fund to allow more flexibility when increasing dividends.

Under the fund's current rules, dividends must be paid out of profits.

Directors are proposing an amendment to the fund's by-law to allow dividends to be paid from net assets.

With the fund's performance tied to locally-listed stocks, and with investors partial to dividends, the move is not surprising.

Local companies' stock performance has been lacklustre for months, with the index, a composite of Bermuda's blue chip companies, reflecting the trend.

Shareholders will vote on the amendment tomorrow.

It is hoped the move, which allows directors more dividend payment "flexibility'', will attract more investors to the fund.

The Buttress Bermuda Fund was launched in early 1994 at $10 a share.

The fund's dividend is now eight cents a share per quarter.

With net asset value of $11.8 million, or $9.41 a share, at December 11, that dividend represents annualised return of 3.4 percent.

"The amendment will enable the fund to pay dividends at a rate similar to the underlying securities,'' the Bank of Butterfield said.

Shareholders can vote on the amendment by proxy or by attending the special meeting at the Bank of Butterfield on Front Street on Friday at 10 a.m.