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9 <br />CASH EQUIVALENTS <br /> <br />Cash equivalents shall be held in funds complying with Rule 2(a)-7 of the Investment Company Act of <br />1940. <br /> <br />Portfolio Risk Hedging <br /> <br />Portfolio investments designed to hedge various risks including volatility risk, interest rate risk, etc. are <br />allowed to the extent that the investments are not used for the sole purpose of leveraging Trust assets. <br />One example of a hedge vehicle is an exchange traded fund (“ETF”) which takes short positions. <br /> <br />Prohibited Investments <br /> <br />Except for purchase within authorized investments, securities having the following characteristics are <br />not authorized and shall not be purchased: letter stock and other unregistered securities, direct <br />commodities or commodity contracts, or private placements (with the exception of Rule 144A <br />securities). Further, derivatives, options, or futures for the sole purpose of direct portfolio leveraging <br />are prohibited. Direct/physical ownership of real estate, natural resource properties such as oil, gas or <br />timber and the purchase of collectibles is also prohibited. <br /> <br /> <br /> <br />Safekeeping <br /> <br />All assets of the Trust shall be held by a custodian approved by the Administrator for safekeeping of <br />Trust assets. The custodian shall produce statements on a monthly basis, listing the name and value of <br />all assets held, and the dates and nature of all transactions in accordance with the terms in the Trust <br />Agreement. Investments of the Trust not held as liquidity or investment reserves shall, at all times, be <br />invested in interest-bearing accounts. Investments and portfolio securities may not be loaned. <br /> <br /> <br /> <br /> <br />Control Procedures <br /> <br />Review of Investment Objectives <br /> <br />The Advisor shall review annually and report to the Administrator the appropriateness of this Policy <br />Statement for achieving the Trust’s stated objectives. It is not expected that this Policy Statement will <br />change frequently. In particular, short-term changes in the financial markets should not require an <br />adjustment in this Policy Statement. <br /> <br />Review of Investment Performance <br /> <br />The Advisor shall report on a quarterly basis to the Administrator to review the investment performance <br />of the Trust. In addition, the Advisor will be responsible for keeping the Administrator advised of any