Investment Strategy - Pender Balanced Fund

The Pender Balanced Fund is consistent with Pender's overarching objectives of capital preservation, income and low volatility relative to comparable funds.

The strategy of the fund is to invest in a concentrated portfolio of equity and fixed income holdings that are evaluated as businesses. The asset allocation between equity and fixed income will adjust between 60-40% and 40-60%, depending on market conditions. A portion of the fixed income allocation will be invested into the Pender Corporate Bond Fund.

To be a candidate investment on the equity side, a company must generate a true investment return through cash flow and dividends and have management’s interests aligned with it’s shareholders. These rigorous standards along with an unwillingness to overpay for a company are intended to produce long term performance and portfolios that stand the test of time.

To be a candidate investment on the fixed income side, an issuer must be a company that the fixed income manager can understand and that generates or has the potential to generate significant free cash flow. An emphasis is placed on fundamental analysis rather than reliance on ratings agencies.