Froley, Revy's investment process begins with an evaluation of the economy and the current business cycle. Convertible portfolios are focused on market sectors where the firm perceives the outlook to be superior to that of the aggregate economy.

Within industries considered to have the best prospects over the next six to twelve months, Froley • Revy uses its research resources to analyze the companies with convertibles outstanding. Once a company is identified as a potential investment candidate, the convertible security itself must pass our examination of credit quality, income level, investment bond value, and equity participation potential.

Investments are placed in companies which have competitive products, a strong balance sheet, good cash flows, and an ability to grow earnings. Our investment team is composed exclusively of convertible specialists with a keen eye for value. Normal investment parameters are a 5% company limit and a 20% industry limit, creating well-diversified portfolios with yet another built-in risk-reduction measure.