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Exhibit 99.-q(1)
ISI Funds
Consolidated Code of Ethics
I. General
Rule 17j-1 under the Investment Company Act of 1940 (the "1940 Act") makes it
unlawful for investment company personnel and other "Access Persons" to engage
in "fraudulent, deceptive or manipulative" practices in connection with their
personal transactions in securities when those securities are held or to be
acquired by an investment company. The Rule also requires every investment
company, the investment company's investment advisor and, in certain cases, the
investment company's principal underwriter, to adopt a Code of Ethics containing
provisions "reasonably necessary to prevent" such prohibited practices.
This document constitutes the Code of Ethics required by Rule 17j-1 for the
"Funds", as defined in Appendix A. Appendix A also provides certain other
definitions for entities which are referenced in this Code of Ethics.
II. Definitions
For purposes of this Code, the following terms have the meanings set forth as
follows:
A. "Access Person" means:
1. Any director, trustee or officer of a Fund, Advisor or Sub-Advisor(1);
2. Every "Advisory Person" of a Fund, Advisor or Sub-Advisor. An "Advisory
Person" is:
(a) any employee who, in connection with his or her regular functions
or duties, makes, participates in, or obtains information regarding
the Purchase or Sale of a Security by a Fund, or whose functions
relate to the making of any recommendations with respect to such
Purchases or Sales; and
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(1) If an Advisor or Sub-Advisor is primarily engaged in a business other than
advising funds or advisory clients within the meaning of Section (a)(1)(B) of
Rule 17j-1 under the 1940 Act, "Access Person" means any director, officer or
Advisory Person of an Advisor or Sub-Advisor who, with respect to a Fund for
which such entity acts as Advisor or Sub-Advisor, makes any recommendation,
participates in the determination of which recommendation shall be made, or
whose principal function or duties relate to the determination of which
recommendation shall be made or who, in connection with his or her duties,
obtains any information concerning securities recommendations being made by such
investment advisor or sub-advisor to the Fund.
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(b) any natural person in a Control relationship to a Fund, Advisor or
Sub-Advisor who obtains information concerning recommendations made
to the Fund with regard to the Purchase or Sale of a Security by
the Fund; and
3. Any director, trustee or officer of the Distributor who in the ordinary
course of his or her business makes, participates in or obtains
information regarding the Purchase or Sale of Securities for the Funds
or whose functions or duties as part of the ordinary course of his or
her business relate to the making of any recommendation to the Funds
regarding any Purchase or Sale of Securities.
B. "Beneficial Ownership" of a Security is to be determined in the same manner
as it is for purposes of Section 16a1-(a)(2) of the Securities Exchange Act
of 1934. This means that a person should generally consider himself or
herself the beneficial owner of any securities of which he or she shares in
the profits, even if he or she has no influence on voting or disposition of
the securities.
C. "Control" shall have the same meaning as that set forth in Section 2(a)(9)
of the 1940 Act. Section 2(a)(9) defines "control" as the power to exercise
a controlling influence over the management or policies of a company, unless
such power is solely the result of an official position with such company.
Ownership of 25% or more of a company's outstanding voting securities is
presumed to give the holder thereof control over the company. Such
presumption may be countered by the facts and circumstances of a given
situation.
D. "Covered Persons" means any officer, director, trustee or employee of the
Funds, Advisor, Sub-Advisors or Distributor.
E. "Disinterested Director" means a director or trustee of a Fund who is not an
"interested person" of the Fund within the meaning of Section 2 (a)(19) of
the Investment Company Act of 1940.
F. "Purchase or Sale of a Security" means obtaining or disposing of "Beneficial
Ownership" of that Security and includes, among other things, the writing of
an option to purchase or sell a Security.
G. "Security" shall have the same meaning as that set forth in Section 2(a)(36)
of the 1940 Act, except that it shall not include direct obligations of the
Government of the United States, bankers' acceptances, bank certificates of
deposit, commercial paper and high quality short-term debt instruments
(including repurchase agreements) and shares issued by registered, open-end
investment companies.
III. General Principles Applicable to Covered Persons
A. Introduction
Although certain provisions of this Code of Ethics apply only to Access
Persons, all Covered Persons are subject to the prohibitions of Rule 17j-1
against fraudulent, deceptive and manipulative practices and to the general
fiduciary principles as set forth in III.B. and III.C. below.
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Every Covered Person should appreciate the need to behave in an ethical
manner with respect to the Funds. In particular, all Covered Persons who
are involved in any way with the activities of a Fund should be wary of any
potential conflicts between their duty of loyalty to a Fund and their own
financial interests, particularly with respect to their own securities
trading activities. Covered Persons should take care to preserve the
confidentiality of the Funds' business affairs. Covered Persons who are not
"Access Persons" but who become aware of proposed fund securities
transactions should not engage in transactions in those same securities
without the permission of the Secretary of the Fund. Otherwise, Covered
Persons who are not Access Persons are not limited in their personal
securities transactions by this Code, but such Covered Persons are
encouraged to consult with the Secretary of the Funds if they have any
doubts about the applicability of the Code of Ethics to any proposed
transaction.
B. Statement of General Fiduciary Principles
The following principles are the policy of the Funds and are the
obligations of all Covered Persons:
1. It is the duty of all Covered Persons at all times to place the
interests of Fund shareholders first.
2. All personal securities transactions must be conducted in such manner as
to avoid any actual or potential conflict of interest or any abuse of an
individual's position of trust and responsibility.
3. Covered Persons must not take inappropriate advantage of their positions
or the information they acquire, with or on behalf of a Fund, Advisor,
Sub-Advisor and/or Distributor, to the detriment of shareholders of the
Funds.
