U.S. Treasury Obligations) and repurchase agreements.
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