Appendix 22A
Objectives and Policies of
an International Mutual
Fund
By
Cheng Few Lee
Joseph Finnerty
John Lee
Alice C Lee
Donald Wort
APPENDIX 22A: OBJECTIVES AND POLICIES OF AN
INTERNATIONAL MUTUAL FUND
The investment objective of the Fund is to seek obtain total return on
its assets primarily through long-term capital growth and to a lesser
extent from income…. The Fund will seek to achieve such objective
through investment in all types of common stocks and equivalents,
preferred stocks and bonds, and other debt obligations of domestic
and foreign companies and governments and international
organizations. There is no limitation on the percent or amount of the
Fund’s assets which may be invested for growth or income.[1]
The percentage of the Fund’s assets invested in particular
geographic sectors will shift from time to time in accordance with the
judgment of the Investment Advisers….
[1] Reproduced by courtesy of Dean Witter Worldwide Investment
Trust Fund.
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APPENDIX 22A: OBJECTIVES AND POLICIES OF AN
INTERNATIONAL MUTUAL FUND
Notwithstanding the Fund’s investment objective of seeking
total return, the fund may, for defensive purposes, with
limitation, invest in: obligations of the United States
Government, its agencies or instrumentalities, cash and cash
equivalents in major currencies, repurchase agreements, money
market instruments, and high quality commercial paper.
The Fund may also invest in securities of foreign issuers in the
form of American Depository Receipts, European Depository
Receipts or similar securities convertible into securities of
foreign issuers….
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APPENDIX 22A: OBJECTIVES AND POLICIES OF AN
INTERNATIONAL MUTUAL FUND
The Fund may enter into forward foreign currency exchange
contracts as a hedge against fluctuations in future foreign
exchange rates.
Since investments in foreign companies will usually involve
currencies of foreign countries, and since the Fund may
temporarily hold funds in bank deposits in foreign currencies
during the course of investment programs, the value of the
assets of the Fund as measured in United States dollars may be
affected by changes in foreign currency exchange rates,
exchange control regulations, and the Fund may incur costs in
connection with conversion between various currencies.
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APPENDIX 22A: OBJECTIVES AND POLICIES OF AN
INTERNATIONAL MUTUAL FUND
When management of the Fund believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, it may enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of some or
all of the Fund’s portfolio securities denominated in such foreign currency.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible since the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward
contract is entered into and the date it matures.
In making the allocation of assets among the various markets, the
Investment Advisers will consider such factors as recent developments in the
various countries, the condition and growth potential of various economies
and securities markets, currency and tax considerations and other pertinent
financial social, national and political factors . . .
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APPENDIX 22A: OBJECTIVES AND POLICIES OF AN
INTERNATIONAL MUTUAL FUND
There may be the possibility of expropriations or confiscatory
taxation, political, economic or social instability or diplomatic
developments which could affect assets of the Fund held in foreign
countries.
There may be less publicly available information about foreign
companies comparable to reports and ratings published about United
States companies. Foreign stock markets have substantially less
volume that the New York Stock Exchange and securities of some
foreign companies are less liquid and more volatile than securities of
comparable United States companies. Brokerage commissions and
other transactions costs on foreign securities exchanges are generally
higher than in the United States.
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