Beech Hill Advisors, Inc. (the “Adviser”) seeks to achieve the Fund’s investment objective by investing primarily in:

·         equity securities

·         fixed income securities, and

·         cash equivalents

selected using the Adviser’s asset allocation strategy. The Fund defines equity securities as common stock and convertible preferred stock of US companies as well as American Depositary Receipts (“ADRs”) representing common stock and convertible preferred stock of foreign issuers. ADRs are receipts issued by an American bank or trust company evidencing ownership of underlying securities issued by a foreign issuer. The Fund defines fixed income securities as notes, bonds, non-convertible preferred shares and other evidences of indebtedness. The Fund will invest only in US Dollar denominated securities. However, it invests without restriction to issuer capitalization or country. Nonetheless, the Adviser anticipates that the Fund’s equity investments will be predominantly in securities of large capitalization issuers (those with market capitalizations over $10 billion).

Individual fixed income securities are purchased without restriction as to maturity. The Fund restricts fixed income securities to those rated BB- or higher by Standard and Poor’s Ratings Group (“S&P”) or equivalently rated by another nationally recognized statistical rating organization (“NRSRO”) or, if unrated, determined by the Adviser to be of similar quality. The Fund may also employ leverage including bank borrowing of up to 33% of the Fund’s assets (defined as net assets plus borrowing for investment purposes).

The Fund seeks income from both dividends paid by equity securities and interest payments from fixed income securities. It seeks capital appreciation from equity and fixed income securities. The Adviser will also seek to preserve principal when it believes equity market conditions are unfavorable by increasing allocations to fixed income securities and cash equivalents.

The Adviser buys and sells securities to meet its asset allocation targets. Additionally, it sells specific securities when a price target is achieved, the investment is no longer considered undervalued, or an issuer’s fundamental financial outlook has deteriorated.