II. Investment Declaration

23. The objective of investment policy of the Managing Company shall include the short-term investment of assets into securities in order to attain the gain of assets included in the Fund.

24. The assets included in the Fund may be invested in:

• state securities of the Russian Federation;
• state securities of the constituent territories of the Russian Federation;
• municipal securities;
• shares of Russian open joint stock companies, except for the shares of Russian joint stock  investment funds included in funds of funds category;
• bonds of Russian business companies if the state registration of it’s issue was accompanied with registration of its prospectus of issue or if the prospectus was registered in relation of such bonds;
• securities of foreign states;
• securities of international financial organizations;
• shares of foreign joint stock companies;
• bonds of foreign commercial entities;
• investment units of open and interval mutual investment funds, except for the investment units of the mutual investment funds included in funds of funds category;
• investment units of closed mutual investment funds included in the quotation list of trade institutors.

The Fund assets will be invested in ordinary and preferred shares and bonds of issuers engaged, mainly, in the following branches of industry: power industry, fuel industry, communication and telecommunications, chemical industry, mechanical engineering and metalworking, metallurgy, trade, transport, food industry, financial sector and insurance, forest, woodworking, mineral resources industry, pulp & paper industry, construction, science and scientific service, industry of construction materials, light industry, housing maintenance and utilities, petrochemical industry, medical industry, printing industry, agriculture, glass and porcelain & faience industry, perfumery & cosmetic industry.

The assets included in the Fund may be invested in bonds issued by:

- federal executive bodies of the Russian Federation;

- executive bodies of the constituent territories of the Russian Federation;

- bodies of local self-government;

- foreign states.

- Russian and foreign legal entities.

The Fund assets may include monetary funds including foreign currency particularly but not exclusively  on bank accounts and in deposits.

Acquisition of foreign currency and securities in a foreign currency to be included in the assets of the Fund is carried out in the order, established by the legislation of the Russian Federation on currency regulation and currency control.

For the Fund assets there may be acquired only the securities in relation to which the acceptable quotations are available as of the date of purchase agreement or of the previous date. This requirement does not apply to the investment units of the open mutual investment funds.

The securities the assets included in the Fund invested in shall be included in the quotation lists of a trade institutor at the securities market or admitted for trading by the trade institutor without including in the quotation list.

The Fund assets may not include:

- shares of Russian joint stock investment funds and investment units of mutual investment funds if the investment reserves of such joint stock investment funds or mutual investment funds are being managed by the same managing company which is engaged in the trust management of the Fund;

- securities issued by the Managing Company, the Specialized depository or the Auditor, as well as their affiliated persons, except for the securities included in the quotations list of trade institutor;

- shares of foreign joint stock companies and bonds of foreign commercial entities  which have not been listed at the stock exchanges the list of which is defined by the federal executive body for the securities market;

- securities of foreign states and securities of international financial organizations not included in the list approved by the federal executive body for the securities market.

Within the term of the Fund formation the assets thereof may include only the assets brought in by the holders of investment units.

25. Structure of the Fund’s assets shall meet at the same time the following requirements:

- monetary funds allocated in the accounts and on deposits of one and the same credit institution may not exceed 25 per cent of the value of the assets

- estimated value of securities of foreign states, securities of international financial organizations, shares of foreign joint stock companies and bonds of foreign commercial entities may not exceed 20 per cent of the asset value;

- the estimated value of state securities of the Russian Federation or  state securities of constituent territories of the Russian Federation of a single issue may not exceed 35 per cent of the asset value;

- the estimated value of securities of a single issuer (except for the state securities of the Russian Federation and  state securities of constituent territories of the Russian Federation) may not exceed 15 per cent of the asset value;

- not less than two-thirds of working days within one month the estimated value of the Russian joint stock investment funds and investment units of mutual investment funds shall constitute not less  than 50 per cent of the asset value;

- the estimated value of shares of Russian joint stock investment funds and investment units of mutual investment funds of real estate funds and funds of extra risk (venture) investments may not exceed 10 per cent of the asset value;

- the estimated value of shares of a single joint stock investment fund (investment units of a single mutual investment fund) may not exceed 10 per cent of the asset value;

- the estimated value of investment units of mutual investment funds and shares of joint stock investment funds, which (the investment reserves of which) are under trust management (management) of a single managing company, may not exceed 35 per cent of the asset value;

- the estimated value of securities which lack the acceptable quotations, except investment units of open mutual investment funds, may not exceed 10 per cent of the asset value;

- the estimated value of common shares of an open joint stock company  may not exceed 10 per cent of total number placed common shares of this issuer in relation to which report on the issue’s results was registered;

- the number of investment units of a mutual investment fund may not exceed 30 per cent of the number of issued investment units of that mutual investment fund.

This clause shall be valid upon completion of the Fund formation.

26. Description of Risks Connected with Investment

Investments in securities is connected with the high degree of risk and does not implicate any guarantees on the issuer’s part both as regards of the repayment of basic sum and interest thereon. Beside that, the  risks of investment in securities include the following:

Higher political risk of expropriation, taxation of confiscation kind, state’s failure to perform the obligations in relation to the securities, devaluation and fluctuation of currency exchange rates, policy aimed at reducing the profit of investments including, along with other things, limitation of investments in the economy sectors being the sphere of specific state interests.

The Managing Company shall undertake all necessary actions in order to ensure full authenticity and veracity of information on the basis of which the securities acquisition will be carried out. Nevertheless, an investor shall run the risk of losses connected with the reduction of value of investment units of the Fund. The investment profitability is not ensured in the future and the state does not guarantee the profitability of investments in the Fund.  The results of activity of the Managing Company in the past is not the guarantee of the Fund income in the future and the decision on purchase of Fund units shall be taken by the investor by himself upon familiarization of these Rules of the Fund, its investment declaration and evaluation of relevant risks.