Argo Distressed Credit Fund

Limited

Fund Investment Objectives

The Fund's investment objective is to achieve above-average returns on a risk adjusted basis by actively trading and investing in securities and other commercial instruments of developing markets. The scope of the Fund seeks to benefit from investment opportunities globally arising from dislocated markets, distressed credit opportunities, Distressed Securities and other investments opportunities the Fund identifies. The Fund focuses on building a diversified, bottom-up portfolio in stressed/distressed assets utilising a combination of long and where appropriate, short positions. It will invest directionally in emerging market bonds (corporate and sovereigns) trading at levels that do not reflect their fundamentals and deep value bonds with longer-term recovery potential. Hedging: We may hedge market risk by shorting liquid sovereign positions and/or create market neutral spread positions and cover credit risk by buying protection through CDS. We may also use reverse repo facilities to cover credit risk. Market Exposure: The Fund invests across the emerging market credit spectrum, namely in short-to-medium duration bonds with good fundamentals and in deep value bonds with a longer term recovery potential. Portfolio Concentration: We aim to keep the Fund diversified, both in terms of positions and entity, including both corporate and sovereign names. Although allocation will vary depending on market conditions, to date, we have had no occasion to significantly deviate from this target. Geographical Market Focus: We are a global player in emerging markets and we seek opportunities wherever they are attractive. Liquidity: Our systems produce projected cash-flow reports and assets are classed into liquidity buckets as reported in our monthly newsletter. Correlation: We try to limit the number of positions to between 20 and 30 and ensure that not more than 25% of the NAV of the Fund is invested in any one theme. We also apply an individual jurisdiction limit so that no more than 30% of the NAV of the Fund is invested in the aggregate entities located in the same jurisdiction. Correlation tests are also run across the different assets in the Fund. Leverage: up to 200%, currently no leverage is employed