Resolution 5170 - Laserfiche WebLink

Home Browse Search

Yield infonnation may be useful in reviewing the performance of each Fund and for providing a basis for comparison with other investment alternatives. However. each Fund's yield will fluctuate. .~nlike cenificates of deposit or other investments which typically pay a fixed yield for a stated period of tlme. DETElt.\1INATION OF NET ASSET VALUE The net asset value per share of each Fund for the purpose of calculating the price at which each Fund's shares are issued and redeemed is detennined by the Administrator as of the dose of business on each Minnesota banking day. Such detennination is made by subtracting from the value of the assets of the applicable Fund the amount of the Fund's liabilities and dividing the remainder by the number of outstanding shares of the Fund. The value of each Fund's investments are detennined using the amortized cost method. The amortized cost method of valuation involves valuing an investment instrument at its cost at the time of purchase and thereafter assuming a constant amortization to maturity of any discount or premium. regardless of the impact of fluctuating interest rates on the market value of the instrument. While this method provides certainty in valuation. it may result in periods during which value. as detennined by amortized cost. is higher or lower than the price the applicable Fund would receive if it sold the instrument. During such periods. the yield to Participants may differ somewhat from that which would be obtained if the applicable Fund used the market value method for all its portfolio investments. For example. if the use of amortized cost resulted in a lower (higher) aggregate portfolio value on a particular day, a prospective Participant would be able to obtain a somewhat higher (lower) yield than would result _if the applicable Fund used the market value method. and existing Participants would receive less (more) .vestment income. The purpose of this method of calculation is to attempt to maintain a constant net set value per share of $1.00. The Board of Trustees has adopted procedures with respect to each Fund's use of the amortized cost method to value its portfolio. These procedures are designed and intended (taking into account market conditions and each Fund's investment objectives) to stabilize net asset value per share as computed for the purpose of investment and redemption at $1.00 per share. The procedures indude a periodic review by the Board of Trustees. in such manner as they deem appropriate and at such intervals as are reasonable in light of current market conditions. of the relationship between net asset value per share based upon the amortized cost value of each Fund's investments and the net asset value per share based upon available indications of market value with respect to such portfolio investments. The Board of Trustees will consider steps. if any, that should be taken in the event of a difference of more than 1/2 of 1 % between the two methods of valuation. The Board of Trustees will take such steps as they consider appropriate (such as shortening the average portfolio maturity or realizing gains or losses) to minimize any material dilution or other unfair results which might arise from differences between the two methods of valuation. The Trust has adopted policies on behalf of each Fund to (1) maintain a dollar weighted average portfolio maturity (which will not be more than ninety days) appropriate to the objective of maintaining a stable net asset value of $1.00 per share, and (2) not purchase any instrument with a remaining maturity of more than one year (unless such investment is subject at the time of its purchase to an irrevocable agreement on the part of a responsible person to purchase such investment from the applicable Fund .hin one year). Should the disposition of a portfolio investment result in a dollar weighted average -10-