Net
realized foreign currency gains and losses resulting from changes in exchange
rates associated with (i) foreign currency, (ii) investments and (iii)
derivatives
include foreign currency gains and losses between trade date and settlement date
of the transactions, foreign currency transactions, and
the
difference between the amounts of interest and dividends recorded on the books
of the Funds and the amounts actually received are recognized
as
a component of “Net realized gain (loss) from foreign currency transactions” on
the Statement of Operations, when applicable.
The
unrealized gains and losses resulting from changes in foreign currency exchange
rates and changes in foreign exchange rates associated with
(i)
investments and (ii) other assets and liabilities are recognized as a component
of “Change in unrealized appreciation (depreciation) on foreign
currency
translations” on the Statement of Operations, when applicable. The unrealized
gains and losses resulting from changes in foreign exchange
rates
associated with investments in derivatives are recognized as a component of the
respective derivative’s related “Change in unrealized
appreciation
(depreciation)” on the Statement of Operations, when applicable.
Foreign
Taxes:
The
Funds may be subject to foreign taxes on income, gains on investments or foreign
currency repatriation, a portion of which may
be
recoverable. The Funds will accrue such taxes and recoveries as applicable,
based upon the current interpretation of tax rules and regulations that
exist
in the markets in which the Funds invest.
Indemnifications:
Under
the Trust’s organizational documents, its officers and trustees are indemnified
against certain liabilities arising out of
the
performance of their duties to the Trust. In addition, in the normal course of
business, the Trust enters into contracts that provide general
indemnifications
to other parties. The Trust’s maximum exposure under these arrangements is
unknown as this would involve future claims that may
be
made against the Trust that have not yet occurred. However, the Trust has not
had prior claims or losses pursuant to these contracts and expects
the
risk of loss to be remote.
Investments
and Investment Income:
Securities
transactions are accounted for as of the end of trade date for financial
reporting purposes. Realized
gains
and losses on securities transactions
are
based upon the specific identification method. Dividend income is recorded on
the ex-dividend
date.
Non-cash dividends received in the form of stock, if any, are recognized on the
ex-dividend date and recorded at fair value. Interest income is
recorded
on an accrual basis and includes accretion of discounts and amortization of
premiums for financial reporting purposes. Interest income also
reflects
payment-in-kind ("PIK") interest and paydown gains and losses, if any. PIK
interest represents income received in the form of securities in lieu
of
cash. Securities lending income is comprised of fees earned from borrowers and
income earned on cash collateral investments.
Segment
Reporting:
Each
Fund represents a single operating segment. The officers of the Funds act as the
chief operating decision maker
(“CODM”),
as defined in U.S. GAAP. The CODM monitors the operating results of each Fund as
a whole and is responsible for each Fund’s long-
term
strategic asset allocation in accordance with the terms of its prospectus, based
on a defined investment strategy which is executed by the
Fund’s
portfolio managers as a team. The financial information in the form of the
Fund’s portfolio composition, total returns, expense ratios and
changes
in net assets (i.e., changes in net assets resulting from operations,
subscriptions and redemptions), which are used by the CODM to assess
the
segment’s performance versus the Fund’s comparative benchmarks and to make
resource allocation decisions for the Fund’s single segment,
is
consistent with that presented within the Fund’s financial statements. Segment
assets are reflected on the Statement of Assets and Liabilities as
“total
assets” and significant segment revenues and expenses are listed on the
Statement of Operations.
New
Accounting Pronouncement (ASU No. 2025-11)
:
In December 2025, the FASB issued Accounting Standard Updated ("ASU") No.
2025-11,
Interim
Reporting (Topic 270) Narrow Scope Improvements (“ASU 2025-11”). The amendments
in ASU 2025-11 provide a comprehensive list of
interim
disclosures that are required by U.S. GAAP. ASU 2025-11 also includes a
disclosure principle that requires entities to disclose events since the
end
of the last annual reporting period that have a material impact on the entity.
The amendments in ASU 2025-11 are effective for interim reporting
periods
within annual reporting periods beginning after December 15, 2027. Early
adoption is permitted for all entities. Management is currently
evaluating
the implications of these changes on the financial statements.
3.
Investment Valuation and Fair Value Measurements
The
Funds’ investments in securities are recorded at their estimated fair value
utilizing valuation methods approved by the Adviser, subject to
oversight
of the Board. Fair value is defined as the price that would be received
upon selling an investment or transferring a liability in an orderly
transaction
to an independent buyer in the principal or most advantageous market for the
investment. U.S. GAAP establishes the three-tier hierarchy
which
is used to maximize the use of observable market data and minimize the use of
unobservable inputs and to establish classification of fair value
measurements
for disclosure purposes. Observable inputs reflect the assumptions market
participants would use in pricing the asset or liability.
Observable
inputs are based on market data obtained from sources independent of the
reporting entity. Unobservable inputs reflect management’s
assumptions
about the assumptions market participants would use in pricing the asset or
liability. Unobservable inputs are based on the best
information
available in the circumstances. The following is a summary of the three-tiered
hierarchy of valuation input levels.
Level
1 – Inputs are unadjusted and prices are determined using quoted prices in
active markets for identical securities.
Level
2 – Prices are determined using other significant observable inputs (including
quoted prices for similar securities, interest rates, credit
spreads,
etc.).
Level
3 – Prices are determined using significant unobservable inputs (including
management’s assumptions in determining the fair value of
investments).
A
description of the valuation techniques applied to the Funds’ major
classifications of assets and liabilities measured at fair value follows:
Equity
securities and exchange-traded funds listed or traded on a national market or
exchange are valued based on their last reported sales price or
official
closing price of such market or exchange on the valuation date. Foreign equity
securities and registered investment companies that trade on
a
foreign exchange are valued at the last reported sales price or official closing
price on the principal exchange where traded, and converted to U.S.
