Wyoming Cultural Resource Trust Fund Investment Review and Management Outline

MAY 22, 2017

MARK GORDON AND PATRICK FLEMING

TREASURER

The general outline of the presentation is to: • Introduce Pool A,

• Explain Differences between Pool A and the State

Agency Pool,

• Present asset allocation and new asset classes,

• Explain how we will administer the fund

• Answer your Questions

• Up until the 2017 Legislative Session every agency budget and most non-permanent funds of the State were grouped together in the State Agency Pool which was precluded from owning anything other than fixed income investments like bonds.

• In the fall of 2018, Wyoming voters approved Constitutional Amendment A giving the Legislature the authority to designate non-permanent accounts that could invest in equities too.

• In the 2017 Legislative Session, the Wyoming Legislature pooled 5 funds into “Pool A.” Those accounts are: • The Tobacco Settlement Trust • The Wyoming Wildlife and Natural Resource Trust • The Wyoming Cultural Resource Trust • The Wyoming Public Broadcasting Matching Funds Endowment Account • And The Game and Fish Trust

The State Agency Pool

State Agency Pool

Purpose:

5

This fund dispenses income and capital gains. Pooling of money from many different agencies which are not specifically invested for that agency.

Fund Horizon: Non-Permanent Fund

Return Objective: Current: CPI + 2% Potential: CPI + 1%

Primary Investment Goal: Safety of capital, yield and liquidity.

Spending Policy: Income is distributed back to a specific state agency or to the state general fund.

Liquidity Requirements: Liquidity must be maintained to move money between asset classes and to meet cash needs as determined by the State Treasurer’s Office.

Investment Constraints: Cannot invest in “common stocks”. “Common stocks” is currently interpreted to include all public equity and alternative investments.

Source: Wyoming State Loan and Investment Board Master Investment Policy and Sub-Policies (June 2016) and Wyoming State Treasurer’s Annual Report FY 2016.

Strengths and Challenges for the State Agency pool: • The SAP can only invest in fixed income assets

• Normally considered “safe.” • However, when interest rates rise the market value of these assets falls (more

likely scenario today)with interest rates at current low levels. • Having to sell an asset at market value below costs realizes losses • Fixed income investments are not riskless • Inflation erodes the purchasing power of investments over time and currently

inflation is higher than most bond yields. Generally the higher the yield the higher the risk.

• The SAP pools agency budget appropriations, savings accounts, and other accounts

together • Gains when they occur are prorated across all participants in the SAP • Losses when they occur are prorated across all participants in the SAP • Thus, when loans are made from component funds participating in the SAP that

do not charge an interest rate of at least the inflation rate, every participant in the SAP subsidizes that loan through the opportunity cost or forgone return.

Potential Asset Allocation Changes: State Agency Pool

Efficient Frontier

1 2

3 4

5 6

7 8

9 10

SAP Target

P otential LT Target S

AP Interim Alloc.

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

2.50 3.00 3.50 5.00 5.50 6.00

Ret

urn

(Ann

ualiz

ed, %

)

4.00 4.50 Risk (Annualized Standard Deviation, %)

Lower expected return, lower risk

Allocation range will provide flexibility to adjust

7

risk profile when ts become relatively

the marke

expensive or cheap.

Potential Asset Allocation Changes: State Agency Pool

SAP Target

SAP Interim Alloc.

Difference Potential LT Target

Difference

Total Fixed Income & Cash 100.0 100.0 -- 100.0 -- Convertibles 3.0 3.0 -- 5.0 +2.0 Int. Duration Fixed Income 65.4 29.1 -36.3 10.0 -55.4 Internal Fixed Income 3.6 37.1 +33.5 20.0 +16.4 Low Duration Fixed Income 0.0 0.0 -- 30.0 +30.0 High Yield Fixed Income 1.8 4.0 +2.2 0.0 -1.8 Bank Loans 5.5 12.0 +6.5 15.0 +9.5 EMD (Local) 4.6 3.0 -1.6 5.0 +0.4 TIPS 7.2 2.1 -5.1 5.0 -2.2 Cash Equivalents 9.0 9.8 +0.8 10.0 +1.0 Total 100.0 100.0 -- 100.0 --

Allocations may not sum exactly to totals due to rounding. The current credit fixed income portfolio is split out into its underlying components.

