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Capitalized terms used herein that are not defined have the same meaning as in the","page_number":1,"box":{"x":116,"y":394,"width":686,"height":13}},{"id":"3dfd06cf-a49e-4309-822d-f6b196be7a28","block_type":"box","text":"Prospectus, unless otherwise noted. Part I of this SAI and the portions of Part II of this SAI that relate","page_number":1,"box":{"x":117,"y":410,"width":755,"height":12}},{"id":"955cebaf-9374-41e6-acd9-d9654328e6d5","block_type":"box","text":"to the Fund have been incorporated by reference into the Fund’s Prospectus. 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80","page_number":3,"box":{"x":221,"y":397,"width":654,"height":10}},{"id":"d9c8aea4-a3c8-4486-9aaf-6f84f3b2777f","block_type":"box","text":"Independent Registered Public Accounting Firm","page_number":3,"box":{"x":151,"y":413,"width":359,"height":12}},{"id":"67398940-7ad9-48b6-b38f-4441fedcaeaa","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80","page_number":3,"box":{"x":515,"y":413,"width":360,"height":9}},{"id":"71732216-372f-49d9-9d2f-0115426cc12b","block_type":"box","text":"Investors’ Rights","page_number":3,"box":{"x":151,"y":428,"width":127,"height":12}},{"id":"87c590e2-0829-4bd1-a99d-1c71cd413ff2","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80","page_number":3,"box":{"x":283,"y":428,"width":592,"height":10}},{"id":"bd19b9d0-31de-4cc8-888f-5aa6fec4a0f4","block_type":"box","text":"Financial Statements","page_number":3,"box":{"x":117,"y":444,"width":160,"height":9}},{"id":"8cef850f-6cf5-44ba-a5f8-aff3b4518b6a","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80","page_number":3,"box":{"x":283,"y":444,"width":592,"height":9}},{"id":"27a55a0b-2795-440b-85b4-8af32c55f3a5","block_type":"box","text":"PART II","page_number":3,"box":{"x":117,"y":459,"width":62,"height":9}},{"id":"0a5ac912-a370-46c1-9837-7f3d60b9cacc","block_type":"box","text":"Investment Risks and Considerations","page_number":3,"box":{"x":117,"y":475,"width":281,"height":9}},{"id":"76a30b77-d0b5-4ce0-9dc0-a4c0fe63c0ba","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1","page_number":3,"box":{"x":399,"y":475,"width":476,"height":9}},{"id":"7be1a865-313a-4943-ae49-e9b9a6c9c7e6","block_type":"box","text":"Appendix A – Description of Bond Ratings","page_number":3,"box":{"x":116,"y":490,"width":318,"height":12}},{"id":"c6aca2ea-fe92-4236-b59b-36e1b433405f","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1","page_number":3,"box":{"x":435,"y":490,"width":440,"height":10}},{"id":"8847064f-57a9-4f81-8bf3-1d0e8b17bc08","block_type":"box","text":"Appendix B – Proxy Voting Policies","page_number":3,"box":{"x":116,"y":506,"width":267,"height":12}},{"id":"8a4d1d9c-e08e-4136-b030-28c97108be9e","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1","page_number":3,"box":{"x":390,"y":506,"width":485,"height":9}},{"id":"c3b79e7a-97cc-4af4-b808-e87e66ff1e73","block_type":"box","text":"ii","page_number":3,"box":{"x":497,"y":909,"width":5,"height":9}},{"id":"7dfd2f18-dc42-40e9-9c77-1d01d1a0aa55","block_type":"box","text":"NM1026U-6039989-3/256","page_number":3,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"0e9a4f62-5ea9-4b43-8fc3-72db1fa19847","block_type":"box","text":"PART I: INFORMATION ABOUT","page_number":4,"box":{"x":119,"y":92,"width":594,"height":23}},{"id":"242cbd7e-46fe-4153-9e4f-606029e12069","block_type":"box","text":"iSHARES FUTURE ROBOTICS AND","page_number":4,"box":{"x":118,"y":126,"width":678,"height":22}},{"id":"a251fe0b-47e7-4cdb-b9d1-029d4fa8ed15","block_type":"box","text":"RELATED TECHNOLOGIES ACTIVE ETF","page_number":4,"box":{"x":119,"y":159,"width":771,"height":23}},{"id":"46b41da3-9f00-4120-b3c6-88709e624b97","block_type":"box","text":"Part I of this Statement of Additional Information (“SAI”) sets forth information about iShares Future","page_number":4,"box":{"x":117,"y":211,"width":739,"height":12}},{"id":"72659e69-4d52-4aca-b08b-77f8b3c6a8e7","block_type":"box","text":"Robotics and Related Technologies Active ETF (the “Fund”), a series of BlackRock ETF Trust (the","page_number":4,"box":{"x":117,"y":227,"width":734,"height":12}},{"id":"09fde4c6-fe38-4055-8da5-6e9f3936ff38","block_type":"box","text":"“Trust”). It includes information about the Trust’s Board of Trustees (the “Board”), the advisory and","page_number":4,"box":{"x":116,"y":242,"width":735,"height":12}},{"id":"93947e71-836d-4516-af6d-b0abee37629d","block_type":"box","text":"management services provided to and the management fees paid by the Fund and information about","page_number":4,"box":{"x":117,"y":258,"width":754,"height":12}},{"id":"81202e3e-6a72-4891-beb8-cb4c5727ba7d","block_type":"box","text":"other fees applicable to and services provided to the Fund. This Part I of this SAI should be read in","page_number":4,"box":{"x":116,"y":273,"width":738,"height":12}},{"id":"6ccca267-c6f4-4e69-9078-c375f244f345","block_type":"box","text":"conjunction with the Fund’s Prospectus and those portions of Part II of this SAI that pertain to the","page_number":4,"box":{"x":116,"y":289,"width":725,"height":12}},{"id":"ae7fc76e-a9a7-4d27-b46b-0271f9ae90f5","block_type":"box","text":"Fund.","page_number":4,"box":{"x":117,"y":304,"width":46,"height":10}},{"id":"837d6a02-3eec-4600-bba6-b731468d0209","block_type":"box","text":"General Description of the Fund","page_number":4,"box":{"x":118,"y":355,"width":582,"height":29}},{"id":"d562e6d5-f818-48d2-b3b7-e814ed2783b4","block_type":"box","text":"The Fund is managed by BlackRock Fund Advisors (“BFA”), an indirect majority-owned subsidiary of","page_number":4,"box":{"x":116,"y":407,"width":752,"height":13}},{"id":"7fda0d1b-6db5-4eb2-806a-a3c84bae53cb","block_type":"box","text":"BlackRock, Inc.","page_number":4,"box":{"x":117,"y":423,"width":119,"height":11}},{"id":"134fdf5d-a28c-4f73-b3f1-e1af5e2ad008","block_type":"box","text":"The Fund offers and issues shares at their net asset value per share (“NAV”) only in aggregations of a","page_number":4,"box":{"x":116,"y":454,"width":763,"height":12}},{"id":"0e5cfd94-ba9b-4945-b5a9-7b47a8baebf1","block_type":"box","text":"specified number of shares (each, a “Creation Unit”), generally in exchange for a designated portfolio","page_number":4,"box":{"x":116,"y":469,"width":755,"height":13}},{"id":"94667ae1-0d7a-4420-a891-5e5f30129fae","block_type":"box","text":"of securities (including any portion of such securities for which cash may be substituted) (the “Deposit","page_number":4,"box":{"x":116,"y":485,"width":759,"height":12}},{"id":"4c3a3231-4816-402f-93c7-57526c05a63c","block_type":"box","text":"Securities” or “Creation Basket”), together with the deposit of a specified cash payment (the “Cash","page_number":4,"box":{"x":116,"y":500,"width":734,"height":13}},{"id":"35fb2105-e071-41a0-a2fe-954941c1f3f3","block_type":"box","text":"Component”). Shares of the Fund are listed for trading","page_number":4,"box":{"x":117,"y":516,"width":408,"height":12}},{"id":"61691128-d3c2-4123-8f74-b8f190d05ff3","block_type":"box","text":"on NYSE Arca, Inc. (the “Listing Exchange” or","page_number":4,"box":{"x":525,"y":516,"width":347,"height":12}},{"id":"c88a9a6b-db57-4a1a-a515-24819e1c5897","block_type":"box","text":"“NYSE Arca”), a national securities exchange. Shares of the Fund are traded in the secondary market","page_number":4,"box":{"x":116,"y":531,"width":760,"height":13}},{"id":"74c625f2-d4db-48d0-89ae-f0b881e0413f","block_type":"box","text":"and elsewhere at market prices that may be at, above or below the Fund’s NAV. Shares are","page_number":4,"box":{"x":116,"y":547,"width":687,"height":12}},{"id":"aa3ee8da-45b4-4bf4-9eb6-746a50293e4f","block_type":"box","text":"redeemable by the Fund only in Creation Units by Authorized Participants (as defined in the","page_number":4,"box":{"x":117,"y":562,"width":684,"height":13}},{"id":"bba67f9d-e4ab-457b-bce8-08e9b5e41683","block_type":"box","text":"Procedures for Creation of Creation Units","page_number":4,"box":{"x":116,"y":578,"width":308,"height":9}},{"id":"61d3cfa1-0ce9-487a-91a2-a69a95f29748","block_type":"box","text":"s section of this SAI), and, generally, in exchange for portfolio","page_number":4,"box":{"x":424,"y":578,"width":454,"height":12}},{"id":"04d96c20-8fbc-4a4e-a854-3af6e0143b6b","block_type":"box","text":"securities and a Cash Amount (as defined in the","page_number":4,"box":{"x":116,"y":593,"width":363,"height":13}},{"id":"c96ae160-3970-43cc-a049-dc305fe65bc7","block_type":"box","text":"Redemption of Creation Units","page_number":4,"box":{"x":480,"y":593,"width":219,"height":12}},{"id":"c6b8d474-f7d6-4b09-85e1-00c8900f66b9","block_type":"box","text":"s section of this SAI).","page_number":4,"box":{"x":699,"y":593,"width":155,"height":13}},{"id":"18d1d6aa-ac61-4df8-84a2-24caf3c676b6","block_type":"box","text":"Creation Units typically are a specified number of shares, generally 40,000 shares or multiples thereof.","page_number":4,"box":{"x":117,"y":609,"width":766,"height":12}},{"id":"9cb41de6-7419-4746-b588-6bd26a227325","block_type":"box","text":"The Trust reserves the right to permit or require that creations and redemptions of shares are effected","page_number":4,"box":{"x":116,"y":640,"width":762,"height":12}},{"id":"fa3af2cf-ca2a-4c2b-bcd5-b7ac063e1bd2","block_type":"box","text":"fully or partially in cash and reserves the right to permit or require the substitution of Deposit Securities","page_number":4,"box":{"x":116,"y":655,"width":766,"height":13}},{"id":"f47d8308-5c87-40b9-9dcb-cdd8004de945","block_type":"box","text":"in lieu of cash. Shares may be issued in advance of receipt of Deposit Securities, subject to various","page_number":4,"box":{"x":117,"y":671,"width":736,"height":12}},{"id":"0b23e580-64d3-4fd9-b76f-77c6f6211128","block_type":"box","text":"conditions, including a requirement that the Authorized Participant maintain with the Trust collateral as","page_number":4,"box":{"x":116,"y":687,"width":758,"height":12}},{"id":"2584b5f2-2105-4e39-93f4-637357394d01","block_type":"box","text":"set forth in the handbook for Authorized Participants. The Trust may use such collateral at any time to","page_number":4,"box":{"x":116,"y":702,"width":754,"height":12}},{"id":"1956f1c0-b530-4c7e-b34b-6dcbd43e1176","block_type":"box","text":"purchase Deposit Securities. See the","page_number":4,"box":{"x":117,"y":717,"width":275,"height":12}},{"id":"9825ec67-fd6f-4e37-9461-4a4e4e9503ad","block_type":"box","text":"Creation and Redemption of Creation Units","page_number":4,"box":{"x":399,"y":717,"width":320,"height":12}},{"id":"c1c4298f-c1c1-4867-bc39-56398d614a21","block_type":"box","text":"section of this SAI.","page_number":4,"box":{"x":724,"y":717,"width":138,"height":10}},{"id":"a319f231-0899-4e19-a9bf-a823356d36a7","block_type":"box","text":"Transaction fees and other costs associated with creations or redemptions that include a cash portion","page_number":4,"box":{"x":116,"y":733,"width":754,"height":12}},{"id":"5a903c15-fad6-4009-9d35-f68aa1e67fb9","block_type":"box","text":"may be higher than the transaction fees and other costs associated with in-kind creations or","page_number":4,"box":{"x":117,"y":748,"width":681,"height":13}},{"id":"1fbbeb03-e99e-4bb7-abf5-fc2bdd75748b","block_type":"box","text":"redemptions. In all cases, conditions with respect to creations and redemptions of shares and fees will","page_number":4,"box":{"x":117,"y":764,"width":757,"height":12}},{"id":"75e26e80-da1b-419c-a587-e08a8dafb8a1","block_type":"box","text":"be limited in accordance with the requirements of SEC rules and regulations applicable to","page_number":4,"box":{"x":117,"y":780,"width":663,"height":12}},{"id":"33e96582-34b0-4aca-ab71-0671c816ebfd","block_type":"box","text":"management investment companies offering redeemable securities.","page_number":4,"box":{"x":117,"y":795,"width":502,"height":12}},{"id":"29a4f755-58e1-460e-94f1-3d924f9992bc","block_type":"box","text":"1","page_number":4,"box":{"x":497,"y":909,"width":4,"height":9}},{"id":"f14bd2e6-ad3d-4d1d-a8ba-91a676c1968a","block_type":"box","text":"NM1026U-6039989-4/256","page_number":4,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"270d5f81-4ca0-48dc-a3ed-4b73a46bea6e","block_type":"box","text":"Exchange Listing and Trading","page_number":5,"box":{"x":119,"y":92,"width":542,"height":29}},{"id":"5acb31e4-218c-422b-8cb3-7f721cd24a34","block_type":"box","text":"A discussion of exchange listing and trading matters associated with an investment in the Fund is","page_number":5,"box":{"x":116,"y":144,"width":728,"height":12}},{"id":"b1d1de6c-6a48-406b-bd23-4e61c30f1f6f","block_type":"box","text":"contained in the","page_number":5,"box":{"x":116,"y":160,"width":123,"height":9}},{"id":"5997ea39-87d8-4f9c-9f96-fef4d02f3d93","block_type":"box","text":"Shareholder Information","page_number":5,"box":{"x":240,"y":159,"width":179,"height":10}},{"id":"869b101b-0438-47d9-8052-c793af1c4ff2","block_type":"box","text":"section of the Fund’s Prospectus. The discussion below","page_number":5,"box":{"x":420,"y":159,"width":424,"height":12}},{"id":"0fc07cad-fa9b-4e52-8f7a-ea05a43b6017","block_type":"box","text":"supplements, and should be read in conjunction with, that section of the Prospectus.","page_number":5,"box":{"x":116,"y":175,"width":625,"height":12}},{"id":"21065aaa-4f13-4251-a314-3b12e5a27c25","block_type":"box","text":"Shares of the Fund are listed for trading, and trade throughout the day, on the Listing Exchange and in","page_number":5,"box":{"x":116,"y":206,"width":766,"height":12}},{"id":"a079c9dc-4f19-4b76-8959-07f448d15dd5","block_type":"box","text":"other secondary markets. Shares of the Fund may also be listed on certain non-U.S. exchanges. There","page_number":5,"box":{"x":116,"y":221,"width":771,"height":12}},{"id":"43c19552-ec43-4858-a8f6-54ba33196b09","block_type":"box","text":"can be no assurance that the requirements of the Listing Exchange necessary to maintain the listing of","page_number":5,"box":{"x":116,"y":237,"width":767,"height":12}},{"id":"35aabde7-607d-4596-b81e-7517c21323b8","block_type":"box","text":"shares of the Fund will continue to be met. 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The Board reviews the policy and procedures for disclosure of portfolio","page_number":12,"box":{"x":117,"y":643,"width":735,"height":13}},{"id":"d03004b2-ae11-4683-a040-f5cbe41cec62","block_type":"box","text":"holdings information at least annually.","page_number":12,"box":{"x":117,"y":659,"width":285,"height":12}},{"id":"e3a885f8-4e30-40f7-a1e4-2209a84addf3","block_type":"box","text":"Investment Policies","page_number":12,"box":{"x":119,"y":706,"width":356,"height":22}},{"id":"482c77e1-21bb-40e6-8050-f5ef9a160bb7","block_type":"box","text":"The Board has adopted as fundamental policies the","page_number":12,"box":{"x":116,"y":753,"width":376,"height":12}},{"id":"c6b758b6-2a89-4039-a6b2-e5f427593db9","block_type":"box","text":"following numbered investment policies, which","page_number":12,"box":{"x":497,"y":753,"width":336,"height":12}},{"id":"f3931ee3-cf4c-4fe5-88b1-da881642aaa2","block_type":"box","text":"cannot be changed without the approval of the holders","page_number":12,"box":{"x":116,"y":769,"width":396,"height":12}},{"id":"b7a3a4aa-a3f0-4d9b-a0af-11c86b415e3d","block_type":"box","text":"of a majority of the Fund’s outstanding voting","page_number":12,"box":{"x":517,"y":769,"width":326,"height":12}},{"id":"74b62d5d-35c2-45fa-a596-3e6a54b0c425","block_type":"box","text":"securities. A vote of a majority of the outstandi","page_number":12,"box":{"x":116,"y":784,"width":335,"height":12}},{"id":"95c2be3f-8f89-4158-9368-cf244a539343","block_type":"box","text":"ng voting securities of the Fund is defined in the","page_number":12,"box":{"x":453,"y":784,"width":347,"height":12}},{"id":"9de51d64-c992-4843-a088-e647a657d4a0","block_type":"box","text":"Investment Company Act as the lesser of (i) 67%","page_number":12,"box":{"x":117,"y":800,"width":355,"height":12}},{"id":"d291062a-b513-4f4d-95c5-b83bac8e2027","block_type":"box","text":"or more of the voting securities present at a","page_number":12,"box":{"x":478,"y":800,"width":316,"height":12}},{"id":"654c2dc7-4591-4d88-b0be-3eb979582ec8","block_type":"box","text":"shareholder meeting, if the holders of more than 50%","page_number":12,"box":{"x":116,"y":815,"width":387,"height":12}},{"id":"bf013c83-c496-4730-8cb7-e5ee52bf6eba","block_type":"box","text":"of the outstanding voting securities of the Fund are","page_number":12,"box":{"x":509,"y":815,"width":368,"height":12}},{"id":"2ecaf4b9-f3d3-4438-b84e-d622d7e3a81a","block_type":"box","text":"present or represented by proxy, or (ii) more t","page_number":12,"box":{"x":117,"y":831,"width":330,"height":12}},{"id":"2f25a030-0342-436d-a96e-ef3037d742fb","block_type":"box","text":"han 50% of the outstanding voting securities of the Fund.","page_number":12,"box":{"x":448,"y":831,"width":419,"height":12}},{"id":"45fdffae-ce0f-4eed-b64a-8c177f2b206f","block_type":"box","text":"The Fund has also adopted certain non-fundamental inve","page_number":12,"box":{"x":116,"y":846,"width":417,"height":12}},{"id":"4490641b-2896-4000-bdc7-29a6fe82dcfe","block_type":"box","text":"stment policies, including its investment","page_number":12,"box":{"x":534,"y":846,"width":291,"height":12}},{"id":"a0710aa8-2e6e-4223-bf4a-d2fbc35895d5","block_type":"box","text":"objective. Non-fundamental investment policie","page_number":12,"box":{"x":116,"y":862,"width":335,"height":12}},{"id":"73bcba3e-bc4f-44cc-b44e-5b9ec35a2c16","block_type":"box","text":"s may be changed by the Board without shareholder","page_number":12,"box":{"x":452,"y":862,"width":385,"height":12}},{"id":"db4d758e-4c60-4925-b9e5-0c400e7f981c","block_type":"box","text":"approval. Therefore, the Fund may change its inves","page_number":12,"box":{"x":116,"y":877,"width":375,"height":12}},{"id":"594623dc-941b-48a9-bf0a-703ed3987140","block_type":"box","text":"tment objective without shareholder approval.","page_number":12,"box":{"x":492,"y":877,"width":336,"height":12}},{"id":"54f2f30a-6bcb-4080-b839-c733aa957b10","block_type":"box","text":"9","page_number":12,"box":{"x":496,"y":909,"width":7,"height":9}},{"id":"852cd144-d725-469b-b253-5287503a426c","block_type":"box","text":"NM1026U-6039989-12/256","page_number":12,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"640b911c-d5db-46d7-bb53-df6ce73c9d1f","block_type":"box","text":"Fundamental Investment Policies","page_number":13,"box":{"x":117,"y":87,"width":270,"height":10}},{"id":"d2636727-e5fb-4cdf-af04-7d1e8c1a23fa","block_type":"box","text":"The Fund may not:","page_number":13,"box":{"x":116,"y":110,"width":146,"height":12}},{"id":"6218aa68-69c0-4157-9313-3e45e9a77f4d","block_type":"box","text":"1. Concentrate its investments in a particular industry, as that term is used in the Investment","page_number":13,"box":{"x":118,"y":141,"width":703,"height":12}},{"id":"4b4b37c7-825c-4dfc-8360-9917c128034f","block_type":"box","text":"Company Act, except that the Fund will concentrate its investments in one or more industries or","page_number":13,"box":{"x":150,"y":157,"width":714,"height":12}},{"id":"06615541-18ef-4c04-8154-0e94a600a32a","block_type":"box","text":"groups of industries within the industrials and information technology sectors, in aggregate.","page_number":13,"box":{"x":150,"y":172,"width":680,"height":12}},{"id":"9f4529d2-cf8f-42b7-9850-be261096b0b3","block_type":"box","text":"2. Borrow money, except as permitted under the Investment Company Act.","page_number":13,"box":{"x":116,"y":196,"width":576,"height":12}},{"id":"b278e81a-b87a-4013-82c1-4ca29e71a7d5","block_type":"box","text":"3. Issue senior securities to the extent such issuance would violate the Investment Company Act.","page_number":13,"box":{"x":116,"y":219,"width":741,"height":12}},{"id":"2cc98e16-a60f-4d14-9846-5f4ed4e99d28","block_type":"box","text":"4. Purchase or hold real estate, except the Fund may purchase and hold securities or other","page_number":13,"box":{"x":116,"y":242,"width":697,"height":12}},{"id":"bc7f7848-59a9-4961-af31-019d2eb04554","block_type":"box","text":"instruments that are secured by, or linked to, real estate or interests therein, securities of real","page_number":13,"box":{"x":150,"y":258,"width":696,"height":12}},{"id":"03b058a5-3969-4657-8941-1b6de5b672ba","block_type":"box","text":"estate investment trusts (“REITs”), mortgage-related securities and securities of issuers engaged","page_number":13,"box":{"x":150,"y":273,"width":725,"height":12}},{"id":"e3170d3c-46c9-4931-ae55-ed884cbc8b49","block_type":"box","text":"in the real estate business, and the Fund may purchase and hold real estate as a result of the","page_number":13,"box":{"x":150,"y":289,"width":700,"height":12}},{"id":"13ec15cf-6176-4bb6-9b66-bc819f6d300e","block_type":"box","text":"ownership of securities or other instruments.","page_number":13,"box":{"x":150,"y":304,"width":334,"height":12}},{"id":"b5862c8c-e95d-4141-b0d4-f0e118ae2528","block_type":"box","text":"5. Underwrite securities issued by others, except to the extent that the sale of portfolio securities by","page_number":13,"box":{"x":116,"y":327,"width":757,"height":12}},{"id":"5a0c5ee3-ec83-4514-9181-165259677f40","block_type":"box","text":"the Fund may be deemed to be an underwriting or as otherwise permitted by applicable law.","page_number":13,"box":{"x":150,"y":343,"width":689,"height":12}},{"id":"3cbb46fb-4700-400c-a254-6a31bcad4b64","block_type":"box","text":"6. Purchase or sell commodities or commodity contracts, except as permitted by the Investment","page_number":13,"box":{"x":116,"y":366,"width":731,"height":12}},{"id":"0158d36c-e71f-483d-8845-1acdddd2d702","block_type":"box","text":"Company Act.","page_number":13,"box":{"x":150,"y":382,"width":110,"height":12}},{"id":"d95346e3-b4bd-4273-92d0-bc5e33ef7c81","block_type":"box","text":"7. Make loans to the extent prohibited by the Investment Company Act.","page_number":13,"box":{"x":116,"y":405,"width":548,"height":12}},{"id":"21e8526a-96bc-46fe-b8c7-0021e96e391e","block_type":"box","text":"Notations Regarding the Fund’s Fundamental Investment Policies","page_number":13,"box":{"x":116,"y":436,"width":531,"height":12}},{"id":"797505bf-7a93-4ce0-895c-d34a10901a79","block_type":"box","text":"The following notations are not considered to be part of the Fund’s fundamental investment policies","page_number":13,"box":{"x":116,"y":459,"width":743,"height":12}},{"id":"5f335877-0562-4d95-b674-f0934348ed6c","block_type":"box","text":"and are subject to change without shareholder approval.","page_number":13,"box":{"x":116,"y":475,"width":424,"height":12}},{"id":"b726e443-6e7c-46e9-93bf-cb4b29dfd14f","block_type":"box","text":"With respect to the fundamental policy relating to concentration set forth in (1) above, the Investment","page_number":13,"box":{"x":116,"y":506,"width":753,"height":12}},{"id":"91301320-2476-4403-9ca4-f521cdbdba4b","block_type":"box","text":"Company Act does not define what constitutes “concentration” in an industry. The SEC staff has taken","page_number":13,"box":{"x":117,"y":521,"width":763,"height":12}},{"id":"1a8dac05-b7d8-4d39-8240-036ebec27ec9","block_type":"box","text":"the position that investment of 25% or more of a fund’s total assets in one or more issuers conducting","page_number":13,"box":{"x":116,"y":537,"width":759,"height":12}},{"id":"c46c3ea9-4dc5-4393-8f9e-d003f9213761","block_type":"box","text":"their principal activities in the same industry or group of industries constitutes concentration. It is","page_number":13,"box":{"x":116,"y":552,"width":718,"height":12}},{"id":"caffdfb9-59a3-4310-9573-67a97b5606ac","block_type":"box","text":"possible that interpretations of concentration could change in the future. The policy in (1) above will be","page_number":13,"box":{"x":117,"y":568,"width":763,"height":12}},{"id":"7a2cc0f7-4555-4184-a3a5-36043a3f6dc9","block_type":"box","text":"interpreted to refer to concentration as that term may be interpreted from time to time. The policy also","page_number":13,"box":{"x":117,"y":583,"width":757,"height":12}},{"id":"4b436ccb-d7a8-4ef3-a788-26ae4110c129","block_type":"box","text":"will be interpreted to permit investment without limit in the following: securities of the U.S. government","page_number":13,"box":{"x":116,"y":599,"width":759,"height":12}},{"id":"06afb73b-e6af-44c0-9331-c043d3fcf331","block_type":"box","text":"and its agencies or instrumentalities; securities of state, territory, possession or municipal governments","page_number":13,"box":{"x":116,"y":614,"width":770,"height":12}},{"id":"6aae5b74-83a9-4a50-b033-b06fd2ede70b","block_type":"box","text":"and their authorities, agencies, instrumentalities or political subdivisions; and repurchase agreements","page_number":13,"box":{"x":116,"y":630,"width":756,"height":12}},{"id":"358af14a-4927-45c7-a161-c1027b3d0361","block_type":"box","text":"collateralized by any such obligations. Accordingly, issuers of the foregoing securities will not be","page_number":13,"box":{"x":116,"y":645,"width":718,"height":12}},{"id":"8b30c4f9-3ba2-4849-8a7a-21eed89f3e1e","block_type":"box","text":"considered to be members of any industry. There also will be no limit on investment in issuers","page_number":13,"box":{"x":116,"y":661,"width":696,"height":12}},{"id":"3865d94f-5426-457e-a95a-7229e026eb96","block_type":"box","text":"domiciled in a single jurisdiction or country. Finance companies will be considered to be in the","page_number":13,"box":{"x":116,"y":676,"width":696,"height":12}},{"id":"94a1bdd0-7cb9-4a3d-afa2-9632b78d981d","block_type":"box","text":"industries of their parents if their activities are primarily related to financing the activities of the parents.","page_number":13,"box":{"x":117,"y":692,"width":760,"height":12}},{"id":"76a097f5-e074-47f5-9265-d3dc23530e19","block_type":"box","text":"Each foreign government will be considered to be a member of a separate industry. With respect to the","page_number":13,"box":{"x":117,"y":707,"width":764,"height":12}},{"id":"36eccea8-c839-4f47-8bb5-59c55ffc223e","block_type":"box","text":"Fund’s industry classifications, the Fund currently utilizes any one or more of the industry sub","page_number":13,"box":{"x":117,"y":723,"width":697,"height":12}},{"id":"a46cb660-e380-4797-aa9f-a2964453c45e","block_type":"box","text":"classifications used by one or more widely recognized market indexes or rating group indexes, and/or","page_number":13,"box":{"x":116,"y":738,"width":754,"height":12}},{"id":"8edb0004-277a-4235-8466-949d6b00592b","block_type":"box","text":"as defined by Fund management. The policy also will be interpreted to give broad authority to the Fund","page_number":13,"box":{"x":116,"y":754,"width":764,"height":12}},{"id":"46a68b23-19c2-49a6-b7cc-483a10de5cc8","block_type":"box","text":"as to how to classify issuers within or among industries.","page_number":13,"box":{"x":116,"y":769,"width":412,"height":12}},{"id":"e9550f44-eeb5-4156-a764-3a3eb0b93593","block_type":"box","text":"With respect to the fundamental policy relating to borrowing money set forth in (2) above, the","page_number":13,"box":{"x":116,"y":800,"width":689,"height":12}},{"id":"1ac2c6a0-e499-4f7a-a8c1-bf2900c46cbb","block_type":"box","text":"Investment Company Act permits the Fund to borrow money in amounts of up to one-third of the","page_number":13,"box":{"x":117,"y":816,"width":713,"height":12}},{"id":"026cc204-0823-4591-a0e7-e9a95c09974d","block_type":"box","text":"Fund’s total assets from banks for any purpose, and to borrow up to 5% of the Fund’s total assets from","page_number":13,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"e4563c23-a4a9-4acb-a43f-2d3a2b3cf664","block_type":"box","text":"banks or other lenders for temporary purposes. (The Fund’s total assets include the amounts being","page_number":13,"box":{"x":117,"y":847,"width":740,"height":12}},{"id":"a186cdb9-d718-42ca-b0bc-1b8147ffaa4d","block_type":"box","text":"borrowed.) To limit the risks attendant to borrowing, the Investment Company Act requires the Fund to","page_number":13,"box":{"x":117,"y":862,"width":763,"height":12}},{"id":"9aee3269-a764-4ddd-a6c2-5145c5ad2abc","block_type":"box","text":"maintain at all times an “asset coverage” of at least 300% of the amount of its borrowings. Asset","page_number":13,"box":{"x":117,"y":878,"width":718,"height":12}},{"id":"b9fa7567-4023-424e-a4e0-555e5fd3efb5","block_type":"box","text":"10","page_number":13,"box":{"x":492,"y":909,"width":16,"height":9}},{"id":"d616b7f7-977b-4aec-a411-efb2300f1735","block_type":"box","text":"NM1026U-6039989-13/256","page_number":13,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"e4b78687-e29c-45fb-92d5-8cabeddbf65d","block_type":"box","text":"coverage means the ratio that the value of the Fund’s total assets (including amounts borrowed),","page_number":14,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"0cce5508-691e-469f-9d62-b92a9a71406f","block_type":"box","text":"minus liabilities other than borrowings, bears to the aggregate amount of all borrowings. Borrowing","page_number":14,"box":{"x":117,"y":102,"width":736,"height":13}},{"id":"4fed3911-794c-4023-8f08-4ad40f21fc6f","block_type":"box","text":"money to increase portfolio holdings is known as “leveraging.” Certain trading practices and","page_number":14,"box":{"x":117,"y":118,"width":683,"height":12}},{"id":"48e5c814-7f3c-4bfd-82e5-ed8990747a41","block_type":"box","text":"investments, such as reverse repurchase agreements, may be considered to be borrowings or involve","page_number":14,"box":{"x":117,"y":134,"width":761,"height":12}},{"id":"0b6af685-322e-4993-a556-cb6c12678144","block_type":"box","text":"leverage and thus are subject to the Investment Company Act restrictions. In accordance with","page_number":14,"box":{"x":117,"y":149,"width":700,"height":12}},{"id":"f821dab6-d12b-4151-8994-2822a251b977","block_type":"box","text":"Rule 18f-4 under the Investment Company Act, when the Fund engages in reverse repurchase","page_number":14,"box":{"x":117,"y":165,"width":707,"height":12}},{"id":"b99fab41-728c-42af-b179-23c4087defc5","block_type":"box","text":"agreements and similar financing transactions, the Fund may either (i) maintain asset coverage of at","page_number":14,"box":{"x":116,"y":180,"width":750,"height":12}},{"id":"55967da0-2523-4fdf-855e-c56a3c722b1b","block_type":"box","text":"least 300% with respect to such transactions and any other borrowings in the aggregate, or (ii) treat","page_number":14,"box":{"x":117,"y":196,"width":743,"height":12}},{"id":"501b881b-2b35-46f9-84a6-b798a59a6e3c","block_type":"box","text":"such transactions as “derivatives transactions” and comply with Rule 18f-4 with respect to such","page_number":14,"box":{"x":116,"y":211,"width":711,"height":12}},{"id":"dc59d1df-921b-4c99-8009-0b56f27b2fbb","block_type":"box","text":"transactions. Short-term credits necessary for the settlement of securities transactions and","page_number":14,"box":{"x":116,"y":227,"width":678,"height":12}},{"id":"56c3008b-e2b3-45e7-bbda-fec3b8ee0e61","block_type":"box","text":"arrangements with respect to securities lending will not be considered to be borrowings under the","page_number":14,"box":{"x":116,"y":242,"width":727,"height":12}},{"id":"ad7e9ffb-97ae-47de-8dad-f595d558eb8a","block_type":"box","text":"policy. Practices and investments that may involve leverage but are not considered to be borrowings","page_number":14,"box":{"x":117,"y":258,"width":749,"height":12}},{"id":"a13ff7bb-3ff5-4a37-87e0-7a6c86bfe88d","block_type":"box","text":"are not subject to the policy.","page_number":14,"box":{"x":116,"y":273,"width":214,"height":12}},{"id":"9ba44ef1-446e-44a6-a7b2-79e9c6c657f5","block_type":"box","text":"With respect to the fundamental policy relating to underwriting set forth in (5) above, the Investment","page_number":14,"box":{"x":116,"y":303,"width":744,"height":12}},{"id":"8f8b775f-dc3e-4e08-bfe4-030ee7bac89f","block_type":"box","text":"Company Act does not prohibit the Fund from engaging in the underwriting business or from","page_number":14,"box":{"x":117,"y":318,"width":688,"height":12}},{"id":"be9e838a-fec2-45d6-8323-47c8f7b77fc6","block_type":"box","text":"underwriting the securities of other issuers; in fact, in the case of diversified funds, the Investment","page_number":14,"box":{"x":117,"y":334,"width":729,"height":12}},{"id":"4fb609b2-029f-4c20-bf8d-24725472931a","block_type":"box","text":"Company Act permits the Fund to have underwriting commitments of up to 25% of its assets under","page_number":14,"box":{"x":117,"y":349,"width":737,"height":12}},{"id":"73780da9-1ecf-4727-aafe-edb5cf272a09","block_type":"box","text":"certain circumstances. Those circumstances currently are that the amount of the Fund’s underwriting","page_number":14,"box":{"x":116,"y":365,"width":754,"height":12}},{"id":"a06219bd-6b4f-4643-ad2f-1224935d93ee","block_type":"box","text":"commitments, when added to the value of the Fund’s investments in issuers where the Fund owns","page_number":14,"box":{"x":116,"y":380,"width":735,"height":11}},{"id":"cf6184f8-f19b-45e9-a539-4accb04a328a","block_type":"box","text":"more than 10% of the outstanding voting securities of those issuers, cannot exceed the 25% cap. A","page_number":14,"box":{"x":117,"y":396,"width":742,"height":12}},{"id":"00b13dd2-1a82-4e5e-b63d-7325b2552432","block_type":"box","text":"fund engaging in transactions involving the acquisition or disposition of portfolio securities may be","page_number":14,"box":{"x":116,"y":411,"width":729,"height":12}},{"id":"e391d0d2-63fd-42f3-862b-3fc9df6e38a4","block_type":"box","text":"considered to be an underwriter under the Securities Act of 1933, as amended (the “1933 Act”).","page_number":14,"box":{"x":116,"y":427,"width":714,"height":12}},{"id":"abab3300-a38c-4ab9-a37b-99d9be881d56","block_type":"box","text":"Although it is not believed that the application of the 1933 Act provisions described above would cause","page_number":14,"box":{"x":116,"y":442,"width":767,"height":12}},{"id":"9dcc0745-75ef-4b06-8808-2596b6bab6e1","block_type":"box","text":"the Fund to be engaged in the business of underwriting, the policy in (5) above will be interpreted not","page_number":14,"box":{"x":116,"y":458,"width":754,"height":12}},{"id":"b7c4a8f2-c6d2-4eca-b50e-6bf7eac1551e","block_type":"box","text":"to prevent the Fund from engaging in transactions involving the acquisition or disposition of portfolio","page_number":14,"box":{"x":116,"y":473,"width":745,"height":12}},{"id":"8ca58cad-4c9f-4cac-bb84-661f6269339b","block_type":"box","text":"securities, regardless of whether the Fund may be considered to be an underwriter under the 1933 Act","page_number":14,"box":{"x":116,"y":489,"width":766,"height":12}},{"id":"35f1531c-c7d5-4ea6-8c72-6cd5830787e6","block_type":"box","text":"or is otherwise engaged in the underwriting business to the extent permitted by applicable law.","page_number":14,"box":{"x":116,"y":504,"width":706,"height":12}},{"id":"0e022a9e-f8cd-4ea6-bb91-9d29219969ce","block_type":"box","text":"With respect to the fundamental policy relating to lending set forth in (7) above, the Investment","page_number":14,"box":{"x":116,"y":534,"width":706,"height":12}},{"id":"2d387e61-32fe-4189-952e-fd172ac3a142","block_type":"box","text":"Company Act does not prohibit the Fund from making loans (including lending its securities); however,","page_number":14,"box":{"x":117,"y":549,"width":763,"height":12}},{"id":"8dd93281-1ac4-4b30-8c78-7abf812d1b67","block_type":"box","text":"SEC staff interpretations currently prohibit funds from lending more than one-third of their total assets","page_number":14,"box":{"x":116,"y":565,"width":757,"height":12}},{"id":"4c382ebf-7aa4-476f-ab31-7cb094451a8d","block_type":"box","text":"(including lending its securities), except through the purchase of debt obligations or the use of","page_number":14,"box":{"x":117,"y":580,"width":699,"height":12}},{"id":"e5e00042-a52e-46e2-b469-368d5f68749d","block_type":"box","text":"repurchase agreements. 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The Fund also has adopted a policy to","page_number":14,"box":{"x":117,"y":741,"width":709,"height":12}},{"id":"61069ddb-848d-423d-9240-c33418aa97f1","block_type":"box","text":"provide its shareholders with at least 60 days’ notice of any change in such policy. If, subsequent to an","page_number":14,"box":{"x":117,"y":756,"width":760,"height":13}},{"id":"d06ebc2a-22fb-4f93-be20-2a7a2b9b6b2c","block_type":"box","text":"investment, the 80% requirement is no longer met, the Fund’s future investments will be made in a","page_number":14,"box":{"x":117,"y":772,"width":730,"height":12}},{"id":"e52c4ff3-04d4-4324-94a8-0adc7a90d0bc","block_type":"box","text":"manner that will bring the Fund into compliance with this policy.","page_number":14,"box":{"x":117,"y":788,"width":468,"height":12}},{"id":"e460dafa-c93a-4033-acda-f2acbc239360","block_type":"box","text":"Under its non-fundamental investment policies, which may be changed by the Board without","page_number":14,"box":{"x":117,"y":817,"width":683,"height":12}},{"id":"af243c11-5ecc-4de0-ba9a-48ca6fabe4da","block_type":"box","text":"shareholder approval, the Fund may not:","page_number":14,"box":{"x":116,"y":833,"width":308,"height":12}},{"id":"6b67f2dc-8007-4b3e-8d4f-97ddfdaa8f01","block_type":"box","text":"a. 