C. Fraudulent Practices
Rule 17j-1 makes it unlawful for any Covered Person, in connection with a
Fund with which such Covered Person has a relationship, to:
1. employ any device, scheme or artifice to defraud a Fund;
2. make to a Fund any untrue statement of a material fact or omit to state
to the Fund a material fact necessary in order to make the statements
made, in light of the circumstances under which they are made, not
misleading;
3. engage in any act, practice or course of business which operates or
would operate as a fraud or deceit upon a Fund; or
4. engage in any manipulative practice with respect to a Fund.
IV. Requirements Applicable to Disinterested Directors
A. Exceptions to Quarterly Transaction Report Requirement. Not withstanding the
provisions of IV.B., a Disinterested Director is required to complete a
Quarterly Transaction Report only if the Disinterested Director knew or, in
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the ordinary course of fulfilling his official duties as a Fund director or
trustee should have known, that during the 15-day period immediately before
or after the director's or trustee's transaction, such Security is or was
Purchased or Sold, or considered for Purchase or Sale, by a Fund.(2)
B. Quarterly Transaction Reports. Subject to the exception set forth in IV.A.,
no later than 10 days following the end of the calendar quarter to which
such report relates, each Disinterested Director shall report to the
Secretary of the Funds the following information on the form attached as
Appendix B to this Code:
With respect to transactions in any Security in which such Disinterested
Director has, or by reason of such transaction acquires, any direct or
indirect Beneficial Ownership in the Security:
o the date of the transaction, title, interest rate (if applicable), number
of shares and principal amount of each Security involved;
o the type of transaction (i.e., purchase, sale or any other type of
acquisition or disposition);
o the price of the Security at which the transaction was effected;
o the name of the broker, dealer or bank with or through whom the
transaction was effected;
o the date the report was submitted.
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(2) This reporting requirement shall not be applicable to securities traded by
passively managed index funds.
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V. Requirements Applicable to Advisor, Sub-Advisor and Distributors
A. The requirements of this Code of Ethics are not applicable to any Access
Person who is subject to a separate Code of Ethics adopted by an Advisor,
Sub-Advisor or Distributor of a Fund (as such terms are defined in Appendix
A), provided that:
1. such Code of Ethics has been approved by the Board of Directors or
Trustees of the Fund; and
2. such Advisor, Sub-Advisor or Distributor has certified to the Board of
Directors or Trustees of the Fund that it has adopted procedures
reasonably necessary to prevent Access Persons from violating such Code
of Ethics.
B. Each Advisor, Sub-Advisor and Distributor shall:
1. submit to the Fund a copy of its Code of Ethics;
2. promptly report to the Fund in writing any material amendments to such
Code;
3. furnish to the Fund upon request (and in any event no less than
quarterly) written reports which:
a. describe any issues arising under its Code of Ethics or procedures
during the period specified including (but not limited to)
information about material violations of the Code or procedures and
sanctions imposed in response to material violations; and
b. certify that it has adopted procedures reasonably necessary to
prevent Access Persons from violating its Code.
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APPENDIX A
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ENTITY DEFINITIONS
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"Fund" shall mean each of the following and any series of the following
hereafter designated:
Total Return U.S. Treasury Fund, Inc. ("Total Return")
Managed Municipal Fund, Inc. ("Managed Municipal")
North American Government Bond Fund, Inc. ("North American")
ISI Strategy Fund, Inc. ("Strategy")
International Strategy & Investment, Inc. (an "Advisor") is the investment
advisor to the Funds. Wilshire Associates Incorporated (a "Sub-Advisor") is the
sub-advisor to Strategy.
International Strategy & Investment Group, Inc. and ICC Distributors, Inc.
(each, a "Distributor") are the principal underwriters for the Funds.
International Strategy & Investment Group, Inc. is the principal underwriter for
each of the Funds except the Flag classes of Total Return and Managed Municipal,
for which ICC Distributors, Inc. acts as the principal underwriter.
Investment Company Capital Corp. (an "Administrator") is the administrator of
the Funds.
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APPENDIX B
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QUARTERLY PERSONAL SECURITIES TRANSACTIONS REPORT FOR
DISINTERESTED DIRECTORS
A Disinterested Director is required to complete this report ONLY IF the
Director knew or, in the ordinary course of fulfilling his official duties as a
Fund director or trustee should have known, that during the 15-day period
immediately before or after the director's or trustee's transaction, such
Security is or was Purchased or Sold, or considered for Purchase or Sale, by a
Fund. Reports are due within 10 calendar days after the end of the calendar
quarter.*
Name of Reporting Person:_______________________________________________________
Calendar Quarter Ended:_________________________________________________________
Securities Transactions
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<TABLE>
<CAPTION>
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Number of
Shares,
Principal Disclaim
Amount, Name of Beneficial
Name of Maturity Broker, Ownership
Issuer Date and Dealer or ?
and Title Interest Rate Bank (indicate
Date of of (if Type of Effecting by "X")
Transaction Security applicable) Transaction Price Transaction **
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<S> <C> <C> <C> <C> <C> <C>
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</TABLE>
I certify that I have included on this report all securities transactions
required to be reported pursuant to the Code of Ethics.
____________________________ ________________________
Signature Date
Please return this form to Felicia Emry, Mutual Funds Compliance, One South
Street, Baltimore, Maryland 21202. Questions should be directed to Felicia Emry
at 410-895-3826.
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* This reporting requirement shall not be applicable to trading activity in
passively managed index funds
** If you do not want this report to be construed as an admission that you have
Beneficial Ownership of a particular security, please indicate this by
marking an "X" in the box.