Key Observations: • The Potential LT Target portfolio replaces

some of the exposure to intermediate duration fixed income with low duration fixed income and internally managed fixed income.

• Exposure to inflationary assets increases, while exposure to capital preservation thematic allocation declines.

Thematic Allocation (%)

9

8

78

13 10

76

14 10

70

20

90 80 70 60 50 40 30 20 10 0

Capital Appreciation Capital Preservation Inflation

Potential Asset Allocation Changes: State Agency Pool The Potential LT Target portfolio significantly reduces downside and interest rate risk, while earning a similar yield.

SAP Target

SAP Interi

m Alloc.

Difference Potentia

l LT Target

Difference

Expected Return (%) 3.74 3.67 -0.07 3.53 -0.21 Risk (Standard Deviation, %) 5.09 4.55 -0.54 3.92 -1.17 Return (Compound, %) 3.62 3.57 -0.05 3.46 -0.16 Return/Risk Ratio 0.73 0.81 +0.08 0.90 +0.17 RVK Liquidity Metric 83 80 -3 80 -3 Estimated Duration (Int. Rate Risk) 4.94 3.73 -1.21 2.72 -2.22 Estimated Yield (%) 2.82 2.92 +0.10 2.66 -0.16 Portfolio Stress Testing (Monte Carlo Results) 1 Year Max Drawdown (2008-Like Event)

-$579 M (-10.39%)

-$543 M (-9.74%)

+$36 M (+0.65%)

-$463 M (-8.30%)

+$116 M (+2.09%)

Median 1 Year Return +$230 M (+4.12%)

+$226 M (+4.06%)

-$4 M (-0.06%)

+$215 M (+3.85%)

-$15 M (-0.27%)

Probability of Achieving Various Real Return Targets 1.00% Real Return Over 10 Years 58% 56% -2% 52% -6% 1.50% Real Return Over 10 Years 45% 42% -3% 38% -7% 2.00% Real Return Over 10 Years 32% 30% -2% 24% -8%

Differences may not sum exactly due to rounding. Expected returns do not assume active manager alpha. Estimated yields are a weighted average of the underlying asset class benchmarks as of 12/31/16. 1 Year Max Drawdown reflects the 1st percentile results. Dollar amounts are based an initial portfolio value of $5,736 M.

15

Efficient Frontier: State Agency Pool

10

Min

Max

1

2

3

4

5

6

7

8

9

10

SAP Target

SAP Interim Alloc.

Potential LT Target

Convertibles 0 5 0 2 5 5 5 5 5 5 5 5 3.0 3.0 5.0 Int. Duration Fixed Income 0 100 0 0 0 0 3 17 27 35 31 38 65.4 29.1 10.0 High Yield Fixed Income 0 10 0 0 0 0 0 0 2 3 8 10 1.8 4.0 0.0 Bank Loans 0 15 12 15 15 15 15 15 15 15 15 15 5.5 12.0 15.0 Emerging Markets Debt (Local) 0 5 0 0 0 2 5 5 5 5 5 5 4.6 3.0 5.0 TIPS 0 7 0 0 4 7 7 7 7 7 7 7 7.2 2.1 5.0 Custom Internal Fixed Income 20 60 20 20 20 20 20 20 20 20 20 20 3.6 37.1 20.0 Low Duration Fixed Income 0 60 58 53 46 41 35 21 10 0 0 0 0.0 0.0 30.0 Cash Equivalents 0 10 10 10 10 10 10 10 10 10 9 0 9.0 9.8 10.0 Total 100 100 100 100 100 100 100 100 100 100 100.0 100.0 100.0

Total Fixed Income & Cash 100 100 100 100 100 100 100 100 100 100 100 100 100 Capital Appreciation 0 2 5 7 10 10 12 13 18 20 9 10 10 Capital Preservation 88 83 76 71 68 68 66 65 60 58 78 76 70 Alpha 0 0 0 0 0 0 0 0 0 0 0 0 0 Inflation 12 15 19 22 22 22 22 22 22 22 13 14 20

Expected Return 2.90 3.05 3.19 3.34 3.48 3.63 3.77 3.92 4.06 4.21 3.74 3.67 3.53 Risk (Standard Deviation) 3.24 3.28 3.41 3.59 3.81 4.11 4.44 4.78 5.19 5.64 5.09 4.55 3.92

