Fair Value Measurements: As described above, the Fund utilizes various methods to measure the fair value of most of its investments on a recurring basis. U.S. Generally Accepted Accounting Principles (“GAAP”) establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 – observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 – unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
At the end of each fiscal quarter, management evaluates the Level 2 and Level 3 assets and liabilities, if any, for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from third party services, and the existence of contemporaneous, observable trades in the market. Additionally, management evaluates the Level 1 and Level 2 assets and liabilities on a quarterly basis for changes in listing or delistings on national exchanges.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Transfers in and out of levels are recognized at market value at the end of period. The summary of inputs used to value the Fund’s net assets as of January 31, 2021 is as follows:
| | | Total Value at 01/31/2021 | | | Level 1 Quoted Price | | | Level 2 Significant Observable Input | | | Level 3 Significant Unobservable Input | |
| Investments in Securities | | | | | | | | | | | | |
Common Stocks* | | | | | | | | | | | | |
Life Sciences Tools & Services | | $ | 1,102,183 | | | $ | - | | | $ | 1,102,183 | | | $ | - | |
Other Industries | | | 60,552,900 | | | | 60,552,900 | | | | - | | | | - | |
Rights | | | - | | | | - | | | | - | | | | - | |
| Total Investments^ | | $ | 61,655,083 | | | $ | 60,552,900 | | | $ | 1,102,183 | | | $ | - | |
*See Portfolio Holdings detail for country breakout.
^Investments are disclosed individually on the Portfolio Holdings.
