Does the Funds hedging strategy impact the amount of the dividends?
The hedging strategy employed by the Fund is designed to do two things: • Protect the Fund’s net asset value from significant increases in long-term U.S. Treasury rates which occur over a short period of time; and, • Enable the Fund’s dividend rate to increase if long-term U.S. Treasury rates increase significantly over a short period of time. The mechanism is pretty straightforward – if long-terms rates rise significantly, the hedging instruments used by the Fund should under normal market conditions increase in value. This increase offsets some of the decline in the value of the Fund’s investment portfolio (protecting the Fund’s NAV) and produces gains which can be used by the Fund to purchase additional income-producing securities. Please note that on a temporary or extended basis, the Adviser may determine that hedging Fund holdings is not likely to produce these results. If it does, the Adviser may not utilize any hedging strategy for the Fund or may limit hedging to a large exten