Return (Compound) 2.85 3.00 3.13 3.28 3.41 3.55 3.68 3.81 3.93 4.06 3.62 3.57 3.46 Return/Risk Ratio 0.90 0.93 0.94 0.93 0.91 0.88 0.85 0.82 0.78 0.75 0.73 0.81 0.90 RVK Expected Eq Beta (LCUS Eq = 1) 0.06 0.07 0.09 0.10 0.11 0.11 0.12 0.14 0.16 0.17 0.10 0.11 0.11 RVK Liquidity Metric (T-Bills = 100) 82 81 81 81 80 80 79 79 77 75 83 80 80

Estimated Yield (%) 2.31 2.40 2.34 2.40 2.58 2.70 2.89 2.98 3.18 3.47 2.82 2.92 2.66 Estimated Duration of Fixed Income & Cash 1.91 1.86 2.10 2.34 2.56 3.11 3.57 3.89 3.86 4.34 4.94 3.73 2.72

State Agency Pool

Min Long-Term Target Max

Convertibles 2.50 5.00 7.50

Int. Duration Fixed Income 5.00 10.00 15.00

Internal Fixed Income 10.00 20.00 30.00

Low Duration Fixed Income 15.00 30.00 45.00

Bank Loans 7.50 15.00 22.50

Emerging Markets Debt (Local) 2.50 5.00 7.50

TIPS 2.50 5.00 7.50

Cash Equivalents 5.00 10.00 15.00

2017 Asset Allocation

• Protection against duration risk • Improved return in unknown market • Maintain liquidity

Pool A

Pool A Investment Account (Formerly the Tobacco Settlement Fund)

Purpose:

13

This fund dispenses income and capital gains.

Fund Horizon: Non-Permanent Fund

Return Objective: Current: CPI + 2.25% Potential: CPI + 2.25%

Primary Investment Goal: Safety of capital, yield and liquidity.

Spending Policy: Earnings go toward health improvement programs.

Liquidity Requirements: Liquidity must be maintained to move money between asset classes and to meet cash needs as determined by the State Treasurer’s Office.

Investment Constraints: Per the recent amendment to Wyoming Constitution Article 16 Section 6, can now invest in “common stocks”. “Common stocks” is currently interpreted to include all public equity and alternative investments.

Source: Wyoming State Loan and Investment Board Master Investment Policy and Sub-Policies (June 2016) and Wyoming State Treasurer’s Annual Report FY 2016.

Strengths and Challenges for Pool A: • Pool A can only invest broadly:

• Should see better returns over time owing to ability to own equity • But equity exposure can also increase exposure to market losses beyond just

that of fixed income. • Having to sell assets at market value below costs realizes losses • Participants in Pool A are not immune from capital losses though diversification

will help mitigate against the focused exposure to only one asset type. • A diversified portfolio will stand up to inflation much better.

• Similar to the SAP, Pool A participants

• Share gains and losses when they occur are prorated across all participants in Pool A

• Participants in Pool A do not enjoy a dedicated source of income other than investment income

• Thus, if the corpus is not managed conservatively to minimize the potential for loss, the component funds could lose potential to earn income and program funding. Reaching too far for return then could incur excessive risk.

1

2

3

4

5

6

7

8

9

10

Curren t Target

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00

Ret

urn

(Ann

ualiz

ed, %

)

Potential Asset Allocation Changes: Pool A Investment Account

Efficient Frontier

Potential LT Target

Higher expected return, higher risk

Risk (Annualized Standard Deviation, %)

Group Constraints: (i) Broad US Equity must be at least three-fourths (3/4) of total US equity. (ii) Total US equity must be at least one-half (1/2) of total

Alloc flexibilit

public equity.

15

ation range y to adjust t

will provide he risk prof

ile ely when markets become relativ

expensive or cheap.

