The issues within the portfolio will consist primarily of BBB/C or higher credit rating that the portfolio
manager believes are undervalued.
Portfolio management and issue selection encompasses both fundamental and technical analysis and employs
internal and external intelligence in the execution of the approach. Research is also focused on broader
macroeconomic risks, including credit and interest rate risks.
The fund seeks high current income, competitive total return, as well as protection from turbulent financial
markets. By combining security selection and risk management, PVG believes it can generate annual
distributable income of 4% to 6% as well as capital appreciation over time.
The US Corporate Flexible Bond Strategy is suitable for income oriented investors, who also seek
appreciation, but are uncomfortable with substantial bond market risks.
PVG reduces undiversifiable market volatility and risk by hedging portfolios with inverse market index
securities, stop losses and cash positions. Hedging tactics are utilized to reduce overall volatility of the
portfolio, and may also result in minimizing losses that may occur in an unfavorable cyclical or secular
market.
Individual bond risk is also managed by PVG. While PVG extensively researches all issues included in the US
Corporate Flexible Bond Strategy, changing fundamental and market conditions, periodically requires the sale
and replacement of portfolio securities. Others are sold if they rise to excessive valuations.