Kelmoore's Liberty Fund Launches.Business Editors PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif.--(BUSINESS WIRE)--Jan. 25, 2001 Kelmoore Investment Company announced a new fund today, the Kelmoore Strategy(R) Liberty Fund, the latest member of the Kelmoore Strategy(R) family of funds Family of Funds A group of mutual funds offered by one investment or fund company. Each mutual fund has different characteristics and can range depending on investment objective. Also referred to as a "Mutual Fund Family" or simply a "Fund Family". . The fund launched December 26, 2000. The Kelmoore Strategy(R) Liberty Fund will employ the Kelmoore Strategy(R), which involves writing covered options Covered option Option position that is offset by an equal and opposite position in the underlying security. Antithesis of naked option. on leading common stocks, with the goal of enhancing the income generated from an investment portfolio. This Fund will seek to further limit downside risk Downside Risk An estimation of a security's potential to suffer a decline in price if the market conditions turn bad. Notes: You can think of this as an estimate of the amount that you could lose on a stock or other investment. with the subsequent purchase of put options against these same stocks as a possible downside Downside The dollar amount by which the market or a stock has the potential to fall. Notes: You might hear someone say that the downside on stock XYZ is $10. What that means is that the stock could fall by this amount if things got bad. hedge. The Liberty Fund is available in mutual fund share class A and C. The Kelmoore Strategy(R) Liberty Fund seeks to invest in a collection of equities included in the Standard & Poors 100 Index, a market capitalization-weighted index Capitalization-Weighted Index A stock index which is computed by adding the capitalization (float times price) of each individual stock in the index, and then dividing by the divisor. The stocks with the largest market values have the heaviest weighting in the index. of 100 major blue-chip stocks Noun 1. blue-chip stock - a common stock of a nationally known company whose value and dividends are reliable; typically have high price and low yield; "blue chips are usually safe investments" blue chip across diverse industry groups. The blue-chip stocks selected for the fund's portfolio are chosen based on their covered option writing potential. Put options are purchased in an attempt to help cushion Cushion In the context of project financing, the extra amount of net cash flow remaining after expected debt service. cushion See call protection. the portfolio from declining stock prices. This is considered a defensive position since the value of the puts will rise with a decrease in the price of the underlying equities. However, in a rising equity market, puts generally expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. worthless, which means that the Fund would lose the amount of premium paid for the put option. Matthew Kelmon, Portfolio Manager, is a firm believer in the strategy he helped develop. "Before we purchase any stock for the fund's portfolio, we analyze it not only for its fundamental investment characteristics, but also for its covered option writing potential. We believe that covered option writing reduces the inherent risk of owning stocks while decreasing the volatility of a stock portfolio over time." About Kelmoore Kelmoore Investment Company, Inc., headquartered in Palo Alto, CA, is an independently owned, licensed general securities broker/dealer. The company was founded in 1978 and acquired by the current management team in 1992. The management team has developed a trademark strategy that it has used for individuals, corporations, and institutions. Kelmoore Investments currently has $400 million under management in mutual funds, separate accounts, and partnerships. The Kelmoore Strategy(R) family of funds are distributed by Kelmoore Investment Company, Inc., 2471 East Bayshore Road, Suite 501, Palo Alto, CA 94303. Phone: 877/285-1023, www.kelmoore.com. Covered option writing is not appropriate for all investors. Stock volatility may cause the value of underlying stocks to dramatically increase or decrease. As with any mutual fund, the value of the Fund's investments, and therefore the value of the Fund's shares, will fluctuate, and investors could lose money. This fund is for investors that can accept the risks of investing in a portfolio of common stocks and their related options. To obtain a prospectus with more complete information, including risks of investing, charges, and expenses, please call 877/285-1023 or access www.kelmoore.com. Please read the prospectus carefully before investing. |
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