Potential Asset Allocation Changes: Pool A Investment Account

Current Target

Potential LT Target

Difference

Total Public Equity 0.0 18.0 +16.0 Broad US Equity -- 7.5 +7.5 Small Cap US Equity -- 1.0 +1.0 Broad Int’l Equity -- 7.5 +7.5 Preferred Stock -- 2.0 +2.0 Total Alternatives 0.0 5.0 +5.0 MLPs -- 5.0 +5.0 Total Fixed Income & Cash 100.0 77.0 -21.0 Convertibles 3.0 0.0 -3.0 Int. Duration Fixed Income 73.7 49.0 -24.7 High Yield Fixed Income 2.0 0.0 -2.0 Bank Loans 5.8 10.0 +4.2 EMD (Local) 4.9 5.0 +0.1 TIPS 7.7 8.0 +0.3 Cash Equivalents 3.0 5.0 +2.0 Total 100.0 100.0 --

Allocations may not sum exactly to totals due to rounding. Potential target allocation to global equity is assumed to be 50% Broad US Equity and 50% Broad Int’l Equity. The current credit fixed income portfolio is split out into its underlying components.

Thematic Allocation (%) (Potential LT Target = Darker Color)

Key Observations: • The Potential LT Target portfolio adds

exposure to public equity and alternatives, comprising 23% of the total portfolio.

• Exposures to inflationary and capital appreciation assets increase, while exposure to capital preservation declines.

10

16

77

0

14

23

54

0

23

90

80

70

60

50

40

30

20

10

0 Capital

Appreciation Capital

Preservation Alpha Inflation

Potential Asset Allocation Changes: Pool A Investment Account The Potential LT Target portfolio would increase the probability of achieving the current long-term expected return target to 51% over a 10 year period.

Dollar amounts are based on an initial portfolio value of $82.9 M.

Current Target

Potential LT Target

Difference

Expected Return (%) 3.86 4.80 +0.94 Risk (Standard Deviation, %) 5.43 6.31 +0.88 Return (Compound, %) 3.72 4.61 +0.89 Return/Risk Ratio 0.71 0.76 +0.05 Estimated Duration (Int. Rate Risk) (Fixed Income & Cash Only)

5.48 (100% of Total)

5.20 (77% of Total)

-0.28 (-23% of Total)

Estimated Yield (%) 3.24 3.55 +0.31 Portfolio Stress Testing (Monte Carlo Results) 1 Year Max Drawdown (2008-Like Event)

-$8.5 M (-10.22%)

-$10.6 M (-12.82%)

-$2.1 M (-2.60%)

Median 1 Year Return +$3.6 M (+4.31%)

+$4.4 M (+5.34%)

+$0.8 M (+1.03%)

Probability of Achieving Various Real Return Targets 2.0% Real Return Over 10 Years 35% 56% +21% 2.25% Real Return Over 10 Years 29% 51% +22% 2.5% Real Return Over 10 Years 24% 46% +22%

10 Years

Ret

urn

(%, A

nnua

lized

)

Range of Monte Carlo Stress Test Results 1st & 99th Percentiles = Darker Color 5th to 95th Percentiles = Lighter Color

Current Target 20.0

10.0

0.0

-10.0

-20.0

1 Year 3 Years 5 Years

Long-Term Return Expectation

1 Year 3 Years 5 Years 10 Years

Ret

urn

(%, A

nnua

lized

)

Potential LT Target 20.0

10.0

0.0

-10.0 -20.0

Long-Term Return Expectation

Differences may not sum exactly due to rounding. Expected returns do not assume active manager alpha. Estimated yields are a weighted average of the underlying asset class benchmarks as of 12/31/16. 1 Year Max Drawdown reflects the 1st percentile results.

49

Efficient Frontier: Pool A Investment Account

18

Group Constraints: (i) Broad US Equity must be at least three-fourths (3/4) of total US equity. (ii) Total US equity must be at least one-half (1/2) of total public equity.