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As a matter of policy, however, the Fund will not purchase shares of","page_number":14,"box":{"x":151,"y":878,"width":706,"height":12}},{"id":"53a763b8-8f96-4964-84c3-c381a7080335","block_type":"box","text":"11","page_number":14,"box":{"x":492,"y":909,"width":14,"height":9}},{"id":"650dedbb-b54d-4d23-9e2c-ffd120c02c09","block_type":"box","text":"NM1026U-6039989-14/256","page_number":14,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"699f5172-c483-4c44-a3d1-d1fb7be9cc05","block_type":"box","text":"any registered open-end investment company or registered unit investment trust, in reliance on","page_number":15,"box":{"x":150,"y":87,"width":710,"height":12}},{"id":"25dda3c6-5c68-4ce1-8933-0dce01c6de01","block_type":"box","text":"Section 12(d)(1)(F) or (G) (the “fund of funds” provisions) of the Investment Company Act, at any","page_number":15,"box":{"x":150,"y":102,"width":723,"height":13}},{"id":"d2581132-1627-4a2a-b254-25d6090e85af","block_type":"box","text":"time the Fund has knowledge that its shares are purchased by another investment company","page_number":15,"box":{"x":150,"y":118,"width":689,"height":12}},{"id":"c6a9e3b9-9da1-4968-984a-4467dbb08ea1","block_type":"box","text":"investor in reliance on the provisions of subparagraph (G) of Section 12(d)(1).","page_number":15,"box":{"x":150,"y":134,"width":581,"height":12}},{"id":"ed0ec96f-01bb-4151-864a-dac337216142","block_type":"box","text":"b. Make short sales of securities or maintain a short position, except to the extent permitted by the","page_number":15,"box":{"x":117,"y":157,"width":748,"height":12}},{"id":"1c43eb43-f1b3-4123-81c5-14cb441a5cac","block_type":"box","text":"Fund’s Prospectus and SAI, as amended from time to time, and applicable law.","page_number":15,"box":{"x":151,"y":172,"width":592,"height":12}},{"id":"5c7ba15a-4f23-4afe-b2b8-6b51cf31fcb8","block_type":"box","text":"Unless otherwise indicated or with respect to policies adopted pursuant to Rule 35d-1 under the","page_number":15,"box":{"x":117,"y":203,"width":714,"height":12}},{"id":"d7e3201f-2baa-498c-9747-d0846d08817d","block_type":"box","text":"Investment Company Act, all limitations under the Fund’s fundamental or non-fundamental investment","page_number":15,"box":{"x":117,"y":219,"width":762,"height":12}},{"id":"180259db-170c-401c-938a-aec7b244dc94","block_type":"box","text":"policies apply only at the time that a transaction is undertaken. Any change in the percentage of the","page_number":15,"box":{"x":117,"y":234,"width":743,"height":12}},{"id":"5e13cec3-99a7-4cee-819b-54b90d34ba74","block_type":"box","text":"Fund’s assets invested in certain securities or other instruments resulting from market fluctuations or","page_number":15,"box":{"x":117,"y":250,"width":750,"height":12}},{"id":"54cfca09-1460-4adb-bb40-838f4d3020f9","block_type":"box","text":"other changes in the Fund’s total assets will not require the Fund to dispose of an investment until BFA","page_number":15,"box":{"x":116,"y":265,"width":769,"height":12}},{"id":"d5b248ba-b713-4ede-a2b9-f73b31399460","block_type":"box","text":"determines that it is practicable to sell or close out the investment without undue market or tax","page_number":15,"box":{"x":116,"y":281,"width":704,"height":12}},{"id":"6e43d152-94c1-4d23-a9f5-66af00c4f672","block_type":"box","text":"consequences.","page_number":15,"box":{"x":116,"y":299,"width":118,"height":9}},{"id":"3276c8af-80a3-4761-9624-5c0301079d04","block_type":"box","text":"Continuous Offering","page_number":15,"box":{"x":118,"y":348,"width":368,"height":29}},{"id":"3f857667-b3e9-43b7-a0da-06a983d916ae","block_type":"box","text":"The method by which Creation Units are created and traded may raise certain issues under applicable","page_number":15,"box":{"x":116,"y":400,"width":764,"height":12}},{"id":"91c3e5ed-c1ef-424b-ab6d-acd468ed2a6a","block_type":"box","text":"securities laws. Because new Creation Units are issued and sold by the Fund on an ongoing basis, at","page_number":15,"box":{"x":116,"y":415,"width":758,"height":12}},{"id":"8ad31dac-6ac0-4e9d-827d-972d014ca8ec","block_type":"box","text":"any point a “distribution,” as such term is used in the 1933 Act, may occur. Broker-dealers and other","page_number":15,"box":{"x":116,"y":431,"width":748,"height":12}},{"id":"f241921b-51f5-4da2-ad5b-b43a0e7bbf7a","block_type":"box","text":"persons are cautioned that some activities on their part may, depending on the circumstances, result in","page_number":15,"box":{"x":117,"y":446,"width":769,"height":12}},{"id":"77c8bc48-a84e-4265-8efe-d672358b5f91","block_type":"box","text":"their being deemed participants in a distribution in a manner that could render them statutory","page_number":15,"box":{"x":116,"y":462,"width":693,"height":12}},{"id":"908f9b5a-0947-4e20-bf96-e7234ea74015","block_type":"box","text":"underwriters and subject them to the prospectus delivery requirement and liability provisions of the","page_number":15,"box":{"x":117,"y":477,"width":735,"height":12}},{"id":"5a5da363-cb20-4efb-b5e4-be7b7df31f9e","block_type":"box","text":"1933 Act.","page_number":15,"box":{"x":118,"y":493,"width":73,"height":9}},{"id":"8fc5bf4b-80d0-48ff-a069-75cbbcbeaddc","block_type":"box","text":"For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes","page_number":15,"box":{"x":117,"y":524,"width":707,"height":12}},{"id":"4004b85f-8514-443b-8cfe-aa5070ce5c01","block_type":"box","text":"Creation Units after placing an order with the Distributor, breaks them down into constituent shares and","page_number":15,"box":{"x":117,"y":539,"width":771,"height":12}},{"id":"a0fdf9e1-390c-490b-ac88-5d51c0eb3820","block_type":"box","text":"sells such shares directly to customers or if it chooses to couple the creation of new shares with an","page_number":15,"box":{"x":116,"y":555,"width":739,"height":12}},{"id":"6f655e04-2ab7-4a90-9328-a67119ed54c9","block_type":"box","text":"active selling effort involving solicitation of secondary market demand for shares. A determination of","page_number":15,"box":{"x":116,"y":570,"width":745,"height":12}},{"id":"276fc391-12c9-4310-b7dd-ec3b85b117c6","block_type":"box","text":"whether one is an underwriter for purposes of the 1933 Act must take into account all of the facts and","page_number":15,"box":{"x":116,"y":586,"width":757,"height":12}},{"id":"912c96b5-185e-4edc-aa9b-6741b138ad0b","block_type":"box","text":"circumstances pertaining to the activities of the broker-dealer or its client in the particular case and the","page_number":15,"box":{"x":116,"y":601,"width":764,"height":12}},{"id":"a200552b-5672-46fb-9595-267167bf50cf","block_type":"box","text":"examples mentioned above should not be considered a complete description of all the activities that","page_number":15,"box":{"x":116,"y":617,"width":746,"height":12}},{"id":"6e9e46b7-29fc-4949-a05e-e3f5ccbc7e9a","block_type":"box","text":"could lead to a categorization as an underwriter.","page_number":15,"box":{"x":116,"y":632,"width":363,"height":12}},{"id":"52fe6d14-62d5-4313-aef8-0233dfe3a7f8","block_type":"box","text":"Broker-dealer firms should also note that dealers who are not “underwriters” but are effecting","page_number":15,"box":{"x":117,"y":663,"width":687,"height":12}},{"id":"6b8ff766-6fe9-498c-897f-6fe35f464339","block_type":"box","text":"transactions in shares, whether or not participating in the distribution of shares, generally are required","page_number":15,"box":{"x":116,"y":679,"width":754,"height":12}},{"id":"dfd3bca7-edc4-4a17-b9d9-e95c53909f11","block_type":"box","text":"to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3) of the","page_number":15,"box":{"x":116,"y":694,"width":736,"height":12}},{"id":"e237af3d-ffd8-43d8-ba30-46e98936b183","block_type":"box","text":"1933 Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act.","page_number":15,"box":{"x":118,"y":710,"width":739,"height":12}},{"id":"2789a5db-f1b6-4786-b5fb-2d359f806c58","block_type":"box","text":"Firms that incur a prospectus delivery obligation with respect to shares of the Fund are reminded that,","page_number":15,"box":{"x":117,"y":725,"width":753,"height":12}},{"id":"730f4951-2618-456a-ac19-56024d5ec74d","block_type":"box","text":"pursuant to Rule 153 under the 1933 Act, a prospectus delivery obligation under Section 5(b)(2) of the","page_number":15,"box":{"x":117,"y":741,"width":757,"height":12}},{"id":"8e137c96-d89c-452b-afb2-bc2aed3fc60e","block_type":"box","text":"1933 Act owed to an exchange member in connection with a sale on the Listing Exchange generally is","page_number":15,"box":{"x":118,"y":756,"width":757,"height":12}},{"id":"ef6bd9a7-a22d-4672-9c54-b3ac4cec7c61","block_type":"box","text":"satisfied by the fact that the prospectus is available at the Listing Exchange upon request. The","page_number":15,"box":{"x":116,"y":772,"width":700,"height":12}},{"id":"4c92cbad-e59d-4d68-8d2d-f1d83f130a47","block_type":"box","text":"prospectus delivery mechanism provided in Rule 153 is available only with respect to transactions on","page_number":15,"box":{"x":117,"y":787,"width":748,"height":12}},{"id":"5ad0f6e8-6563-41e5-8816-b9a1566566c2","block_type":"box","text":"an exchange.","page_number":15,"box":{"x":116,"y":803,"width":99,"height":12}},{"id":"097bfee3-0792-439a-a593-dc8a34348da8","block_type":"box","text":"12","page_number":15,"box":{"x":492,"y":909,"width":16,"height":9}},{"id":"b6edb205-5ff4-467f-8258-67a1a1147bdb","block_type":"box","text":"NM1026U-6039989-15/256","page_number":15,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ce88459d-b87b-4cc9-aeb2-730f08efe449","block_type":"box","text":"Management","page_number":16,"box":{"x":119,"y":92,"width":244,"height":29}},{"id":"11ed129d-79aa-4f1f-b528-e094db5aad7d","block_type":"box","text":"Trustees and Officers.","page_number":16,"box":{"x":116,"y":144,"width":176,"height":9}},{"id":"acb33e49-d9c8-4d3f-8118-cd2a969498a2","block_type":"box","text":"The Board of the Trust consists of fifteen Trustees, thirteen of whom are not","page_number":16,"box":{"x":294,"y":144,"width":574,"height":11}},{"id":"ceb014cb-c235-4ea1-bcd0-c90e7966fef7","block_type":"box","text":"“interested persons” of the Trust as defined in the 1940 Act (the “Independent Trustees”). The","page_number":16,"box":{"x":116,"y":159,"width":701,"height":12}},{"id":"4c39af20-f35a-4d54-8287-26908ae002b3","block_type":"box","text":"registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are","page_number":16,"box":{"x":117,"y":175,"width":759,"height":12}},{"id":"e99f927a-e157-4282-9bab-01562450c711","block_type":"box","text":"organized into the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex, and the","page_number":16,"box":{"x":116,"y":190,"width":741,"height":12}},{"id":"5a91a5df-2fd5-4b56-9d51-8fd64a1b98c8","block_type":"box","text":"iShares Complex (each, a “BlackRock Fund Complex”). The Trust is included in the BlackRock Fund","page_number":16,"box":{"x":117,"y":206,"width":751,"height":12}},{"id":"e630f5a8-a990-468c-8578-f0128093fd3a","block_type":"box","text":"Complex referred to as the BlackRock Multi-Asset Complex. The Trustees also oversee as board","page_number":16,"box":{"x":117,"y":221,"width":725,"height":12}},{"id":"69dff905-071b-46df-838f-8679c7c4168d","block_type":"box","text":"members the operations of the other open-end registered investment companies included in the","page_number":16,"box":{"x":117,"y":237,"width":715,"height":12}},{"id":"51177d70-4469-4428-9b82-1dcf1cad883e","block_type":"box","text":"BlackRock Multi-Asset Complex.","page_number":16,"box":{"x":117,"y":252,"width":246,"height":12}},{"id":"7af15623-b37a-4f07-b423-0aa72392e394","block_type":"box","text":"Biographical Information","page_number":16,"box":{"x":117,"y":283,"width":203,"height":12}},{"id":"af4bf1e7-e7ab-4d08-8328-61116604fa37","block_type":"box","text":"Interested Trustees","page_number":16,"box":{"x":117,"y":307,"width":159,"height":9}},{"id":"a4289751-b26f-400a-8a06-78b251592bf2","block_type":"box","text":"Name 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(since 2006);","page_number":23,"box":{"x":487,"y":123,"width":358,"height":11}},{"id":"58bbadbc-d046-4da1-8298-5b212674c640","block_type":"box","text":"Chief Compliance Officer of BlackRock Advisors, LLC","page_number":23,"box":{"x":487,"y":138,"width":378,"height":11}},{"id":"ce4e9bf3-f481-45bb-a118-da7fbf870ac0","block_type":"box","text":"(since 2014) and BlackRock Fund Advisors (since","page_number":23,"box":{"x":487,"y":153,"width":352,"height":11}},{"id":"f6805bf6-5f3c-45d6-ab4c-72fa0a4dddce","block_type":"box","text":"2006); Chief Compliance Officer of the iShares","page_number":23,"box":{"x":486,"y":168,"width":331,"height":11}},{"id":"73cf49d3-93c0-4274-b2ce-056ce1c2a13e","block_type":"box","text":"Complex (since 2026 and 2006-2023); Chief","page_number":23,"box":{"x":487,"y":182,"width":314,"height":12}},{"id":"9e31506a-e46b-4c24-ac6c-181ef528c77d","block_type":"box","text":"Compliance Officer of the BlackRock Multi-Asset","page_number":23,"box":{"x":487,"y":197,"width":343,"height":12}},{"id":"bf06bc4a-ddff-419d-b9b3-0ad54e747c8a","block_type":"box","text":"Complex and the BlackRock Fixed-Income Complex","page_number":23,"box":{"x":487,"y":212,"width":369,"height":12}},{"id":"1e9a11ac-c2df-498c-99c3-979e68462c4a","block_type":"box","text":"(since 2026 and 2014-2023).","page_number":23,"box":{"x":487,"y":227,"width":202,"height":11}},{"id":"6a43368a-7c30-4e12-b1b2-a2f691badc80","block_type":"box","text":"Lisa Belle","page_number":23,"box":{"x":117,"y":250,"width":68,"height":9}},{"id":"af8de1f5-bf69-4b1c-81f4-3dbb782d9539","block_type":"box","text":"1968","page_number":23,"box":{"x":117,"y":265,"width":34,"height":9}},{"id":"30acc037-e627-40cf-87f8-beae9785907d","block_type":"box","text":"Anti-Money Laundering","page_number":23,"box":{"x":287,"y":250,"width":165,"height":11}},{"id":"7d2e71b9-90f9-4e0c-8f77-1b9309411fd6","block_type":"box","text":"Compliance Officer","page_number":23,"box":{"x":288,"y":264,"width":136,"height":12}},{"id":"ce92d30e-fb12-43a4-a6db-19dc32d82c47","block_type":"box","text":"(Since 2019)","page_number":23,"box":{"x":288,"y":279,"width":89,"height":12}},{"id":"cb640bc7-343b-4f43-9f42-69368c003793","block_type":"box","text":"Managing Director of BlackRock, Inc. since 2019.","page_number":23,"box":{"x":487,"y":250,"width":347,"height":11}},{"id":"c5a9c305-719a-47eb-914f-2500e1944072","block_type":"box","text":"Janey Ahn","page_number":23,"box":{"x":116,"y":302,"width":74,"height":11}},{"id":"7335afb2-e603-4669-8812-f3e1b124e426","block_type":"box","text":"1975","page_number":23,"box":{"x":117,"y":317,"width":34,"height":9}},{"id":"9edf09b7-e157-47ff-a1b4-2054c3291e6a","block_type":"box","text":"Secretary","page_number":23,"box":{"x":288,"y":302,"width":68,"height":11}},{"id":"11c4485b-2303-4d9c-9d82-c5e276f51fe9","block_type":"box","text":"(Since 2019)","page_number":23,"box":{"x":288,"y":317,"width":89,"height":11}},{"id":"3f9853db-b805-4584-9bb7-905b635e41e7","block_type":"box","text":"Managing Director of BlackRock, Inc. since 2018.","page_number":23,"box":{"x":487,"y":302,"width":347,"height":11}},{"id":"311c5c2f-66f8-4e89-bf67-c840cd70e262","block_type":"box","text":"1","page_number":23,"box":{"x":144,"y":366,"width":2,"height":5}},{"id":"c39d557e-d28c-4bc6-9f55-8fff43dde5f0","block_type":"box","text":"The address of each Officer is c/o BlackRock, Inc., 50 Hudson Yards, New York, New York 10001.","page_number":23,"box":{"x":170,"y":366,"width":584,"height":9}},{"id":"08825ec9-e970-4434-b190-bc92fecb49a9","block_type":"box","text":"2","page_number":23,"box":{"x":143,"y":382,"width":4,"height":4}},{"id":"4f83eb6e-4386-4de7-a472-eb7a4b101009","block_type":"box","text":"Officers of the Trust serve at the pleasure of the Board.","page_number":23,"box":{"x":170,"y":382,"width":326,"height":9}},{"id":"947b1782-efe9-42ae-98d6-946659be49c7","block_type":"box","text":"3","page_number":23,"box":{"x":143,"y":397,"width":4,"height":5}},{"id":"cae1d689-c48e-403c-b065-bea6048bcef6","block_type":"box","text":"Effective August 1, 2026, Charles Park succeeded Aaron Wasserman as Chief Compliance Officer.","page_number":23,"box":{"x":171,"y":397,"width":588,"height":10}},{"id":"9ba777ab-ec76-40a7-a892-e4215848b283","block_type":"box","text":"Each Trustee’s ability to perform his or her duties effectively is evidenced by his or her educational","page_number":23,"box":{"x":117,"y":426,"width":735,"height":12}},{"id":"a0e06d88-1d7a-4e36-8116-af2b39589642","block_type":"box","text":"background or professional training; business, consulting, public service or academic positions;","page_number":23,"box":{"x":117,"y":442,"width":710,"height":12}},{"id":"9a866238-977b-42fe-bff7-94aad59c5a0a","block_type":"box","text":"experience from service as a board member of the Trust and the other funds in the BlackRock Fund","page_number":23,"box":{"x":116,"y":457,"width":747,"height":12}},{"id":"402a11ba-e337-4038-9f97-0bda84e59585","block_type":"box","text":"Complexes (and any predecessor funds), other investment funds, public companies, non-profit entities","page_number":23,"box":{"x":117,"y":473,"width":764,"height":12}},{"id":"b2b87a23-3380-4b89-9853-67ed82b14c02","block_type":"box","text":"or other organizations; ongoing commitment to and participation in Board and Board committee (each,","page_number":23,"box":{"x":116,"y":488,"width":763,"height":12}},{"id":"13135482-8606-4439-94bb-dfecdf32906e","block_type":"box","text":"a “Committee”) meetings, as well as his or her leadership of standing and ad hoc committees","page_number":23,"box":{"x":116,"y":504,"width":696,"height":12}},{"id":"10411b29-2634-494c-b748-2363bb36fced","block_type":"box","text":"throughout the years; or other relevant life experiences.","page_number":23,"box":{"x":116,"y":519,"width":417,"height":12}},{"id":"28adb7f9-1fd7-49dc-92a3-5983bb7cfa11","block_type":"box","text":"Set forth below is a discussion of some of the experiences, qualifications and skills of each of the","page_number":23,"box":{"x":116,"y":550,"width":725,"height":12}},{"id":"ec2934b8-a465-4fd5-84e4-92e5d32c2afe","block_type":"box","text":"Trustees that support the conclusion that each Trustee should serve on the Board.","page_number":23,"box":{"x":116,"y":566,"width":617,"height":12}},{"id":"8ac847e5-a018-47fc-90f4-3cd90516acb8","block_type":"box","text":"Interested Trustees","page_number":23,"box":{"x":117,"y":605,"width":159,"height":9}},{"id":"886ff174-10f1-4fdb-96b4-90c043c536c3","block_type":"box","text":"Robert Fairbairn has more than 25 years of experience with BlackRock, Inc. and over 30 years of","page_number":23,"box":{"x":117,"y":628,"width":726,"height":12}},{"id":"ccc368ea-9481-47d8-ab2d-8ef535f2929d","block_type":"box","text":"experience in finance and asset management. In particular, Mr. Fairbairn’s positions as Vice Chairman","page_number":23,"box":{"x":116,"y":643,"width":767,"height":12}},{"id":"5661f068-1e31-43ac-a08b-90fcf347f288","block_type":"box","text":"of BlackRock, Inc., Member of BlackRock’s Global Operating Committee and Co-Chair of BlackRock’s","page_number":23,"box":{"x":116,"y":659,"width":763,"height":12}},{"id":"3a7c06ad-9760-406d-8ea2-018d1f697828","block_type":"box","text":"Human Capital Committee provide the Board with a wealth of practical business knowledge and","page_number":23,"box":{"x":117,"y":674,"width":709,"height":12}},{"id":"354e32dd-97eb-4e71-a6f9-171b03801e37","block_type":"box","text":"leadership. In addition, Mr. Fairbairn has global investment management and oversight experience","page_number":23,"box":{"x":117,"y":690,"width":731,"height":12}},{"id":"5e258206-44a4-4bcc-9c69-e17032aef67f","block_type":"box","text":"through his former positions as Member of BlackRock’s Global Executive Committee, Global Head of","page_number":23,"box":{"x":116,"y":705,"width":751,"height":12}},{"id":"dadf6e6c-d5fe-43c6-ad63-64122a225c82","block_type":"box","text":"BlackRock’s Retail and iShares","page_number":23,"box":{"x":117,"y":721,"width":232,"height":9}},{"id":"2a5cad91-40cf-41b2-8450-85ac2150cc1c","block_type":"box","text":"®","page_number":23,"box":{"x":349,"y":720,"width":10,"height":7}},{"id":"7202801c-21ea-47d6-8d91-1c49f1a8d108","block_type":"box","text":"businesses, Head of BlackRock’s Global Client Group, Chairman of","page_number":23,"box":{"x":364,"y":721,"width":502,"height":12}},{"id":"8c829024-ca41-40ac-98d4-86fb8bc4fdec","block_type":"box","text":"BlackRock’s international businesses and his previous oversight over BlackRock’s Strategic Partner","page_number":23,"box":{"x":117,"y":736,"width":740,"height":12}},{"id":"31c8bc21-d270-4997-b772-8856a3061047","block_type":"box","text":"Program and Strategic Product Management Group. Mr. Fairbairn also serves as a board member for","page_number":23,"box":{"x":117,"y":752,"width":754,"height":12}},{"id":"61808d70-558c-495f-9e6c-0630c1519960","block_type":"box","text":"the funds in the BlackRock Fixed-Income Complex.","page_number":23,"box":{"x":116,"y":767,"width":380,"height":12}},{"id":"9c64f1c4-fdac-4af5-be01-922c076adcb9","block_type":"box","text":"John M. Perlowski’s experience as Senior Managing Director of BlackRock, Inc. since 2026, Managing","page_number":23,"box":{"x":116,"y":798,"width":761,"height":12}},{"id":"65563b57-76a7-49f4-810a-fd58abc570b2","block_type":"box","text":"Director of BlackRock, Inc. from 2009 to 2025, as the Head of BlackRock Global Business Operations","page_number":23,"box":{"x":117,"y":814,"width":754,"height":12}},{"id":"f934ea95-0bb8-4b54-a157-b94f4a28186a","block_type":"box","text":"Services since 2009, and as President and Chief Executive Officer of the BlackRock-advised Funds","page_number":23,"box":{"x":116,"y":829,"width":745,"height":11}},{"id":"d1752868-cf47-4a40-994a-61d603ff149b","block_type":"box","text":"provides him with a strong understanding of the BlackRock-advised Funds, their operations, and the","page_number":23,"box":{"x":117,"y":845,"width":747,"height":12}},{"id":"898e9398-9553-4e5d-a52c-807235117ef5","block_type":"box","text":"business and regulatory issues facing the BlackRock-advised Funds. Mr. Perlowski’s prior position as","page_number":23,"box":{"x":117,"y":860,"width":757,"height":12}},{"id":"66dd0336-3985-4593-9bd7-60edab896be8","block_type":"box","text":"Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset","page_number":23,"box":{"x":117,"y":876,"width":755,"height":12}},{"id":"7ae3bda4-2863-45ec-bd4b-5f5b4171015f","block_type":"box","text":"20","page_number":23,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"807f9e6d-376e-4749-99e7-469522f23bc1","block_type":"box","text":"NM1026U-6039989-23/256","page_number":23,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"779f7e5a-327c-4db4-94fe-028882c0304b","block_type":"box","text":"Management, and his former service as Treasurer and Senior Vice President of the Goldman Sachs","page_number":24,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"b5ea003e-5624-4c03-85b6-9e907815caec","block_type":"box","text":"Mutual Funds and as Director of the Goldman Sachs Offshore Funds provides the Board with the","page_number":24,"box":{"x":117,"y":102,"width":725,"height":12}},{"id":"0ff6c1d6-a769-4da6-82f2-07a4cfacdeea","block_type":"box","text":"benefit of his experience with the management practices of other financial companies. Mr. Perlowski","page_number":24,"box":{"x":117,"y":118,"width":748,"height":12}},{"id":"9ed6a6e1-d70a-4edf-8ea0-09811e8b4879","block_type":"box","text":"also serves as a board member for the funds in the BlackRock Fixed-Income Complex. Mr. Perlowski","page_number":24,"box":{"x":116,"y":134,"width":757,"height":11}},{"id":"a6b4622a-3b19-4aac-987d-80cd539a7723","block_type":"box","text":"is a member of BlackRock’s Global Executive Committee.","page_number":24,"box":{"x":117,"y":149,"width":433,"height":10}},{"id":"77368e94-975f-4507-b6e0-b316c526738a","block_type":"box","text":"Independent Trustees","page_number":24,"box":{"x":117,"y":184,"width":178,"height":12}},{"id":"7153414b-e7c3-4ce3-a738-c8ae3c3fdfc1","block_type":"box","text":"Christopher Ailman has more than 30 years of experience in the financial services industry, including","page_number":24,"box":{"x":117,"y":206,"width":752,"height":12}},{"id":"77470896-2fce-4d4f-bd38-ce2df0c24cda","block_type":"box","text":"most recently serving as Chief Investment Officer of the California State Teachers Retirement System","page_number":24,"box":{"x":117,"y":221,"width":760,"height":12}},{"id":"4dbd68a3-12cf-4918-933d-736628651ef6","block_type":"box","text":"(CalSTRS) from 2000 to June 2024 where he led its investment program. Mr. Ailman currently is a","page_number":24,"box":{"x":117,"y":237,"width":733,"height":12}},{"id":"7c1da3b5-e7d8-4a51-ae67-02e720ddbed2","block_type":"box","text":"principal at Ailman Advisers. In addition, he has held various roles in the industry, including as member","page_number":24,"box":{"x":117,"y":252,"width":768,"height":12}},{"id":"30f2594e-e525-4d05-9c9a-cc145923034d","block_type":"box","text":"and chair of the asset owner committee of the Kroner Center for Financial Research, chairman of the","page_number":24,"box":{"x":116,"y":268,"width":754,"height":11}},{"id":"f766aba7-946f-4ea4-9115-692984cfec8d","block_type":"box","text":"North American Chapter of the 300 Club of Global CIOs, and co-chair of the Milken Global Capital","page_number":24,"box":{"x":117,"y":283,"width":731,"height":12}},{"id":"9d11db0b-ae98-43e0-951f-b516ed665e66","block_type":"box","text":"Markets Advisory Council. These positions have provided Mr. Ailman with considerable investment","page_number":24,"box":{"x":117,"y":299,"width":737,"height":12}},{"id":"e3bafe6b-628a-45c2-99a3-42dc00c0527e","block_type":"box","text":"expertise across asset classes and strategies, and insight and perspective on the markets and the","page_number":24,"box":{"x":116,"y":314,"width":734,"height":12}},{"id":"9ee418c6-eca9-4752-a733-741a037b800e","block_type":"box","text":"economy. In addition, Mr. Ailman serves as a member of the Governance and Nominating Committee","page_number":24,"box":{"x":116,"y":330,"width":759,"height":12}},{"id":"c0259d58-6957-475c-b10d-2271b7c196e7","block_type":"box","text":"and the Performance Oversight Committee.","page_number":24,"box":{"x":116,"y":345,"width":329,"height":12}},{"id":"cb1b1e9a-c2e9-4d55-9022-15821a3006c8","block_type":"box","text":"Susan J. Carter has over 35 years of experience in investment management. She has served as","page_number":24,"box":{"x":116,"y":374,"width":721,"height":12}},{"id":"c33f429c-1046-4882-9024-5337e8a58817","block_type":"box","text":"President & Chief Executive Officer of CCI, a registered investment adviser focused on non-profit","page_number":24,"box":{"x":117,"y":389,"width":725,"height":12}},{"id":"4d763132-81b3-47fd-a5ca-127b98c3c123","block_type":"box","text":"investors, from 1997 to 2013, Chief Executive Officer of CCI from 2013 to 2014 and Senior Advisor to","page_number":24,"box":{"x":117,"y":405,"width":757,"height":11}},{"id":"a26731c1-700f-43ce-be77-33ca4a3970c9","block_type":"box","text":"CCI in 2015. Ms. Carter also served as director of the Pacific Pension Institute from 2014 to 2018,","page_number":24,"box":{"x":117,"y":420,"width":731,"height":11}},{"id":"014bdd8c-835a-4009-a5bc-90ad471746c9","block_type":"box","text":"trustee to the Financial Accounting Foundation from 2017 to 2021, Advisory Board Member for the","page_number":24,"box":{"x":116,"y":436,"width":735,"height":12}},{"id":"aaeeceb4-25e8-4eb7-9952-68b49304196f","block_type":"box","text":"Center for Private Equity and Entrepreneurship at Tuck School of Business from 1997 to 2021,","page_number":24,"box":{"x":117,"y":451,"width":707,"height":12}},{"id":"05159b7d-6fcc-4654-8562-11c6575e3078","block_type":"box","text":"Advisory Board Member for Bridges Fund Management from 2016 to 2018, Advisory Board Member","page_number":24,"box":{"x":116,"y":467,"width":748,"height":12}},{"id":"570ac134-b717-4438-aae6-6e5775ade98b","block_type":"box","text":"for Girls Who Invest from 2015 to 2018 and Board Member thereof from 2018 to 2022, and Practitioner","page_number":24,"box":{"x":116,"y":482,"width":768,"height":11}},{"id":"04b7f345-15d5-4845-babb-6c1262f82f75","block_type":"box","text":"Advisory Board Member for PCRI from 2017 to 2024. She currently serves as Member of the","page_number":24,"box":{"x":116,"y":498,"width":694,"height":12}},{"id":"ff86723a-01ea-4118-9ad8-1f31d9402b75","block_type":"box","text":"President’s Counsel for Commonfund. These positions have provided her with insight and perspective","page_number":24,"box":{"x":117,"y":513,"width":761,"height":12}},{"id":"be1ccc5e-0902-455d-ba9b-ee20ef02681f","block_type":"box","text":"on the markets and the economy.","page_number":24,"box":{"x":116,"y":529,"width":254,"height":12}},{"id":"0783f7af-08b6-4678-a3ac-fa6ad4a64d15","block_type":"box","text":"Collette Chilton has over 20 years of experience in investment management. She held the position of","page_number":24,"box":{"x":117,"y":557,"width":754,"height":12}},{"id":"f50c41e9-3b5a-40b6-ac5a-bd1dfa53ee02","block_type":"box","text":"Chief Investment Officer of Williams College from October 2006 to June 2023. Prior to that she was","page_number":24,"box":{"x":117,"y":573,"width":742,"height":12}},{"id":"6098b92b-0bc1-4be7-b9db-43232ce93b20","block_type":"box","text":"President and Chief Investment Officer of Lucent Asset Management Corporation, where she oversaw","page_number":24,"box":{"x":117,"y":588,"width":763,"height":12}},{"id":"90a65613-5452-4d70-9a4c-839daa05e70a","block_type":"box","text":"approximately $40 billion in pension and retirement savings assets for the company. These positions","page_number":24,"box":{"x":116,"y":603,"width":752,"height":13}},{"id":"30f458c7-963b-4627-806c-ea665a7806f2","block_type":"box","text":"have provided her with insight and perspective on the markets and the economy.","page_number":24,"box":{"x":117,"y":619,"width":604,"height":12}},{"id":"47d131b8-c0dd-492d-85da-f4f96cb0e46a","block_type":"box","text":"Neil A. Cotty has more than 30 years of experience in the financial services industry, including","page_number":24,"box":{"x":117,"y":647,"width":702,"height":13}},{"id":"1985ffb9-faef-4e05-ae97-bdfe22388371","block_type":"box","text":"19 years at Bank of America Corporation and its affiliates, where he served, at different times, as the","page_number":24,"box":{"x":118,"y":663,"width":745,"height":12}},{"id":"972b16c9-6480-4c5c-b01b-41408da6c86d","block_type":"box","text":"Chief Financial Officer of various businesses including Investment Banking, Global Markets, Wealth","page_number":24,"box":{"x":117,"y":678,"width":737,"height":13}},{"id":"0284bc2e-01eb-4c98-aa54-abab05756752","block_type":"box","text":"Management and Consumer and also served ten years as the Chief Accounting Officer for Bank of","page_number":24,"box":{"x":117,"y":694,"width":733,"height":12}},{"id":"88285799-e7c5-46a5-ac4b-aaa095fe3345","block_type":"box","text":"America Corporation. Mr. Cotty has been determined by the Audit Committee to be an audit committee","page_number":24,"box":{"x":116,"y":709,"width":763,"height":13}},{"id":"a1150a3e-8568-4f82-8fe9-0eb4209c2474","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":24,"box":{"x":116,"y":725,"width":563,"height":12}},{"id":"61fefee5-c996-43dc-8900-b1c56b8bdc5f","block_type":"box","text":"Jeffrey Jarczyk is a CPA and has more than 30 years of experience in the financial services industry,","page_number":24,"box":{"x":116,"y":753,"width":748,"height":12}},{"id":"9dc137cf-c6d0-4a84-acb6-0d021a8940f6","block_type":"box","text":"including over 19 years at Fidelity Investments, where he served, at different times, as the Chief","page_number":24,"box":{"x":117,"y":769,"width":712,"height":12}},{"id":"a7a71ed4-5849-4b46-b3f6-420ebe640bc5","block_type":"box","text":"Auditor and the Chief Accounting Officer of Fidelity Investments’ parent company, FMR LLC. Prior to","page_number":24,"box":{"x":116,"y":784,"width":746,"height":12}},{"id":"dea1948d-9a7a-49ca-9494-76a4c327d656","block_type":"box","text":"working at Fidelity, Mr. Jarczyk was a partner at Deloitte and Arthur Andersen for approximately","page_number":24,"box":{"x":116,"y":800,"width":711,"height":12}},{"id":"c477623f-d359-4199-ab28-3f9f17b503a6","block_type":"box","text":"seventeen years. These positions have allowed him to work extensively with audit and risk committees","page_number":24,"box":{"x":116,"y":815,"width":761,"height":12}},{"id":"5d614339-68b2-4be1-af1a-863d087b82bd","block_type":"box","text":"and company executives helping to identify, manage and mitigate risks for financial services","page_number":24,"box":{"x":116,"y":831,"width":688,"height":12}},{"id":"4ee2b3e3-efda-445b-8c23-59d18ae7b08f","block_type":"box","text":"companies. Mr. Jarczyk also served as consultant to the Independent Trustees prior to becoming an","page_number":24,"box":{"x":116,"y":846,"width":749,"height":12}},{"id":"03472da8-1955-428e-9ffb-52e837c53a11","block_type":"box","text":"Independent Trustee. Mr. Jarczyk has been determined by the Audit Committee to be an audit","page_number":24,"box":{"x":117,"y":862,"width":704,"height":12}},{"id":"b53a7d6d-bca0-4025-a969-3833a041fa74","block_type":"box","text":"committee financial expert, as such term is defined in the applicable Commission rules.","page_number":24,"box":{"x":116,"y":877,"width":652,"height":12}},{"id":"66ca194f-70a4-495e-b578-276d93400f0c","block_type":"box","text":"21","page_number":24,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"cff1a684-52fb-410a-8c8d-ede2f7f4bdd0","block_type":"box","text":"NM1026U-6039989-24/256","page_number":24,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ec90a709-e83a-4a52-a0df-d7bedfcc06d2","block_type":"box","text":"Henry R. Keizer brings over 40 years of executive, financial, operational, strategic and global expertise","page_number":25,"box":{"x":117,"y":87,"width":766,"height":12}},{"id":"688d1486-f6cc-4296-b4fa-56570f81d167","block_type":"box","text":"gained through his 35 year career at KPMG, a global professional services organization and by his","page_number":25,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"da0e7f06-32c7-4f9b-b98d-b67b018831cb","block_type":"box","text":"service as a director to both publicly and privately held organizations. He has extensive experience","page_number":25,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"6386a10d-16aa-45bf-a5ca-bbdcfd04e8fa","block_type":"box","text":"with issues facing complex, global companies and expertise in financial reporting, accounting, auditing,","page_number":25,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"52b7ef68-060b-4688-acce-cca56db4dcfc","block_type":"box","text":"risk management, and regulatory affairs for such companies. Mr. Keizer’s experience also includes","page_number":25,"box":{"x":117,"y":149,"width":738,"height":12}},{"id":"7ab7541c-f185-49ae-accf-0a6323df12af","block_type":"box","text":"service as an audit committee chair to both publicly and privately held organizations across numerous","page_number":25,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"7a0549e4-309e-4d24-a381-28420372ce66","block_type":"box","text":"industries including professional services, property and casualty reinsurance, insurance, diversified","page_number":25,"box":{"x":117,"y":180,"width":739,"height":12}},{"id":"54667eae-2e60-4375-b5d5-03f4ed94e019","block_type":"box","text":"financial services, banking, direct to consumer, business to business and technology. Mr. Keizer is a","page_number":25,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"82f6acab-c6ae-4e79-a154-23de26ca9fc1","block_type":"box","text":"certified public accountant and also served on the board of the American Institute of Certified Public","page_number":25,"box":{"x":116,"y":211,"width":745,"height":12}},{"id":"02af7287-4bcd-45bd-8eda-e8fe707c46a7","block_type":"box","text":"Accountants. Mr. Keizer has been determined by the Audit Committee to be an audit committee","page_number":25,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"0b04c0a3-ef86-4beb-a621-a754df200b2f","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":25,"box":{"x":116,"y":242,"width":569,"height":12}},{"id":"4dd03863-7919-45ea-ae5f-c46daadac816","block_type":"box","text":"Cynthia A. Montgomery has served for over 20 years on the boards of registered investment","page_number":25,"box":{"x":117,"y":269,"width":690,"height":12}},{"id":"558b7775-829f-4bc1-9a39-d04d2375e9ae","block_type":"box","text":"companies, most recently as a member of the boards of certain BlackRock-advised Funds and","page_number":25,"box":{"x":116,"y":285,"width":707,"height":12}},{"id":"c7bd0d53-e82c-4012-9d80-373d7370b70d","block_type":"box","text":"predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. The","page_number":25,"box":{"x":117,"y":300,"width":759,"height":12}},{"id":"b82cbc84-1a70-49ff-b1a8-7695fb87d313","block_type":"box","text":"Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at","page_number":25,"box":{"x":117,"y":316,"width":755,"height":12}},{"id":"073a5a9a-d1af-4209-83b3-ae70b21e7680","block_type":"box","text":"Harvard Business School where she taught courses on corporate strategy and corporate governance.","page_number":25,"box":{"x":117,"y":331,"width":759,"height":12}},{"id":"47df66e2-b0b4-4854-8dc3-0976d8d088d2","block_type":"box","text":"Ms. Montgomery also has business management and corporate governance experience through her","page_number":25,"box":{"x":117,"y":347,"width":749,"height":12}},{"id":"07de2078-b221-4128-956c-ef2911ac7cda","block_type":"box","text":"service on the corporate boards of a variety of public companies. She has also authored numerous","page_number":25,"box":{"x":116,"y":362,"width":739,"height":12}},{"id":"4d06d690-be83-4a67-acdf-83921509315c","block_type":"box","text":"articles and books on these topics.","page_number":25,"box":{"x":116,"y":378,"width":263,"height":12}},{"id":"a97003da-5888-496d-96c5-edf37b44d9c4","block_type":"box","text":"Donald C. Opatrny has more than 40 years of business, oversight and executive experience, including","page_number":25,"box":{"x":117,"y":405,"width":763,"height":12}},{"id":"620dc0d4-2021-445e-a1ed-7797d4f7693e","block_type":"box","text":"through his service as president, director and investment committee chair for academic and