Note 5
New accounting pronouncement

As required, the fund has adopted the provisions of the AICPA
Audit and Accounting Guide, Audits of Investment Companies.  This
Guide requires that the fund amortize premiums and accrete
discounts on all fixed-income securities, and classify as
interest income gains and losses realized on paydowns on
mortgage-backed securities.  Prior to November 1, 2001, the fund
did not amortize premiums for certain fixed-income securities and
characterized as realized gains and losses paydowns on mortgage-
backed securities.  Adopting these accounting principles did not
affect the fund net asset value, but did change the
classification of certain amounts between interest income and
realized and unrealized gain/loss in the Statement of operations.
The adoption of this principle for the year ended October 31,
2002 was to decrease net investment income by $1,044,496,
increase net unrealized appreciation by $806,485 and to decrease
net realized losses by $238,011.  The Statement of changes in net
assets and Financial highlights for prior periods have not been
restated to reflect this change in presentation.