Investment Approach

The equity securities within the portfolio will consist primarily of dividend-paying common stocks that the portfolio manager believes are undervalued. The portfolio may also include preferred stock, real estate investment trusts, closed-end funds, exchange traded funds and foreign securities. Portfolio management and security selection encompasses both fundamental and technical analysis. Research is also focused on broader macroeconomic risks, including credit and interest rate risks.

Investment Objective

The strategy 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 Equity Income Strategy is suitable for income oriented investors, who also seek appreciation, but are uncomfortable with substantial stock or bond market risks.

Risk Management

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 security risk is also managed by PVG. While PVG extensively researches all securities included in Equity Income portfolios, changing fundamental and market conditions, periodically requires the sale and replacement of portfolio securities. Others are sold if they rise to excessive valuations.

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