not-for","page_number":25,"box":{"x":116,"y":420,"width":738,"height":12}},{"id":"ca6ad0f2-04ac-4a62-8125-fef5c8ca90ba","block_type":"box","text":"profit organizations, and his experience as a partner, managing director and advisory director at","page_number":25,"box":{"x":117,"y":436,"width":715,"height":12}},{"id":"dba093fb-e884-4cc3-9f54-18ca0461b397","block_type":"box","text":"Goldman Sachs for 32 years. He also has investment management experience as a board member of","page_number":25,"box":{"x":117,"y":451,"width":760,"height":12}},{"id":"ef3994ff-71e3-43ab-9f4d-5b58f2c1b046","block_type":"box","text":"Athena Capital Advisors LLC.","page_number":25,"box":{"x":116,"y":467,"width":224,"height":12}},{"id":"5b96052c-feeb-48eb-b32b-fe9e02202c01","block_type":"box","text":"Lori Richards has more than 30 years of experience in the financial services industry, most notably as","page_number":25,"box":{"x":117,"y":494,"width":759,"height":12}},{"id":"73324291-f8d1-48ef-ad80-c36f613b4985","block_type":"box","text":"the first Director of the Office of Compliance Inspections and Examinations (“OCIE”) of the Securities","page_number":25,"box":{"x":116,"y":509,"width":753,"height":13}},{"id":"15eb7d20-90fd-4255-a4f4-0152139898d6","block_type":"box","text":"and Exchange Commission (“SEC”) from 1995 to 2009. During 14 years as the Director of OCIE, she","page_number":25,"box":{"x":116,"y":525,"width":756,"height":12}},{"id":"f39a7d2c-05b9-49e4-9812-84468f517564","block_type":"box","text":"led the SEC’s nationwide examination oversight program for advisers, mutual funds, hedge funds,","page_number":25,"box":{"x":117,"y":540,"width":730,"height":13}},{"id":"02f06297-3e7a-40e4-a884-55c515818e7e","block_type":"box","text":"broker-dealers, stock exchanges, and other industry firms. Prior to that, from 1985 to 1995, she held","page_number":25,"box":{"x":117,"y":556,"width":748,"height":12}},{"id":"df7fe3d1-51d7-4ca9-bfc6-a9dc876a73f9","block_type":"box","text":"various roles at the SEC, including Associate Director for Enforcement for the SEC’s Pacific Regional","page_number":25,"box":{"x":116,"y":571,"width":757,"height":13}},{"id":"2e31ef4a-4830-423e-b9e8-c7c6637867b4","block_type":"box","text":"Office and executive assistant and senior advisor to then SEC Chairman Arthur Levitt. More recently,","page_number":25,"box":{"x":116,"y":587,"width":755,"height":12}},{"id":"9dbd4055-04ce-46c4-bc6a-ad18ffccd51b","block_type":"box","text":"Ms. Richards served as Chief Compliance Officer of the Asset and Wealth Management global lines of","page_number":25,"box":{"x":117,"y":602,"width":765,"height":13}},{"id":"4192609e-a17b-420f-a7ce-eff75e3db199","block_type":"box","text":"business at JPMorgan Chase & Co. from 2013 to 2018 where she led its global compliance program,","page_number":25,"box":{"x":117,"y":618,"width":754,"height":12}},{"id":"74a948d2-de73-4fed-a196-04a98394df41","block_type":"box","text":"advised business leaders on compliance issues, oversaw risk assessment, monitoring, testing and","page_number":25,"box":{"x":116,"y":634,"width":736,"height":12}},{"id":"52ea05ad-b89b-42ba-a218-f52938cd591b","block_type":"box","text":"training, and maintained relationships with regulators. In addition, Ms. Richards served as a member of","page_number":25,"box":{"x":116,"y":649,"width":769,"height":12}},{"id":"540ed632-29c3-4f4f-ab99-6da30762aa45","block_type":"box","text":"the National Adjudicatory Council of the Financial Industry Regulatory Authority (FINRA) from 2019 to","page_number":25,"box":{"x":116,"y":665,"width":753,"height":12}},{"id":"849062a7-fec3-44e7-9411-569d2db6ad01","block_type":"box","text":"2022 and held the chair and vice chair posts during her tenure. Prior thereto, from 2010 to 2013, she","page_number":25,"box":{"x":116,"y":680,"width":746,"height":12}},{"id":"76aef86c-4801-4aef-bf38-8acb9cf99765","block_type":"box","text":"was a Principal at PricewaterhouseCoopers LLP (“PwC”) and co-leader of its Asset Management","page_number":25,"box":{"x":116,"y":696,"width":720,"height":12}},{"id":"be7fc4df-3ba0-4022-b989-2720e8ae6bf3","block_type":"box","text":"Regulatory group. At PwC, she assisted a broad range of financial services clients in designing and","page_number":25,"box":{"x":117,"y":711,"width":736,"height":12}},{"id":"16d26467-b350-4d29-be4b-b0ccab5a670c","block_type":"box","text":"implementing risk management and compliance programs, and preparing for new regulatory","page_number":25,"box":{"x":117,"y":727,"width":683,"height":12}},{"id":"7a583108-7082-47e2-b6b8-670fa4ecbe7d","block_type":"box","text":"expectations. These positions have provided her with insight and perspective on the markets and the","page_number":25,"box":{"x":116,"y":742,"width":749,"height":12}},{"id":"6721d026-25a0-4391-a93a-29c17ecadaff","block_type":"box","text":"economy, as well as asset management regulation and compliance. In addition, Ms. Richards serves","page_number":25,"box":{"x":116,"y":758,"width":748,"height":12}},{"id":"499d7e54-bb70-4b34-bc1a-54392b0873f1","block_type":"box","text":"as a member of the Audit Committee and the Compliance Committee.","page_number":25,"box":{"x":116,"y":773,"width":518,"height":12}},{"id":"059593f5-7193-4681-81bd-2e765f26ff00","block_type":"box","text":"Mark Stalnecker has gained a wealth of experience in investing and asset management from his over","page_number":25,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"e6ac0d89-0781-48f2-a7df-335bfea1f7ee","block_type":"box","text":"13 years of service as the Chief Investment Officer of the University of Delaware as well as from his","page_number":25,"box":{"x":118,"y":816,"width":737,"height":12}},{"id":"7784b317-887a-472d-aa3a-be8b4487bc6a","block_type":"box","text":"various positions with First Union Corporation, including Senior Vice President and State Investment","page_number":25,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"1ac8e06a-6963-47b2-a5c0-497228530eef","block_type":"box","text":"Director of First Investment Advisors. The Board benefits from his experience and perspective as the","page_number":25,"box":{"x":117,"y":847,"width":752,"height":12}},{"id":"cd2fcf3e-b68a-4e69-87f7-07b4c4d234ad","block_type":"box","text":"Chief Investment Officer of a university endowment and from the oversight experience he gained from","page_number":25,"box":{"x":117,"y":862,"width":761,"height":12}},{"id":"43fac61b-a02d-4d7e-8f2b-a4774c73b9d1","block_type":"box","text":"service on various private and non-profit boards.","page_number":25,"box":{"x":116,"y":878,"width":365,"height":12}},{"id":"bb7868e1-7651-42c4-b0b1-9389abd7f066","block_type":"box","text":"22","page_number":25,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"17582504-e94f-4ce8-ac34-f119e73820ad","block_type":"box","text":"NM1026U-6039989-25/256","page_number":25,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ea97fc5a-b802-4757-9ed7-5f581d6287bf","block_type":"box","text":"Marc D. Stern has more than 30 years of experience in investing and asset management. Mr. Stern","page_number":26,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"1d69c24a-ab1c-4cfd-884e-4d67ce93c3d5","block_type":"box","text":"served as the Chief Executive Officer at Bessemer Trust, a wealth management business, for 13","page_number":26,"box":{"x":116,"y":102,"width":722,"height":13}},{"id":"ca3f4e6f-0681-42a3-87f2-08721dbc0555","block_type":"box","text":"years. During his tenure at Bessemer Trust, Mr. Stern served on the firm’s board of directors, chaired","page_number":26,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"1ce0f176-e0d1-4d65-85a7-70d071d04779","block_type":"box","text":"the board’s trust and investment committee, and led the firm’s executive committee. He also served as","page_number":26,"box":{"x":116,"y":134,"width":766,"height":11}},{"id":"37c4a16f-9168-47c6-8bb9-9ceb80c9239f","block_type":"box","text":"Bessemer’s Chief Investment Officer for 8 years, where he was Chair of the Investment Policy and","page_number":26,"box":{"x":117,"y":149,"width":735,"height":12}},{"id":"ed4caab9-b72f-4e43-98ba-b4156431e94b","block_type":"box","text":"Strategy Committee with responsibility for overall asset allocation and investment strategy. Mr. Stern","page_number":26,"box":{"x":116,"y":165,"width":751,"height":12}},{"id":"a0381282-c3c1-4efd-944d-0c643a054d59","block_type":"box","text":"also served as Chair of the Private Clients Investment group at AllianceBernstein. These positions","page_number":26,"box":{"x":116,"y":180,"width":733,"height":12}},{"id":"90e5d554-1d4e-4b43-82c6-6dc96b243c27","block_type":"box","text":"provide Mr. Stern with insight and perspective into investment management, the economy, and","page_number":26,"box":{"x":117,"y":196,"width":708,"height":12}},{"id":"51053f7f-3281-49a5-b2a0-b50f84639825","block_type":"box","text":"fiduciary governance. Mr. Stern also served as consultant to the Independent Trustees prior to","page_number":26,"box":{"x":116,"y":211,"width":705,"height":12}},{"id":"ffdbdfd8-89ea-4deb-9f33-6d7bc8ca1346","block_type":"box","text":"becoming an Independent Trustee.","page_number":26,"box":{"x":117,"y":227,"width":264,"height":12}},{"id":"4ce831bf-4139-4eb9-816c-3a1951561b22","block_type":"box","text":"Kenneth L. Urish has served for over 15 years on the boards of registered investment companies, most","page_number":26,"box":{"x":117,"y":256,"width":771,"height":12}},{"id":"1baf34bd-ed92-4571-ace1-b2a724075b3d","block_type":"box","text":"recently as a member of the boards of certain BlackRock-advised Funds and predecessor funds,","page_number":26,"box":{"x":117,"y":271,"width":722,"height":12}},{"id":"79dbb16e-417a-473d-b414-da03a23abb04","block_type":"box","text":"including the legacy BlackRock funds. He has over 30 years of experience in public accounting.","page_number":26,"box":{"x":117,"y":287,"width":713,"height":12}},{"id":"7ed40a02-b919-4d2d-af11-423b94606645","block_type":"box","text":"Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been","page_number":26,"box":{"x":117,"y":302,"width":766,"height":12}},{"id":"056d96d8-5150-4274-ba68-d71713b516c0","block_type":"box","text":"determined by the Audit Committee to be an audit committee financial expert, as such term is defined","page_number":26,"box":{"x":116,"y":318,"width":758,"height":12}},{"id":"58c3e3a1-06e4-44d6-8a07-170d821c5282","block_type":"box","text":"in the applicable Commission rules.","page_number":26,"box":{"x":117,"y":333,"width":268,"height":12}},{"id":"4014f63b-ba0f-4772-bf0b-c2096671ac45","block_type":"box","text":"Claire A. Walton has over 25 years of experience in investment management. She has served as the","page_number":26,"box":{"x":117,"y":363,"width":753,"height":12}},{"id":"694f719c-d3f5-4477-b832-f80b0aea91c4","block_type":"box","text":"Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP/ Steel","page_number":26,"box":{"x":117,"y":378,"width":739,"height":12}},{"id":"8bc4dca0-3346-4a86-8337-ed5fdae3f664","block_type":"box","text":"Partners Japan Asset Management, LP from 1998 to 2015, an investment manager that specialized in","page_number":26,"box":{"x":117,"y":394,"width":762,"height":12}},{"id":"9c979aba-37d5-49f1-a4d0-c0bc4e1a0c9a","block_type":"box","text":"long/short non-U.S. equity investments, and was an owner and General Partner of Neon Liberty","page_number":26,"box":{"x":117,"y":409,"width":715,"height":12}},{"id":"9636ee6c-dea0-4617-8e54-d23f2bce3653","block_type":"box","text":"Capital Management, LLC from 2003 to 2023, a firm focusing on long/short equities in global emerging","page_number":26,"box":{"x":117,"y":425,"width":766,"height":12}},{"id":"45ce06cb-578b-49f1-bc8c-bfaf12a22de2","block_type":"box","text":"and frontier markets. These positions have provided her with insight and perspective on the markets","page_number":26,"box":{"x":116,"y":440,"width":748,"height":12}},{"id":"c480eeb7-9c59-4784-b309-b47851f01a0e","block_type":"box","text":"and the economy. Ms. Walton has been determined by the Audit Committee to be an audit committee","page_number":26,"box":{"x":116,"y":456,"width":759,"height":12}},{"id":"a376fb17-7474-4ddc-aefc-d873a271b999","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":26,"box":{"x":116,"y":471,"width":569,"height":12}},{"id":"166673e7-3432-460a-bf00-7585aba2a671","block_type":"box","text":"Board – Leadership Structure and Oversight Responsibilities","page_number":26,"box":{"x":117,"y":500,"width":454,"height":12}},{"id":"e31728a4-e969-44cc-a691-0c3be1a445f6","block_type":"box","text":"The Board has overall responsibility for the oversight of the Trust and the Fund. The Chair of the Board","page_number":26,"box":{"x":116,"y":523,"width":770,"height":12}},{"id":"cccd5be0-3b55-4c07-a473-d7d9d0feafdb","block_type":"box","text":"is an Independent Trustee, and the Chair of each Committee is an Independent Trustee. The Board","page_number":26,"box":{"x":117,"y":538,"width":744,"height":12}},{"id":"3dba3b6f-cc88-42e7-a811-60473cfefb30","block_type":"box","text":"has five standing Committees: an Audit Committee, a Governance and Nominating Committee, a","page_number":26,"box":{"x":117,"y":554,"width":724,"height":12}},{"id":"0f3f3cd1-c575-468d-9ead-bee8466cedf3","block_type":"box","text":"Compliance Committee, a Performance Oversight Committee and an Ad Hoc Topics Committee. The","page_number":26,"box":{"x":117,"y":569,"width":756,"height":12}},{"id":"1487f0e0-bafb-4fd1-9cd1-31b05bb818a6","block_type":"box","text":"role of the Chair of the Board is to preside at all meetings of the Board and to act as a liaison with","page_number":26,"box":{"x":117,"y":585,"width":727,"height":12}},{"id":"fe0b5b91-6f53-41b7-918c-7317064f0cf3","block_type":"box","text":"service providers, officers, attorneys and other Trustees generally between meetings. The Chair of","page_number":26,"box":{"x":116,"y":600,"width":736,"height":12}},{"id":"ff2dd605-3b23-4b03-b015-bfda76a0cd0b","block_type":"box","text":"each Committee performs a similar role with respect to the Committee. The Chair of the Board or the","page_number":26,"box":{"x":116,"y":616,"width":753,"height":12}},{"id":"058598e6-a5f6-4218-b931-dd655623adbe","block_type":"box","text":"Chair of a Committee may also perform such other functions as may be delegated by the Board or the","page_number":26,"box":{"x":117,"y":631,"width":762,"height":12}},{"id":"a81d3675-89cc-4056-b0de-12bab7fdc6d0","block_type":"box","text":"Committee from time to time. The Independent Trustees meet regularly outside the presence of Fund","page_number":26,"box":{"x":117,"y":647,"width":756,"height":12}},{"id":"e837ebe5-962d-47ae-be98-fd6a3c05428f","block_type":"box","text":"management, in executive session or with other service providers to the Fund. The Board has regular","page_number":26,"box":{"x":117,"y":662,"width":753,"height":12}},{"id":"94c66c52-cc09-4e3e-a4e8-faa5bf1e281b","block_type":"box","text":"meetings five times a year, and may hold special meetings if required before its next regular meeting.","page_number":26,"box":{"x":117,"y":678,"width":750,"height":12}},{"id":"c94aa672-a0d5-403e-a43e-b68d0243ed62","block_type":"box","text":"Each Committee meets regularly to conduct the oversight functions delegated to that Committee by the","page_number":26,"box":{"x":117,"y":693,"width":765,"height":12}},{"id":"cf3a3a65-192b-4364-9015-2e43605e93aa","block_type":"box","text":"Board and reports its findings to the Board. The Board and each standing Committee conduct annual","page_number":26,"box":{"x":117,"y":709,"width":748,"height":12}},{"id":"6a914a03-11b4-4b0e-a62b-52848579e2bb","block_type":"box","text":"assessments of their oversight function and structure. The Board has determined that the Board’s","page_number":26,"box":{"x":116,"y":724,"width":725,"height":12}},{"id":"357f335f-e0ce-4a15-97ea-233f24d464b5","block_type":"box","text":"leadership structure is appropriate because it allows the Board to exercise independent judgment over","page_number":26,"box":{"x":117,"y":740,"width":758,"height":12}},{"id":"f7e34fb5-3280-49a4-856f-e4985cca7b54","block_type":"box","text":"management and to allocate areas of responsibility among Committees and the full Board to enhance","page_number":26,"box":{"x":117,"y":755,"width":753,"height":12}},{"id":"02b4df33-d394-456c-82c2-4fc9ba15bfce","block_type":"box","text":"effective oversight.","page_number":26,"box":{"x":116,"y":771,"width":139,"height":12}},{"id":"0e4a0116-d89f-4b36-acb0-02c48af4fdfb","block_type":"box","text":"The Board has engaged BFA to manage the Fund on a day-to-day basis. The Board is responsible for","page_number":26,"box":{"x":116,"y":800,"width":759,"height":12}},{"id":"9ffbf459-a94a-4da7-933d-1770c6601d3a","block_type":"box","text":"overseeing BFA, other service providers, the operations of the Fund and associated risks in","page_number":26,"box":{"x":116,"y":816,"width":679,"height":12}},{"id":"9ed53f05-bcbb-4ab0-a00d-1351f497fa68","block_type":"box","text":"accordance with the provisions of the 1940 Act, state law, other applicable laws, the Trust’s charter,","page_number":26,"box":{"x":116,"y":831,"width":744,"height":12}},{"id":"34e4ab0d-a3d7-42f0-88ab-b875ed1d0ff0","block_type":"box","text":"and the Fund’s investment objective and strategies. The Board reviews, on an ongoing basis, the","page_number":26,"box":{"x":116,"y":847,"width":726,"height":12}},{"id":"8483ff1c-9398-4b5c-add1-0efe66ef0e82","block_type":"box","text":"Fund’s performance, operations and investment strategies and techniques. The Board also conducts","page_number":26,"box":{"x":117,"y":862,"width":752,"height":12}},{"id":"4aa8d813-e635-402c-b85e-b50ef641b8c1","block_type":"box","text":"reviews of BFA and its role in running the operations of the Fund.","page_number":26,"box":{"x":117,"y":878,"width":488,"height":12}},{"id":"f1d6305a-2cd4-4237-b7b9-b16c3042746c","block_type":"box","text":"23","page_number":26,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"505be45f-0174-4919-b160-4535371ef6be","block_type":"box","text":"NM1026U-6039989-26/256","page_number":26,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"6e4896b8-f7df-43a2-856d-30da4955ddd8","block_type":"box","text":"Day-to-day risk management with respect to the Fund is the responsibility of BFA or of sub-advisers or","page_number":27,"box":{"x":117,"y":87,"width":765,"height":12}},{"id":"dc512513-0bdc-4117-a3c5-2323776ac687","block_type":"box","text":"other service providers (depending on the nature of the risk), subject to the supervision of BFA. The","page_number":27,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"86705544-64ce-4eff-b3e7-fe6f5eb7d9e4","block_type":"box","text":"Fund is subject to a number of risks, including investment, compliance, operational and valuation risks,","page_number":27,"box":{"x":117,"y":118,"width":767,"height":12}},{"id":"2c828580-5140-4ad7-8379-dd7b6292fe17","block_type":"box","text":"among others. While there are a number of risk management functions performed by BFA and the sub","page_number":27,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"96372545-e8e1-4053-98e1-b1335c03edf9","block_type":"box","text":"advisers or other service providers, as applicable, it is not possible to eliminate all of the risks","page_number":27,"box":{"x":116,"y":149,"width":697,"height":12}},{"id":"2b2f0bab-22f1-48d0-9a6b-07d5cdd41400","block_type":"box","text":"applicable to the Fund. Risk oversight forms part of the Board’s general oversight of the Fund and is","page_number":27,"box":{"x":116,"y":165,"width":747,"height":12}},{"id":"4928ae33-8c8b-41bf-9bd0-f73ef1d5db93","block_type":"box","text":"addressed as part of various Board and Committee activities. The Board, directly or through a","page_number":27,"box":{"x":116,"y":180,"width":701,"height":12}},{"id":"7849bb2f-1a5d-479e-a22a-9c0d8caf21d9","block_type":"box","text":"Committee, also reviews reports from, among others, management, the independent registered public","page_number":27,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"e5e4f054-7f32-40c8-ae29-96f72ff8e72d","block_type":"box","text":"accounting firm for the Fund, sub-advisers and internal auditors for BFA or its affiliates, as appropriate,","page_number":27,"box":{"x":116,"y":211,"width":767,"height":12}},{"id":"e8ccf53c-4dac-406a-94b0-211e9757f15b","block_type":"box","text":"regarding risks faced by the Fund and management’s or the service provider’s risk functions. The","page_number":27,"box":{"x":117,"y":227,"width":726,"height":12}},{"id":"eb79c237-cee9-43ed-9e8a-327260a928d1","block_type":"box","text":"Committee system facilitates the timely and efficient consideration of matters by the Trustees, and","page_number":27,"box":{"x":117,"y":242,"width":733,"height":12}},{"id":"ac6c6e29-6d3c-4c86-9b1d-8d112ba3c663","block_type":"box","text":"facilitates effective oversight of compliance with legal and regulatory requirements and of the Fund’s","page_number":27,"box":{"x":116,"y":258,"width":748,"height":12}},{"id":"8e36ba6b-d248-4d9d-925d-d91e90f57ece","block_type":"box","text":"activities and associated risks. The Board has appointed a Chief Compliance Officer, who oversees the","page_number":27,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"950a6bd0-97ff-42a7-a10d-6dd81f9f9757","block_type":"box","text":"implementation and testing of the Trust’s compliance program and reports to the Board regarding","page_number":27,"box":{"x":117,"y":289,"width":726,"height":12}},{"id":"9132b03e-3bb6-4454-bd43-2f5578f2d29e","block_type":"box","text":"compliance matters for the Fund and its service providers. The Independent Trustees have engaged","page_number":27,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"a4720a31-be92-4446-8da8-1ccfd020a0c4","block_type":"box","text":"independent legal counsel to assist them in performing their oversight responsibilities.","page_number":27,"box":{"x":117,"y":320,"width":640,"height":12}},{"id":"6fff97a5-a1eb-4e1b-a5ce-9db1344bd878","block_type":"box","text":"Committees of the Board of Trustees.","page_number":27,"box":{"x":116,"y":351,"width":299,"height":9}},{"id":"d002951d-26d8-4b40-b60f-15d784493e03","block_type":"box","text":"The members of the Audit Committee (the “Audit Committee”)","page_number":27,"box":{"x":416,"y":351,"width":469,"height":12}},{"id":"49fb5dd6-bacc-42e7-bfae-27a88c413e9d","block_type":"box","text":"are Henry R. Keizer (Chair), Neil A. Cotty, Jeffrey Jarczyk, Lori Richards, Kenneth L. Urish and Claire","page_number":27,"box":{"x":116,"y":366,"width":758,"height":12}},{"id":"98e29e2e-e2f7-4057-a352-a8c19c3123e6","block_type":"box","text":"A. Walton, all of whom are Independent Trustees. The principal responsibilities of the Audit Committee","page_number":27,"box":{"x":116,"y":382,"width":766,"height":12}},{"id":"02630823-258a-415f-9a59-54b0abb1fbf6","block_type":"box","text":"are to approve, and recommend to the full Board for approval, the selection, retention, termination and","page_number":27,"box":{"x":116,"y":397,"width":764,"height":12}},{"id":"8d7ddbb4-9da5-497d-8e4a-f7bbe89c1868","block_type":"box","text":"compensation of the Fund’s independent registered public accounting firm (the “Independent","page_number":27,"box":{"x":116,"y":413,"width":693,"height":12}},{"id":"a74d1d91-0a8d-49f1-ace2-4d3b1c1957a8","block_type":"box","text":"Registered Public Accounting Firm”) and to oversee the Independent Registered Public Accounting","page_number":27,"box":{"x":117,"y":428,"width":739,"height":12}},{"id":"63e13a09-11a7-42f5-b7d8-f6bd5bcae941","block_type":"box","text":"Firm’s work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the","page_number":27,"box":{"x":117,"y":444,"width":721,"height":12}},{"id":"4057a562-21ae-4912-877f-1afa30757d9d","block_type":"box","text":"qualifications and independence of the Independent Registered Public Accounting Firm; (2) approve all","page_number":27,"box":{"x":116,"y":459,"width":769,"height":12}},{"id":"1fd7bba0-8cf1-4f47-8c08-4776b1d79ace","block_type":"box","text":"audit engagement terms and fees for the Fund; (3) review the conduct and results of each independent","page_number":27,"box":{"x":116,"y":475,"width":770,"height":12}},{"id":"524c83e5-277e-41dd-a3b8-70b36be43a0c","block_type":"box","text":"audit of the Fund’s annual financial statements; (4) review any issues raised by the Independent","page_number":27,"box":{"x":116,"y":490,"width":718,"height":12}},{"id":"d694ff48-bada-4b68-909f-52b4b9c4d836","block_type":"box","text":"Registered Public Accounting Firm or Fund management regarding the accounting or financial","page_number":27,"box":{"x":117,"y":506,"width":703,"height":12}},{"id":"765bf2b1-77aa-44f1-9b52-845ece067342","block_type":"box","text":"reporting policies and practices of the Fund and the internal controls of the Fund and certain service","page_number":27,"box":{"x":117,"y":521,"width":745,"height":12}},{"id":"f7135624-00e7-4c07-bf5a-ff54b6b787c4","block_type":"box","text":"providers; (5) oversee the performance of the Fund’s Independent Registered Public Accounting Firm;","page_number":27,"box":{"x":117,"y":537,"width":762,"height":12}},{"id":"1d7bfe86-03a1-44d6-a880-3f5dd3f8ad38","block_type":"box","text":"(6) review and discuss with management and the Fund’s Independent Registered Public Accounting","page_number":27,"box":{"x":117,"y":552,"width":747,"height":12}},{"id":"b15881e8-1695-4fe1-870e-75ec64ae416c","block_type":"box","text":"Firm the performance and findings of the Fund’s internal auditors; (7) discuss with Fund management","page_number":27,"box":{"x":117,"y":568,"width":758,"height":12}},{"id":"48b63181-e1a6-4796-becc-21d9c50fdfd2","block_type":"box","text":"its policies regarding risk assessment and risk management as such matters relate to the Fund’s","page_number":27,"box":{"x":117,"y":583,"width":721,"height":12}},{"id":"810fa68e-31f7-4590-abf3-21d7f8b6f871","block_type":"box","text":"financial reporting and controls; (8) resolve any disagreements between Fund management and the","page_number":27,"box":{"x":116,"y":599,"width":744,"height":12}},{"id":"a6e5c208-d8bc-4bd5-9801-e1e5b52c7453","block_type":"box","text":"Independent Registered Public Accounting Firm regarding financial reporting; and (9) undertake such","page_number":27,"box":{"x":117,"y":614,"width":755,"height":12}},{"id":"1a612ea5-3ae4-4e2f-b787-ca1ffac05acf","block_type":"box","text":"other duties and responsibilities as may from time to time be delegated by the Board to the Audit","page_number":27,"box":{"x":116,"y":630,"width":721,"height":12}},{"id":"c4cc8b42-370d-4e44-9c6e-63176c09848e","block_type":"box","text":"Committee. The Board has adopted a written charter for the Audit Committee. During the twelve","page_number":27,"box":{"x":117,"y":645,"width":717,"height":12}},{"id":"76f948b9-69a4-48d8-ad0c-39f627df385b","block_type":"box","text":"months ended April 30, 2026, the Audit Committee met four times.","page_number":27,"box":{"x":117,"y":661,"width":490,"height":12}},{"id":"12ce9fa4-6e98-489d-aff3-8d4a06ee9d85","block_type":"box","text":"The members of the Governance and Nominating Committee (the “Governance Committee”) are","page_number":27,"box":{"x":116,"y":692,"width":717,"height":12}},{"id":"00cf9cab-1fc3-4597-b4e3-6dd4f8641e77","block_type":"box","text":"Cynthia A. Montgomery (Chair), Christopher J. Ailman, Susan J. Carter, Collette Chilton, Henry R.","page_number":27,"box":{"x":117,"y":707,"width":725,"height":12}},{"id":"531dab1b-a5a1-417c-ab9a-ed768925299e","block_type":"box","text":"Keizer and Marc D. Stern, all of whom are Independent Trustees. The principal responsibilities of the","page_number":27,"box":{"x":117,"y":723,"width":747,"height":12}},{"id":"a92f6e07-383c-47fc-9056-3d5c333dedb1","block_type":"box","text":"Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of the","page_number":27,"box":{"x":117,"y":738,"width":760,"height":12}},{"id":"121d636a-ecaf-43c0-82bf-57dad6413f71","block_type":"box","text":"Trust and recommend Independent Trustee nominees for election by shareholders or appointment by","page_number":27,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"7be2bab7-d580-4c14-9ea0-5d2235f1dfb1","block_type":"box","text":"the Board; (2) advise the Board with respect to Board composition, procedures and committees (other","page_number":27,"box":{"x":116,"y":769,"width":757,"height":12}},{"id":"c3d70401-2ebc-48e7-a85e-e9b2787d8c8e","block_type":"box","text":"than the Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the","page_number":27,"box":{"x":116,"y":785,"width":755,"height":12}},{"id":"3b833833-0d71-4d1c-9e81-21cc29313f10","block_type":"box","text":"Board (other than the Audit Committee); (4) review and make recommendations regarding","page_number":27,"box":{"x":117,"y":800,"width":668,"height":12}},{"id":"835e7642-b89d-4e58-a05d-1e865eac1fec","block_type":"box","text":"Independent Trustee compensation; (5) monitor corporate governance matters and develop","page_number":27,"box":{"x":117,"y":816,"width":679,"height":12}},{"id":"01ee55fd-766e-4ea1-9d07-396da6cb8f70","block_type":"box","text":"appropriate recommendations to the Board; (6) act as the administrative committee with respect to","page_number":27,"box":{"x":116,"y":831,"width":736,"height":12}},{"id":"0ca01fdf-a8ee-4fbb-b47f-602a0c3a43c1","block_type":"box","text":"Board policies and procedures, committee policies and procedures (other than the Audit Committee)","page_number":27,"box":{"x":117,"y":847,"width":749,"height":12}},{"id":"ea339140-59f2-4647-8369-1bd503aaca50","block_type":"box","text":"and codes of ethics as they relate to Independent Trustees; and (7) undertake such other duties and","page_number":27,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"ddfa8717-c54f-4d54-8b0b-54e8d23b715f","block_type":"box","text":"responsibilities as may from time to time be delegated by the Board to the Governance Committee.","page_number":27,"box":{"x":117,"y":878,"width":739,"height":12}},{"id":"3cc45026-70c6-4f75-bcaa-086582391918","block_type":"box","text":"24","page_number":27,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d23951f4-b579-4cb7-9e7a-9260701e200b","block_type":"box","text":"NM1026U-6039989-27/256","page_number":27,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"c52fd0e9-3b54-4efc-8362-40de4c66114b","block_type":"box","text":"The Governance Committee may consider nominations for Trustees made by the Fund’s shareholders","page_number":28,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"e71e9261-7eea-4e96-b7f6-4601692e3822","block_type":"box","text":"as it deems appropriate. Under the Trust’s Bylaws, shareholders must follow certain procedures to","page_number":28,"box":{"x":116,"y":102,"width":735,"height":13}},{"id":"39a01707-5d6f-4bf2-b268-d70d0bf7f125","block_type":"box","text":"nominate a person for election as a Trustee at a shareholder meeting at which Trustees are to be","page_number":28,"box":{"x":117,"y":118,"width":727,"height":12}},{"id":"39d63654-3c9f-4743-b9b6-5a83f3ded5bf","block_type":"box","text":"elected. Under these advance notice procedures, shareholders must submit the proposed nominee by","page_number":28,"box":{"x":116,"y":134,"width":763,"height":12}},{"id":"a03a4fca-3e25-48ff-9fd2-8092c152e3ac","block_type":"box","text":"delivering a notice to the Secretary of the Trust at its principal executive offices no earlier than the","page_number":28,"box":{"x":116,"y":149,"width":731,"height":12}},{"id":"69550a93-817b-4d87-a843-67afd35698fb","block_type":"box","text":"150th day prior to such meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th","page_number":28,"box":{"x":118,"y":165,"width":746,"height":12}},{"id":"ab8a1356-b15d-487b-a925-6ef73a1b8a4c","block_type":"box","text":"day prior to such meeting or the tenth day following the day on which public announcement is first","page_number":28,"box":{"x":116,"y":180,"width":729,"height":12}},{"id":"b3cf2c60-9b7d-40c2-baae-49c80351bb1a","block_type":"box","text":"made of the date of such meeting. The Trust’s Bylaws provide that notice of a proposed nomination","page_number":28,"box":{"x":117,"y":196,"width":742,"height":12}},{"id":"93d5aa7c-7f66-4623-97d8-d917ff5298b1","block_type":"box","text":"must include certain information about the shareholder and the nominee, as well as certain other","page_number":28,"box":{"x":117,"y":211,"width":721,"height":11}},{"id":"d4a170f0-972b-4cfe-8a8b-17630ee870fb","block_type":"box","text":"information, including a written consent of the proposed nominee to serve if elected. Reference is","page_number":28,"box":{"x":117,"y":227,"width":726,"height":12}},{"id":"6ae32b83-0326-4250-b8b7-598126b70354","block_type":"box","text":"made to the Trust’s Bylaws for more details. The Board has adopted a written charter for the","page_number":28,"box":{"x":117,"y":242,"width":690,"height":12}},{"id":"cedff42b-0f39-40ad-8814-a5ab7672582a","block_type":"box","text":"Governance Committee. During the twelve months ended April 30, 2026, the Governance Committee","page_number":28,"box":{"x":117,"y":258,"width":756,"height":12}},{"id":"47d312d1-3b26-4ff6-828b-7837ee2e25ca","block_type":"box","text":"met eleven times.","page_number":28,"box":{"x":117,"y":273,"width":135,"height":10}},{"id":"136d01ae-0dbe-409b-add4-f6aca0a4e581","block_type":"box","text":"The members of the Compliance Committee (the “Compliance Committee”) are Claire A. Walton","page_number":28,"box":{"x":116,"y":304,"width":720,"height":12}},{"id":"c738cbd2-6d2b-4bdd-b447-f57931b4ba2c","block_type":"box","text":"(Chair), Jeffrey Jarczyk, Cynthia A. Montgomery, Donald C. Opatrny, Lori Richards and Kenneth L.","page_number":28,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"2b014dda-490e-42b1-8aa0-b0ca4b797f54","block_type":"box","text":"Urish, all of whom are Independent Trustees. The Compliance Committee’s purpose is to assist the","page_number":28,"box":{"x":117,"y":335,"width":742,"height":12}},{"id":"99dcca2c-6b41-4c8b-9dad-ab6abb352a82","block_type":"box","text":"Board in fulfilling its responsibility to oversee regulatory and fiduciary compliance matters involving the","page_number":28,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"bc631426-2060-47b0-8550-9f7ed9b9f70a","block_type":"box","text":"Trust, the fund-related activities of BFA and any sub-adviser and the Trust’s third-party service","page_number":28,"box":{"x":116,"y":366,"width":706,"height":12}},{"id":"1b5c2d47-aad5-4f33-bb5a-05bcb48716eb","block_type":"box","text":"providers. The Compliance Committee’s responsibilities include, without limitation, to (1) oversee the","page_number":28,"box":{"x":117,"y":382,"width":751,"height":12}},{"id":"070dbd2b-9e76-4a50-8a70-9e6b845a421a","block_type":"box","text":"compliance policies and procedures of the Trust and its service providers and recommend changes or","page_number":28,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"6ca9df11-d4ec-4158-9a2e-800616731705","block_type":"box","text":"additions to such policies and procedures; (2) review information on and, where appropriate,","page_number":28,"box":{"x":116,"y":413,"width":690,"height":12}},{"id":"66c3bef0-9920-4da2-9b5b-116da9787877","block_type":"box","text":"recommend policies concerning the Trust’s compliance with applicable law; (3) review reports from,","page_number":28,"box":{"x":117,"y":428,"width":741,"height":12}},{"id":"c4d57f8d-ae6c-47e0-810f-4048e892524e","block_type":"box","text":"oversee the annual performance review of, and make certain recommendations and determinations","page_number":28,"box":{"x":116,"y":444,"width":744,"height":12}},{"id":"6d7bb1cf-fe9d-4d44-b581-7ec87de394de","block_type":"box","text":"regarding the Trust’s Chief Compliance Officer (the “CCO”), including determining the amount and","page_number":28,"box":{"x":117,"y":459,"width":732,"height":12}},{"id":"af3446da-7a1b-44e2-b87e-c7f6caf331b1","block_type":"box","text":"structure of the CCO’s compensation and recommending such amount and structure to the full Board","page_number":28,"box":{"x":116,"y":475,"width":756,"height":12}},{"id":"91380c88-da9a-477b-83dd-78b0acb59bd0","block_type":"box","text":"for approval and ratification; and (4) undertake such other duties and responsibilities as may from time","page_number":28,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"29faae84-9730-453e-b9b0-86c0eaae761a","block_type":"box","text":"to time be delegated by the Board to the Compliance Committee. The Board has adopted a written","page_number":28,"box":{"x":116,"y":506,"width":737,"height":12}},{"id":"6728ddb2-2408-4203-8430-6e2620bc725d","block_type":"box","text":"charter for the Compliance Committee. During the twelve months ended April 30, 2026, the","page_number":28,"box":{"x":116,"y":521,"width":681,"height":12}},{"id":"d1cc6e99-bdba-4427-8211-4727a2ccc341","block_type":"box","text":"Compliance Committee met four times.","page_number":28,"box":{"x":117,"y":537,"width":294,"height":12}},{"id":"94eff96c-ab9c-46fd-b300-4bd3c3697f4c","block_type":"box","text":"The members of the Performance Oversight Committee (the “Performance Oversight Committee”) are","page_number":28,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"6e69ac3c-74ff-4352-8cb7-e296425aa8e1","block_type":"box","text":"Donald C. Opatrny (Chair), Christopher J. Ailman, Susan J. Carter, Collette Chilton, Neil A. Cotty and","page_number":28,"box":{"x":117,"y":583,"width":755,"height":12}},{"id":"f539fac1-0d5d-4549-9109-ddca700bbc81","block_type":"box","text":"Marc D. Stern, all of whom are Independent Trustees. The Performance Oversight Committee’s","page_number":28,"box":{"x":117,"y":599,"width":714,"height":12}},{"id":"9bbf30e8-f6c2-4ed4-9264-1d582a520357","block_type":"box","text":"purpose is to assist the Board in fulfilling its responsibility to oversee the Fund’s investment","page_number":28,"box":{"x":117,"y":614,"width":680,"height":12}},{"id":"c3a3b99f-f6c7-456f-ba41-d07a6aec099b","block_type":"box","text":"performance