Min Max 1 2 3 4 5 6 7 8 9 10 Current Target

Potential LT Target

Broad US Equity 0 20 0 1 3 6 7 9 12 14 20 20 0.0 7.5 Small Cap US Equity 0 5 0 0 1 2 2 3 4 5 5 5 0.0 1.0 Broad International Equity 0 20 0 2 4 8 10 12 16 19 20 20 0.0 7.5 Preferred Stock 0 5 0 0 0 0 3 5 5 5 5 5 0.0 2.0 MLPs 0 5 1 4 5 5 5 5 5 5 5 5 0.0 5.0 Convertibles 0 5 5 5 4 0 0 0 0 0 0 5 3.0 0.0 Int. Duration Fixed Income 0 100 71 64 57 52 48 42 35 29 20 7 73.7 49.0 High Yield Fixed Income 0 10 0 0 0 0 0 0 0 0 2 10 2.0 0.0 Bank Loans 0 10 10 10 10 10 10 10 10 10 10 10 5.8 10.0 Emerging Markets Debt (Local) 0 5 0 0 4 5 5 5 5 5 5 5 4.9 5.0 TIPS 0 8 8 8 8 8 8 8 8 8 8 8 7.7 8.0 Cash Equivalents 0 5 5 5 5 5 2 0 0 0 0 0 3.0 5.0 Total 100 100 100 100 100 100 100 100 100 100 100.0 100.0

Total Fixed Income & Cash 99 92 88 80 72 65 58 52 45 45 100 77 Capital Appreciation 5 9 15 20 28 35 42 48 57 70 10 23 Capital Preservation 76 69 62 57 49 42 35 29 20 7 77 54 Alpha 0 0 0 0 0 0 0 0 0 0 0 0 Inflation 19 22 23 23 23 23 23 23 23 23 14 23

Expected Return 3.81 4.11 4.42 4.73 5.03 5.34 5.65 5.95 6.26 6.57 3.86 4.80 Risk (Standard Deviation) 5.04 5.18 5.56 6.13 6.87 7.69 8.62 9.64 10.84 12.17 5.43 6.31

Return (Compound) 3.69 3.98 4.27 4.55 4.81 5.06 5.30 5.51 5.71 5.88 3.72 4.61 Return/Risk Ratio 0.76 0.79 0.79 0.77 0.73 0.69 0.66 0.62 0.58 0.54 0.71 0.76 RVK Expected Eq Beta (LCUS Eq = 1) 0.10 0.15 0.20 0.25 0.29 0.34 0.40 0.46 0.54 0.60 0.11 0.26 RVK Liquidity Metric (T-Bills = 100) 83 83 82 82 82 83 83 83 83 80 82 83

Estimated Yield (%) 3.16 3.25 3.48 3.51 3.56 3.56 3.55 3.51 3.54 3.78 3.24 3.55 Estimated Duration of Fixed Income & Cash 5.22 5.17 5.14 5.23 5.21 5.15 5.06 4.97 4.74 4.03 5.48 5.20

Pool A Investment Account

Min

Long-Term

Target Max

Broad US Equity 3.75 7.50 11.25 Small Cap US Equity 0.50 1.00 1.50 Broad International Equity 3.75 7.50 11.25 Preferred Stock 1.00 2.00 3.00 MLPs 2.50 5.00 7.50 Int. Duration Fixed Income 24.50 49.00 73.50 Bank Loans 5.00 10.00 15.00 Emerging Markets Debt (Local) 2.50 5.00 7.50 TIPS 4.00 8.00 12.00 Cash Equivalents 2.50 5.00 7.50

2017 Asset Allocation

• More endowment like opportunity to grow corpus • Improved return in unknown market • Maintain liquidity

Asset Allocation for Pool A includes two new asset classes that are more focused on generating income: • Master Limited Partnerships, and

• Preferred Stocks

MLPs: Definitions A master limited partnership (MLP) is a type of business organization that exists in the form of a publicly traded limited partnership. There

are two classes of partners in a master limited partnership: limited partners and general partners. Limited partners are investors that purchase units in the MLP that provide the capital for the MLP's operation and that receive periodic income distributions from the MLP's cash flow, whereas the general partners are responsible for managing the day to day operation of the MLP and that receive compensation based on the performance of the MLP's business venture.

BREAKING DOWN 'Master Limited Partnership - MLP'

MLPs are most commonly present in the energy industry, providing and managing resources such as oil and gas pipelines. These types of business endeavors are conducive to producing regular income, thus enabling MLPs to offer attractive income yields, because they earn stable income that is often based on long-term service contracts. An example of an MLP is Genesis Energy L.P., which provides pipeline transportation, refinery services, and supply and logistics support services for oil companies.

