Objectives

The Trust’s primary objective is the production of income. Capital appreciation is also an objective of the Trust, but its achievement must be compatible with the primary objective.

Principal Strategies

The Trustees invest primarily in marketable securities of established companies which the Trustees believe provide reasonable income and which, where consistent with this objective, may have potential for capital appreciation. This would include bonds which may be purchased at a discount or premium, preferred stocks, common stocks, securities convertible into common stocks and securities with warrants attached. Subject to its investment restrictions, the proportion of the Trust’s assets invested in each type of security will vary from time to time depending on market and economic conditions. The Trust emphasizes fixed income securities and generally more than 80% of its assets are held in bonds or other debt securities. The Trust does not impose any particular rating standards or maturity guidelines which must be applied in making investment decisions.

The Trust’s portfolio emphasizes high yield corporate bonds (sometimes referred to as “junk bonds”) which are rated as lower than investment grade by either of the two principal rating services or unrated securities having similar characteristics. High-yield fixed income securities are typically issued with maturities of less than ten years; and the Trust’s holdings are generally within this range. The Trustees have usually relied upon their own credit analysis in making decisions concerning the Trust’s portfolio. For equity investments the Trustees consider their potential for appreciation based upon growth and value analysis.

Management

The Trust is managed by its Trustees. The Trustee principally responsible for the day-to-day management of the Trust’s portfolio is Bruce H. Monrad.  Bruce H. Monrad has been associated with the Trust since July, 1989 as co-portfolio manager, was appointed Trustee in May, 1993 and Chairman in May, 2000.  Chapin P. Mechem has been associated with the Trust since 2001 as a securities analyst and now shares portfolio management duties with Mr. Monrad.