relative to its agreed-upon performance objectives and to assist the Independent","page_number":28,"box":{"x":117,"y":630,"width":702,"height":12}},{"id":"e87860dd-bfbe-4649-95f5-bb57f7304102","block_type":"box","text":"Trustees in their consideration of investment advisory agreements. The Performance Oversight","page_number":28,"box":{"x":116,"y":645,"width":712,"height":12}},{"id":"2f34017b-7589-42ac-b97e-446e8a1fe7bf","block_type":"box","text":"Committee’s responsibilities include, without limitation, to (1) review information on, and make","page_number":28,"box":{"x":117,"y":661,"width":695,"height":12}},{"id":"86273794-fd7c-4f84-9a62-d74d8ec4046b","block_type":"box","text":"recommendations to the full Board in respect of, the Fund’s investment objective, policies and","page_number":28,"box":{"x":117,"y":676,"width":694,"height":12}},{"id":"26b99e25-a238-4538-a260-fba62ce0c4a2","block_type":"box","text":"practices; (2) review information on the Fund’s investment performance; (3) review information on","page_number":28,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"581aba0c-c554-470c-9f17-d5779307e676","block_type":"box","text":"appropriate benchmarks and competitive universes and unusual or exceptional investment matters;","page_number":28,"box":{"x":116,"y":707,"width":736,"height":12}},{"id":"fa3824ee-bbee-4a2d-91de-9c187eab1bc4","block_type":"box","text":"(4) review personnel and other resources devoted to management of the Fund and evaluate the nature","page_number":28,"box":{"x":117,"y":723,"width":763,"height":12}},{"id":"f6181e46-fffc-4cc8-9210-56db382b7580","block_type":"box","text":"and quality of information furnished to the Performance Oversight Committee; (5) recommend any","page_number":28,"box":{"x":116,"y":738,"width":728,"height":12}},{"id":"cd2da602-b386-47c8-bafc-0e29430afe5c","block_type":"box","text":"required action regarding changes in fundamental and non-fundamental investment policies and","page_number":28,"box":{"x":117,"y":754,"width":711,"height":12}},{"id":"e293fbf0-499a-4a3c-977e-e058ab55db44","block_type":"box","text":"restrictions, fund mergers or liquidations; (6) request and review information on the nature, extent and","page_number":28,"box":{"x":117,"y":769,"width":753,"height":12}},{"id":"c061d65c-9ca9-4bff-b631-9053545ecdf0","block_type":"box","text":"quality of services provided to the shareholders; (7) make recommendations to the Board concerning","page_number":28,"box":{"x":116,"y":785,"width":748,"height":12}},{"id":"c15a125a-cb45-466c-93df-bc83c4bef251","block_type":"box","text":"the approval or renewal of investment advisory agreements; and (8) undertake such other duties and","page_number":28,"box":{"x":116,"y":800,"width":748,"height":12}},{"id":"b1128952-38e9-48ef-a89e-ad5b65dae874","block_type":"box","text":"responsibilities as may from time to time be delegated by the Board to the Performance Oversight","page_number":28,"box":{"x":117,"y":816,"width":725,"height":12}},{"id":"3b7ca541-14a5-401e-9d93-3ef837ccc9cf","block_type":"box","text":"Committee. The Board has adopted a written charter for the Performance Oversight Committee. During","page_number":28,"box":{"x":117,"y":831,"width":771,"height":12}},{"id":"f5860163-25ca-45cb-ad7d-74cc1462e776","block_type":"box","text":"the twelve months ended April 30, 2026, the Performance Oversight Committee met five times.","page_number":28,"box":{"x":116,"y":847,"width":710,"height":12}},{"id":"60f63667-9a71-466b-b0fc-83aae3f0ba0d","block_type":"box","text":"25","page_number":28,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"c50d8c57-e239-4d64-963f-c79744d9decb","block_type":"box","text":"NM1026U-6039989-28/256","page_number":28,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"79de3d14-a594-413c-b971-df636b677e24","block_type":"box","text":"The members of the Ad Hoc Topics Committee (the “Ad Hoc Topics Committee”) are Mark Stalnecker","page_number":29,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"c6c4008c-228e-468b-9431-f5bf2b2bc015","block_type":"box","text":"(Chair) and Claire A. Walton, both of whom are Independent Trustees, and John M. Perlowski, who","page_number":29,"box":{"x":117,"y":102,"width":741,"height":13}},{"id":"cc91133b-a4c5-4058-8a7b-16c435f6b47b","block_type":"box","text":"serves as an interested Trustee. The principal responsibilities of the Ad Hoc Topics Committee are to","page_number":29,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"a4449c4f-fd18-4c1e-afbd-15c12c97dc5a","block_type":"box","text":"(1) act on routine matters between meetings of the Board; (2) act on such matters as may require","page_number":29,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"073695c9-86ae-4983-888b-8507c6ae33b8","block_type":"box","text":"urgent action between meetings of the Board; and (3) exercise such other authority as may from time","page_number":29,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"697855e3-1ccc-47dd-8384-f7db164289bd","block_type":"box","text":"to time be delegated to the Ad Hoc Topics Committee by the Board. The Board has adopted a written","page_number":29,"box":{"x":116,"y":165,"width":758,"height":12}},{"id":"0b02c1d2-8c97-466e-9eab-b87efd649b6f","block_type":"box","text":"charter for the Ad Hoc Topics Committee. During the twelve months ended April 30, 2026, the Ad Hoc","page_number":29,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"9bfe7cee-49fe-43fe-aa76-fdc60fd49878","block_type":"box","text":"Topics Committee did not meet.","page_number":29,"box":{"x":116,"y":196,"width":242,"height":11}},{"id":"026cdeee-fd90-43d2-82cb-79f7e933cec8","block_type":"box","text":"The Governance Committee has adopted a statement of","page_number":29,"box":{"x":116,"y":223,"width":404,"height":12}},{"id":"d82eea5d-901a-4210-88d3-3bec5292426c","block_type":"box","text":"f policy that describes the experience,","page_number":29,"box":{"x":519,"y":223,"width":269,"height":12}},{"id":"89020620-b5aa-44ce-958e-4602ce8b0185","block_type":"box","text":"qualifications, skills and attributes that are nec","page_number":29,"box":{"x":116,"y":238,"width":326,"height":12}},{"id":"c4072343-252b-48b4-b6c8-fbc99f74e050","block_type":"box","text":"essary and desirable for potential Independent Trustee","page_number":29,"box":{"x":443,"y":238,"width":394,"height":12}},{"id":"264da6d4-67a5-47e4-a333-c782db30983d","block_type":"box","text":"candidates (the “Statement of Policy”). The Board belie","page_number":29,"box":{"x":116,"y":254,"width":391,"height":12}},{"id":"4a2f930e-1ecb-427f-8a63-a9620cbed0b9","block_type":"box","text":"ves that each Independent Trustee satisfied, at the","page_number":29,"box":{"x":507,"y":254,"width":366,"height":12}},{"id":"53c2e527-a1c2-4b05-9f4e-b61d5308161e","block_type":"box","text":"time he or she was initially elected or appointed a T","page_number":29,"box":{"x":116,"y":269,"width":355,"height":12}},{"id":"dc2899ad-14ee-4f0f-9a68-1b900ef8a10f","block_type":"box","text":"Trustee, and continues to satisfy, the standards","page_number":29,"box":{"x":471,"y":269,"width":342,"height":12}},{"id":"64f33c31-916f-4466-a2bf-fd1dc2cf281a","block_type":"box","text":"contemplated by the Statement of","page_number":29,"box":{"x":116,"y":285,"width":245,"height":12}},{"id":"a7d62578-74e7-4ba5-abc8-fe0b54c59bcf","block_type":"box","text":"Policy. Furthermore, in determining that a particular Independent Trustee","page_number":29,"box":{"x":362,"y":285,"width":522,"height":12}},{"id":"b1fce538-7db9-40b7-ae92-4a93bbd2f762","block_type":"box","text":"was and continues to be qualified to serve as a Trustee,","page_number":29,"box":{"x":116,"y":300,"width":396,"height":12}},{"id":"401ba6bc-5c09-4f32-b9b2-dfebb2ae44fd","block_type":"box","text":"the Board has considered a variety of criteria, none","page_number":29,"box":{"x":513,"y":300,"width":373,"height":12}},{"id":"7f7dd637-0c4e-4a23-a0c2-b7755ea627de","block_type":"box","text":"of which, in isolation, was controlling. The Board","page_number":29,"box":{"x":116,"y":316,"width":347,"height":12}},{"id":"0640b732-d7d1-4308-b5ba-6cd6b1353e08","block_type":"box","text":"believes that, collectively, the Independent Trustees have","page_number":29,"box":{"x":463,"y":316,"width":412,"height":12}},{"id":"4629e7f4-0b58-4454-acec-9af06d22860e","block_type":"box","text":"balanced and diverse experience, skills, attributes and","page_number":29,"box":{"x":117,"y":331,"width":389,"height":12}},{"id":"986654e3-baea-4b1d-a9ad-fd732db825a6","block_type":"box","text":"qualifications, which allow the Board to operate","page_number":29,"box":{"x":506,"y":331,"width":339,"height":12}},{"id":"e7dfaf09-51ce-4544-84d6-c9bf28b2e801","block_type":"box","text":"effectively in governing the Trust and protecting t","page_number":29,"box":{"x":116,"y":347,"width":346,"height":12}},{"id":"f7f01ac8-8255-4ec3-94f2-a2ec08d61a69","block_type":"box","text":"he interests of shareholders. Among the attributes","page_number":29,"box":{"x":463,"y":347,"width":359,"height":12}},{"id":"a10d6938-db1d-4391-a424-ad2c5d7225e3","block_type":"box","text":"common to all Independent Trustees are their ability to","page_number":29,"box":{"x":116,"y":362,"width":387,"height":12}},{"id":"6d4e71e0-2198-4b10-9fe4-9ce38746fbcd","block_type":"box","text":"review critically, evaluate, question and discuss","page_number":29,"box":{"x":503,"y":362,"width":346,"height":12}},{"id":"2c75616e-ad67-4667-a8df-af69cb0c751c","block_type":"box","text":"information provided to them, to interact effectively w","page_number":29,"box":{"x":117,"y":378,"width":362,"height":12}},{"id":"5acc4110-7937-4aac-8f87-4b7ce3a7088e","block_type":"box","text":"with the Fund’s investment adviser, sub-advisers, other","page_number":29,"box":{"x":479,"y":378,"width":397,"height":11}},{"id":"322670b5-5143-48de-936b-494dd7c12904","block_type":"box","text":"service providers, counsel and the Independent Regi","page_number":29,"box":{"x":116,"y":393,"width":375,"height":12}},{"id":"bf278b97-b412-4d89-8330-a45656d14cab","block_type":"box","text":"stered Public Accounting Firm, and to exercise","page_number":29,"box":{"x":492,"y":393,"width":336,"height":12}},{"id":"be9d6bf3-fdec-45c0-a3f9-8dde2852a3c8","block_type":"box","text":"effective business judgment in the performance of their duties as Trustees.","page_number":29,"box":{"x":116,"y":409,"width":535,"height":12}},{"id":"5dfc9f02-e62c-4d4f-a4ec-9a6656999007","block_type":"box","text":"Information relating to each Trustee’s share ownership in all BlackRock-advised Funds that are","page_number":29,"box":{"x":117,"y":436,"width":710,"height":12}},{"id":"a726124a-437f-4827-a9cc-4fa5e6622dbb","block_type":"box","text":"currently overseen by the respective Trustee (“Supervised Funds”) as of December 31, 2025, except","page_number":29,"box":{"x":116,"y":451,"width":752,"height":13}},{"id":"4ee1035c-94ce-493c-b2c6-5cce32252d97","block_type":"box","text":"as otherwise noted, is set forth in the chart below. Amounts shown may include shares as to which a","page_number":29,"box":{"x":116,"y":467,"width":751,"height":12}},{"id":"c23fe5bd-3ff6-45cc-bfb4-71711bcd300b","block_type":"box","text":"Trustee has indirect beneficial ownership, such as through participation in certain family accounts,","page_number":29,"box":{"x":116,"y":482,"width":732,"height":13}},{"id":"026e99d6-c013-4201-b301-f56882e49c15","block_type":"box","text":"529 college savings plan interests, or similar arrangements where the Trustee has beneficial economic","page_number":29,"box":{"x":116,"y":498,"width":768,"height":12}},{"id":"bf944251-1acc-46ec-b925-66c39a26ce65","block_type":"box","text":"interest but not a direct ownership interest.","page_number":29,"box":{"x":117,"y":514,"width":321,"height":11}},{"id":"24478815-61c1-4f44-883a-3af54cf4cb43","block_type":"box","text":"Name","page_number":29,"box":{"x":261,"y":569,"width":35,"height":7}},{"id":"a93c1540-db73-46ff-b231-5ad0c2f1a743","block_type":"box","text":"Aggregate Dollar","page_number":29,"box":{"x":667,"y":538,"width":108,"height":9}},{"id":"b588783a-b618-44c7-8105-1ba6a83b6f60","block_type":"box","text":"Range of Equity","page_number":29,"box":{"x":671,"y":548,"width":101,"height":9}},{"id":"d3de47b9-8d6b-4ed8-8ed3-a6015a1aaf2c","block_type":"box","text":"Securities in","page_number":29,"box":{"x":681,"y":558,"width":79,"height":8}},{"id":"b09e61f0-26cb-4991-bd6f-a387b4bd3254","block_type":"box","text":"Supervised Funds","page_number":29,"box":{"x":663,"y":568,"width":116,"height":10}},{"id":"23db321c-2ad8-4d16-a8af-240e231904a0","block_type":"box","text":"Interested Trustees","page_number":29,"box":{"x":117,"y":586,"width":144,"height":10}},{"id":"7a30b77b-5534-4cca-93bb-ad24b3577cf4","block_type":"box","text":"Robert Fairbairn Over $100,000","page_number":29,"box":{"x":117,"y":600,"width":664,"height":12}},{"id":"1d847481-1410-4628-87be-5fdfb86f86e2","block_type":"box","text":"John M. Perlowski Over $100,000","page_number":29,"box":{"x":116,"y":614,"width":665,"height":12}},{"id":"59cc5eab-f86d-42b1-8caf-6e8ef97912e0","block_type":"box","text":"Independent Trustees","page_number":29,"box":{"x":117,"y":637,"width":162,"height":12}},{"id":"1942721e-31e2-497b-81a4-610fae9fafaa","block_type":"box","text":"Christopher J. Ailman Over $100,000","page_number":29,"box":{"x":117,"y":651,"width":664,"height":12}},{"id":"8e9c1721-2eac-4623-8566-21b06bd2339c","block_type":"box","text":"Susan J. Carter Over $100,000","page_number":29,"box":{"x":116,"y":665,"width":660,"height":12}},{"id":"603fa45a-79df-4581-90b2-8df0db9c6812","block_type":"box","text":"Collette Chilton Over $100,000","page_number":29,"box":{"x":117,"y":680,"width":659,"height":11}},{"id":"b8a2bb4c-00ac-45fc-bf47-6b24a4ab9bf4","block_type":"box","text":"Neil A. Cotty Over $100,000","page_number":29,"box":{"x":117,"y":694,"width":659,"height":13}},{"id":"bbe83b37-1a16-43fd-a129-e6f136c5312d","block_type":"box","text":"Jeffrey Jarczyk* None","page_number":29,"box":{"x":116,"y":709,"width":624,"height":12}},{"id":"e4a11850-e773-4299-ba24-109ba52bbd24","block_type":"box","text":"Henry R. Keizer Over $100,000","page_number":29,"box":{"x":117,"y":723,"width":659,"height":13}},{"id":"dbf77e7f-b145-4506-885d-22e8d28f280d","block_type":"box","text":"Cynthia A. Montgomery Over $100,000","page_number":29,"box":{"x":117,"y":737,"width":659,"height":13}},{"id":"d7d4eb12-b04b-4370-9b6a-48bac345e3e4","block_type":"box","text":"Donald C. Opatrny Over $100,000","page_number":29,"box":{"x":117,"y":752,"width":659,"height":12}},{"id":"c00d7a1d-d2b6-4cce-a8a0-a3438d2c8c95","block_type":"box","text":"Lori Richards None","page_number":29,"box":{"x":117,"y":767,"width":623,"height":9}},{"id":"b0226824-873b-4ce4-b0c9-2c7c7f874837","block_type":"box","text":"Mark Stalnecker Over $100,000","page_number":29,"box":{"x":117,"y":780,"width":659,"height":12}},{"id":"b0742654-bd13-40e2-99c1-cda826e0d117","block_type":"box","text":"Marc D. Stern* None","page_number":29,"box":{"x":117,"y":796,"width":623,"height":9}},{"id":"3462e624-ee48-42a4-b543-7f3d210ae84d","block_type":"box","text":"Kenneth L. Urish Over $100,000","page_number":29,"box":{"x":117,"y":809,"width":659,"height":12}},{"id":"d0a2bd53-b436-449b-822f-7507d442bb8d","block_type":"box","text":"Claire A. Walton Over $100,000","page_number":29,"box":{"x":117,"y":824,"width":659,"height":12}},{"id":"e47f254b-2037-4152-9d05-8e4bf5132779","block_type":"box","text":"* Information is provided as of April 1, 2026, the date Mr. Jarczyk and Mr. Stern first served as consultants to the","page_number":29,"box":{"x":143,"y":866,"width":684,"height":10}},{"id":"8eaa977f-9874-49f1-8835-6df4ec2a8265","block_type":"box","text":"Independent Trustees.","page_number":29,"box":{"x":171,"y":879,"width":132,"height":10}},{"id":"22576fc7-2bb3-4e39-9725-d0f83a2e0304","block_type":"box","text":"26","page_number":29,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"658de03d-c7e9-472e-8ccb-122d716f6619","block_type":"box","text":"NM1026U-6039989-29/256","page_number":29,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"189a78ab-ae52-4e98-b3de-95cd6ebc5e5e","block_type":"box","text":"As of December 31, 2025 (and, with respect to Mr. Jarczyk","page_number":30,"box":{"x":116,"y":87,"width":443,"height":12}},{"id":"04f24064-bda9-4d8a-87dd-f83604c98c67","block_type":"box","text":"and Mr. Stern, as of April 1, 2026), none of","page_number":30,"box":{"x":559,"y":87,"width":323,"height":12}},{"id":"12df2087-b61e-4177-a9a4-bd330768a7e3","block_type":"box","text":"the Independent Trustees of the Trust or their immediate family members owned directly or indirectly","page_number":30,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"c4d36cc7-a068-4403-9d56-96d59f66b414","block_type":"box","text":"beneficially or of record any securities of the Fund’s investment adviser, principal underwriter, or any","page_number":30,"box":{"x":117,"y":118,"width":749,"height":12}},{"id":"7523195c-8848-409a-88c9-11df3f4024e3","block_type":"box","text":"person directly or indirectly controlling, controlled by, or under common control with such entities.","page_number":30,"box":{"x":117,"y":134,"width":724,"height":12}},{"id":"63174433-6514-450c-bd81-b1af78497e8e","block_type":"box","text":"Remuneration of Trustees.","page_number":30,"box":{"x":117,"y":162,"width":211,"height":9}},{"id":"63187ced-e831-4155-b7a9-1d90fcabe2d7","block_type":"box","text":"Each Trustee who is an Independent Trustee is paid as compensation an","page_number":30,"box":{"x":329,"y":162,"width":554,"height":12}},{"id":"ab39cbf4-5c68-4409-9f9c-fa6d17169777","block_type":"box","text":"annual retainer of $375,000 per year for his or her services as a board member of the BlackRock","page_number":30,"box":{"x":116,"y":177,"width":725,"height":12}},{"id":"d80d0012-b962-4d44-863c-812dc420c95f","block_type":"box","text":"advised Funds in the BlackRock Multi-Asset Complex, including the Trust, and a $20,000 board","page_number":30,"box":{"x":116,"y":192,"width":714,"height":13}},{"id":"82ad4ffd-009c-46fc-9d54-c643516a80e6","block_type":"box","text":"meeting fee to be paid for each in-person board meeting attended (and may receive a board meeting","page_number":30,"box":{"x":117,"y":208,"width":753,"height":12}},{"id":"ea554e47-89cc-4ac3-a873-fcd54961f895","block_type":"box","text":"fee for telephonic attendance at board meetings), for up to five board meetings held in a calendar year","page_number":30,"box":{"x":116,"y":224,"width":764,"height":12}},{"id":"3baae9ee-0f22-4193-b601-d74abb2aa648","block_type":"box","text":"(compensation for meetings in excess of this number to be determined on a case-by-case basis),","page_number":30,"box":{"x":117,"y":239,"width":725,"height":12}},{"id":"2289e51c-4ef0-4737-b881-e892f89193e6","block_type":"box","text":"together with out-of-pocket expenses in accordance with a board policy on travel and other business","page_number":30,"box":{"x":116,"y":255,"width":750,"height":12}},{"id":"b80f6739-9489-423d-b570-4d2ff328347f","block_type":"box","text":"expenses relating to attendance at meetings. 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From time to time, an Authorized","page_number":31,"box":{"x":117,"y":102,"width":764,"height":12}},{"id":"7784e3ca-eb3c-45fb-8319-2fa4eca6aa30","block_type":"box","text":"Participant, a third-party investor or the Fund’s adviser or an affiliate of the Fund’s adviser, or a fund,","page_number":31,"box":{"x":117,"y":118,"width":750,"height":12}},{"id":"fea2bbca-5324-48be-af8d-e264d6a2eecb","block_type":"box","text":"may invest in the Fund and hold its investment for a specific period of time.","page_number":31,"box":{"x":117,"y":134,"width":560,"height":12}},{"id":"b4a90565-4dd7-4845-b7b2-d9d00a63240c","block_type":"box","text":"Conflicts of Interest.","page_number":31,"box":{"x":116,"y":165,"width":161,"height":9}},{"id":"faff52f0-d097-4ab3-9731-cef6be5e85b1","block_type":"box","text":"Certain activities of BFA, BlackRock, Inc. and the other subsidiaries of","page_number":31,"box":{"x":279,"y":165,"width":530,"height":11}},{"id":"5a4dc64e-6387-4ff2-a5a8-dcc62b6b4871","block_type":"box","text":"BlackRock, Inc. (collectively referred to in this section as “BlackRock”) and their respective directors,","page_number":31,"box":{"x":117,"y":180,"width":749,"height":12}},{"id":"9c360a6a-43db-4962-ad65-c0f1f0549523","block_type":"box","text":"officers or employees, with respect to the Fund and/or other accounts managed by BlackRock, may","page_number":31,"box":{"x":116,"y":196,"width":744,"height":12}},{"id":"e02f1a34-95a2-4461-a183-bc84a9253380","block_type":"box","text":"give rise to actual or perceived conflicts of interest such as those described below.","page_number":31,"box":{"x":116,"y":211,"width":616,"height":12}},{"id":"9d9de2a2-5f7c-4b79-96b9-b9dd7d691738","block_type":"box","text":"BlackRock is one of the world’s largest asset management firms. BlackRock, its subsidiaries and their","page_number":31,"box":{"x":117,"y":242,"width":759,"height":12}},{"id":"d3287f79-3338-40e4-ac2b-6a24b03fd05d","block_type":"box","text":"respective directors, officers and employees, including the business units or entities and personnel","page_number":31,"box":{"x":117,"y":258,"width":736,"height":12}},{"id":"4489807d-7133-40b1-b535-13f97585228f","block_type":"box","text":"who may be involved in the investment activities and business operations of the Fund, are engaged","page_number":31,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"551049ab-1171-4c30-8a70-1e12a4aed4fd","block_type":"box","text":"worldwide in businesses, including managing equities, fixed income securities, cash and alternative","page_number":31,"box":{"x":116,"y":289,"width":742,"height":12}},{"id":"757a719d-121a-4e11-9b86-5f306fb178ee","block_type":"box","text":"investments, and other financial services, and have interests other than that of managing the Fund.","page_number":31,"box":{"x":117,"y":304,"width":740,"height":12}},{"id":"e6b7cca9-a8f3-45f1-b07d-43cb83b5f7cf","block_type":"box","text":"These are considerations of which investors in the Fund should be aware, and which may cause","page_number":31,"box":{"x":116,"y":320,"width":720,"height":12}},{"id":"438ed753-0e1a-4e97-90dc-88b4c1933ae3","block_type":"box","text":"conflicts of interest that could disadvantage the Fund and its shareholders. These businesses and","page_number":31,"box":{"x":116,"y":335,"width":731,"height":12}},{"id":"cff0efb3-84df-41b0-8160-1c721540e179","block_type":"box","text":"interests include potential multiple advisory, transactional, financial and other relationships with, or","page_number":31,"box":{"x":117,"y":351,"width":733,"height":12}},{"id":"eb8fb3ab-7861-4852-b245-4e154ff3385d","block_type":"box","text":"interests in companies and interests in securities or other instruments that may be purchased or sold","page_number":31,"box":{"x":117,"y":366,"width":751,"height":12}},{"id":"d166a061-5dd9-408c-81a8-1928d710551b","block_type":"box","text":"by the Fund.","page_number":31,"box":{"x":117,"y":382,"width":97,"height":12}},{"id":"fa999f02-bad1-41c0-8179-1c1bf5ee3377","block_type":"box","text":"BlackRock may have proprietary interests in, and may manage or advise with respect to, accounts or","page_number":31,"box":{"x":117,"y":413,"width":754,"height":12}},{"id":"2cb36b8a-2339-4c46-95e6-2544b87cd290","block_type":"box","text":"funds (including separate accounts and other funds and collective investment vehicles) that have","page_number":31,"box":{"x":116,"y":428,"width":724,"height":12}},{"id":"f9952f22-3c25-403a-b409-b4d245f80ceb","block_type":"box","text":"investment objectives identical or similar to those of the Fund and/or that engage in transactions in the","page_number":31,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"cd9f28c7-6ffd-40cd-9bfd-4abdb12916bf","block_type":"box","text":"same types of securities, currencies and instruments as the Fund. Such other funds or accounts may","page_number":31,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"052dee4f-7e75-487b-a303-91a6dc98668b","block_type":"box","text":"offer exposure to strategies that are identical or substantially similar to those of the Fund but with","page_number":31,"box":{"x":116,"y":475,"width":724,"height":12}},{"id":"983fd3cd-2f5d-44ed-8756-6db946ab2e91","block_type":"box","text":"different fees and expenses, governance and structures, and/or services provided by BlackRock.","page_number":31,"box":{"x":116,"y":490,"width":724,"height":12}},{"id":"dea89dd0-2bdb-4142-9c9a-51442113be23","block_type":"box","text":"BlackRock is also a major participant in the global currency, equities, swap and fixed income markets,","page_number":31,"box":{"x":117,"y":506,"width":760,"height":12}},{"id":"7b4685c0-c2ec-40fc-88df-f82022a56ba9","block_type":"box","text":"in each case, for the accounts of clients and, in some cases, on a proprietary basis. As such,","page_number":31,"box":{"x":117,"y":521,"width":693,"height":12}},{"id":"d8716a8c-6011-4f77-a8d1-bcd25ca7b89f","block_type":"box","text":"BlackRock is or may be actively engaged in transactions in the same securities, currencies, and","page_number":31,"box":{"x":117,"y":537,"width":715,"height":12}},{"id":"daa62e8e-1159-47e0-a719-5ade1b26f0a6","block_type":"box","text":"instruments in which the Fund invests.","page_number":31,"box":{"x":117,"y":552,"width":289,"height":10}},{"id":"7b0cbf39-9000-49e6-90e4-e71517583375","block_type":"box","text":"Such activities could affect the prices and availability of the securities, currencies, and instruments in","page_number":31,"box":{"x":116,"y":583,"width":752,"height":12}},{"id":"c1a5a0f1-8869-4163-984b-0927fc0f0988","block_type":"box","text":"which the Fund invests, which could have an adverse impact on the Fund’s performance. Such","page_number":31,"box":{"x":116,"y":599,"width":710,"height":12}},{"id":"754adedc-8a57-4325-b8b5-f48d93ec386c","block_type":"box","text":"transactions, particularly in respect of most proprietary accounts or client accounts, will be executed","page_number":31,"box":{"x":116,"y":614,"width":746,"height":12}},{"id":"57df1152-cf1d-4b47-8cb3-03e94222a0c2","block_type":"box","text":"independently of the Fund’s transactions and thus at prices or rates that may be more or less favorable","page_number":31,"box":{"x":117,"y":630,"width":769,"height":12}},{"id":"4c2cc39d-9b98-47fd-a337-0b75bd2a97ca","block_type":"box","text":"than those obtained by the Fund.","page_number":31,"box":{"x":116,"y":645,"width":251,"height":12}},{"id":"8bd0d1a4-fb21-403e-b775-fb0a2c5ac7c3","block_type":"box","text":"When BlackRock seeks to purchase or sell the same assets for client accounts, including the Fund, the","page_number":31,"box":{"x":116,"y":676,"width":765,"height":12}},{"id":"d45eeaef-452c-4edf-9d50-9cd261ffe462","block_type":"box","text":"assets actually purchased or sold may be allocated among the accounts on a basis determined in its","page_number":31,"box":{"x":116,"y":692,"width":746,"height":12}},{"id":"2ebed510-e415-4319-badf-d55fd9edac6f","block_type":"box","text":"good faith discretion to be equitable. In some cases, this system may adversely affect the size or price","page_number":31,"box":{"x":116,"y":707,"width":759,"height":12}},{"id":"7bbe71ae-046e-4ef3-82e2-968f814a031e","block_type":"box","text":"of the assets purchased or sold for the Fund. In addition, transactions in investments by one or more","page_number":31,"box":{"x":116,"y":723,"width":746,"height":12}},{"id":"6079f969-60ac-481e-8432-5ba32ec05fab","block_type":"box","text":"other accounts managed by BlackRock may have the effect of diluting or otherwise disadvantaging the","page_number":31,"box":{"x":116,"y":738,"width":762,"height":12}},{"id":"281f5aec-ecd8-45d3-a430-a6c481196b0d","block_type":"box","text":"values, prices or investment strategies of the Fund, particularly, but not limited to, with respect to small","page_number":31,"box":{"x":116,"y":754,"width":760,"height":12}},{"id":"6b6613d3-a352-417d-94b3-8456cbee935a","block_type":"box","text":"capitalization, emerging market or less liquid strategies. This may occur with respect to BlackRock","page_number":31,"box":{"x":116,"y":769,"width":735,"height":12}},{"id":"0784a8bb-b783-4152-b1cd-f9c8268692a9","block_type":"box","text":"advised accounts when investment decisions regarding the Fund are based on research or other","page_number":31,"box":{"x":116,"y":785,"width":718,"height":12}},{"id":"f402b6a2-8bfd-4fcd-82a7-95f80e353ca8","block_type":"box","text":"information that is also used to support decisions for other accounts. When BlackRock implements a","page_number":31,"box":{"x":117,"y":800,"width":744,"height":12}},{"id":"3d065b25-0612-464a-a687-0251dd002607","block_type":"box","text":"portfolio decision or strategy on behalf of another account ahead of, or contemporaneously with, similar","page_number":31,"box":{"x":117,"y":816,"width":766,"height":12}},{"id":"d5a5dbbf-9740-4834-9e50-f615886570f5","block_type":"box","text":"decisions or strategies for the Fund, market impact, liquidity constraints, or other factors could result in","page_number":31,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"8fd0332e-0f80-42bb-90bc-5db48011f929","block_type":"box","text":"the Fund receiving less favorable trading results and the costs of implementing such decisions or","page_number":31,"box":{"x":116,"y":847,"width":725,"height":12}},{"id":"2de0a91d-a8c0-4545-8e44-3465e419c567","block_type":"box","text":"strategies could be increased or the Fund could otherwise be disadvantaged. BlackRock may, in","page_number":31,"box":{"x":116,"y":862,"width":721,"height":12}},{"id":"495abf5d-c927-4477-ad2d-a6f64a5a1edc","block_type":"box","text":"certain cases, elect to implement internal policies and procedures designed to limit such","page_number":31,"box":{"x":116,"y":878,"width":658,"height":12}},{"id":"c9bdccc0-9c2b-4e65-a657-5ebaf3530f8c","block_type":"box","text":"28","page_number":31,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"9264e823-afb4-4c52-b173-511a47ffabb2","block_type":"box","text":"NM1026U-6039989-31/256","page_number":31,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"3cbe7812-9d61-496a-89c4-603215512602","block_type":"box","text":"consequences, which may cause the Fund to be unable to engage in certain activities, including","page_number":32,"box":{"x":116,"y":87,"width":717,"height":12}},{"id":"8039cc2a-f161-468d-b966-6d6dfb1f7acb","block_type":"box","text":"purchasing or disposing of securities, when it might otherwise be desirable for it to do so. Conflicts may","page_number":32,"box":{"x":117,"y":102,"width":770,"height":13}},{"id":"494e3b2e-e2e0-46b9-b055-5ccdb9929bae","block_type":"box","text":"also arise because portfolio decisions regarding the Fund may benefit other accounts managed by","page_number":32,"box":{"x":116,"y":118,"width":735,"height":12}},{"id":"ec4fca78-99ba-473f-92d3-7133a858aa8b","block_type":"box","text":"BlackRock. For example, the sale of a long position or establishment of a short position by the Fund","page_number":32,"box":{"x":117,"y":134,"width":745,"height":12}},{"id":"157ff65f-119f-43a8-8590-d56eeb620592","block_type":"box","text":"may impair the price of the same security sold short by (and therefore benefit) BlackRock or its other","page_number":32,"box":{"x":117,"y":149,"width":750,"height":12}},{"id":"af35bc2d-6edb-4ad6-8d3a-035791079938","block_type":"box","text":"accounts or funds, and the purchase of a security or covering of a short position in a security by the","page_number":32,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"3eb6330f-677a-432d-96a3-c59641cd0122","block_type":"box","text":"Fund may increase the price of the same security held by (and therefore benefit) BlackRock or its other","page_number":32,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"750d535a-ecef-4522-a300-930f13a639f5","block_type":"box","text":"accounts or funds.","page_number":32,"box":{"x":116,"y":196,"width":142,"height":9}},{"id":"9d6e6944-2150-4774-b625-d26b35bc31be","block_type":"box","text":"BlackRock, on behalf of other client accounts, on the one hand, and the Fund, on the other hand, may","page_number":32,"box":{"x":117,"y":224,"width":761,"height":12}},{"id":"de4a16a0-d71a-48df-813d-b16021fe0b2e","block_type":"box","text":"invest in or extend credit to different parts of the capital structure of a single issuer. BlackRock may","page_number":32,"box":{"x":117,"y":239,"width":739,"height":12}},{"id":"9a9b5bbf-ff45-4909-9eaa-e8980ca472a9","block_type":"box","text":"pursue rights, provide advice or engage in other activities, or refrain from pursuing rights, providing","page_number":32,"box":{"x":117,"y":255,"width":737,"height":12}},{"id":"31f61050-f276-46fe-869a-705db578e73d","block_type":"box","text":"advice or engaging in other activities, on behalf of other clients with respect to an issuer in which the","page_number":32,"box":{"x":116,"y":270,"width":749,"height":12}},{"id":"7bfeef25-c43d-4170-b168-af09c8e7d10c","block_type":"box","text":"Fund has invested, and such actions (or refraining from action) may have a material adverse effect on","page_number":32,"box":{"x":117,"y":286,"width":761,"height":12}},{"id":"f684227c-1285-4456-9590-d31355b4ef1d","block_type":"box","text":"the Fund. In situations in which clients of BlackRock (including the Fund) hold positions in multiple","page_number":32,"box":{"x":116,"y":301,"width":732,"height":13}},{"id":"ed8234e5-3f57-4127-99ff-bc4acd2ae1c2","block_type":"box","text":"parts of the capital structure of an issuer, BlackRock may not pursue certain actions or remedies that","page_number":32,"box":{"x":117,"y":317,"width":752,"height":12}},{"id":"08082711-16f9-4145-8dc2-c79170e5cf98","block_type":"box","text":"may be available to the Fund, as a result of legal and regulatory requirements or otherwise. BlackRock","page_number":32,"box":{"x":117,"y":332,"width":766,"height":13}},{"id":"c65b06b0-284e-4927-bf1b-ad5928af4ac7","block_type":"box","text":"addresses these and other potential conflicts of interest based on the facts and circumstances of","page_number":32,"box":{"x":116,"y":348,"width":722,"height":12}},{"id":"ac7adc05-fec9-42fd-8dac-7cd0d6b7ce03","block_type":"box","text":"particular situations. For example, BlackRock may determine to rely on information barriers between","page_number":32,"box":{"x":117,"y":363,"width":748,"height":13}},{"id":"cd0d4e26-44ea-4b88-be0a-6772e41d656d","block_type":"box","text":"different business units or portfolio management teams. BlackRock may also determine to rely on the","page_number":32,"box":{"x":116,"y":379,"width":757,"height":12}},{"id":"ac373924-adae-40e7-8e7f-994bc45a261e","block_type":"box","text":"actions of similarly situated holders of loans or securities rather than, or in connection with, taking such","page_number":32,"box":{"x":116,"y":394,"width":768,"height":13}},{"id":"dcf7fd7e-855a-4a48-acc5-c8806f3b8d39","block_type":"box","text":"actions itself on behalf of the Fund.","page_number":32,"box":{"x":116,"y":410,"width":265,"height":9}},{"id":"e6a8d7b3-44e4-4088-ac79-5f2a908442e3","block_type":"box","text":"In addition, to the extent permitted by applicable law, the Fund may invest its assets in other funds","page_number":32,"box":{"x":117,"y":438,"width":733,"height":12}},{"id":"15f88e71-8541-4c12-a1ce-fa8bf2078349","block_type":"box","text":"advised by BlackRock, including funds that are managed by one or more of the same portfolio","page_number":32,"box":{"x":116,"y":454,"width":702,"height":12}},{"id":"2761660a-3c15-4d6c-ae78-da0973a53edc","block_type":"box","text":"managers, which could result in conflicts of interest relating to asset allocation, timing of Fund","page_number":32,"box":{"x":117,"y":469,"width":699,"height":12}},{"id":"84fb3024-b108-4562-a18a-ff8d079d425c","block_type":"box","text":"purchases and redemptions, and increased remuneration and profitability for BlackRock and/or its","page_number":32,"box":{"x":117,"y":485,"width":730,"height":12}},{"id":"df8566a1-070c-49e1-b6a4-1d53c53ce4f7","block_type":"box","text":"personnel, including portfolio managers.","page_number":32,"box":{"x":117,"y":500,"width":302,"height":12}},{"id":"a63b894c-c01e-46df-80b1-fce90bdf824f","block_type":"box","text":"Third parties, including service providers to BlackRock or the Fund, may sponsor events (including, but","page_number":32,"box":{"x":116,"y":529,"width":769,"height":12}},{"id":"9aac392c-cbf4-4f67-9337-a33398c2e963","block_type":"box","text":"not limited to, marketing and promotional activities and presentations, educational training programs","page_number":32,"box":{"x":117,"y":544,"width":746,"height":12}},{"id":"81b7903f-74f2-4e7f-a10e-1914396ec20d","block_type":"box","text":"and conferences) for registered representatives, other professionals and individual investors. There is","page_number":32,"box":{"x":116,"y":560,"width":759,"height":12}},{"id":"dd4bf49f-e1f0-403b-9cb2-c5b2a2b1bb37","block_type":"box","text":"a potential conflict of interest as such sponsorships may defray the costs of such activities to","page_number":32,"box":{"x":116,"y":575,"width":691,"height":12}},{"id":"ab67be43-0c7f-4b01-b7ad-fe7f1ebfeee0","block_type":"box","text":"BlackRock, and may provide an incentive to BlackRock to retain such third parties to provide services","page_number":32,"box":{"x":117,"y":591,"width":757,"height":12}},{"id":"bf0d44ef-5fed-41c1-9540-eb7652bc9128","block_type":"box","text":"to the Fund.","page_number":32,"box":{"x":116,"y":606,"width":94,"height":10}},{"id":"9a98014a-8ab9-403d-9b77-9b8110cfa89a","block_type":"box","text":"In certain circumstances, BlackRock, on behalf of the Fund, may seek to buy from or sell securities to","page_number":32,"box":{"x":117,"y":635,"width":757,"height":12}},{"id":"1e3becbc-96ea-414f-8ec2-2c2a3d1a6d57","block_type":"box","text":"another fund or account advised by BlackRock. BlackRock may (but is not required to) effect","page_number":32,"box":{"x":116,"y":650,"width":692,"height":12}},{"id":"2632fe61-9d5d-4c9a-9ddd-a007cec2857a","block_type":"box","text":"purchases and sales between BlackRock clients (“cross trades”), including the Fund, if BlackRock","page_number":32,"box":{"x":117,"y":666,"width":726,"height":12}},{"id":"9ec7d88f-97af-474e-9dd3-10b4f94f1021","block_type":"box","text":"believes such transactions are appropriate based on each party’s investment objectives and","page_number":32,"box":{"x":117,"y":681,"width":681,"height":12}},{"id":"a481cf20-d10d-4f46-8606-50015441612e","block_type":"box","text":"guidelines, subject to applicable law and regulation. There may be potential conflicts of interest or","page_number":32,"box":{"x":116,"y":697,"width":724,"height":12}},{"id":"37b8b68d-0505-46fc-b25f-2b33f7dee332","block_type":"box","text":"regulatory issues relating to these transactions which could limit BlackRock’s decision to engage in","page_number":32,"box":{"x":117,"y":712,"width":732,"height":12}},{"id":"6aad958e-d2b6-44c1-ae40-4917b1b2b846","block_type":"box","text":"these transactions for the Fund. BlackRock may have a potentially conflicting division of loyalties and","page_number":32,"box":{"x":116,"y":728,"width":749,"height":12}},{"id":"55a6cb22-d9dc-4ea5-a545-67cb62e3169d","block_type":"box","text":"responsibilities to the parties in such transactions.","page_number":32,"box":{"x":117,"y":743,"width":368,"height":12}},{"id":"317f7abe-9991-491f-842a-590d67d02184","block_type":"box","text":"BlackRock and its clients may pursue or enforce rights with respect to an issuer in which the Fund has","page_number":32,"box":{"x":117,"y":771,"width":758,"height":13}},{"id":"7b0d0d91-5c54-4199-aeb9-49a2dd195637","block_type":"box","text":"invested, and those activities may have an adverse effect on the Fund. As a result, prices, availability,","page_number":32,"box":{"x":117,"y":787,"width":753,"height":12}},{"id":"a85b1202-17db-4c7b-86e2-64b214a587e7","block_type":"box","text":"liquidity and terms of the Fund’s investments may be negatively impacted by the activities of","page_number":32,"box":{"x":117,"y":802,"width":683,"height":13}},{"id":"39a2a890-2471-4ffd-9315-f3cec152773f","block_type":"box","text":"BlackRock or its clients, and transactions for the Fund may be impaired or effected at prices or terms","page_number":32,"box":{"x":117,"y":818,"width":748,"height":12}},{"id":"86269450-57ac-4b57-b58d-c1443e1f1130","block_type":"box","text":"that may be less favorable than would otherwise have been the case.","page_number":32,"box":{"x":116,"y":833,"width":520,"height":13}},{"id":"90c8260f-9ff1-489a-bb9a-cc79b2a6c119","block_type":"box","text":"The results of the Fund’s investment activities may differ significantly from the results achieved by","page_number":32,"box":{"x":116,"y":862,"width":731,"height":12}},{"id":"6ef9f9e3-ddcf-44d6-8144-e2ca325b9dbe","block_type":"box","text":"BlackRock for its proprietary accounts or other accounts (including investment companies or collective","page_number":32,"box":{"x":117,"y":877,"width":763,"height":12}},{"id":"25efbbd9-e5d5-4bbb-9493-bc8431c7e87e","block_type":"box","text":"29","page_number":32,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6857cef6-1bc5-41ad-9889-699710b0eaa8","block_type":"box","text":"NM1026U-6039989-32/256","page_number":32,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"871d516e-3f40-4f42-be16-320f0e7c24f0","block_type":"box","text":"investment vehicles) that it manages or advises. It is possible that one or more accounts managed or","page_number":33,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"bfe20db8-cf23-4cb1-8257-1b901385f018","block_type":"box","text":"advised by BlackRock and such other accounts will achieve investment results that are substantially","page_number":33,"box":{"x":116,"y":103,"width":747,"height":12}},{"id":"6d0aa09a-c934-491b-9bf7-629259f1e24d","block_type":"box","text":"more or less favorable than the results achieved by the Fund. Moreover, it is possible that the Fund will","page_number":33,"box":{"x":117,"y":118,"width":769,"height":12}},{"id":"9d861a3c-18cc-4cc4-8bff-c0dbaa19d944","block_type":"box","text":"sustain losses during periods in which one or more proprietary or other accounts managed or advised","page_number":33,"box":{"x":116,"y":134,"width":759,"height":12}},{"id":"de581cb0-a351-4f75-a6e3-2fffbd7228c2","block_type":"box","text":"by BlackRock achieve significant profits. The opposite result is also possible.","page_number":33,"box":{"x":117,"y":149,"width":574,"height":12}},{"id":"7276a826-504b-472b-9885-f4e468d0fa4f","block_type":"box","text":"From time to time, the Fund may be restricted from purchasing or selling securities, or from engaging","page_number":33,"box":{"x":117,"y":180,"width":754,"height":12}},{"id":"71a2eb36-811e-4246-9c9b-266e085453fc","block_type":"box","text":"in other investment activities because of regulatory, legal or contractual requirements applicable to","page_number":33,"box":{"x":117,"y":196,"width":735,"height":12}},{"id":"65288c93-4f75-47b6-b0af-efc3b9cb1592","block_type":"box","text":"BlackRock or other accounts managed or advised by BlackRock, and/or the internal policies of","page_number":33,"box":{"x":117,"y":211,"width":706,"height":12}},{"id":"b73b3641-45ec-4fea-954e-7289ae511622","block_type":"box","text":"BlackRock designed to comply with such requirements. As a result, there may be periods, for example,","page_number":33,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"391f70ba-e97a-49c7-8f3d-ad9a5486575a","block_type":"box","text":"when BlackRock will not initiate or recommend certain types of transactions in certain securities or","page_number":33,"box":{"x":116,"y":242,"width":734,"height":12}},{"id":"4769c7da-b19a-4dad-9232-fb19a4f91de3","block_type":"box","text":"instruments with respect to which BlackRock is performing services or when position limits have been","page_number":33,"box":{"x":117,"y":258,"width":757,"height":12}},{"id":"087de061-f844-4881-a1a6-4d9b06791669","block_type":"box","text":"reached. For example, the investment activities of BlackRock for its proprietary accounts and accounts","page_number":33,"box":{"x":117,"y":273,"width":766,"height":12}},{"id":"225ab9ae-05db-4752-8a64-f861bcd52f5a","block_type":"box","text":"under its management may limit the investment opportunities for the Fund in certain emerging and","page_number":33,"box":{"x":117,"y":289,"width":733,"height":12}},{"id":"df0a610b-891d-4a96-99ba-98e04259bea8","block_type":"box","text":"other markets in which limitations are imposed upon the amount of investment, in the aggregate or in","page_number":33,"box":{"x":116,"y":304,"width":754,"height":12}},{"id":"bcda635f-cdc4-4cc9-ab05-05e376b6f5d2","block_type":"box","text":"individual issuers, by affiliated foreign investors.","page_number":33,"box":{"x":117,"y":320,"width":359,"height":12}},{"id":"c2f91d56-14ae-45ee-a23e-ebfd3a7dfdca","block_type":"box","text":"In connection with its management of the Fund, BlackRock may have access to certain fundamental","page_number":33,"box":{"x":117,"y":351,"width":747,"height":12}},{"id":"dee8064a-959e-411f-ad16-6e3f1a948cb5","block_type":"box","text":"analysis and proprietary technical models developed by BlackRock. BlackRock will not be under any","page_number":33,"box":{"x":116,"y":366,"width":750,"height":12}},{"id":"c7661f42-c1fa-4bfd-867b-7b106020c28e","block_type":"box","text":"obligation, however, to effect transactions on behalf of the Fund in accordance with such analysis and","page_number":33,"box":{"x":116,"y":382,"width":760,"height":12}},{"id":"55afcde5-ddd8-44ae-9e8d-5b85474d993a","block_type":"box","text":"models. In addition, BlackRock will not have any obligation to make available any information regarding","page_number":33,"box":{"x":117,"y":397,"width":770,"height":12}},{"id":"dc94b081-d708-47a4-aff8-1545ae39be55","block_type":"box","text":"its proprietary activities or strategies, or the activities or strategies used for other accounts managed by","page_number":33,"box":{"x":117,"y":413,"width":769,"height":12}},{"id":"41416c31-31d3-4657-8836-d033c17742ff","block_type":"box","text":"them, for the benefit of the management of the Fund and it is not anticipated that BlackRock will have","page_number":33,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"4f5f25da-e034-4ee1-9daa-488c9b19ae5e","block_type":"box","text":"access to such information for the purpose of managing the Fund. The proprietary activities or portfolio","page_number":33,"box":{"x":116,"y":444,"width":767,"height":12}},{"id":"e94ba399-e708-48b7-a6a8-4596bbd4fea0","block_type":"box","text":"strategies of BlackRock, or the activities or strategies used for accounts managed by BlackRock or","page_number":33,"box":{"x":116,"y":459,"width":738,"height":12}},{"id":"903354cc-6b9a-44f9-861d-391f5f8beb6f","block_type":"box","text":"other client accounts could conflict with the transactions and strategies employed by BlackRock in","page_number":33,"box":{"x":116,"y":475,"width":731,"height":12}},{"id":"b53495e6-7105-4342-8cac-01e6d0aaf49c","block_type":"box","text":"managing the Fund.","page_number":33,"box":{"x":117,"y":490,"width":153,"height":12}},{"id":"f437a3e4-39f7-47ea-be78-91d09a40f28e","block_type":"box","text":"The Fund may be included in investment models developed by BlackRock for use by clients and","page_number":33,"box":{"x":116,"y":521,"width":719,"height":12}},{"id":"ab8eab8a-5524-43c6-8bfe-2c9d1da44202","block_type":"box","text":"financial advisors. To the extent clients invest in these investment models and increase the assets","page_number":33,"box":{"x":116,"y":537,"width":733,"height":9}},{"id":"0b1d4d03-6fc3-465b-8332-87787457b60c","block_type":"box","text":"under management of the Fund, the investment management fee amounts paid by the Fund to","page_number":33,"box":{"x":117,"y":552,"width":707,"height":12}},{"id":"19273214-7a63-49a6-b4d0-4469b45ff066","block_type":"box","text":"BlackRock may also increase. The net asset value and liquidity of the Fund may be impacted by","page_number":33,"box":{"x":117,"y":568,"width":718,"height":12}},{"id":"0a6033ea-f5ad-48c8-b474-f9dd8c276b10","block_type":"box","text":"purchases and sales of the Fund by model-driven investment portfolios, as well as by BlackRock itself","page_number":33,"box":{"x":117,"y":583,"width":760,"height":12}},{"id":"91f0ec0b-301f-4b5f-a647-36f3010dd3ae","block_type":"box","text":"and by its advisory clients.","page_number":33,"box":{"x":116,"y":599,"width":201,"height":12}},{"id":"fbcbf8c9-f91a-4720-8d57-23513eaae9c5","block_type":"box","text":"In addition, certain principals and certain employees of the Fund’s investment adviser are also","page_number":33,"box":{"x":117,"y":630,"width":702,"height":12}},{"id":"b3653be6-5ebb-40bd-a25e-5ab1a4116b72","block_type":"box","text":"principals or employees of other business units or entities within BlackRock. As a result, these","page_number":33,"box":{"x":117,"y":645,"width":702,"height":12}},{"id":"33a428b7-d1a4-42f1-8b3b-f3cf8b072c21","block_type":"box","text":"principals and employees may have obligations to such other business units or entities or their clients","page_number":33,"box":{"x":117,"y":661,"width":751,"height":12}},{"id":"5da31d20-974f-4f99-817a-9de06a7ac435","block_type":"box","text":"and such obligations to other business units or entities or their clients may be a consideration of which","page_number":33,"box":{"x":116,"y":676,"width":757,"height":12}},{"id":"9cda62df-115b-4093-8712-a68b6adbd747","block_type":"box","text":"investors in the Fund should be aware.","page_number":33,"box":{"x":117,"y":692,"width":286,"height":9}},{"id":"f75112cc-1dd5-49b6-bfa5-eb2db9119f43","block_type":"box","text":"BlackRock may enter into transactions and invest in securities, instruments and currencies on behalf of","page_number":33,"box":{"x":117,"y":723,"width":765,"height":12}},{"id":"9fe95828-3692-45aa-9c05-c43bb0b8fb3d","block_type":"box","text":"the Fund in which clients of BlackRock, or, to the extent permitted by the Commission and applicable","page_number":33,"box":{"x":116,"y":738,"width":749,"height":12}},{"id":"4a2adf78-2e6a-4e9b-8e48-0e46d515aa20","block_type":"box","text":"law, BlackRock, serves as the counterparty, principal or issuer. In such cases, such party’s interests in","page_number":33,"box":{"x":117,"y":754,"width":758,"height":12}},{"id":"c20ec2cd-2f02-406e-a0a8-c85357e2173e","block_type":"box","text":"the transaction will be adverse to the interests of the Fund, and such party may have no incentive to","page_number":33,"box":{"x":116,"y":769,"width":741,"height":12}},{"id":"3bbb0847-3a49-42f2-bc69-9b3eb6ae6ed0","block_type":"box","text":"assure that the Fund obtains the best possible prices or terms in connection with the transactions. In","page_number":33,"box":{"x":116,"y":785,"width":744,"height":12}},{"id":"0b90868f-b54d-41a6-9016-d89e5e69bcb8","block_type":"box","text":"addition, the purchase, holding and sale of such investments by the Fund may enhance the profitability","page_number":33,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"60030b97-d5bf-42fc-80aa-ca29868fa18d","block_type":"box","text":"of BlackRock.","page_number":33,"box":{"x":116,"y":816,"width":101,"height":9}},{"id":"d35ed8c2-313e-422c-9d38-bedafd871bbf","block_type":"box","text":"BlackRock may also create, write or issue derivatives for clients, the underlying securities, currencies","page_number":33,"box":{"x":117,"y":847,"width":755,"height":12}},{"id":"12654bbf-b2e0-4f3e-ada3-b3fcba9fcf7d","block_type":"box","text":"or instruments of which may be those in which the Fund invests or which may be based on the","page_number":33,"box":{"x":116,"y":862,"width":706,"height":12}},{"id":"df6c5b0f-de6f-4a60-b892-de0c298ef88b","block_type":"box","text":"performance of the Fund. Additionally, an affiliate of BlackRock will create, write or issue options,","page_number":33,"box":{"x":117,"y":878,"width":724,"height":12}},{"id":"878e645c-09c1-4af7-a3d1-6d6c0a21128c","block_type":"box","text":"30","page_number":33,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"9560f403-59ca-4d74-8382-38424fe942cc","block_type":"box","text":"NM1026U-6039989-33/256","page_number":33,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"fb0b98cf-3831-4f3e-a863-7c05a715b12a","block_type":"box","text":"which may be based on the performance of the Fund. BlackRock has entered into an arrangement with","page_number":34,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"dba38e5b-eab2-43c7-ba29-ab831eeed71f","block_type":"box","text":"Markit Indices Limited, the index provider for underlying fixed-income indexes used by certain iShares","page_number":34,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"056a9b23-5a6b-4015-b508-104d9c9ddccb","block_type":"box","text":"ETFs, related to derivative fixed-income products that are based on such iShares ETFs. Trading","page_number":34,"box":{"x":117,"y":118,"width":718,"height":12}},{"id":"1db62ffb-6999-431e-9149-95550dc4665c","block_type":"box","text":"activity in these derivative products could also potentially lead to greater liquidity for such products,","page_number":34,"box":{"x":116,"y":134,"width":739,"height":12}},{"id":"56e1fd95-672f-4b0f-a15e-86dc74bce999","block_type":"box","text":"increased purchase activity with respect to these iShares ETFs and increased assets under","page_number":34,"box":{"x":117,"y":149,"width":684,"height":12}},{"id":"0ea4d673-4d31-4dce-a9b5-5cc290d678c5","block_type":"box","text":"management for BlackRock.","page_number":34,"box":{"x":117,"y":165,"width":215,"height":12}},{"id":"cbfba6e1-5740-40c7-90bf-eb9c59aa3599","block_type":"box","text":"The Fund may, subject to applicable law, purchase investments that are the subject of an underwriting","page_number":34,"box":{"x":116,"y":196,"width":764,"height":12}},{"id":"76e42c6c-5dfe-4149-b2de-6f64620a8175","block_type":"box","text":"or other distribution by BlackRock and may also enter into transactions with other clients of BlackRock","page_number":34,"box":{"x":116,"y":211,"width":763,"height":12}},{"id":"1bc854cd-3f34-430a-a7d6-9a7c8034ebff","block_type":"box","text":"where such other clients have interests adverse to those of the Fund. At times, these activities may","page_number":34,"box":{"x":116,"y":227,"width":741,"height":12}},{"id":"8f476238-629b-4146-ad1d-8eeb8ce2053c","block_type":"box","text":"cause business units or entities within BlackRock to give advice to clients that may cause these clients","page_number":34,"box":{"x":116,"y":242,"width":766,"height":12}},{"id":"b98ae92d-e73f-466e-9d69-b222c1d0f959","block_type":"box","text":"to take actions adverse to the interests of the Fund. To the extent such transactions are permitted, the","page_number":34,"box":{"x":116,"y":258,"width":763,"height":11}},{"id":"89316fac-2282-43af-b745-d064449ba939","block_type":"box","text":"Fund will deal with BlackRock on an arms-length basis.","page_number":34,"box":{"x":117,"y":273,"width":414,"height":12}},{"id":"cd9b0b8b-6941-4203-bcb6-f2cc37b2d8b6","block_type":"box","text":"To the extent authorized by applicable law, BlackRock may act as broker, dealer, agent, lender or","page_number":34,"box":{"x":116,"y":304,"width":729,"height":12}},{"id":"69b270e4-0702-475b-ae4d-621825343686","block_type":"box","text":"adviser or in other commercial capacities for the Fund. It is anticipated that the commissions, mark","page_number":34,"box":{"x":116,"y":320,"width":737,"height":12}},{"id":"2625a586-b4b4-4e2c-97f3-a7acc18cfb03","block_type":"box","text":"ups, mark-downs, financial advisory fees, underwriting and placement fees, sales fees, financing and","page_number":34,"box":{"x":117,"y":335,"width":754,"height":12}},{"id":"2cab4f1d-e364-4944-bf3c-7bb7adc863d2","block_type":"box","text":"commitment fees, brokerage fees, other fees, compensation or profits, rates, terms and conditions","page_number":34,"box":{"x":116,"y":351,"width":735,"height":12}},{"id":"a492df58-0548-4680-91ae-df95e82ed8a8","block_type":"box","text":"charged by BlackRock will be in its view commercially reasonable, although BlackRock, including its","page_number":34,"box":{"x":116,"y":366,"width":747,"height":12}},{"id":"347486bc-ff4c-4219-a108-65db4bbf8f71","block_type":"box","text":"sales personnel, will have an interest in obtaining fees and other amounts that are favorable to","page_number":34,"box":{"x":116,"y":382,"width":706,"height":12}},{"id":"c477f225-f71a-4b7b-889b-10420780bbaf","block_type":"box","text":"BlackRock and such sales personnel, which may have an adverse effect on the Fund. Index based","page_number":34,"box":{"x":117,"y":397,"width":738,"height":12}},{"id":"cb2ae180-6a20-4e1a-b3fd-b9276c8e8330","block_type":"box","text":"funds may use an index provider that is affiliated with another service provider of the Fund or","page_number":34,"box":{"x":116,"y":413,"width":694,"height":12}},{"id":"3b04f66e-6a59-4fe4-a42f-49a9f9531856","block_type":"box","text":"BlackRock that acts as a broker, dealer, agent, lender or in other commercial capacities for the Fund or","page_number":34,"box":{"x":117,"y":428,"width":770,"height":12}},{"id":"60c47db2-b611-42f5-987f-41a0a3bd2e40","block_type":"box","text":"BlackRock.","page_number":34,"box":{"x":117,"y":444,"width":88,"height":9}},{"id":"804c19ff-1918-40be-9466-ca1709378200","block_type":"box","text":"Subject to applicable law, BlackRock (and its personnel and other distributors) will be entitled to retain","page_number":34,"box":{"x":116,"y":475,"width":761,"height":12}},{"id":"d3d488b8-acb5-4508-9920-cbccb7b288bd","block_type":"box","text":"fees and other amounts that they receive in connection with their service to the Fund as broker, dealer,","page_number":34,"box":{"x":116,"y":490,"width":769,"height":12}},{"id":"2a862623-d943-4cd1-8234-7061c02f6750","block_type":"box","text":"agent, lender, adviser or in other commercial capacities. No accounting to the Fund or its shareholders","page_number":34,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"67031358-a247-44f5-85ce-5285176ed0d2","block_type":"box","text":"will be required, and no fees or other compensation payable by the Fund or its shareholders will be","page_number":34,"box":{"x":116,"y":521,"width":739,"height":12}},{"id":"6b4a25a4-cc1f-4ece-9fdf-20b1d365cd87","block_type":"box","text":"reduced by reason of receipt by BlackRock of any such fees or other amounts.","page_number":34,"box":{"x":117,"y":537,"width":587,"height":12}},{"id":"16fd41a8-e813-4a44-922e-3b20a9ab56f2","block_type":"box","text":"When BlackRock acts as broker, dealer, agent, adviser or in other commercial capacities in relation to","page_number":34,"box":{"x":116,"y":568,"width":761,"height":12}},{"id":"b9f09d37-7f35-44e9-931b-568bb1cfebcd","block_type":"box","text":"the Fund, BlackRock may take commercial steps in its own interests, which may have an adverse","page_number":34,"box":{"x":116,"y":583,"width":730,"height":12}},{"id":"04b668ba-509d-43a1-a119-20cd1750a750","block_type":"box","text":"effect on the Fund.","page_number":34,"box":{"x":116,"y":599,"width":145,"height":9}},{"id":"b0aa0da8-705b-4f22-9c32-a5a65f412387","block_type":"box","text":"The Fund will be required to establish business relationships with its counterparties based on the","page_number":34,"box":{"x":116,"y":630,"width":724,"height":12}},{"id":"ed52a697-05eb-4985-bfe2-70db410bc2a9","block_type":"box","text":"Fund’s own credit standing. BlackRock will not have any obligation to allow its credit to be used in","page_number":34,"box":{"x":117,"y":645,"width":728,"height":12}},{"id":"158cec52-45b8-4f8d-8255-e5081c174198","block_type":"box","text":"connection with the Fund’s establishment of its business relationships, nor is it expected that the","page_number":34,"box":{"x":116,"y":661,"width":715,"height":12}},{"id":"7a4179a9-b45e-4a0e-a16e-4d9e25bbd0f7","block_type":"box","text":"Fund’s counterparties will rely on the credit of BlackRock in evaluating the Fund’s creditworthiness.","page_number":34,"box":{"x":117,"y":676,"width":732,"height":12}},{"id":"82a0a0b3-ec65-4c45-911a-618be9e8f39d","block_type":"box","text":"BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, pursuant to SEC exemptive","page_number":34,"box":{"x":117,"y":707,"width":747,"height":12}},{"id":"0575592a-04ee-4e92-bea5-5f22bb177452","block_type":"box","text":"relief, acts as securities lending agent to, and receives a share of securities lending revenues from, the","page_number":34,"box":{"x":117,"y":723,"width":762,"height":12}},{"id":"48487286-f3ad-45cc-a264-606121405d6b","block_type":"box","text":"Fund. BlackRock will also receive compensation for managing the reinvestment of the cash collateral","page_number":34,"box":{"x":117,"y":738,"width":748,"height":12}},{"id":"db0c8f7a-042b-42ea-806a-b81176f783bc","block_type":"box","text":"from securities lending. There are potential conflicts of interests in managing a securities lending","page_number":34,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"7b4efdbd-aeb0-4922-ba69-e143fa844b00","block_type":"box","text":"program, including but not limited to: (i) BlackRock as securities lending agent may have an incentive","page_number":34,"box":{"x":117,"y":769,"width":749,"height":12}},{"id":"41069391-ea62-4ae6-af89-89eb5346a7b5","block_type":"box","text":"to, among other things, increase or decrease the amount of securities on loan or to lend particular","page_number":34,"box":{"x":116,"y":785,"width":726,"height":12}},{"id":"2ed8099a-d3ad-4caa-a085-d6fc078754dd","block_type":"box","text":"securities in order to generate additional risk-adjusted revenue for BlackRock and its affiliates; and","page_number":34,"box":{"x":116,"y":800,"width":730,"height":12}},{"id":"e6d3e2c0-8b2c-46e2-a128-de04fd0e65e1","block_type":"box","text":"(ii) BlackRock as securities lending agent may have an incentive to allocate loans to clients that would","page_number":34,"box":{"x":117,"y":816,"width":755,"height":12}},{"id":"fba7806b-94ce-4f60-b372-bc4658eb9efe","block_type":"box","text":"provide more revenue to BlackRock. As described further below, BlackRock seeks to mitigate this","page_number":34,"box":{"x":117,"y":831,"width":729,"height":12}},{"id":"67133a7c-5e28-4f91-bc01-9fa1185c7d4a","block_type":"box","text":"conflict by providing its securities lending clients with equal lending opportunities over time in order to","page_number":34,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"161c9786-249e-4de2-b356-e20346841db3","block_type":"box","text":"approximate pro rata allocation.","page_number":34,"box":{"x":116,"y":862,"width":240,"height":12}},{"id":"ff033278-1cf7-4f20-ad5c-ab4dbbb66150","block_type":"box","text":"31","page_number":34,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"6d703356-0af2-4b0f-b067-d5857c15229e","block_type":"box","text":"NM1026U-6039989-34/256","page_number":34,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"cc0e1ebb-8146-4eab-ac1e-b5b9e121a045","block_type":"box","text":"As part of its securities lending program, BlackRock indemnifies the Fund and certain other clients and/","page_number":35,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"73c16002-eae6-47a3-b15d-0c2a13295b18","block_type":"box","text":"or funds against a shortfall in collateral in the event of borrower default. On a regular basis, BlackRock","page_number":35,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"077dbebe-c8a1-4cba-8108-e8c7deabe9c2","block_type":"box","text":"calculates the potential dollar exposure of collateral shortfall resulting from a borrower default (“shortfall","page_number":35,"box":{"x":116,"y":118,"width":772,"height":12}},{"id":"97b6acd9-47d8-459c-ad72-0c77be11907e","block_type":"box","text":"risk”) in the securities lending program. BlackRock establishes program-wide borrower limits (“credit","page_number":35,"box":{"x":117,"y":134,"width":745,"height":12}},{"id":"58adc77f-45a5-434c-b37c-8baea9a9039d","block_type":"box","text":"limits”) to actively manage borrower-specific credit exposure. BlackRock oversees the risk model that","page_number":35,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"3209535c-6225-4c61-a42b-50b736e98ec4","block_type":"box","text":"calculates projected collateral shortfall values using loan-level factors such as loan and collateral type","page_number":35,"box":{"x":116,"y":165,"width":759,"height":12}},{"id":"14d1df9f-5b72-4263-b78f-a5908166bb33","block_type":"box","text":"and market value as well as specific borrower credit characteristics. When necessary, BlackRock may","page_number":35,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"645cf4c1-f479-49df-a286-aab1d05c82ce","block_type":"box","text":"adjust securities lending program attributes by restricting eligible collateral or reducing borrower credit","page_number":35,"box":{"x":116,"y":196,"width":760,"height":12}},{"id":"b64a4190-1b9e-4951-9d7f-89094b3a47b7","block_type":"box","text":"limits. As a result, the management of program-wide exposure as well as BlackRock-specific","page_number":35,"box":{"x":117,"y":211,"width":691,"height":12}},{"id":"6156ef2e-c188-41b4-85cd-26ce647cefeb","block_type":"box","text":"indemnification exposure may affect the amount of securities lending activity BlackRock may conduct","page_number":35,"box":{"x":117,"y":227,"width":755,"height":12}},{"id":"7e8a285b-522f-46c6-99c7-3e75a52016b9","block_type":"box","text":"at any given point in time by reducing the volume of lending opportunities for certain loans (including by","page_number":35,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"cc73a465-386b-46b8-8f1c-dc5295734dab","block_type":"box","text":"asset type, collateral type and/or revenue profile).","page_number":35,"box":{"x":116,"y":258,"width":373,"height":12}},{"id":"f5682f70-6a28-4275-975a-c76bddf5373c","block_type":"box","text":"BlackRock may decline to make a securities loan on behalf of the Fund, discontinue lending on behalf","page_number":35,"box":{"x":117,"y":286,"width":759,"height":12}},{"id":"f9f2431a-c7f4-4aa8-868c-8336152bf831","block_type":"box","text":"of the Fund or terminate a securities loan on behalf of the Fund for any reason, including but not limited","page_number":35,"box":{"x":116,"y":301,"width":772,"height":13}},{"id":"7a0af73f-05f5-4e71-bb22-6081f3f66b86","block_type":"box","text":"to regulatory requirements and/or market rules, liquidity considerations, or credit considerations, which","page_number":35,"box":{"x":116,"y":317,"width":765,"height":12}},{"id":"90fc8c00-67e5-475c-bb75-ca69633441d0","block_type":"box","text":"may impact the Fund by reducing or eliminating the volume of lending opportunities for certain types of","page_number":35,"box":{"x":117,"y":332,"width":766,"height":13}},{"id":"8438b54c-fecc-45df-bf85-6836194389d6","block_type":"box","text":"loans, loans in particular markets, loans of particular securities or types of securities, or for loans","page_number":35,"box":{"x":117,"y":348,"width":720,"height":12}},{"id":"f29ebe78-709f-4cd9-98c8-269071ab215d","block_type":"box","text":"overall. In addition, some borrowers may prefer certain BlackRock lenders that provide additional","page_number":35,"box":{"x":116,"y":363,"width":725,"height":13}},{"id":"74dd2f56-fe2e-44aa-90e2-94f7716b55a7","block_type":"box","text":"protections against lender default that are favored by their prudential regulation.","page_number":35,"box":{"x":117,"y":379,"width":596,"height":12}},{"id":"7ecc961d-a9e5-431e-891a-fbf5d4297698","block_type":"box","text":"BlackRock uses a predetermined systematic process in order to approximate pro rata allocation over","page_number":35,"box":{"x":117,"y":407,"width":752,"height":12}},{"id":"0601995a-6b13-4ece-81a4-53d592a5929e","block_type":"box","text":"time. In order to allocate a loan to a portfolio: (i) BlackRock as a whole must have sufficient lending","page_number":35,"box":{"x":116,"y":423,"width":739,"height":12}},{"id":"f0e0f9a4-a145-4eb2-a7d7-ab5f9ff86db9","block_type":"box","text":"capacity pursuant to the various program limits (","page_number":35,"box":{"x":116,"y":438,"width":358,"height":12}},{"id":"cf5b9d6d-efc1-46dd-bd3a-30e0755b2961","block_type":"box","text":"i.e.","page_number":35,"box":{"x":475,"y":438,"width":20,"height":10}},{"id":"70b4f134-c56d-4ae3-bb5c-ebee15476a38","block_type":"box","text":"indemnification exposure limit and borrower credit","page_number":35,"box":{"x":497,"y":438,"width":379,"height":12}},{"id":"d78dcdd2-82f0-480b-9c25-d8f13f0de0ac","block_type":"box","text":"limits); (ii) the lending portfolio must hold the asset at the time a loan opportunity arrives; and (iii) the","page_number":35,"box":{"x":117,"y":454,"width":747,"height":12}},{"id":"3379f095-751a-4573-b2dd-44b63a6bebf0","block_type":"box","text":"lending portfolio must also have enough inventory, either on its own or when aggregated with other","page_number":35,"box":{"x":117,"y":469,"width":738,"height":12}},{"id":"b881a885-f112-450e-8588-129a90821a92","block_type":"box","text":"portfolios into one single market delivery, to satisfy the loan request. In doing so, BlackRock seeks to","page_number":35,"box":{"x":117,"y":485,"width":753,"height":12}},{"id":"4208bd4d-448e-4dc0-8702-449322361d4f","block_type":"box","text":"provide equal lending opportunities for all portfolios, independent of whether BlackRock indemnifies the","page_number":35,"box":{"x":117,"y":500,"width":770,"height":12}},{"id":"fa2d812b-8385-480f-b7ec-5cbc5d8d943b","block_type":"box","text":"portfolio. Equal opportunities for lending portfolios does not guarantee equal outcomes. Specifically,","page_number":35,"box":{"x":117,"y":516,"width":744,"height":12}},{"id":"1c46b333-7eb5-493f-84bb-a5466f99693c","block_type":"box","text":"short and long-term outcomes for individual clients may vary due to asset mix, asset/liability spreads","page_number":35,"box":{"x":116,"y":531,"width":749,"height":12}},{"id":"06450790-3840-4bda-bdcf-efd891296e4b","block_type":"box","text":"on different securities, and the overall limits imposed by the firm.","page_number":35,"box":{"x":116,"y":547,"width":477,"height":12}},{"id":"fe488a81-4667-4ee1-b39a-6f069413a847","block_type":"box","text":"Purchases and sales of securities and other assets for the Fund may be aggregated with orders for","page_number":35,"box":{"x":117,"y":575,"width":740,"height":12}},{"id":"10761eae-a01c-41f3-9860-6b39477c0788","block_type":"box","text":"other BlackRock client accounts, including with accounts that pay different transaction costs solely due","page_number":35,"box":{"x":116,"y":591,"width":767,"height":12}},{"id":"5657f9d7-79dd-4083-9de1-c1286bc1140c","block_type":"box","text":"to the fact that they have different research payment arrangements. BlackRock, however, is not","page_number":35,"box":{"x":116,"y":606,"width":714,"height":12}},{"id":"a3cac5c4-7185-4248-86be-5e8a8d5bb4f1","block_type":"box","text":"required to aggregate orders if portfolio management decisions for different accounts are made","page_number":35,"box":{"x":117,"y":622,"width":710,"height":12}},{"id":"39ce5966-3352-4c56-9cb1-862452cefcbd","block_type":"box","text":"separately, or if they determine that aggregating is not practicable or required, or in cases involving","page_number":35,"box":{"x":116,"y":637,"width":740,"height":12}},{"id":"bfb02b8d-22ef-4fa5-a14b-9aa27274aa5d","block_type":"box","text":"client direction.","page_number":35,"box":{"x":116,"y":653,"width":117,"height":9}},{"id":"f793dcc6-b4c7-4d10-803a-735377232b37","block_type":"box","text":"Prevailing trading activity frequently may make impossible the receipt of the same price or execution","page_number":35,"box":{"x":117,"y":681,"width":742,"height":12}},{"id":"eaf87d10-aaf3-402f-932c-248cfc3a67cb","block_type":"box","text":"on the entire volume of securities purchased or sold. When this occurs, the various prices may be","page_number":35,"box":{"x":116,"y":697,"width":724,"height":12}},{"id":"1e648395-f012-4a66-a848-b19eae79ead2","block_type":"box","text":"averaged, and the Fund will be charged or credited with the average price. Thus, the effect of the","page_number":35,"box":{"x":116,"y":712,"width":721,"height":12}},{"id":"fff78ffb-ad16-4162-a5c1-9709245982ef","block_type":"box","text":"aggregation may operate on some occasions to the disadvantage of the Fund. In addition, under","page_number":35,"box":{"x":116,"y":728,"width":717,"height":12}},{"id":"9403fd03-5e98-43ce-bb0d-da9f405c9943","block_type":"box","text":"certain circumstances, the Fund will not be charged the same commission or commission equivalent","page_number":35,"box":{"x":116,"y":743,"width":745,"height":12}},{"id":"3bbd8c80-7537-481a-b5a9-534a5e362d43","block_type":"box","text":"rates in connection with an aggregated order.","page_number":35,"box":{"x":117,"y":759,"width":335,"height":12}},{"id":"e9ae2852-61ba-45cd-887a-4915a7e38598","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may cause the Fund or account to pay a broker or","page_number":35,"box":{"x":117,"y":787,"width":730,"height":12}},{"id":"7ee1a53a-8f78-49c2-ac3e-d76c35a95c28","block_type":"box","text":"dealer a commission for effecting a transaction that exceeds the amount another broker or dealer","page_number":35,"box":{"x":116,"y":802,"width":723,"height":13}},{"id":"4a10504a-4147-43e5-86c1-4b32ee8b65dc","block_type":"box","text":"would have charged for effecting the same transaction in recognition of the value of brokerage and","page_number":35,"box":{"x":116,"y":818,"width":731,"height":12}},{"id":"6d3697e0-1a46-4ea1-a05d-d865fdb466d9","block_type":"box","text":"research services provided by that broker or dealer.","page_number":35,"box":{"x":117,"y":834,"width":388,"height":12}},{"id":"73a23997-9f8c-4300-8c76-4505340f5f99","block_type":"box","text":"Subject to applicable law, BlackRock may select brokers that furnish BlackRock, the Fund, other","page_number":35,"box":{"x":116,"y":862,"width":720,"height":12}},{"id":"f1e60f34-8d74-42e6-8164-2db53edcea3c","block_type":"box","text":"BlackRock client accounts or personnel, directly or through correspondent relationships, with research","page_number":35,"box":{"x":117,"y":877,"width":762,"height":12}},{"id":"97a47394-0a3d-47e0-a4d3-3a5252d98465","block_type":"box","text":"32","page_number":35,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"aec88525-f39f-49f2-b6a6-8db113d2dfe6","block_type":"box","text":"NM1026U-6039989-35/256","page_number":35,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"3a779a85-f5df-4f1b-9bb9-7890ad381b24","block_type":"box","text":"or other appropriate services which provide, in BlackRock’s view, appropriate assistance to BlackRock","page_number":36,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"3ff8f3fb-5748-48db-bbf5-8c37858c1685","block_type":"box","text":"in the investment decision-making process (including with respect to futures, fixed-price offerings and","page_number":36,"box":{"x":117,"y":102,"width":756,"height":13}},{"id":"b100ef74-74b6-4681-88f6-9210bd3ed361","block_type":"box","text":"OTC transactions). Such research or other services may include, to the extent permitted by law,","page_number":36,"box":{"x":116,"y":118,"width":717,"height":12}},{"id":"c18189d2-2b83-4369-9258-c1db123db798","block_type":"box","text":"research reports on companies, industries and securities; economic and financial data; financial","page_number":36,"box":{"x":117,"y":134,"width":714,"height":11}},{"id":"58ccb9fb-edae-4a74-886a-b8747837fb39","block_type":"box","text":"publications; proxy analysis; trade industry seminars; computer data bases; research-oriented software","page_number":36,"box":{"x":117,"y":149,"width":769,"height":12}},{"id":"52e3d079-26e5-47a7-ab2e-a5f3d3ae47af","block_type":"box","text":"and other services and