There are certain restrictions with regard to gearing. Borrowing for investment purposes on a permanent basis from first class credit institutions that specialise in this type of transaction is permitted, subject to the following:

• Borrowing may not exceed 200% of the net assets. Consequently the value of the total assets may not exceed 300% of the value of the net assets.
• In cases where there is a high degree of correlation between long-term and short-term positions, borrowings may rise to 400% of net assets.

Counterparty risk, defined as the difference between the value of assets given as guarantee and the amount borrowed, cannot represent more than 20% of the Undertaking for Collective Investment’s (UCI) assets per lender.

Additionally Funds may borrow the equivalent of up to 25% of net assets without restriction in respect of the intended use thereof (except to finance margin deposits).