Characteristics of an MLP

An MLP differs from a corporation in that an MLP is considered the aggregate of its partners rather than a separate legal entity. The most distinguishing characteristic of an MLP is the fact that an MLP combines the tax benefits of a partnership, by virtue of the fact that the profits generated from the MLP are only taxed when unitholders in the partnership receive distributions, with the liquidity of a company that is publicly traded. An MLP also differs from a corporation in that it technically has no employees; the general partners are responsible for providing all necessary operational services.

Limited partners invest in an MLP by purchasing publicly traded units, and are commonly referred to as unitholders rather than shareholders.

21

MLPs: Definitions

Tax Advantages for MLP Unitholders

The major benefit of an MLP is its tax advantage. MLPs allow for what is known as pass-through income. Pass-through income means that the MLP itself is not liable for corporate income taxes as is a corporation. Instead, the owners, or unitholders, of the MLP are only personally liable for income taxes on their portions of the MLP's earnings. The advantage of this structure is that it avoids the double taxation scenario in which corporations pay corporate income taxes, but shareholders must also pay personal income taxes on the income derived from their stock shares.

MLPs make distributions to unitholders, typically on a quarterly basis, similar to dividends paid to stock shareholders. Another tax advantage of MLPs is that much of the income distribution that unitholders receive is tax-deferred until the unitholder sells his units, and is then taxed at the lower capital gains rate rather than at the higher personal income rate.

An advantage that draws many of the investors in an MLP is the fact that MLPs commonly offer yields that are substantially higher than the average dividend yield available from stocks.

3

MLPs: Industry Concentration Metrics

4

MLP Industry Concentration 1990 2013

Oil and Gas Midstream and Downstream 10% 51%

Oil and Gas Exploration & Production (Upstream) 21% 12%

Propane 0% 3%

Oil & Gas Marine Transportation 1% 5%

Coal Leasing or Production 0% 4%

Other Natural Resources 5% 7%

Real Estate - Income Properties 14% 2%

Real Estate - Developers, Homebuilders 4% 0%

Real Estate - Mortgage Securities 13% 2%

Hotels, Motels, Restaurants 12% 0%

Investment / Financial 6% 9%

Other Businesses 15% 4%

*Capital Innovations, Master Limited Partnership (MLP) Investing, 2014

MLP ETFs/ETNs = approximately 23 products MLP CEFs = approximately 26 products MLP Mutual Funds =approximately 22 products MLP UITs = approximately 6 products

MLPs: Are Inexpensive vs. Historical Norms

24

Preferred Stock A preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares generally have a dividend that must be paid out before dividends to common shareholders, and the shares usually do not carry voting rights. Preferred stock combines features of debt, in that it pays fixed dividends, and equity, in that it has the potential to appreciate in price. The details of each preferred stock depend on the issue. Preferred shareholders have priority over common stockholders when it comes to dividends, which generally yield more than common stock and can be paid monthly or quarterly. These dividends can be fixed or set in terms of a benchmark interest rate like the LIBOR. Companies in Distress. If a company is struggling and has to suspend its dividend, preferred shareholders may have the right to receive payment in arrears before the dividend can be resumed for common shareholders. Shares that have this arrangement are known as cumulative

Preferred shareholders have prior claim on a company's assets if it is liquidated, though they remain subordinate to bondholders. Preferred shares are equity, but in many ways they are hybrid assets that lie between stock and bonds. They offer more predicable income than common stock and are rated by the major credit rating agencies. Unlike with bondholders, failing to pay a dividend to preferred shareholders does not mean a company is in default. Because preferred shareholders do not enjoy the same guarantees as creditors, the ratings on preferred shares are generally lower than the same issuer's bonds, with the yields being accordingly higher. Preferred shares usually do not carry voting rights. Preferred stock comes in a wide variety of forms. A company can issue preferred shares under almost any set of terms, assuming they don't fall foul of laws or regulations. Most preferred issues have no maturity dates or very distant ones. Preferred ETFs yield approx. 5.75% while the S&P 500 yields 1.75%

Source: Invetopedia

The funds in Pool A have asset allocations designed to be conservative yet also take advantage of opportunities in equity markets when they present themselves which should lead to more income generation. The allocation is designed to limit downside loss risk.

The allocation comports with the overall expectations of pool

participants to grow assets and income potential without outsized risk.

Implementation will be gradual and done in a way that will not compromise the corpus or earning potential of the funds

Questions? Thank you