products.","page_number":36,"box":{"x":116,"y":165,"width":249,"height":11}},{"id":"de2009aa-8ecb-4db6-8192-76643de86825","block_type":"box","text":"Research or other services obtained in this manner","page_number":36,"box":{"x":117,"y":196,"width":363,"height":9}},{"id":"2d175016-82d7-43a5-a34b-94d57c809b55","block_type":"box","text":"r may be used in servicing any or all of the Fund and","page_number":36,"box":{"x":480,"y":196,"width":372,"height":12}},{"id":"608f6ee6-7626-4714-af53-3daffe9c40d8","block_type":"box","text":"other BlackRock client accounts, including in connect","page_number":36,"box":{"x":116,"y":211,"width":373,"height":12}},{"id":"49129d90-2371-4bea-a511-10a67ece51e1","block_type":"box","text":"ction with BlackRock client accounts other than those","page_number":36,"box":{"x":489,"y":211,"width":375,"height":10}},{"id":"3ddaffc1-8cba-4b6f-9d41-771d23481b7c","block_type":"box","text":"that pay commissions to the broker relating to the re","page_number":36,"box":{"x":116,"y":227,"width":369,"height":12}},{"id":"c1f9bf52-b000-4aa6-93bc-166b99cd7a09","block_type":"box","text":"search or other service arrangements. Such products","page_number":36,"box":{"x":486,"y":227,"width":384,"height":12}},{"id":"90f95ed0-b5da-441d-a486-e22095946d9c","block_type":"box","text":"and services may disproportionately benefit other BlackR","page_number":36,"box":{"x":116,"y":242,"width":406,"height":12}},{"id":"a03958f2-ed24-403e-aaa2-4ae8252c3221","block_type":"box","text":"ock client accounts relative to the Fund based on","page_number":36,"box":{"x":522,"y":242,"width":353,"height":10}},{"id":"ab3ba070-197e-4df3-806a-c3db02648e95","block_type":"box","text":"the amount of brokerage commissions paid by the Fund","page_number":36,"box":{"x":116,"y":258,"width":402,"height":12}},{"id":"bc93e170-4e65-4c93-9a88-1d43a0c794a6","block_type":"box","text":"and such other BlackRock client accounts. For","page_number":36,"box":{"x":519,"y":258,"width":335,"height":9}},{"id":"e9f19c94-d177-4055-8202-e60a47a8fc2d","block_type":"box","text":"example, research or other services that are pai","page_number":36,"box":{"x":116,"y":273,"width":340,"height":12}},{"id":"5080755f-304a-42e2-863a-ae3838d45f77","block_type":"box","text":"d for through one client’s commissions may not be used in","page_number":36,"box":{"x":457,"y":273,"width":418,"height":12}},{"id":"7c873479-d4a7-447d-a6b8-911a256589c6","block_type":"box","text":"managing that client’s account. In addition, other","page_number":36,"box":{"x":117,"y":289,"width":348,"height":12}},{"id":"4bfb810f-d044-4750-8408-b21b1ef6f64c","block_type":"box","text":"BlackRock client accounts may receive the benefit,","page_number":36,"box":{"x":466,"y":289,"width":365,"height":12}},{"id":"9c91e08d-9b7a-42df-8a3f-11607cd5d247","block_type":"box","text":"including disproportionate benefits, of economies of sca","page_number":36,"box":{"x":117,"y":304,"width":394,"height":12}},{"id":"48d370ee-bbde-46d2-8e57-e063732ca97f","block_type":"box","text":"le or price discounts in connection with products","page_number":36,"box":{"x":512,"y":304,"width":345,"height":12}},{"id":"7dcb64c2-f713-4a14-b652-1ea3b8b36af3","block_type":"box","text":"and services that may be provided to the Fund and to su","page_number":36,"box":{"x":116,"y":320,"width":401,"height":12}},{"id":"95b933dd-88bc-4c1f-96b2-99b8ccacd971","block_type":"box","text":"ch other BlackRock client accounts. To the extent","page_number":36,"box":{"x":518,"y":320,"width":356,"height":9}},{"id":"9bd1ae7b-d0f6-43fb-9faf-7c0af14d0545","block_type":"box","text":"that BlackRock uses soft dollars, it will not have to pay for those products and services itself.","page_number":36,"box":{"x":116,"y":335,"width":659,"height":12}},{"id":"7ade8390-b232-434f-b644-31849859ee4f","block_type":"box","text":"The Fund does participate in a Commission Sharing Arrangement or Client Commission Arrangement","page_number":36,"box":{"x":116,"y":366,"width":760,"height":12}},{"id":"85b3693e-947c-4120-9c94-5c17c1218111","block_type":"box","text":"which utilizes the Fund’s assets in the form of brokerage commissions to receive eligible brokerage","page_number":36,"box":{"x":116,"y":382,"width":741,"height":12}},{"id":"2996cf19-8adb-410e-955e-5afae8171311","block_type":"box","text":"and research services (collectively “eligible services”) as permitted under Section 28(e) of the 1934","page_number":36,"box":{"x":116,"y":397,"width":740,"height":12}},{"id":"846f3a69-e5ea-4f24-aa63-38c1771b60f3","block_type":"box","text":"Act, generally referred to as “soft dollars”. Commissions paid as soft dollars that consider the full array","page_number":36,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"933b967c-cd65-4ccb-a193-75bb6bcc1c88","block_type":"box","text":"of eligible services may be higher than commissions paid for “execution only” services and may include","page_number":36,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"52da8622-3bc7-47fe-ad69-2c149e7a777f","block_type":"box","text":"services provided by third parties where the executing broker-dealer shares a portion of the","page_number":36,"box":{"x":116,"y":444,"width":683,"height":12}},{"id":"83aef79c-d6ef-4786-bd69-6e020de6bcf3","block_type":"box","text":"commissions received with that third-party. A potential conflict exists when eligible services are paid for","page_number":36,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"63921104-5587-4b39-bd86-bb1dbbc42a2a","block_type":"box","text":"through soft dollars using fund assets as they are not paid by BlackRock using its own assets.","page_number":36,"box":{"x":116,"y":475,"width":702,"height":12}},{"id":"e60af673-f3f3-4527-9fec-6c799cea6f40","block_type":"box","text":"BlackRock believes eligible services obtained through soft dollars enhance its investment decision","page_number":36,"box":{"x":117,"y":490,"width":733,"height":12}},{"id":"bbf7821b-c4d0-4eed-a162-cf157837a1d2","block_type":"box","text":"making capabilities, thereby increasing the prospects for higher investment returns, and recognizes","page_number":36,"box":{"x":117,"y":506,"width":741,"height":12}},{"id":"786ea293-85ab-4e3e-881d-ee110930a797","block_type":"box","text":"certain eligible services may only be made available to BlackRock through the use of soft dollars.","page_number":36,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"bc8c3ef9-45b5-4fa6-82ca-fb3eac1a14f4","block_type":"box","text":"BlackRock only engages in soft dollar transactions that comply with applicable regulatory requirements","page_number":36,"box":{"x":117,"y":537,"width":767,"height":12}},{"id":"2142ccf0-7adb-4685-90b1-8ed7388ee5dd","block_type":"box","text":"and guidance which includes its requirement to seek best execution.","page_number":36,"box":{"x":116,"y":552,"width":512,"height":12}},{"id":"853dea68-93cd-4ed5-9efe-4cbfe2ad033d","block_type":"box","text":"BlackRock may utilize certain electronic crossing networks (“ECNs”) (including, without limitation,","page_number":36,"box":{"x":117,"y":583,"width":724,"height":12}},{"id":"23e0babf-52df-4bb5-b579-f5731a268cd1","block_type":"box","text":"ECNs in which BlackRock has an investment or other interest, to the extent permitted by applicable","page_number":36,"box":{"x":117,"y":599,"width":741,"height":12}},{"id":"f2088935-051d-476c-857b-12e1bc30c701","block_type":"box","text":"law) in executing client securities transactions for certain types of securities. These ECNs may charge","page_number":36,"box":{"x":117,"y":614,"width":760,"height":12}},{"id":"fcd9a7c8-34eb-4462-9239-2b18cf83138c","block_type":"box","text":"fees for their services, including access fees and transaction fees. The transaction fees, which are","page_number":36,"box":{"x":116,"y":630,"width":733,"height":12}},{"id":"e258893d-e331-4723-8188-c36cce721380","block_type":"box","text":"similar to commissions or markups/markdowns, will generally be charged to clients and, like","page_number":36,"box":{"x":116,"y":645,"width":686,"height":12}},{"id":"d56e42b6-9698-4d2f-ac34-47fd16a46206","block_type":"box","text":"commissions and markups/markdowns, would generally be included in the cost of the securities","page_number":36,"box":{"x":116,"y":661,"width":710,"height":12}},{"id":"d68544fc-68dc-47d7-b83e-0b47b47e5f6e","block_type":"box","text":"purchased. Access fees may be paid by BlackRock even though incurred in connection with executing","page_number":36,"box":{"x":117,"y":676,"width":757,"height":12}},{"id":"a7878038-5b62-42b5-9a01-2d85f2fcd1e9","block_type":"box","text":"transactions on behalf of clients, including the Fund. In certain circumstances, ECNs may offer volume","page_number":36,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"736a412c-738b-41ec-beb6-269a02f4478e","block_type":"box","text":"discounts that will reduce the access fees typically paid by BlackRock. BlackRock will only utilize ECNs","page_number":36,"box":{"x":116,"y":707,"width":765,"height":12}},{"id":"09a1410c-a051-43a3-8d3f-b2d1cdadd328","block_type":"box","text":"consistent with its obligation to seek to obtain best execution in client transactions.","page_number":36,"box":{"x":116,"y":723,"width":610,"height":12}},{"id":"7354c2f4-ac06-4870-9c4b-96ea86327f88","block_type":"box","text":"BlackRock owns a minority interest in, and is a member of, Members Exchange (“MEMX”), a newly","page_number":36,"box":{"x":117,"y":754,"width":734,"height":12}},{"id":"dc2827c6-7b5a-4421-948a-222e2a579407","block_type":"box","text":"created U.S. stock exchange. Transactions for the Fund may be executed on MEMX if third party","page_number":36,"box":{"x":116,"y":769,"width":720,"height":12}},{"id":"4d874975-56f6-4d6a-abd3-76e8efc97ee9","block_type":"box","text":"brokers select MEMX as the appropriate venue for execution of orders placed by BlackRock traders on","page_number":36,"box":{"x":117,"y":785,"width":762,"height":12}},{"id":"3d2fa560-0ae0-42f5-895e-b947fffe09cc","block_type":"box","text":"behalf of the Fund. In addition, transactions in Fund shares may be executed on MEMX if third party","page_number":36,"box":{"x":117,"y":800,"width":742,"height":12}},{"id":"db0766b1-0818-4811-a591-fb949a4cd7e2","block_type":"box","text":"brokers select MEMX as the appropriate venue for the execution of such orders.","page_number":36,"box":{"x":117,"y":816,"width":593,"height":12}},{"id":"39f46826-3f73-4471-a0e1-1b2cd926f326","block_type":"box","text":"BlackRock has adopted policies and procedures designed to prevent conflicts of interest from","page_number":36,"box":{"x":117,"y":847,"width":697,"height":12}},{"id":"00972931-b100-4357-81e2-a139d69125dc","block_type":"box","text":"influencing proxy voting decisions that it makes on behalf of advisory clients, including the Fund, and to","page_number":36,"box":{"x":117,"y":862,"width":769,"height":12}},{"id":"c96af4a2-b228-4309-b6a3-f1d1cae6cf2f","block_type":"box","text":"help ensure that such decisions are made in accordance with BlackRock’s fiduciary obligations to its","page_number":36,"box":{"x":117,"y":878,"width":748,"height":12}},{"id":"7e82d73e-6998-4122-9632-4da9748e115d","block_type":"box","text":"33","page_number":36,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"0ade4330-0f0d-465b-b4d6-74a7c838dc2a","block_type":"box","text":"NM1026U-6039989-36/256","page_number":36,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1c165d91-a892-4559-8239-f26a54d165a7","block_type":"box","text":"clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting","page_number":37,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"edea4726-020e-4f0d-bd5d-51c5f3ec3b5d","block_type":"box","text":"decisions of BlackRock may have the effect of favoring the interests of other clients or businesses of","page_number":37,"box":{"x":116,"y":102,"width":750,"height":13}},{"id":"bf75edd7-3046-4055-999b-3ccaa7c1ca43","block_type":"box","text":"other divisions or units of BlackRock, provided that BlackRock believes such voting decisions to be in","page_number":37,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"93cdf77f-a359-47ae-b73a-566ae4762d22","block_type":"box","text":"accordance with its fiduciary obligations. For a more detailed discussion of these policies and","page_number":37,"box":{"x":116,"y":134,"width":696,"height":12}},{"id":"c215ac9c-ac6c-4f7e-a050-f4de3b015c8f","block_type":"box","text":"procedures, see the","page_number":37,"box":{"x":117,"y":149,"width":152,"height":12}},{"id":"97f704aa-18b5-4edf-b0c9-b4a894fb3b04","block_type":"box","text":"Proxy Voting Policy","page_number":37,"box":{"x":270,"y":149,"width":145,"height":12}},{"id":"8ed2eccc-4daf-4f5e-95b0-2097b8b3fa53","block_type":"box","text":"y section in this SAI.","page_number":37,"box":{"x":414,"y":149,"width":148,"height":10}},{"id":"9c47ba33-6534-42f9-bb1d-a4addf8e6c54","block_type":"box","text":"It is also possible that, from time to time, BlackRock and/or its advisory clients (including other funds","page_number":37,"box":{"x":117,"y":180,"width":747,"height":12}},{"id":"ab74b844-3588-4bb6-b63e-9fc17f1137f3","block_type":"box","text":"and separately managed accounts) may, subject to compliance with applicable law, purchase and hold","page_number":37,"box":{"x":116,"y":196,"width":768,"height":12}},{"id":"7f9591e7-34be-4f07-971c-b07ec6899c22","block_type":"box","text":"shares of the Fund. Increasing the Fund’s assets may enhance investment flexibility and diversification","page_number":37,"box":{"x":116,"y":211,"width":768,"height":12}},{"id":"fb287590-c49f-4771-9b7d-ae5a96e4267e","block_type":"box","text":"and may contribute to economies of scale that tend to reduce the Fund’s expense ratio. BlackRock","page_number":37,"box":{"x":116,"y":227,"width":738,"height":12}},{"id":"9a5c6bb8-3581-4e15-928e-5a6318d37050","block_type":"box","text":"reserves the right, subject to compliance with applicable law, to sell into the market or redeem in","page_number":37,"box":{"x":117,"y":242,"width":718,"height":12}},{"id":"57056a01-7d54-4fde-bc13-e4c3eb268366","block_type":"box","text":"Creation Units through an Authorized Participant at any time some or all of the shares of the Fund","page_number":37,"box":{"x":117,"y":258,"width":731,"height":12}},{"id":"3279e246-264d-4599-bcfb-2e2d1dba9721","block_type":"box","text":"acquired for its own accounts or the account of a BlackRock advisory client. A large sale or redemption","page_number":37,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"889a55ed-7b34-4b6e-8a15-a30ba05e06a5","block_type":"box","text":"of shares of the Fund by BlackRock itself or a BlackRock advisory client could significantly reduce the","page_number":37,"box":{"x":116,"y":289,"width":759,"height":12}},{"id":"5bb1852f-3042-4d48-8a9f-cef8ed634033","block_type":"box","text":"asset size of the Fund, which might have an adverse effect on the Fund’s liquidity, investment","page_number":37,"box":{"x":116,"y":304,"width":701,"height":12}},{"id":"ce8729a3-c36b-452e-9055-43bb1beb4047","block_type":"box","text":"flexibility, portfolio diversification, expense ratio or ability to comply with the listing requirements for the","page_number":37,"box":{"x":116,"y":320,"width":764,"height":12}},{"id":"5b14cd22-4450-4a9b-b2a6-6a331dc253aa","block_type":"box","text":"Fund.","page_number":37,"box":{"x":117,"y":335,"width":46,"height":10}},{"id":"b212a272-5f60-4806-b6df-918b5c851c72","block_type":"box","text":"It is possible that the Fund may invest in securities of, or engage in transactions with, companies in","page_number":37,"box":{"x":117,"y":366,"width":739,"height":12}},{"id":"aa602d47-a12f-40b7-a54a-2f96218c4275","block_type":"box","text":"which BlackRock has significant debt or equity investments or other interests. The Fund may also","page_number":37,"box":{"x":116,"y":382,"width":729,"height":12}},{"id":"d2b1228c-502b-480a-b19f-43dfe380f32a","block_type":"box","text":"invest in issuances (such as structured notes) by entities for which BlackRock provides and is","page_number":37,"box":{"x":117,"y":397,"width":699,"height":12}},{"id":"cbb468fc-514c-498e-9013-43ac0d024621","block_type":"box","text":"compensated for cash management services relating to the proceeds from the sale of such issuances.","page_number":37,"box":{"x":116,"y":413,"width":765,"height":12}},{"id":"3210048b-b331-4a7c-a1d7-c9b386bef1ef","block_type":"box","text":"In making investment decisions for the Fund, BlackRock is not permitted to obtain or use material non","page_number":37,"box":{"x":117,"y":428,"width":760,"height":12}},{"id":"52b09f0f-7075-4e74-9c49-d0c65df42ee1","block_type":"box","text":"public information acquired by any unit of BlackRock, in the course of these activities. In addition, from","page_number":37,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"25f6fa7a-83d0-47fe-98a7-aa32dbdcb3e2","block_type":"box","text":"time to time, the activities of BlackRock may limit the Fund’s flexibility in purchases and sales of","page_number":37,"box":{"x":116,"y":459,"width":714,"height":12}},{"id":"45deb459-eea2-4ee1-97f4-49bd85778370","block_type":"box","text":"securities. As indicated below, BlackRock may engage in transactions with companies in which","page_number":37,"box":{"x":116,"y":475,"width":710,"height":12}},{"id":"325bc809-0760-42a5-8110-350af14e11c0","block_type":"box","text":"BlackRock-advised funds or other clients of BlackRock have an investment.","page_number":37,"box":{"x":117,"y":490,"width":566,"height":10}},{"id":"bb6e7304-3fbc-49ad-8483-be8e22b61f2c","block_type":"box","text":"BlackRock and its personnel and other financial service providers may have interests in promoting","page_number":37,"box":{"x":117,"y":521,"width":733,"height":12}},{"id":"d35bcba1-dd69-4d56-b639-2b96693d8aeb","block_type":"box","text":"sales of the Fund. With respect to BlackRock and its personnel, the remuneration and profitability","page_number":37,"box":{"x":116,"y":537,"width":727,"height":12}},{"id":"5bf24c5c-0c0f-4a68-8103-6f68e23445d7","block_type":"box","text":"relating to services to and sales of the Fund or other products may be greater than remuneration and","page_number":37,"box":{"x":117,"y":552,"width":753,"height":12}},{"id":"36ff32e3-cd13-4b84-9d78-c055a3666abe","block_type":"box","text":"profitability relating to services to and sales of certain funds or other products that might be provided or","page_number":37,"box":{"x":117,"y":568,"width":767,"height":12}},{"id":"b399e449-d56f-4ea5-b72e-4288b4edd9a3","block_type":"box","text":"offered. BlackRock and its sales personnel may directly or indirectly receive a portion of the fees and","page_number":37,"box":{"x":116,"y":583,"width":753,"height":12}},{"id":"2711faa0-2921-4d13-a140-0aad9ff002f7","block_type":"box","text":"commissions charged to the Fund or its shareholders. BlackRock and its advisory or other personnel","page_number":37,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"1e182d0c-19d1-48a0-bb90-eb37adb857a7","block_type":"box","text":"may also benefit from increased amounts of assets under management. Fees and commissions may","page_number":37,"box":{"x":117,"y":614,"width":752,"height":12}},{"id":"672b1c45-1bb5-40a0-a032-1ff7fa211f27","block_type":"box","text":"also be higher than for other products or services, and the remuneration and profitability to BlackRock","page_number":37,"box":{"x":116,"y":630,"width":761,"height":12}},{"id":"38dd9712-92b1-4d87-8605-ed875912efbe","block_type":"box","text":"and such personnel resulting from transactions on behalf of or management of the Fund may be","page_number":37,"box":{"x":116,"y":645,"width":719,"height":12}},{"id":"9003eedd-aab9-4753-b287-90041c4f414a","block_type":"box","text":"greater than the remuneration and profitability resulting from other funds or products.","page_number":37,"box":{"x":116,"y":661,"width":628,"height":12}},{"id":"cb9e8cc4-d416-4f4d-a816-d0a8738f4f4c","block_type":"box","text":"BlackRock may provide valuation assistance to certain clients with respect to certain securities or other","page_number":37,"box":{"x":117,"y":692,"width":764,"height":12}},{"id":"2497600b-30b5-46b5-9c9d-546e51a440fd","block_type":"box","text":"investments and the valuation recommendations made for such clients’ accounts may differ from the","page_number":37,"box":{"x":117,"y":707,"width":744,"height":12}},{"id":"b2b83505-77d8-4e21-aa86-d298769fa4c0","block_type":"box","text":"valuations for the same securities or investments assigned by the Fund’s pricing vendors, especially if","page_number":37,"box":{"x":116,"y":723,"width":757,"height":12}},{"id":"1cc73645-19f2-4621-b49a-0ad701527a78","block_type":"box","text":"such valuations are based on broker-dealer quotes or other data sources unavailable to the Fund’s","page_number":37,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"6355ea41-c6ff-4cff-aa36-191f65e0ea6c","block_type":"box","text":"pricing vendors. While BlackRock will generally communicate its valuation information or","page_number":37,"box":{"x":117,"y":754,"width":655,"height":12}},{"id":"0683f32c-83b7-4a79-9882-e66c49091494","block_type":"box","text":"determinations to the Fund’s pricing vendors and/or fund accountants, there may be instances where","page_number":37,"box":{"x":116,"y":769,"width":750,"height":12}},{"id":"0d2a7fcc-840e-4369-b58a-05aaf08665ed","block_type":"box","text":"the Fund’s pricing vendors or fund accountants assign a different valuation to a security or other","page_number":37,"box":{"x":116,"y":785,"width":713,"height":12}},{"id":"66d5b9a7-3f48-4451-bb46-7660d2556245","block_type":"box","text":"investment than the valuation for such security or investment determined or recommended by","page_number":37,"box":{"x":117,"y":800,"width":694,"height":12}},{"id":"1716c07b-af79-45d2-ad25-20799c29ed62","block_type":"box","text":"BlackRock.","page_number":37,"box":{"x":117,"y":816,"width":81,"height":9}},{"id":"7c5ea948-efb6-446e-afa4-d884664676c8","block_type":"box","text":"As disclosed in more detail in the","page_number":37,"box":{"x":116,"y":847,"width":250,"height":9}},{"id":"7bd49fd6-c8de-417a-b918-360395631934","block_type":"box","text":"Determination of Net Asset Value","page_number":37,"box":{"x":367,"y":847,"width":248,"height":9}},{"id":"05655499-e6d9-4039-8288-fb3e67062b3f","block_type":"box","text":"section in this SAI, when market","page_number":37,"box":{"x":615,"y":847,"width":249,"height":11}},{"id":"d56b3212-f7b2-478b-85b8-496d2ece7e14","block_type":"box","text":"quotations are not readily available or are believed by BFA to be unreliable, the Fund’s investments are","page_number":37,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"ffa4d12e-23ee-423a-a185-43d7e47df8a8","block_type":"box","text":"valued at fair value by BFA. BFA has been designated as the Fund’s valuation designee pursuant to","page_number":37,"box":{"x":116,"y":878,"width":743,"height":12}},{"id":"70f3bf81-86ed-4363-bdd5-ad0a829375e1","block_type":"box","text":"34","page_number":37,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"e54f6fd5-1726-4bce-8ae6-d07a4bcfc149","block_type":"box","text":"NM1026U-6039989-37/256","page_number":37,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"36cf2d63-8cfd-4774-83e4-68b580c92815","block_type":"box","text":"Rule 2a-5 under the Investment Company Act and acts through BFA’s Rule 2a-5 Committee (the","page_number":38,"box":{"x":117,"y":87,"width":722,"height":12}},{"id":"a7b4c3de-8680-4448-9928-d83f0f1a5b93","block_type":"box","text":"“2a-5 Committee”), with assistance from other BFA pricing committees and in accordance with BFA’s","page_number":38,"box":{"x":116,"y":102,"width":755,"height":13}},{"id":"67fd5857-0826-403b-964e-9e642291f7d0","block_type":"box","text":"policies and procedures (the “Valuation Procedures”). When determining a “fair value price,” the","page_number":38,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"b42c2827-60f5-4ccc-840b-bd3078e7656d","block_type":"box","text":"2a-5 Committee seeks to determine the price that the Fund might reasonably expect to receive from","page_number":38,"box":{"x":116,"y":134,"width":748,"height":12}},{"id":"4398e6d2-8587-4809-ac20-14e0c5a2abaa","block_type":"box","text":"the current sale of that asset or liability in an arm’s-length transaction. The price generally may not be","page_number":38,"box":{"x":116,"y":149,"width":758,"height":12}},{"id":"6486a575-3a93-49ce-9094-f5a7d73ebace","block_type":"box","text":"determined based on what the Fund might reasonably expect to receive for selling an asset or liability","page_number":38,"box":{"x":116,"y":165,"width":759,"height":12}},{"id":"93f39838-bd80-4590-9051-2eb5419fd117","block_type":"box","text":"at a later time or if it holds the asset or liability to maturity. While fair value determinations will be based","page_number":38,"box":{"x":116,"y":180,"width":770,"height":12}},{"id":"982df08c-6d47-49a5-9aac-d199981a0700","block_type":"box","text":"upon all available factors that BFA deems relevant at the time of the determination, and may be based","page_number":38,"box":{"x":117,"y":196,"width":763,"height":12}},{"id":"703e3e20-e4b2-4c0b-a89c-3e4695f54bcc","block_type":"box","text":"on analytical values determined by BFA using proprietary or third party valuation models, fair value","page_number":38,"box":{"x":116,"y":211,"width":738,"height":12}},{"id":"f1946b1d-0bf6-477c-aa63-ca858f65b5b7","block_type":"box","text":"represents only a good faith approximation of the value of an asset or liability. The fair value of one or","page_number":38,"box":{"x":117,"y":227,"width":753,"height":12}},{"id":"b7622b66-a42c-421c-b3ee-590211dd21c6","block_type":"box","text":"more assets or liabilities may not, in retrospect, be the price at which those assets or liabilities could","page_number":38,"box":{"x":117,"y":242,"width":745,"height":12}},{"id":"e939785d-3e64-4987-be0f-3dd4ccf709a0","block_type":"box","text":"have been sold during the period in which the particular fair values were used in determining the","page_number":38,"box":{"x":117,"y":258,"width":718,"height":12}},{"id":"b1430441-45a0-4e00-8bbc-1a90e98ced79","block_type":"box","text":"Fund’s NAV. As a result, the Fund’s sale or redemption of its shares at NAV, at a time when a holding","page_number":38,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"c2b469d9-bbce-441d-a43f-b08e5f3ffd59","block_type":"box","text":"or holdings are valued by the 2a-5 Committee at fair value, may have the effect of diluting or increasing","page_number":38,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"706d245e-41da-488e-b55a-18dad5e3a553","block_type":"box","text":"the economic interest of existing shareholders and may affect the amount of revenue received by BFA","page_number":38,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"3b12c7dc-a949-42ba-8bb0-e392ef9b800c","block_type":"box","text":"with respect to services for which it receives an asset-based fee.","page_number":38,"box":{"x":116,"y":320,"width":478,"height":12}},{"id":"41eec752-ac8f-4e15-a925-c60ea55fa08a","block_type":"box","text":"To the extent permitted by applicable law, the Fund may invest all or some of its short term cash","page_number":38,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"b3d76052-5611-4b70-a193-8e2a4918c45a","block_type":"box","text":"investments in any money market fund or similarly-managed private fund advised or managed by","page_number":38,"box":{"x":117,"y":366,"width":725,"height":12}},{"id":"cb793752-ffa1-499a-8a34-8b69208cdb89","block_type":"box","text":"BlackRock. In connection with any such investments, the Fund, to the extent permitted by the","page_number":38,"box":{"x":117,"y":382,"width":697,"height":12}},{"id":"5310668b-7a17-4573-b8c9-dab4e60c9b51","block_type":"box","text":"Investment Company Act, may pay its share of expenses of a money market fund or other similarly","page_number":38,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"c3742d2c-4994-4174-ac15-e366e3c83e27","block_type":"box","text":"managed private fund in which it invests, which may result in the Fund bearing some additional","page_number":38,"box":{"x":117,"y":413,"width":709,"height":12}},{"id":"97175ac3-b715-48ba-a825-423ddbeb027b","block_type":"box","text":"expenses.","page_number":38,"box":{"x":116,"y":431,"width":81,"height":9}},{"id":"e5828bfa-5144-41b2-a8b2-16c189cdbde3","block_type":"box","text":"BlackRock and its directors, officers and employees, may buy and sell securities or other investments","page_number":38,"box":{"x":117,"y":459,"width":758,"height":12}},{"id":"61087e0b-4b4c-41fa-be8c-d31725a35e7b","block_type":"box","text":"for their own accounts and may have conflicts of interest with respect to investments made on behalf of","page_number":38,"box":{"x":116,"y":475,"width":771,"height":12}},{"id":"f0ca4735-eb55-4dc1-af87-d00a2998ea31","block_type":"box","text":"the Fund. As a result of differing trading and investment strategies or constraints, positions may be","page_number":38,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"501e9c2f-d32c-4b05-a046-bb42fff2cf54","block_type":"box","text":"taken by directors, officers and employees of BlackRock that are the same, different from or made at","page_number":38,"box":{"x":116,"y":506,"width":752,"height":12}},{"id":"50cd2d32-fd0e-4516-a802-20850554e641","block_type":"box","text":"different times than positions taken for the Fund. To lessen the possibility that the Fund will be","page_number":38,"box":{"x":116,"y":521,"width":703,"height":12}},{"id":"4be000aa-d7b5-446e-aebf-5a4fe3d9ba8b","block_type":"box","text":"adversely affected by this personal trading, the Fund, BFA and BlackRock each have adopted a Code","page_number":38,"box":{"x":116,"y":537,"width":761,"height":12}},{"id":"9e194392-6596-43e4-8c39-7139a8617051","block_type":"box","text":"of Ethics in compliance with Section 17(j) of the Investment Company Act that restricts securities","page_number":38,"box":{"x":116,"y":552,"width":722,"height":12}},{"id":"25d8f6fb-aab3-4bfc-ab39-78451b3a36d2","block_type":"box","text":"trading in the personal accounts of investment professionals and others who normally come into","page_number":38,"box":{"x":116,"y":568,"width":717,"height":12}},{"id":"12ee94dd-fab2-470e-8fa3-13b7d042512f","block_type":"box","text":"possession of information regarding the Fund’s portfolio transactions. Each Code of Ethics is also","page_number":38,"box":{"x":117,"y":583,"width":727,"height":12}},{"id":"3c58a76c-f9b9-417a-af4a-e72da332661e","block_type":"box","text":"available on the EDGAR Database on the Commission’s Internet site at http://www.sec.gov, and","page_number":38,"box":{"x":116,"y":599,"width":719,"height":12}},{"id":"ccb4ad50-3a4b-46e8-8593-9ae743069610","block_type":"box","text":"copies may be obtained, after paying a duplicating fee, by e-mail at publicinfo@sec.gov.","page_number":38,"box":{"x":116,"y":614,"width":659,"height":12}},{"id":"a1dedbc1-785d-4415-b51a-fff0a0a9a222","block_type":"box","text":"BlackRock will not purchase securities or other property from, or sell securities or other property to, the","page_number":38,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"fb1b59a6-e3be-455b-93fd-1e945c4edb26","block_type":"box","text":"Fund, except that the Fund may in accordance with rules or guidance adopted under the Investment","page_number":38,"box":{"x":117,"y":661,"width":742,"height":12}},{"id":"f16f982b-0001-4aae-a560-da2a6b34f4c6","block_type":"box","text":"Company Act engage in transactions with another fund or accounts that are affiliated with the Fund as","page_number":38,"box":{"x":117,"y":676,"width":756,"height":12}},{"id":"b112a349-9257-4144-8121-fe40458584c3","block_type":"box","text":"a result of common officers, directors, or investment advisers or pursuant to exemptive orders granted","page_number":38,"box":{"x":116,"y":692,"width":757,"height":12}},{"id":"4382d7f6-2cdf-448a-94fd-53a71822c5f4","block_type":"box","text":"to the Fund and/or BlackRock by the Commission. These transactions would be effected in","page_number":38,"box":{"x":116,"y":707,"width":674,"height":12}},{"id":"1abb95a0-d70d-4416-b4bc-a997ea8b21da","block_type":"box","text":"circumstances in which BlackRock determined that it would be appropriate for the Fund to purchase","page_number":38,"box":{"x":116,"y":723,"width":741,"height":12}},{"id":"f407d89c-f30c-444d-bad7-cb1f1c6d0b50","block_type":"box","text":"and another client of BlackRock to sell, or the Fund to sell and another client of BlackRock to","page_number":38,"box":{"x":116,"y":738,"width":689,"height":11}},{"id":"7b26780d-a842-474b-9b77-9133d84ecf6f","block_type":"box","text":"purchase, the same security or instrument on the same day. From time to time, the activities of the","page_number":38,"box":{"x":117,"y":754,"width":730,"height":12}},{"id":"4d2a3c94-64c2-4582-b9d7-838f0677eb73","block_type":"box","text":"Fund may be restricted because of regulatory requirements applicable to BlackRock and/or","page_number":38,"box":{"x":117,"y":769,"width":676,"height":12}},{"id":"c0b3efec-4e86-4241-bb0f-4b163dd14b01","block_type":"box","text":"BlackRock’s internal policies designed to comply with, limit the applicability of, or otherwise relate to","page_number":38,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"02a7d364-5b40-4f01-a0d8-c0346926850c","block_type":"box","text":"such requirements. A client not advised by BlackRock would not be subject to some of those","page_number":38,"box":{"x":116,"y":800,"width":687,"height":12}},{"id":"551b1576-3940-442b-88c8-04f33824a22d","block_type":"box","text":"considerations. There may be periods when BlackRock may not initiate or recommend certain types of","page_number":38,"box":{"x":116,"y":816,"width":761,"height":12}},{"id":"2c53adbe-0b44-45ee-99fd-b2275d7afd00","block_type":"box","text":"transactions, or may otherwise restrict or limit its advice in certain securities or instruments issued by","page_number":38,"box":{"x":116,"y":831,"width":753,"height":12}},{"id":"b34e54f6-f3de-4feb-8b31-cf9f6b894e8b","block_type":"box","text":"or related to companies for which BlackRock is performing advisory or other services or has proprietary","page_number":38,"box":{"x":116,"y":847,"width":772,"height":12}},{"id":"2f9f8be9-aa24-45e6-b4c4-ee4c28ca41dd","block_type":"box","text":"positions. For example, when BlackRock is engaged to provide advisory or risk management services","page_number":38,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"eb5ea301-b4a4-4999-839c-18834b7ce914","block_type":"box","text":"for a company, BlackRock may be prohibited from or limited in purchasing or selling securities of that","page_number":38,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"ad5056af-2348-4584-b5c9-7c09f74d2a1b","block_type":"box","text":"35","page_number":38,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"426697be-70b1-4503-a596-49d506ea5caa","block_type":"box","text":"NM1026U-6039989-38/256","page_number":38,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"bec4c735-597c-4e9e-acf7-c5ebae9043ee","block_type":"box","text":"company on behalf of the Fund, particularly where such services result in BlackRock obtaining material","page_number":39,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"25577506-db40-4b79-88e3-a60ba4c35cdc","block_type":"box","text":"non-public information about the company (e.g., in connection with participation in a creditors’","page_number":39,"box":{"x":117,"y":102,"width":698,"height":13}},{"id":"19cb996f-af55-41af-9866-2ed3f836bdfd","block_type":"box","text":"committee). Similar situations could arise if personnel of BlackRock serve as directors of companies","page_number":39,"box":{"x":116,"y":118,"width":747,"height":12}},{"id":"8ba1dae7-4e35-4f40-87a3-4e58f87b7e48","block_type":"box","text":"the securities of which the Fund wishes to purchase or sell. However, if permitted by applicable law,","page_number":39,"box":{"x":116,"y":134,"width":745,"height":12}},{"id":"e42de7d6-066f-4a96-8d0c-57a39bd4dba7","block_type":"box","text":"and where consistent with BlackRock’s policies and procedures (including the necessary","page_number":39,"box":{"x":116,"y":149,"width":663,"height":12}},{"id":"a1dbe0d5-7ebf-4fbe-96f5-a335fe32edc6","block_type":"box","text":"implementation of appropriate information barriers), the Fund may purchase securities or instruments","page_number":39,"box":{"x":117,"y":165,"width":755,"height":12}},{"id":"cbbc5699-9fdf-4ebb-8e6c-6a291a5b93ef","block_type":"box","text":"that are issued by such companies, are the subject of an advisory or risk management assignment by","page_number":39,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"e425eafa-f521-4853-acf0-ab5c4d0b8d1e","block_type":"box","text":"BlackRock, or where personnel of BlackRock are directors or officers of the issuer.","page_number":39,"box":{"x":117,"y":196,"width":617,"height":11}},{"id":"a20e04c5-6a17-4029-a8e4-cff3c67bbb7a","block_type":"box","text":"BlackRock has adopted and implemented policies and procedures that are designed to address","page_number":39,"box":{"x":117,"y":227,"width":714,"height":12}},{"id":"88617c19-4354-4ac3-8ef2-4149db387d06","block_type":"box","text":"potential conflicts that arise in connection with the advisory services BlackRock provides to the Fund","page_number":39,"box":{"x":117,"y":242,"width":749,"height":12}},{"id":"f1bef921-4bd2-4e71-b695-ed7a9928abd5","block_type":"box","text":"and other clients. Certain BlackRock advisory personnel may take views, and make decisions or","page_number":39,"box":{"x":116,"y":258,"width":719,"height":12}},{"id":"51d03dda-6d17-4f2f-b461-dfda8ec7b4e8","block_type":"box","text":"recommendations, that are different than or opposite those of other BlackRock advisory personnel.","page_number":39,"box":{"x":117,"y":273,"width":737,"height":12}},{"id":"df8520f8-8a53-452f-896d-5d8f7b55b1e8","block_type":"box","text":"Certain portfolio management teams within BlackRock may make decisions or take (or refrain from","page_number":39,"box":{"x":117,"y":289,"width":737,"height":12}},{"id":"32d34370-354f-4b1c-a9f1-17cb5806cfd8","block_type":"box","text":"taking) actions with respect to clients they advise in a manner different than or adverse to the decisions","page_number":39,"box":{"x":116,"y":304,"width":771,"height":12}},{"id":"95642179-1bb8-4d19-8507-c7f70a38ba8c","block_type":"box","text":"made or the actions taken (or not taken) by the Fund’s portfolio management teams. The various","page_number":39,"box":{"x":117,"y":320,"width":723,"height":12}},{"id":"1e1939a8-7ce9-49e7-aeb6-43c9c39249d5","block_type":"box","text":"portfolio management teams may not share information with each other, including as a result of certain","page_number":39,"box":{"x":117,"y":335,"width":767,"height":12}},{"id":"190ce365-67f6-4b6b-83fa-c77690f1169b","block_type":"box","text":"information barriers and other policies, and will not have any obligation or other duty to do so.","page_number":39,"box":{"x":117,"y":351,"width":697,"height":12}},{"id":"89f48ce2-3578-4e85-9935-acb7fc7f00fe","block_type":"box","text":"BlackRock has established certain information barriers and other policies to address the sharing of","page_number":39,"box":{"x":117,"y":382,"width":736,"height":12}},{"id":"3bfaa15f-a4d6-45a4-abda-62bbc9574c84","block_type":"box","text":"information between different businesses within BlackRock, including with respect to personnel","page_number":39,"box":{"x":117,"y":397,"width":709,"height":12}},{"id":"14da1b1a-3151-4c43-8dd6-7ac31d7ce4b1","block_type":"box","text":"responsible with managing portfolios and voting proxies with respect to certain index equity portfolios","page_number":39,"box":{"x":117,"y":413,"width":753,"height":12}},{"id":"339a4619-bf30-4f5b-9b47-2be0bb11f965","block_type":"box","text":"versus those responsible for managing portfolios and voting proxies with respect to all other portfolios.","page_number":39,"box":{"x":116,"y":428,"width":763,"height":12}},{"id":"951d5a0e-8496-46eb-9746-0a15e486a487","block_type":"box","text":"As a result of information barriers, certain units of BlackRock generally will not have access, or will","page_number":39,"box":{"x":116,"y":444,"width":735,"height":12}},{"id":"aee8a972-472d-4bd8-a83e-cb4e56a67c0c","block_type":"box","text":"have limited access, to certain information and personnel, including senior personnel, in other units of","page_number":39,"box":{"x":117,"y":459,"width":757,"height":12}},{"id":"ec76c1eb-a73b-40da-be0d-7cfc6530298b","block_type":"box","text":"BlackRock, and generally will not manage the funds with the benefit of information possessed by such","page_number":39,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"905dee31-2abc-4fb1-8eaf-a89bf954ee1a","block_type":"box","text":"other units. Therefore, BlackRock may not be able to review potential investments for the Fund with the","page_number":39,"box":{"x":116,"y":490,"width":772,"height":12}},{"id":"70c2a61c-7c75-43af-be64-116ec3df61f4","block_type":"box","text":"benefit of information held by certain areas of BlackRock.","page_number":39,"box":{"x":117,"y":506,"width":429,"height":12}},{"id":"9703030c-8e9f-4681-a350-e6f9b6067cf0","block_type":"box","text":"BlackRock may determine to move certain personnel, businesses, or business units from one side of","page_number":39,"box":{"x":117,"y":537,"width":752,"height":12}},{"id":"94deba8b-aac7-4c0c-b387-48af83d71d63","block_type":"box","text":"an information barrier to the other side of the information barrier. In connection therewith, BlackRock","page_number":39,"box":{"x":116,"y":552,"width":750,"height":11}},{"id":"426cd662-a8de-4a09-b5d4-219afe6a3c24","block_type":"box","text":"personnel, businesses, and business units that were moved will no longer have access to the","page_number":39,"box":{"x":117,"y":568,"width":697,"height":12}},{"id":"6c8a84fa-4979-45b0-836c-60756247004a","block_type":"box","text":"information and personnel from the side of the information barrier from which they were moved.","page_number":39,"box":{"x":117,"y":583,"width":712,"height":12}},{"id":"c13035e1-1fd9-43ba-a098-f56438468af5","block_type":"box","text":"Information obtained in connection with such changes to information barriers may limit or restrict the","page_number":39,"box":{"x":117,"y":599,"width":746,"height":12}},{"id":"802495d2-cbef-4271-8bce-949b3786a5ff","block_type":"box","text":"ability of BlackRock to engage in or otherwise effect transactions on behalf of the Fund (including","page_number":39,"box":{"x":116,"y":614,"width":726,"height":12}},{"id":"49561d79-4c99-404a-b966-829306d6dfc8","block_type":"box","text":"purchasing or selling securities that BlackRock may otherwise have purchased or sold for a client in","page_number":39,"box":{"x":117,"y":630,"width":743,"height":12}},{"id":"d4d1eda5-e897-4746-b945-c4198a771f7b","block_type":"box","text":"the absence of a change to an information barrier). Information barriers may not have their intended","page_number":39,"box":{"x":116,"y":645,"width":746,"height":12}},{"id":"62ea28d5-4f8e-468b-8d85-6ab2b4b876e7","block_type":"box","text":"impact due to, for example, changes in applicable law or inadvertent crossings of the barriers, and","page_number":39,"box":{"x":117,"y":661,"width":726,"height":12}},{"id":"547120b2-068d-4f61-a920-d9dc49608baf","block_type":"box","text":"actions by personnel on one side of a barrier may impact the potential actions of personnel on the","page_number":39,"box":{"x":116,"y":676,"width":725,"height":12}},{"id":"470f0c4b-ed13-48d0-bad7-597437ff4930","block_type":"box","text":"other side of a barrier.","page_number":39,"box":{"x":116,"y":692,"width":163,"height":9}},{"id":"9f9ec539-9e81-41f3-a2af-1799e7af6b30","block_type":"box","text":"Although the information barriers are intended to allow for independent portfolio management decision","page_number":39,"box":{"x":116,"y":723,"width":764,"height":12}},{"id":"b1655274-ebe5-45ad-9912-433e7ece10a2","block_type":"box","text":"making and proxy voting among certain BlackRock businesses, the investment activities of BlackRock","page_number":39,"box":{"x":117,"y":738,"width":756,"height":12}},{"id":"d17f4fc0-13ac-418d-8a43-da1a80f2b8b1","block_type":"box","text":"for BlackRock clients, as well as BlackRock’s proprietary accounts, may nonetheless limit the","page_number":39,"box":{"x":116,"y":754,"width":691,"height":12}},{"id":"6801341a-72d7-49e6-9b83-635913a0d4e5","block_type":"box","text":"investment strategies and rights of other clients (including the Fund). As BlackRock’s assets under","page_number":39,"box":{"x":117,"y":769,"width":731,"height":12}},{"id":"ae740183-e9ec-4253-987a-adaef3424646","block_type":"box","text":"management increases, BlackRock clients may face greater negative impacts due to ownership","page_number":39,"box":{"x":117,"y":785,"width":709,"height":12}},{"id":"c927658d-f90f-42ec-9a64-f6c097ed4586","block_type":"box","text":"restrictions and limitations imposed by laws, regulations, rules, regulators, or issuers. For example, in","page_number":39,"box":{"x":117,"y":800,"width":750,"height":12}},{"id":"dbbbfbae-a221-4749-af8a-73799f4f8349","block_type":"box","text":"certain circumstances where a BlackRock client invests in securities issued by companies that operate","page_number":39,"box":{"x":116,"y":816,"width":762,"height":12}},{"id":"79de7729-7186-4b69-a80d-8e525da41be2","block_type":"box","text":"in certain industries (e.g., banking, insurance, and utilities) or in certain emerging or international","page_number":39,"box":{"x":117,"y":831,"width":720,"height":12}},{"id":"1956f857-05d8-4071-b9f7-b9938f3d8496","block_type":"box","text":"markets, or are subject to regulatory or corporate ownership restrictions (e.g., with mechanisms such","page_number":39,"box":{"x":117,"y":847,"width":753,"height":12}},{"id":"e20bcaa4-fcac-41da-a64b-07167859ecd0","block_type":"box","text":"as poison pills in place to prevent takeovers), or where a BlackRock client invests in certain futures and","page_number":39,"box":{"x":116,"y":862,"width":772,"height":12}},{"id":"112c6e66-705a-42dd-ab0c-c45dd0349a89","block_type":"box","text":"derivatives, there may be limits on the aggregate amount invested by BlackRock for its clients and","page_number":39,"box":{"x":116,"y":878,"width":733,"height":12}},{"id":"54a47f66-b65c-4336-b5bb-9544e9c298f5","block_type":"box","text":"36","page_number":39,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"c3d66fd3-badf-42c4-b927-8e697a3e6c3e","block_type":"box","text":"NM1026U-6039989-39/256","page_number":39,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"851ab942-6118-40dc-9fce-c8c13dc4b2d1","block_type":"box","text":"BlackRock’s proprietary accounts that may not be exceeded without the grant of a license or other","page_number":40,"box":{"x":117,"y":87,"width":732,"height":12}},{"id":"3c233e6f-211b-4acd-9322-1348314649d5","block_type":"box","text":"regulatory or corporate approval, order, consent, relief, waiver or non-disapproval or, if exceeded, may","page_number":40,"box":{"x":117,"y":102,"width":764,"height":13}},{"id":"95b46b2f-d65a-40f4-a952-56a0efa998b0","block_type":"box","text":"cause BlackRock or its clients to be subject to enforcement actions, disgorgement of share ownership","page_number":40,"box":{"x":116,"y":118,"width":761,"height":12}},{"id":"ea0a4fb1-1c99-4506-bc34-4cc30aa5fd85","block_type":"box","text":"or profits, regulatory restrictions, complex compliance reporting, increased compliance costs or suffer","page_number":40,"box":{"x":116,"y":134,"width":756,"height":12}},{"id":"e58b70b1-7966-457b-a761-41471b96fedc","block_type":"box","text":"disadvantages or business restrictions. In light of certain restrictions, BlackRock may also seek to","page_number":40,"box":{"x":116,"y":149,"width":729,"height":12}},{"id":"ad31a3bb-7d81-4bb2-814a-25af4a3fcf49","block_type":"box","text":"make indirect investments (e.g., using derivatives) on behalf of its clients to receive exposure to certain","page_number":40,"box":{"x":117,"y":165,"width":769,"height":12}},{"id":"a2f51dd1-9a6f-4255-a859-42ac6f9b48d1","block_type":"box","text":"securities in excess of the applicable ownership restrictions and limitations when legally permitted that","page_number":40,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"9c3da18c-68f5-4718-8219-aa26ffcc1eff","block_type":"box","text":"will expose such clients to additional costs and additional risks, including any risks associated with","page_number":40,"box":{"x":116,"y":196,"width":734,"height":12}},{"id":"bd6d3634-09af-44a2-aba1-da9bf3ff7594","block_type":"box","text":"investing in derivatives. There may be limited availability of derivatives that provide indirect exposure to","page_number":40,"box":{"x":117,"y":211,"width":769,"height":12}},{"id":"f8ea9b53-7903-49e8-b90b-33a4826f4ecc","block_type":"box","text":"an impacted security. BlackRock clients can be subject to more than one ownership limitation","page_number":40,"box":{"x":116,"y":227,"width":698,"height":12}},{"id":"1e15c3e0-3a45-4812-a347-03dc166b6caf","block_type":"box","text":"depending on each client’s holdings, and each ownership limitation can impact multiple securities held","page_number":40,"box":{"x":116,"y":242,"width":763,"height":12}},{"id":"216258f9-371a-44c7-ac38-5cb089743d9f","block_type":"box","text":"by the client. Certain clients or shareholders may have their own overlapping obligations to monitor","page_number":40,"box":{"x":117,"y":258,"width":738,"height":12}},{"id":"adc50a5a-2270-4b4f-814a-b0f5d636c3bb","block_type":"box","text":"their compliance with ownership limitations across their investments.","page_number":40,"box":{"x":116,"y":273,"width":513,"height":12}},{"id":"836e6ad1-4706-4f0b-b983-5b87fbcf77bf","block_type":"box","text":"If certain aggregate ownership thresholds are reached either through the actions of BlackRock or a","page_number":40,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"080c7d5c-97e6-4a1f-a419-f35bb766e413","block_type":"box","text":"BlackRock client or as a result of corporate actions by the issuer, the ability of BlackRock on behalf of","page_number":40,"box":{"x":117,"y":320,"width":758,"height":12}},{"id":"fecd187b-161c-4f35-a00f-8d6052a45803","block_type":"box","text":"clients to purchase or dispose of investments, or exercise rights (including voting) or undertake","page_number":40,"box":{"x":116,"y":335,"width":709,"height":12}},{"id":"856c3f13-83c4-44a9-b620-a62182cfdc69","block_type":"box","text":"business transactions, may be restricted by law, regulation, rule, or organizational documents or","page_number":40,"box":{"x":117,"y":351,"width":717,"height":12}},{"id":"36cf9c92-22a1-45af-a120-eba57bb0381b","block_type":"box","text":"otherwise impaired. For example, to meet the requirements of an ownership limitation or restriction, a","page_number":40,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"43671e07-ef59-40da-abf0-1c8050f3c338","block_type":"box","text":"client may be unable to purchase or directly hold a security the client would otherwise purchase or","page_number":40,"box":{"x":116,"y":382,"width":733,"height":12}},{"id":"cde36fe1-4b7b-44c2-8377-17a19bfdf877","block_type":"box","text":"hold. The limitation or restriction may be based on the holdings of other BlackRock clients instead of","page_number":40,"box":{"x":117,"y":397,"width":747,"height":12}},{"id":"2f70d503-af75-4fc9-88d0-b76b35c04707","block_type":"box","text":"the specific client being restricted. For index funds, this means a fund may not be able to track its index","page_number":40,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"709f3d22-8821-447d-ac84-783248db05ef","block_type":"box","text":"as closely as it would if it was not subject to an ownership limitation or restriction because the fund","page_number":40,"box":{"x":116,"y":428,"width":735,"height":12}},{"id":"8a324682-dc34-47f1-98f9-3dd6feebeac9","block_type":"box","text":"cannot acquire the amount of the impacted security included in its index. BlackRock on behalf of its","page_number":40,"box":{"x":116,"y":444,"width":741,"height":12}},{"id":"df81bb6d-9d18-4993-976c-b79c615e5161","block_type":"box","text":"clients may limit purchases, sell existing investments, utilize indirect investments, utilize information","page_number":40,"box":{"x":116,"y":459,"width":742,"height":12}},{"id":"7d75bf76-c376-461a-994a-1701f978f66a","block_type":"box","text":"barriers, or otherwise restrict, forgo, or limit the exercise of rights (including transferring, outsourcing, or","page_number":40,"box":{"x":117,"y":475,"width":771,"height":12}},{"id":"764e06bc-d2a9-42ab-873d-998fe915a023","block_type":"box","text":"limiting voting rights or forgoing the right to receive dividends) when BlackRock, in its sole discretion,","page_number":40,"box":{"x":117,"y":490,"width":751,"height":12}},{"id":"6dad8e64-2dde-414e-b3ec-2796da03b161","block_type":"box","text":"deems it appropriate in light of potential regulatory or other restrictions on ownership or other","page_number":40,"box":{"x":116,"y":506,"width":694,"height":12}},{"id":"7c46c4bf-538c-4884-a0cc-587357e74c30","block_type":"box","text":"consequences resulting from reaching investment thresholds. These types of restrictions could","page_number":40,"box":{"x":116,"y":521,"width":708,"height":12}},{"id":"8d3ae8d4-aab1-4e1e-a5d3-390cb502f3f7","block_type":"box","text":"negatively impact a client’s performance or ability to meet its investment objective.","page_number":40,"box":{"x":117,"y":537,"width":614,"height":12}},{"id":"bc5737ec-158d-4726-8a5e-a5e3ca1c84da","block_type":"box","text":"When BlackRock or a BlackRock client is subject to an ownership limitation, BlackRock may in its","page_number":40,"box":{"x":116,"y":568,"width":728,"height":12}},{"id":"d4bf66c3-7208-4461-8711-9d959da31057","block_type":"box","text":"discretion seek permission from the applicable issuers or regulators to exceed the limitation. However,","page_number":40,"box":{"x":116,"y":583,"width":764,"height":12}},{"id":"a6785985-60eb-4f6b-83de-32e3d8bcb84c","block_type":"box","text":"there is no guarantee that permission will be granted, or that, once granted, it will not be modified or","page_number":40,"box":{"x":116,"y":599,"width":746,"height":12}},{"id":"8da75d74-ded7-4995-857a-015032b870c1","block_type":"box","text":"revoked at a later date with minimal or no notice. The issuer and/or regulator may also require that","page_number":40,"box":{"x":117,"y":614,"width":734,"height":12}},{"id":"998f8eaa-8978-4344-9adb-b0b8164102a1","block_type":"box","text":"BlackRock on behalf of itself and its clients take or refrain from taking certain actions in connection with","page_number":40,"box":{"x":117,"y":630,"width":770,"height":12}},{"id":"a47ee030-f227-4b35-9de4-c9663c1ee84a","block_type":"box","text":"the approval, order, consent, relief or non-disapproval, which BlackRock may accept if it believes the","page_number":40,"box":{"x":116,"y":645,"width":752,"height":12}},{"id":"eb3d8e42-64a3-4e51-8545-5418c692cffe","block_type":"box","text":"benefits outweigh the costs and may limit BlackRock from taking actions that it otherwise would take.","page_number":40,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"15b58217-6d14-4773-a694-da37cbbbc22a","block_type":"box","text":"In those circumstances where ownership thresholds or limitations must be observed, BlackRock seeks","page_number":40,"box":{"x":117,"y":676,"width":760,"height":12}},{"id":"43d1d62a-d003-48ae-8559-2128a3863ed3","block_type":"box","text":"to allocate limited investment opportunities equitably among clients, taking into consideration","page_number":40,"box":{"x":116,"y":692,"width":687,"height":12}},{"id":"54726a18-4813-44f3-9d5c-1ef8944d60d5","block_type":"box","text":"benchmark weight and investment strategy. BlackRock may adopt certain controls designed to prevent","page_number":40,"box":{"x":117,"y":707,"width":762,"height":12}},{"id":"896f3bc5-ab1d-4c09-aad1-1a4f7314e5c2","block_type":"box","text":"the occurrence of a breach of any applicable ownership threshold or limits, including, for example,","page_number":40,"box":{"x":116,"y":723,"width":725,"height":12}},{"id":"95075459-3892-43f5-8825-cd9120c00bec","block_type":"box","text":"when ownership in certain securities nears an applicable threshold, BlackRock may limit additional","page_number":40,"box":{"x":116,"y":738,"width":730,"height":12}},{"id":"0b462497-f338-43d2-8574-22bf6b59d00e","block_type":"box","text":"purchases in such securities or remove such securities from the list of Deposit Securities to be","page_number":40,"box":{"x":117,"y":754,"width":699,"height":12}},{"id":"5361bb4c-780b-4358-81d8-e5b998b42402","block_type":"box","text":"delivered to the Fund in connection with purchases of Creation Units of the Fund. If client holdings of","page_number":40,"box":{"x":116,"y":769,"width":748,"height":12}},{"id":"96bfa662-fcc7-4e5e-a21e-a1f04769fc00","block_type":"box","text":"an issuer exceed an applicable threshold and BlackRock is unable to obtain relief to enable the","page_number":40,"box":{"x":116,"y":785,"width":705,"height":12}},{"id":"b01ee8fd-fd56-43e7-925e-979a9b197734","block_type":"box","text":"continued holding of such investments, it may be necessary to reduce these positions to meet the","page_number":40,"box":{"x":116,"y":800,"width":724,"height":12}},{"id":"d30103a7-6314-4a62-9642-ceb24be4e4f4","block_type":"box","text":"applicable limitations and BlackRock or such client may be subject to regulatory actions. 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It is possible that, despite BlackRock’s intent to either","page_number":41,"box":{"x":116,"y":87,"width":715,"height":12}},{"id":"34edde79-3be4-4888-b112-6c2cd39d9b86","block_type":"box","text":"comply with or be granted permission to exceed ownership limitations, it may inadvertently breach a","page_number":41,"box":{"x":116,"y":103,"width":746,"height":12}},{"id":"88bee6f3-be0f-4613-ad8b-6fabf478b66a","block_type":"box","text":"limit or violate the corporate or regulatory approval, order, consent, relief or non-disapproval that was","page_number":41,"box":{"x":117,"y":118,"width":753,"height":12}},{"id":"c43b985a-8871-4f05-bcfe-ef6d264d1284","block_type":"box","text":"obtained.","page_number":41,"box":{"x":116,"y":134,"width":74,"height":9}},{"id":"19c14423-15fc-47d7-a126-7c3e8cb7c8e6","block_type":"box","text":"In addition to the foregoing, other ownership thresholds may trigger reporting requirements to","page_number":41,"box":{"x":117,"y":165,"width":696,"height":12}},{"id":"0acd429a-8ba1-4d2d-8a24-bc7d0cbc1084","block_type":"box","text":"governmental and regulatory authorities, and such reports may entail the disclosure of the identity of a","page_number":41,"box":{"x":116,"y":180,"width":763,"height":12}},{"id":"6b85256a-1e6c-45c9-b9d0-6a95b3b8d859","block_type":"box","text":"client or BlackRock’s intended strategy with respect to such security or asset.","page_number":41,"box":{"x":116,"y":196,"width":579,"height":12}},{"id":"d5081574-e923-458a-b9e9-1853666fb7d5","block_type":"box","text":"BlackRock may not serve as an Authorized Participant in the creation and redemption of the Fund and","page_number":41,"box":{"x":117,"y":227,"width":763,"height":12}},{"id":"68295f74-2dca-41cd-bca8-7a889003eb55","block_type":"box","text":"other BFA-advised ETFs.","page_number":41,"box":{"x":116,"y":242,"width":193,"height":10}},{"id":"8738b55f-1e9a-4c85-bf1a-5bedf223274d","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to perform certain","page_number":41,"box":{"x":117,"y":273,"width":764,"height":12}},{"id":"1bb0fa81-a775-4817-b292-0f55890698c0","block_type":"box","text":"order processing, Authorized Participant communications, and related services in connection with the","page_number":41,"box":{"x":116,"y":289,"width":756,"height":12}},{"id":"0d9af792-fa85-4945-ac7c-ad73b5ed1987","block_type":"box","text":"issuance and redemption of Creation Units (“ETF Services”). BRIL has engaged Citibank, N.A.","page_number":41,"box":{"x":117,"y":304,"width":706,"height":12}},{"id":"c7240716-1004-4e99-9d92-0d728c56c750","block_type":"box","text":"(“Citibank”) as a subcontractor to provide certain ETF Services. BRIL retains a portion of the standard","page_number":41,"box":{"x":117,"y":320,"width":759,"height":12}},{"id":"f3affdc4-b2be-4b0e-8b86-0bb141b5103a","block_type":"box","text":"transaction fee received from Authorized Participants on each creation or redemption order from the","page_number":41,"box":{"x":116,"y":335,"width":748,"height":12}},{"id":"2f98a881-ca67-434f-8309-c7758534e7f9","block_type":"box","text":"Authorized Participant for the ETF Services provided. BlackRock collaborated with, and received","page_number":41,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"71375f04-5d93-48e6-9dea-3281434ca4bf","block_type":"box","text":"payment from, Citibank on the design and development of the ETF Services platform. Citibank has,","page_number":41,"box":{"x":117,"y":366,"width":741,"height":12}},{"id":"6f44e772-705f-4d0d-9242-af70896ec3b6","block_type":"box","text":"and may, from time to time, develop additional relationships with BlackRock or funds managed by BFA","page_number":41,"box":{"x":116,"y":382,"width":767,"height":12}},{"id":"1169fa07-90f7-4824-8ddd-ac7c132a1153","block_type":"box","text":"and its affiliates.","page_number":41,"box":{"x":116,"y":397,"width":125,"height":10}},{"id":"49d741df-fe7a-4c15-92a7-e0cb72f4a89a","block_type":"box","text":"In order to defray transaction expenses and protect against possible shareholder dilution, the Fund","page_number":41,"box":{"x":117,"y":428,"width":737,"height":12}},{"id":"ce26b733-b375-4e50-82dd-ab1d217e5f73","block_type":"box","text":"may collect certain fees from Authorized Participants in connection with cash substitutions for creation","page_number":41,"box":{"x":117,"y":444,"width":761,"height":12}},{"id":"8ffc96e8-9fdc-475d-a062-726ed25c8496","block_type":"box","text":"and redemption transactions. While BlackRock uses good faith estimates of the expected costs to the","page_number":41,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"2556cfb9-0948-4e45-8fcc-5548742efc13","block_type":"box","text":"Fund in determining the rates for fees collected by the Fund related to creation and redemption activity,","page_number":41,"box":{"x":117,"y":475,"width":770,"height":12}},{"id":"7faed4cb-4211-4dcb-979b-452ed075b968","block_type":"box","text":"BlackRock may have incentives to improve Fund performance through the collection of these fees. As","page_number":41,"box":{"x":117,"y":490,"width":760,"height":12}},{"id":"e98e770b-219c-4ce5-9226-4ef1d989c531","block_type":"box","text":"these charges are based on estimates, where the charges exceed actual transaction costs incurred by","page_number":41,"box":{"x":116,"y":506,"width":765,"height":12}},{"id":"87cade0e-00a5-4006-8794-33671ec7a71d","block_type":"box","text":"the Fund, Fund performance could improve as a result. BlackRock has established processes to","page_number":41,"box":{"x":116,"y":521,"width":720,"height":12}},{"id":"f568fb0c-1cc9-4339-9ffa-f79930b02fb4","block_type":"box","text":"oversee the determination of these estimates in an effort to mitigate this conflict.","page_number":41,"box":{"x":116,"y":537,"width":600,"height":12}},{"id":"c5bc3adc-c209-4c06-a382-0068327b8cb1","block_type":"box","text":"BlackRock may maintain securities indices. To the extent permitted by applicable laws, the Fund may","page_number":41,"box":{"x":117,"y":568,"width":756,"height":12}},{"id":"529c1f20-237c-4dea-ac10-21fe6586563e","block_type":"box","text":"seek to license and use such indices as part of its investment strategy. Index based funds that seek to","page_number":41,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"fa8adadf-1107-4cf5-bbae-a362de82d6a2","block_type":"box","text":"track the performance of securities indices also may use the name of the index or index provider in the","page_number":41,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"a1896e64-b40c-4acb-bfd9-369796c2e877","block_type":"box","text":"fund name. Index providers, including BlackRock (to the extent permitted by applicable law), may be","page_number":41,"box":{"x":116,"y":614,"width":749,"height":12}},{"id":"d7a7c923-8f21-407b-b65d-a3d5d29d8375","block_type":"box","text":"paid licensing fees for use of their index or index name. In instances where BlackRock charges a","page_number":41,"box":{"x":117,"y":630,"width":723,"height":12}},{"id":"bb5c096c-41e7-49a2-b3c3-71142a77e5c8","block_type":"box","text":"unitary management fee, BlackRock may have a financial incentive to use a BlackRock index that is","page_number":41,"box":{"x":117,"y":645,"width":746,"height":12}},{"id":"94ce327a-07bc-4264-b824-21890f83806c","block_type":"box","text":"less costly to BlackRock than a third party index. BlackRock may benefit from the Fund using","page_number":41,"box":{"x":117,"y":661,"width":689,"height":12}},{"id":"b417c2ef-b832-40e9-b5ef-e99eb5b6459c","block_type":"box","text":"BlackRock indices by creating increasing acceptance in the marketplace for such indices. BlackRock is","page_number":41,"box":{"x":117,"y":676,"width":763,"height":12}},{"id":"72113b2c-ecfe-47aa-8174-18f463c3d47b","block_type":"box","text":"not obligated to license its indices to the Fund and the Fund is under no obligation to use BlackRock","page_number":41,"box":{"x":117,"y":692,"width":742,"height":12}},{"id":"d6aca4d5-817b-4f90-aa08-3d65d02c1b1c","block_type":"box","text":"indices. Any fund that enters into a license for a BlackRock index cannot be assured that the terms of","page_number":41,"box":{"x":117,"y":707,"width":752,"height":12}},{"id":"c42cd50e-9dbf-478b-a692-61eca1ccc1d7","block_type":"box","text":"any index licensing agreement with BlackRock will be as favorable as those terms offered to other","page_number":41,"box":{"x":116,"y":723,"width":728,"height":12}},{"id":"5626696d-c5e8-47bd-be91-bf8124be952e","block_type":"box","text":"licensees.","page_number":41,"box":{"x":117,"y":738,"width":72,"height":10}},{"id":"4500fa2f-41f2-48ca-882d-189acaa2698d","block_type":"box","text":"BlackRock may enter into contractual arrangements with third-party service providers to the Fund (e.g.,","page_number":41,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"d8794e65-9c1b-4309-be82-7aab51bcdacd","block_type":"box","text":"custodians, administrators and index providers) pursuant to which BlackRock receives fee discounts or","page_number":41,"box":{"x":116,"y":785,"width":764,"height":12}},{"id":"7c38e226-d74a-4027-963b-2c4048bfcec1","block_type":"box","text":"concessions in recognition of BlackRock’s overall relationship with such service providers. BlackRock","page_number":41,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"20ce7eb7-e274-49c5-962b-fd1398707dc5","block_type":"box","text":"may also enter into contractual arrangements with such service providers pursuant to which BlackRock","page_number":41,"box":{"x":117,"y":816,"width":764,"height":12}},{"id":"d2907090-55df-4029-99b2-5e926f320bb7","block_type":"box","text":"incurs additional costs if the service provider’s services are terminated with respect to the Fund. To the","page_number":41,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"3701fbc1-7d07-4b71-b286-a4c501e786af","block_type":"box","text":"extent that BlackRock is responsible for paying service providers out of its fees that it receives from the","page_number":41,"box":{"x":116,"y":847,"width":770,"height":12}},{"id":"4dedfcf9-b40b-4881-bfca-473e7e2aa892","block_type":"box","text":"Fund, the benefits of lower fees, including any fee discounts or concessions, or any additional savings,","page_number":41,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"e6c0e27c-2a88-4f0d-9cc0-e1b4d8239205","block_type":"box","text":"may accrue, in whole or in part, to BlackRock, which could result in conflicts of interest relating to the","page_number":41,"box":{"x":117,"y":878,"width":752,"height":12}},{"id":"170e6521-18f8-480a-b063-1415b53cfdda","block_type":"box","text":"38","page_number":41,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"3af78f25-4a71-4ac6-a8da-c2f5eb9ffb20","block_type":"box","text":"NM1026U-6039989-41/256","page_number":41,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"4dc2949c-83d6-4e33-ac70-48a087c01ff8","block_type":"box","text":"use or termination of service providers to the Fund. In addition, conflicts of interest may arise with","page_number":42,"box":{"x":117,"y":87,"width":727,"height":12}},{"id":"e5805984-5949-4dbe-af79-68864e0bea39","block_type":"box","text":"respect to contractual arrangements with third-party service providers to the Fund, or the selection of","page_number":42,"box":{"x":117,"y":102,"width":752,"height":13}},{"id":"63936d39-22b8-4393-84e9-bab821fea1ed","block_type":"box","text":"such providers, particularly in circumstances where BlackRock is negotiating on behalf of both funds","page_number":42,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"4ff71ef6-991c-4410-90b7-4d316dc78e58","block_type":"box","text":"that have a unitary management fee and those that do not or different service providers have different","page_number":42,"box":{"x":116,"y":134,"width":761,"height":12}},{"id":"a4349675-546a-4245-bc61-f1863f4f2336","block_type":"box","text":"fee structures.","page_number":42,"box":{"x":116,"y":149,"width":111,"height":10}},{"id":"c5420876-427b-472a-a5db-124635bee326","block_type":"box","text":"Conflicts of interest may arise as a result of simultaneous investment management of multiple client","page_number":42,"box":{"x":117,"y":179,"width":744,"height":12}},{"id":"a59eddcf-ceb7-47bc-b712-d2ff7a36344d","block_type":"box","text":"accounts by BlackRock’s investment professionals. For example, differences in the advisory fee","page_number":42,"box":{"x":116,"y":194,"width":716,"height":12}},{"id":"eabdfc1e-3eb9-4a8d-8cf6-e6c1acf0ea21","block_type":"box","text":"structure may create the appearance of actual or potential conflicts of interest because such","page_number":42,"box":{"x":116,"y":210,"width":689,"height":12}},{"id":"a9fe79f7-a274-4763-8ea7-86c4d7eb5301","block_type":"box","text":"differences could create pecuniary incentives for BlackRock to favor one client account over another.","page_number":42,"box":{"x":116,"y":225,"width":754,"height":12}},{"id":"1389a4bc-5100-4d22-990d-3e03d9872584","block_type":"box","text":"BlackRock owns or has an ownership interest in certain trading, portfolio management, operations and/","page_number":42,"box":{"x":117,"y":255,"width":765,"height":12}},{"id":"4b769c00-b3ff-4473-bc3e-09fb836e1a61","block_type":"box","text":"or information systems used by Fund service providers. 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The Fund service provider’s payments to BlackRock for the use of these systems may","page_number":42,"box":{"x":116,"y":332,"width":744,"height":12}},{"id":"75e38fcb-f2a2-40c7-ace5-65544d7d8755","block_type":"box","text":"enhance the profitability of BlackRock.","page_number":42,"box":{"x":116,"y":348,"width":290,"height":12}},{"id":"a18a5905-15bd-4f06-81e0-a8ec357c437f","block_type":"box","text":"BlackRock’s receipt of fees from a service provider in connection with the use of systems provided by","page_number":42,"box":{"x":117,"y":377,"width":757,"height":12}},{"id":"d754bec4-a308-4bc7-9ad3-7844afd0cbe4","block_type":"box","text":"BlackRock may create an incentive for BlackRock to recommend that the Fund enter into or renew an","page_number":42,"box":{"x":117,"y":393,"width":759,"height":12}},{"id":"a2bde4e7-8d11-4a12-a80e-6b3876976c78","block_type":"box","text":"arrangement with the service provider.","page_number":42,"box":{"x":116,"y":408,"width":291,"height":12}},{"id":"fd337f77-3b26-4e56-8257-2d00fb1fb546","block_type":"box","text":"In recognition of a BlackRock client’s overall relationship with BlackRock, BlackRock may offer special","page_number":42,"box":{"x":117,"y":438,"width":762,"height":12}},{"id":"1dc13ad8-27db-42e6-a8c4-404158c7aed0","block_type":"box","text":"pricing arrangements for certain services provided by BlackRock. 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In most cases, these benchmarks are the same as the benchmark or","page_number":46,"box":{"x":117,"y":304,"width":688,"height":12}},{"id":"5ac4c885-6a58-461a-8da8-674ed072df0d","block_type":"box","text":"benchmarks against which the performance of the Fund or other accounts managed by the portfolio","page_number":46,"box":{"x":117,"y":320,"width":744,"height":12}},{"id":"2975885f-a6f4-423d-b0d0-2f06156da0e1","block_type":"box","text":"managers are measured. BlackRock’s global compensation team determines the benchmarks or","page_number":46,"box":{"x":117,"y":335,"width":721,"height":12}},{"id":"5df09b68-56fb-46c9-91d4-f52264581ae4","block_type":"box","text":"rankings against which the performance of the Fund and other accounts managed by the portfolio","page_number":46,"box":{"x":117,"y":351,"width":729,"height":12}},{"id":"53ad9154-4905-47c5-b935-70de56049c94","block_type":"box","text":"management team is compared and the period of time over which performance is evaluated. With","page_number":46,"box":{"x":117,"y":366,"width":730,"height":12}},{"id":"f50c88c3-6f15-4606-ba5f-9bdfc354de60","block_type":"box","text":"respect to these portfolio managers, such benchmarks for the Fund and other accounts are:","page_number":46,"box":{"x":117,"y":382,"width":686,"height":12}},{"id":"75e7d9af-6c0a-45fc-ae0f-45352072f64f","block_type":"box","text":"Portfolio Manager","page_number":46,"box":{"x":117,"y":409,"width":113,"height":10}},{"id":"cefd372b-2e65-4c0b-a8bf-2239eab8b835","block_type":"box","text":"Applicable Benchmarks","page_number":46,"box":{"x":341,"y":409,"width":152,"height":10}},{"id":"6bcef718-f9f9-4a1d-9c53-c4f2e8330cd9","block_type":"box","text":"Tony Kim AMSCI ACWI 25% Call Overwrite Index; MSCI All Country World Index","page_number":46,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"ddea5834-303c-4e6a-8d80-ff0391fed902","block_type":"box","text":"(Net Total Return); MSCI All Country World Information Technology- Net","page_number":46,"box":{"x":342,"y":444,"width":543,"height":12}},{"id":"4c1d2c83-4622-42a5-988d-f2f1404eb2b6","block_type":"box","text":"Return in USD.","page_number":46,"box":{"x":342,"y":459,"width":117,"height":10}},{"id":"55c1b798-bf56-4b31-baa7-9f42fe564ed9","block_type":"box","text":"Tomas Hamudis","page_number":46,"box":{"x":116,"y":480,"width":127,"height":9}},{"id":"8504cc96-03cb-41d2-8639-798d63f43e95","block_type":"box","text":"Peter Jegunma, CFA","page_number":46,"box":{"x":117,"y":495,"width":160,"height":12}},{"id":"175d6746-aa99-42b2-aab3-6432d7ad84e2","block_type":"box","text":"Gowrishankar Subramanian","page_number":46,"box":{"x":117,"y":511,"width":212,"height":9}},{"id":"c644bd06-bfbf-4c28-a15f-867ffd054a03","block_type":"box","text":"None","page_number":46,"box":{"x":342,"y":480,"width":44,"height":9}},{"id":"f69f6409-f9ae-4ea0-ba29-27529694b83a","block_type":"box","text":"A smaller element of portfolio manager discretionary compensation may include consideration of:","page_number":46,"box":{"x":116,"y":542,"width":726,"height":12}},{"id":"881d10f7-7771-457f-8fda-ec13b4182200","block_type":"box","text":"financial results, expense control, profit margins, strategic planning and implementation, quality of","page_number":46,"box":{"x":116,"y":557,"width":729,"height":12}},{"id":"4c1fba2f-663e-4402-aaa8-9ee83d16dde1","block_type":"box","text":"client service, market share, corporate reputation, capital allocation, compliance and risk control,","page_number":46,"box":{"x":116,"y":573,"width":721,"height":12}},{"id":"3059471e-33ff-4ced-bb57-af2fd223b22b","block_type":"box","text":"leadership, technology and innovation. These factors are considered collectively by BlackRock","page_number":46,"box":{"x":117,"y":588,"width":706,"height":12}},{"id":"3d9e6504-2822-4bda-91f7-22ae76c4e8fa","block_type":"box","text":"management and the relevant Chief Investment Officers.","page_number":46,"box":{"x":117,"y":604,"width":426,"height":12}},{"id":"f8a879ad-05a2-4c45-8d83-667354d40408","block_type":"box","text":"Distribution of Discretionary Incentive Compensation.","page_number":46,"box":{"x":117,"y":635,"width":429,"height":12}},{"id":"f66962a2-f245-4d51-8f7a-1ab9d5b69ab8","block_type":"box","text":"Discretionary incentive compensation is","page_number":46,"box":{"x":547,"y":635,"width":305,"height":12}},{"id":"0a99e344-7bba-415c-9567-8b76c7f4d4dd","block_type":"box","text":"distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/","page_number":46,"box":{"x":116,"y":650,"width":764,"height":12}},{"id":"d52250d5-3ade-428d-a3de-58a9b3dca95f","block_type":"box","text":"or deferred cash awards that notionally track the return of certain BlackRock investment products.","page_number":46,"box":{"x":116,"y":666,"width":724,"height":12}},{"id":"d298a9b9-a2d5-4ead-80f2-b02e6f04571f","block_type":"box","text":"Portfolio managers receive their annual discretionary incentive compensation in the form of cash.","page_number":46,"box":{"x":117,"y":697,"width":719,"height":12}},{"id":"a0b8ba37-2643-49a1-be32-d1ff46593281","block_type":"box","text":"Portfolio managers whose total compensation is above a specified threshold also receive deferred","page_number":46,"box":{"x":117,"y":712,"width":726,"height":12}},{"id":"fce5ec45-8a7f-4592-8bed-9b8ea31d45a5","block_type":"box","text":"BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a","page_number":46,"box":{"x":117,"y":728,"width":752,"height":12}},{"id":"4ae06b38-72ce-4b0a-98ae-55ee927b51b6","block_type":"box","text":"portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts","page_number":46,"box":{"x":117,"y":743,"width":721,"height":12}},{"id":"d4232d04-482d-49aa-94a9-a9bd76ce5263","block_type":"box","text":"compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to","page_number":46,"box":{"x":116,"y":759,"width":751,"height":12}},{"id":"37d22d16-cc6a-4973-a3c0-912737b53b6e","block_type":"box","text":"sustain and improve its performance over future periods. In some cases, additional deferred","page_number":46,"box":{"x":116,"y":774,"width":682,"height":12}},{"id":"7e70f9bf-db84-4c66-b8a3-c547ad24ce71","block_type":"box","text":"BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award","page_number":46,"box":{"x":117,"y":790,"width":757,"height":12}},{"id":"5cea6cfe-e0c7-4ae1-b081-02de1c5eae3c","block_type":"box","text":"to aid in retention, align interests with long-term shareholders and motivate performance. Deferred","page_number":46,"box":{"x":116,"y":805,"width":728,"height":12}},{"id":"127ee044-67fe-45c4-8174-8646f32e22ce","block_type":"box","text":"BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units","page_number":46,"box":{"x":117,"y":821,"width":763,"height":12}},{"id":"cf68cd37-80e4-41fd-aa76-a33fb5bf1efa","block_type":"box","text":"that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc.","page_number":46,"box":{"x":116,"y":836,"width":717,"height":12}},{"id":"222577df-11e6-4bac-81a1-eb12e7105e06","block_type":"box","text":"common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.","page_number":46,"box":{"x":116,"y":852,"width":725,"height":12}},{"id":"5eddc52d-948e-400b-9f7f-31ed2b54c386","block_type":"box","text":"43","page_number":46,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"7c8251a0-8ff4-40c4-aef3-dc038aee9944","block_type":"box","text":"NM1026U-6039989-46/256","page_number":46,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"a1c0ed9b-5c34-43ad-a9e2-0f7e6f9dd2d2","block_type":"box","text":"For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed","page_number":47,"box":{"x":117,"y":87,"width":765,"height":12}},{"id":"3c440c26-b654-4386-b75f-4a14131974e0","block_type":"box","text":"in the form of deferred cash awards that notionally track the returns of select BlackRock investment","page_number":47,"box":{"x":117,"y":102,"width":741,"height":13}},{"id":"7746d1d7-24f2-43fb-afcb-02996d3e265f","block_type":"box","text":"products they manage, which provides direct alignment of portfolio manager discretionary incentive","page_number":47,"box":{"x":117,"y":118,"width":740,"height":12}},{"id":"c0de8887-04c4-48a7-8bea-1ef2e2010d38","block_type":"box","text":"compensation with investment product results. Deferred cash awards vest ratably over a number of","page_number":47,"box":{"x":116,"y":134,"width":742,"height":12}},{"id":"48a674e1-cef0-4206-9d6f-51722fb5c440","block_type":"box","text":"years and, once vested, settle in the form of cash. Only portfolio managers who manage specified","page_number":47,"box":{"x":116,"y":149,"width":732,"height":12}},{"id":"ceb32e16-01cc-4a2d-ac67-be5c25df1b36","block_type":"box","text":"products and whose total compensation is above a specified threshold are eligible to participate in the","page_number":47,"box":{"x":117,"y":165,"width":759,"height":12}},{"id":"6daf7ca5-98fb-4ea8-a687-f7b6356d51e9","block_type":"box","text":"deferred cash award program.","page_number":47,"box":{"x":116,"y":180,"width":230,"height":12}},{"id":"397e4b5a-f32c-4a8f-b1d0-39fee5e0e70a","block_type":"box","text":"Other Compensation Benefits.","page_number":47,"box":{"x":116,"y":211,"width":241,"height":12}},{"id":"6438e3e0-1268-404b-9b55-6d897b983b82","block_type":"box","text":"In addition to base compensation and discretionary incentive","page_number":47,"box":{"x":358,"y":211,"width":460,"height":12}},{"id":"5c25c626-7f59-4776-9433-7aaaeccf809a","block_type":"box","text":"compensation, portfolio managers may be eligible to receive or participate in one or more of the","page_number":47,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"44ffe2ac-a268-486e-b2e7-606852671fa1","block_type":"box","text":"following:","page_number":47,"box":{"x":116,"y":242,"width":74,"height":12}},{"id":"6f2b48f7-2636-4c01-bfda-e176b7cb62b4","block_type":"box","text":"Incentive Savings Plans","page_number":47,"box":{"x":117,"y":273,"width":177,"height":12}},{"id":"d5067eec-9263-49ad-bb87-7ac477a44444","block_type":"box","text":"s — BlackRock, Inc. has created a variety of incentive savings plans in which","page_number":47,"box":{"x":294,"y":273,"width":570,"height":12}},{"id":"1f52e2ba-2979-4438-8360-01afbf615785","block_type":"box","text":"BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock","page_number":47,"box":{"x":117,"y":289,"width":688,"height":12}},{"id":"637c5d3e-f15b-4bd6-8849-416c2c534aba","block_type":"box","text":"Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The","page_number":47,"box":{"x":117,"y":304,"width":728,"height":12}},{"id":"b738d25d-9a0e-4bd0-b3da-4fc2483e8d85","block_type":"box","text":"employer contribution components of the RSP include a company match equal to 50% of the first 8%","page_number":47,"box":{"x":116,"y":320,"width":754,"height":12}},{"id":"c2a00bf7-cb23-41c9-b569-7d755c7b0229","block_type":"box","text":"of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement","page_number":47,"box":{"x":116,"y":334,"width":685,"height":13}},{"id":"eea01491-adbd-41a6-887f-70ce0c87a1a5","block_type":"box","text":"contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($360,000","page_number":47,"box":{"x":116,"y":350,"width":764,"height":13}},{"id":"b327074c-829b-4df4-abab-75d5533eb4cf","block_type":"box","text":"for 2026). The RSP offers a range of investment options, including registered investment companies","page_number":47,"box":{"x":116,"y":366,"width":749,"height":12}},{"id":"2b6cccff-a1d0-4200-9e70-d09395b17a2a","block_type":"box","text":"and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the","page_number":47,"box":{"x":116,"y":382,"width":698,"height":12}},{"id":"26251e46-3d21-48b3-ba70-7896bdab2137","block_type":"box","text":"investment direction set by participants for their own contributions or, absent participant investment","page_number":47,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"94d6bb94-ebd1-4dbe-8589-fdbd631109c7","block_type":"box","text":"direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the","page_number":47,"box":{"x":116,"y":413,"width":767,"height":12}},{"id":"9e8461bc-48b9-4102-9485-70fce4273ab2","block_type":"box","text":"participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5%","page_number":47,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"a248ec39-a44c-4f80-92fd-df4ffbd1dbe8","block_type":"box","text":"discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is","page_number":47,"box":{"x":116,"y":444,"width":765,"height":12}},{"id":"a94a5cc4-b43a-4f75-b2fc-6420d3b46a64","block_type":"box","text":"limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair","page_number":47,"box":{"x":117,"y":458,"width":758,"height":13}},{"id":"3673a9f4-66a5-4aa9-94b9-a399d36751d0","block_type":"box","text":"market value on the purchase date. All of the eligible portfolio managers are eligible to participate in","page_number":47,"box":{"x":117,"y":475,"width":743,"height":12}},{"id":"38a672cd-4463-45e7-b65d-9ee15072c949","block_type":"box","text":"these plans.","page_number":47,"box":{"x":116,"y":490,"width":89,"height":12}},{"id":"fd1dc602-0cb8-4133-aa54-b3a9fd920d83","block_type":"box","text":"As of the date of this SAI, the Portfolio Managers did not beneficially own shares of the Fund.","page_number":47,"box":{"x":116,"y":521,"width":697,"height":12}},{"id":"31758ea3-bd71-4d10-8bef-16d33f9ddded","block_type":"box","text":"Codes of Ethics.","page_number":47,"box":{"x":116,"y":552,"width":130,"height":10}},{"id":"28483e8b-f15e-49d0-93a5-c26a3c9ea280","block_type":"box","text":"The Trust, BFA and the Distributor have adopted codes of ethics pursuant to","page_number":47,"box":{"x":248,"y":552,"width":578,"height":12}},{"id":"df8faf8a-28cb-48b1-b6cf-365acd7aaf8b","block_type":"box","text":"Rule 17j-1 under the 1940 Act. The codes of ethics permit personnel subject to the codes of ethics to","page_number":47,"box":{"x":117,"y":568,"width":753,"height":12}},{"id":"1ae08007-6ba7-4ccb-9781-2869c13021cc","block_type":"box","text":"invest in securities, subject to certain limitations, including securities that may be purchased or held by","page_number":47,"box":{"x":117,"y":583,"width":763,"height":12}},{"id":"272cbd4f-e7f1-4b62-a746-22bb3d294dec","block_type":"box","text":"the Fund. Each code of ethics is available by contacting BlackRock at the telephone number on the","page_number":47,"box":{"x":116,"y":599,"width":742,"height":12}},{"id":"a9476d14-89ba-44dc-8483-d860437f8c1a","block_type":"box","text":"back cover of the Fund’s Prospectus or by accessing the EDGAR Database on the SEC’s Internet site","page_number":47,"box":{"x":117,"y":614,"width":762,"height":12}},{"id":"f4c1c1b9-830b-4c7b-b3aa-f1ff8f2edde8","block_type":"box","text":"at http://www.sec.gov, and copies may be obtained, after paying a duplicating fee, by e-mail at","page_number":47,"box":{"x":116,"y":630,"width":705,"height":12}},{"id":"a262d149-2880-4a40-bf39-6d73dccee536","block_type":"box","text":"publicinfo@sec.gov.","page_number":47,"box":{"x":117,"y":645,"width":154,"height":12}},{"id":"dc16cdf4-42e9-4721-bbac-b8599fd7b00f","block_type":"box","text":"Anti-Money Laundering Requirements.","page_number":47,"box":{"x":116,"y":676,"width":308,"height":12}},{"id":"6716b2d9-51dd-4be6-8a17-e7ed80b73c16","block_type":"box","text":"The Fund is subject to the USA PATRIOT Act (the “Patriot","page_number":47,"box":{"x":430,"y":676,"width":432,"height":12}},{"id":"b39875a6-8d17-4bfa-b56b-49efc4bbd6be","block_type":"box","text":"Act”). The Patriot Act is intended to prevent the use of the U.S. financial system in furtherance of","page_number":47,"box":{"x":116,"y":692,"width":717,"height":12}},{"id":"0d69ab29-a0b8-420b-b536-9522b4250025","block_type":"box","text":"money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, the","page_number":47,"box":{"x":117,"y":707,"width":766,"height":12}},{"id":"afa0cc4e-1624-4e21-9517-68e63ccc8db6","block_type":"box","text":"Fund may request information from Authorized Participants to enable it to form a reasonable belief that","page_number":47,"box":{"x":117,"y":723,"width":762,"height":12}},{"id":"a677387d-33ff-40de-8af9-032f57bf987d","block_type":"box","text":"it knows the true identity of its Authorized Participants. This information will be used to verify the","page_number":47,"box":{"x":117,"y":738,"width":710,"height":12}},{"id":"4935a114-ff4f-4fdc-aa8b-45dd5aad0817","block_type":"box","text":"identity of Authorized Participants or, in some cases, the status of financial professionals; it will be","page_number":47,"box":{"x":117,"y":754,"width":725,"height":12}},{"id":"80cd531c-5201-467e-b5f4-3c733013f877","block_type":"box","text":"used only for compliance with the requirements of the Patriot Act.","page_number":47,"box":{"x":117,"y":769,"width":483,"height":12}},{"id":"2744ad19-3002-42eb-af23-47587c81a75c","block_type":"box","text":"The Fund reserves the right to reject purchase orders from persons who have not submitted","page_number":47,"box":{"x":116,"y":800,"width":682,"height":12}},{"id":"da090302-8130-4f97-8c7a-b5d12493bdc4","block_type":"box","text":"information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to","page_number":47,"box":{"x":117,"y":816,"width":715,"height":12}},{"id":"d386e9fe-f017-410d-b022-70d0c14f9ca2","block_type":"box","text":"redeem any amounts in the Fund from persons whose identity it is unable to verify on a timely basis. It","page_number":47,"box":{"x":117,"y":831,"width":762,"height":12}},{"id":"a9bcc87f-7f24-4cbc-871c-e0301bec9a8d","block_type":"box","text":"is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with","page_number":47,"box":{"x":117,"y":847,"width":756,"height":12}},{"id":"61a46ded-4699-40eb-862c-17379e02fef2","block_type":"box","text":"respect to potential money laundering, terrorism or other illicit activities.","page_number":47,"box":{"x":117,"y":862,"width":533,"height":12}},{"id":"e2f41b2a-d98e-4d2d-93b0-03357b1faf46","block_type":"box","text":"44","page_number":47,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"9ea3a631-b9f8-4070-a46e-3c0e5b055ac4","block_type":"box","text":"NM1026U-6039989-47/256","page_number":47,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"464f8a72-d5b8-43cd-b8f4-2c4b042e828b","block_type":"box","text":"Administrator, Custodian and Transfer Agent.","page_number":48,"box":{"x":116,"y":87,"width":364,"height":12}},{"id":"bea7033a-24c3-4854-8f17-378e2387fe74","block_type":"box","text":"State Street Bank and Trust Company (“State","page_number":48,"box":{"x":481,"y":87,"width":350,"height":12}},{"id":"cf07fcc5-8a1c-4fa7-b6fc-fffb8611c56b","block_type":"box","text":"Street”) serves as administrator, custodian and transfer agent for the Fund under the Master Services","page_number":48,"box":{"x":116,"y":102,"width":759,"height":13}},{"id":"ca14364b-860c-44f9-a750-379a45492655","block_type":"box","text":"Agreement and related Service Schedule (the “Service Module”). State Street’s principal address is","page_number":48,"box":{"x":116,"y":118,"width":742,"height":12}},{"id":"85b89dc4-a051-4c81-ab94-7ac5a63e373c","block_type":"box","text":"One Congress Street, Suite 1, Boston, MA 02114. Pursuant to the Service Module for Fund","page_number":48,"box":{"x":116,"y":134,"width":684,"height":12}},{"id":"0443f17e-4fb2-494b-8a4a-49f9c36cbbb8","block_type":"box","text":"Administration and Accounting Services with the Trust, State Street provides necessary administrative,","page_number":48,"box":{"x":116,"y":149,"width":768,"height":12}},{"id":"32c27182-81c6-4444-bbee-14c6154a6497","block_type":"box","text":"legal, tax and accounting and financial reporting services for the maintenance and operations of the","page_number":48,"box":{"x":117,"y":165,"width":743,"height":12}},{"id":"6994d2bc-7299-4505-9495-acce517f313b","block_type":"box","text":"Trust and the Fund. In addition, State Street makes available the office space, equipment, personnel","page_number":48,"box":{"x":116,"y":180,"width":751,"height":12}},{"id":"b61436c0-6a4d-47c9-988b-7a8a38ebb8eb","block_type":"box","text":"and facilities required to provide such services. Pursuant to the Service Module for Custodial Services","page_number":48,"box":{"x":116,"y":196,"width":761,"height":11}},{"id":"04321051-637a-477d-a391-3be4b1214b0a","block_type":"box","text":"with the Trust, State Street maintains, in separate accounts, cash, securities and other assets of the","page_number":48,"box":{"x":116,"y":211,"width":747,"height":12}},{"id":"78ea44fb-9504-42d9-8488-fb6c12e31207","block_type":"box","text":"Trust and the Fund, keeps all necessary accounts and records and provides other services. State","page_number":48,"box":{"x":116,"y":227,"width":729,"height":12}},{"id":"d8f5c00c-121b-474d-bc2c-1a2e5e569776","block_type":"box","text":"Street is required, upon the order of the Trust, to deliver securities held by State Street and to make","page_number":48,"box":{"x":116,"y":242,"width":745,"height":12}},{"id":"d1dd1e93-fe0f-43a9-88d6-8de5d40de053","block_type":"box","text":"payments for securities purchased by the Trust for the Fund. State Street is authorized to appoint","page_number":48,"box":{"x":117,"y":258,"width":726,"height":12}},{"id":"433d43b8-8531-4cc5-9138-858de7fc3758","block_type":"box","text":"certain foreign custodians or foreign custody managers for Fund investments outside the U.S.","page_number":48,"box":{"x":116,"y":273,"width":701,"height":12}},{"id":"39a969cc-d0d4-440d-98d9-5d30f2764816","block_type":"box","text":"Pursuant to the Service Module for Transfer Agency Services with the Trust, State Street acts as a","page_number":48,"box":{"x":117,"y":289,"width":736,"height":12}},{"id":"0881e6c9-518b-4c0d-92c4-d7de84e76d9a","block_type":"box","text":"transfer agent for the Fund’s authorized and issued shares of beneficial interest, and as dividend","page_number":48,"box":{"x":116,"y":304,"width":722,"height":12}},{"id":"2da795e0-3b63-4ee6-a3d1-e7bf8a0d97f8","block_type":"box","text":"disbursing agent of the Trust. As compensation for these services, State Street receives certain out-of","page_number":48,"box":{"x":116,"y":320,"width":762,"height":12}},{"id":"5a8f57ef-169d-4267-b076-eae9e56b7ee4","block_type":"box","text":"pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by BFA.","page_number":48,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"c68f2449-1c65-48a2-8429-e1ac9c2661be","block_type":"box","text":"BFA pays the compensation because it has agreed to pay these operating expenses under the","page_number":48,"box":{"x":117,"y":351,"width":708,"height":12}},{"id":"a2cee749-e0c5-4339-9896-cfe039f9cff9","block_type":"box","text":"Investment Advisory Agreement as described therein.","page_number":48,"box":{"x":117,"y":366,"width":403,"height":12}},{"id":"7a491410-e5b2-4c7b-99c7-38d433d8bd3b","block_type":"box","text":"Credit Agreement.","page_number":48,"box":{"x":116,"y":397,"width":144,"height":12}},{"id":"c078e2ee-fc8c-4716-a676-0fb5e88fca2a","block_type":"box","text":"It is expected that the Trust, on behalf of the Fund, will become a party to a","page_number":48,"box":{"x":262,"y":397,"width":567,"height":12}},{"id":"4d11434a-c17b-4a74-aa70-720b9c7373e0","block_type":"box","text":"364-day, $2.4 billion credit agreement, along with certain other funds managed by BFA and its","page_number":48,"box":{"x":116,"y":412,"width":704,"height":13}},{"id":"4118ec20-6392-46ec-91c2-5440568bbf10","block_type":"box","text":"affiliates (“Participating Funds”), with a group of lenders, which facility terminates on April 8, 2027,","page_number":48,"box":{"x":116,"y":428,"width":731,"height":12}},{"id":"52e16e52-3271-4849-a844-fe990e4875de","block_type":"box","text":"unless otherwise extended or renewed (the “Credit Agreement”). Excluding commitments designated","page_number":48,"box":{"x":117,"y":444,"width":753,"height":12}},{"id":"d0e04d63-4c5d-4f78-9de7-ccf1ae861521","block_type":"box","text":"for certain Participating Funds, the Participating Funds, including the Fund, can borrow up to an","page_number":48,"box":{"x":116,"y":459,"width":715,"height":12}},{"id":"1b89b0e4-a081-4b9f-86ca-57b97a980702","block_type":"box","text":"aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage","page_number":48,"box":{"x":116,"y":474,"width":730,"height":13}},{"id":"b35ed8c9-923c-43a1-a3b2-6c64756f78ab","block_type":"box","text":"and other limitations as specified in the Credit Agreement. The Fund may borrow under the Credit","page_number":48,"box":{"x":116,"y":490,"width":730,"height":12}},{"id":"86c1aa83-adc7-4ab8-b866-f53f9da412d4","block_type":"box","text":"Agreement to meet shareholder redemptions and for other lawful purposes. However, the Fund may","page_number":48,"box":{"x":116,"y":506,"width":748,"height":12}},{"id":"18762908-ab32-4c2a-94a9-064cfceefcd1","block_type":"box","text":"not borrow under the Credit Agreement for leverage. The Fund may borrow up to the maximum","page_number":48,"box":{"x":117,"y":521,"width":711,"height":12}},{"id":"4f8a30dd-28b2-4bd8-b566-de8425705591","block_type":"box","text":"amount allowable under its current Prospectus and SAI, subject to various other legal, regulatory or","page_number":48,"box":{"x":116,"y":537,"width":743,"height":12}},{"id":"c2417a9e-b343-41dc-9b27-567592522374","block_type":"box","text":"contractual limits. Borrowing results in interest expense and other fees and expenses for the Fund","page_number":48,"box":{"x":116,"y":552,"width":732,"height":12}},{"id":"518850ce-480c-45f7-893b-3e2345af8c0f","block_type":"box","text":"which may impact the Fund’s net expenses. The costs of borrowing may reduce the Fund’s return.","page_number":48,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"4906aa05-8036-4775-99a5-f29566f79f44","block_type":"box","text":"The Fund is charged its pro rata share of upfront fees and commitment fees on the aggregate","page_number":48,"box":{"x":116,"y":583,"width":700,"height":12}},{"id":"0e4e743a-12fc-4bab-8cab-46d0dddf0a96","block_type":"box","text":"commitment amount based on its net assets. If the Fund borrows pursuant to the Credit Agreement,","page_number":48,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"34724198-9863-4d33-a161-b8c3971519b8","block_type":"box","text":"the Fund will be charged interest at a variable rate.","page_number":48,"box":{"x":116,"y":614,"width":382,"height":12}},{"id":"15554ce6-273d-479d-96b4-6d5a9bbd86ab","block_type":"box","text":"Distributor.","page_number":48,"box":{"x":117,"y":645,"width":88,"height":10}},{"id":"81374f05-eee8-48cb-a6fe-88137d61d14b","block_type":"box","text":"The Distributor’s principal address is 50 Hudson Yards, New York, NY 10001. Shares are","page_number":48,"box":{"x":206,"y":645,"width":674,"height":12}},{"id":"77f6cf97-525e-4934-85e5-7a36fc7854c9","block_type":"box","text":"continuously offered for sale by the Fund through the Distributor or its agent only in Creation Units, as","page_number":48,"box":{"x":116,"y":661,"width":754,"height":12}},{"id":"a979ef1a-bd66-48fe-ad2e-1d32a0070bc0","block_type":"box","text":"described in the Prospectus and below in the","page_number":48,"box":{"x":116,"y":676,"width":334,"height":12}},{"id":"4b21fd60-ab7d-4e61-93b2-b76565c99db5","block_type":"box","text":"Creation and Redemption of Creation Units","page_number":48,"box":{"x":457,"y":676,"width":320,"height":12}},{"id":"01992035-825c-4de4-bbc2-c1560eca6969","block_type":"box","text":"section of","page_number":48,"box":{"x":782,"y":676,"width":72,"height":10}},{"id":"d8f90f5f-68ff-401b-8848-ce82255c1dfc","block_type":"box","text":"this SAI. Fund shares in amounts less than Creation Units are generally not distributed by the","page_number":48,"box":{"x":116,"y":692,"width":693,"height":12}},{"id":"8f2fa01e-8363-4731-8f04-e51a836c5153","block_type":"box","text":"Distributor or its agent. The Distributor or its agent will arrange for the delivery of the Prospectus and,","page_number":48,"box":{"x":117,"y":707,"width":749,"height":12}},{"id":"e3a798d0-a3ac-4881-9ff8-ae62dd058d57","block_type":"box","text":"upon request, this SAI to persons purchasing Creation Units and will maintain records of both orders","page_number":48,"box":{"x":117,"y":723,"width":744,"height":12}},{"id":"b866d0d8-3cc4-431f-9ad5-d22a3a30326d","block_type":"box","text":"placed with it or its agents and confirmations of acceptance furnished by it or its agents. The Distributor","page_number":48,"box":{"x":117,"y":738,"width":765,"height":12}},{"id":"a498a916-2478-4ed1-a29f-66663b86713d","block_type":"box","text":"is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “1934 Act”),","page_number":48,"box":{"x":117,"y":754,"width":760,"height":12}},{"id":"27465d82-c327-4906-97b6-cb13942bf1cd","block_type":"box","text":"and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is also","page_number":48,"box":{"x":116,"y":769,"width":735,"height":12}},{"id":"75907b8e-054f-412f-bbc7-f0a84d3d0858","block_type":"box","text":"licensed as a broker-dealer in all 50 U.S. states, as well as in Puerto Rico, the U.S. Virgin Islands and","page_number":48,"box":{"x":117,"y":785,"width":752,"height":12}},{"id":"bdaf19bc-0154-4e66-bbc5-c7c037d21fcc","block_type":"box","text":"the District of Columbia.","page_number":48,"box":{"x":116,"y":800,"width":177,"height":10}},{"id":"da0ffc6b-6607-42a9-89ac-4fac9d3a3ace","block_type":"box","text":"The Distribution Agreement for the Fund provides that it may be terminated at any time, without the","page_number":48,"box":{"x":116,"y":831,"width":741,"height":12}},{"id":"799fc7f3-8a0e-46c3-942b-3788e16d0262","block_type":"box","text":"payment of any penalty, on at least 60 days’ prior written notice to the other party following (i) the vote","page_number":48,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"3c4da253-0342-4549-aa23-f9bbec692cfa","block_type":"box","text":"of a majority of the Independent Trustees, or (ii) the vote of a majority of the outstanding voting","page_number":48,"box":{"x":116,"y":862,"width":709,"height":12}},{"id":"21195abb-467d-4462-a8ab-9c4f68c658a7","block_type":"box","text":"45","page_number":48,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"ffd254f9-3914-4b17-a97e-34f6be12c33e","block_type":"box","text":"NM1026U-6039989-48/256","page_number":48,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"4c61f643-5702-44cf-9c95-c0dc0693f3b7","block_type":"box","text":"securities (as defined in the 1940 Act) of the Fund. The Distribution Agreement will terminate","page_number":49,"box":{"x":116,"y":87,"width":693,"height":12}},{"id":"9051ea7f-d4c5-44c9-ade5-4c573d946a20","block_type":"box","text":"automatically in the event of its assignment (as defined in the 1940 Act).","page_number":49,"box":{"x":116,"y":102,"width":541,"height":13}},{"id":"b8e97971-25b4-4590-b2f3-896a026464fe","block_type":"box","text":"The Distributor may also enter into agreements with securities dealers (“Soliciting Dealers”) who will","page_number":49,"box":{"x":116,"y":134,"width":746,"height":12}},{"id":"a1eebde9-7692-4c74-b08b-a7c1fba59087","block_type":"box","text":"solicit purchases of Creation Units of Fund shares. Such Soliciting Dealers may also be Authorized","page_number":49,"box":{"x":116,"y":149,"width":739,"height":12}},{"id":"2c09e935-9b2e-450e-ad06-2b42bceef0a7","block_type":"box","text":"Participants (as described below), Depository Trust Company (“DTC”) participants and/or investor","page_number":49,"box":{"x":117,"y":165,"width":729,"height":12}},{"id":"05f1e09d-840e-49c7-ba33-facb88aabf08","block_type":"box","text":"services organizations.","page_number":49,"box":{"x":116,"y":180,"width":176,"height":12}},{"id":"d80fcafe-f631-48cd-9599-78d8946a79fb","block_type":"box","text":"BFA or its affiliates may, from time to time and from its own resources, pay, defray or absorb costs","page_number":49,"box":{"x":117,"y":211,"width":735,"height":12}},{"id":"a8e77db6-0b6c-4640-bbf7-fb7f36e6f25b","block_type":"box","text":"relating to distribution, including payments out of its own resources to the Distributor, or to otherwise","page_number":49,"box":{"x":117,"y":227,"width":747,"height":12}},{"id":"bb24fec6-a25f-48b0-be55-6b0f885d07bd","block_type":"box","text":"promote the sale of shares.","page_number":49,"box":{"x":117,"y":242,"width":207,"height":12}},{"id":"24b9bd11-e507-4d82-8c64-a8111dee685d","block_type":"box","text":"Securities Lending.","page_number":49,"box":{"x":116,"y":273,"width":154,"height":12}},{"id":"f158f48e-0637-4237-a857-8e099bd19a28","block_type":"box","text":"To the extent that the Fund engages in securities lending, the Fund conducts its","page_number":49,"box":{"x":271,"y":273,"width":603,"height":12}},{"id":"daf92569-17a0-41bc-affb-fd715ff3afd8","block_type":"box","text":"securities lending pursuant to an exemptive order from the Commission permitting it to lend portfolio","page_number":49,"box":{"x":116,"y":289,"width":747,"height":12}},{"id":"7dcc3798-f0f1-4fdf-9823-a097f67cd094","block_type":"box","text":"securities to borrowers affiliated with the Fund and to retain an affiliate of the Fund as securities","page_number":49,"box":{"x":116,"y":304,"width":715,"height":10}},{"id":"e1484e6b-9b84-405c-bcff-501b0bf7dcc1","block_type":"box","text":"lending agent. To the extent that the Fund engages in securities lending, BTC acts as securities","page_number":49,"box":{"x":117,"y":320,"width":714,"height":12}},{"id":"3532be04-9b52-46fd-9c23-5a08139bc5da","block_type":"box","text":"lending agent for the Fund, subject to the overall supervision of BFA, pursuant to a written agreement","page_number":49,"box":{"x":117,"y":335,"width":757,"height":12}},{"id":"2caa3715-a882-4d5c-b4d6-85e8795cea44","block_type":"box","text":"(the “Securities Lending Agency Agreement”). BTC administers the lending program in accordance","page_number":49,"box":{"x":117,"y":351,"width":738,"height":12}},{"id":"ac5ec88c-f5a5-4d1d-b8e3-f85e34315442","block_type":"box","text":"with guidelines approved by the Board.","page_number":49,"box":{"x":116,"y":366,"width":294,"height":12}},{"id":"ef1dcdff-3d9b-4182-8a59-c9161d154e99","block_type":"box","text":"The Fund retains a portion of the securities lending income and remits the remaining portion to BTC as","page_number":49,"box":{"x":116,"y":397,"width":768,"height":12}},{"id":"3ce9c760-7956-4fb2-b274-21a192b635e3","block_type":"box","text":"compensation for its services as securities lending agent. Securities lending income is generally equal","page_number":49,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"c7aea113-077e-4ae7-94ac-007e6191b4e9","block_type":"box","text":"to the total of income earned from the reinvestment of cash collateral (and excludes collateral","page_number":49,"box":{"x":116,"y":428,"width":698,"height":12}},{"id":"a689edc9-3a63-4dcc-93a5-17cf820904ec","block_type":"box","text":"investment fees as defined below), and any fees or other payments to and from borrowers of","page_number":49,"box":{"x":117,"y":444,"width":692,"height":12}},{"id":"37f80505-7167-4091-81e6-1297363ce0ea","block_type":"box","text":"securities. As securities lending agent, BTC bears all operational costs directly related to securities","page_number":49,"box":{"x":116,"y":459,"width":738,"height":12}},{"id":"cd7cefb1-bfb3-44c8-a5af-fbf8aa7412c2","block_type":"box","text":"lending. The Fund is responsible for fees in connection with the investment of cash collateral received","page_number":49,"box":{"x":117,"y":475,"width":759,"height":12}},{"id":"9883ffe6-305d-427f-a830-b711d2ddf828","block_type":"box","text":"for securities on loan in money market funds advised by BFA or its affiliates, and such fees will not be","page_number":49,"box":{"x":116,"y":490,"width":759,"height":12}},{"id":"b3326a62-1dca-438a-87c7-ff33ea8e249e","block_type":"box","text":"subject to any waivers (the “collateral investment fees”); however, BTC has agreed to reduce the","page_number":49,"box":{"x":116,"y":506,"width":723,"height":12}},{"id":"361d1198-6e0b-4b23-b0da-51118ed7b74d","block_type":"box","text":"amount of securities lending income it receives in order to effectively limit the collateral investment fees","page_number":49,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"285ce6f1-0014-4428-aca8-5cd1af9f4a4d","block_type":"box","text":"the Fund bears to an annual rate of 0.04%. Such money market fund shares will not be subject to a","page_number":49,"box":{"x":116,"y":537,"width":742,"height":12}},{"id":"6332ed0a-d8be-45f9-8f68-6d9beb997bf0","block_type":"box","text":"sales load, distribution fee or service fee.","page_number":49,"box":{"x":116,"y":552,"width":309,"height":11}},{"id":"2fb54d58-47ff-4b8b-a18e-f807a45cfb8c","block_type":"box","text":"To the extent that the Fund invests cash collateral in a non-government money market fund, the Fund","page_number":49,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"6445c510-4c66-4d40-bfee-da3bfe8aacfb","block_type":"box","text":"may be subject to a discretionary liquidity fee of up to 2% on all redemptions. Discretionary liquidity","page_number":49,"box":{"x":117,"y":599,"width":739,"height":12}},{"id":"8e46f233-ab24-4451-94f9-cdef22fb78a5","block_type":"box","text":"fees may be imposed or terminated at any time at the discretion of the board of directors of the money","page_number":49,"box":{"x":116,"y":614,"width":764,"height":12}},{"id":"89a7b16c-6bf2-42dd-ade6-ad94997916c6","block_type":"box","text":"market fund, or its delegate, if it is determined that such fee would be, or would not be, respectively, in","page_number":49,"box":{"x":117,"y":630,"width":763,"height":12}},{"id":"e738716f-3f09-408f-93f4-1378c19d7f3b","block_type":"box","text":"the best interest of the money market fund. Additionally, the Fund will be subject to a mandatory","page_number":49,"box":{"x":116,"y":645,"width":718,"height":12}},{"id":"a9808d09-d776-452b-880d-a66abb33b7b3","block_type":"box","text":"liquidity fee if the money market fund’s total net redemptions on a single day exceed 5% of the money","page_number":49,"box":{"x":117,"y":661,"width":755,"height":12}},{"id":"b218d007-89dd-402d-9d6f-a39bce6d837e","block_type":"box","text":"market fund’s net assets, unless the liquidity costs are de minimis (","page_number":49,"box":{"x":117,"y":676,"width":496,"height":12}},{"id":"b2102c77-2c08-4ac2-a1d9-b758345544fc","block_type":"box","text":"i.e.","page_number":49,"box":{"x":614,"y":676,"width":20,"height":10}},{"id":"0d9d0bed-2292-4e98-acac-92984ad4450a","block_type":"box","text":", less than one basis point","page_number":49,"box":{"x":637,"y":676,"width":194,"height":12}},{"id":"d90c5927-8614-4cc5-9ae3-d82f63c2e0ad","block_type":"box","text":"(0.01%)). The money market fund will determine the size of the mandatory liquidity fee by making a","page_number":49,"box":{"x":117,"y":692,"width":736,"height":12}},{"id":"13a60eb7-77b6-4ba3-950b-45cf0aec4f1f","block_type":"box","text":"good faith estimate of certain costs the money market fund would incur if it were to sell a pro rata","page_number":49,"box":{"x":116,"y":707,"width":719,"height":12}},{"id":"ef6389bf-750a-4883-a848-193775d3d3f5","block_type":"box","text":"amount of each security in the portfolio to satisfy the amount of net redemptions on that day. There is","page_number":49,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"68191cf2-431d-47b3-9453-f65953b1af8f","block_type":"box","text":"no limit to the size of a mandatory liquidity fee. If the money market fund cannot estimate the costs of","page_number":49,"box":{"x":117,"y":738,"width":750,"height":12}},{"id":"2aca6617-0da7-49c1-9dad-407c5a3413db","block_type":"box","text":"selling a pro rata amount of each portfolio security in good faith and supported by data, it is required to","page_number":49,"box":{"x":116,"y":754,"width":760,"height":12}},{"id":"19ed8367-eb83-4818-8c3b-60041ab69fcd","block_type":"box","text":"apply a default liquidity fee of 1% on the value of shares redeemed on that day. The imposition of any","page_number":49,"box":{"x":116,"y":769,"width":754,"height":12}},{"id":"abe9aaf0-48fc-4775-b214-31aa76c7da14","block_type":"box","text":"such discretionary or mandatory liquidity fee would reduce the Fund’s returns on securities lending.","page_number":49,"box":{"x":116,"y":785,"width":734,"height":12}},{"id":"e4c2d6ff-f5ba-4a06-bb70-a64cecbe59e5","block_type":"box","text":"Under the securities lending program, the Fund is categorized into one of several specific asset","page_number":49,"box":{"x":117,"y":816,"width":707,"height":12}},{"id":"54ccf86b-da9c-468a-811a-d277d1f79ebd","block_type":"box","text":"classes. The determination of the Fund’s asset class category (fixed-income, domestic equity,","page_number":49,"box":{"x":116,"y":831,"width":701,"height":12}},{"id":"404b1dfc-e00b-45f5-908a-5afa398cdfe6","block_type":"box","text":"international equity or fund of funds), each of which may be subject to a different fee arrangement, is","page_number":49,"box":{"x":117,"y":847,"width":750,"height":12}},{"id":"78012b8c-c3f3-45a2-8e85-544e2e8399cb","block_type":"box","text":"based on a methodology agreed to by the Trust and BTC.","page_number":49,"box":{"x":117,"y":862,"width":433,"height":12}},{"id":"1a7fe856-fc7d-4ae5-a9f4-ec74108f698b","block_type":"box","text":"46","page_number":49,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"62d2d991-5360-4837-96ca-761319e43d71","block_type":"box","text":"NM1026U-6039989-49/256","page_number":49,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"0ee57807-a521-4409-bce7-2601f30dc1cd","block_type":"box","text":"Pursuant to the securities lending agreement effective January 1, 2026: (i) the Fund retains 82% of","page_number":50,"box":{"x":117,"y":87,"width":738,"height":12}},{"id":"ed1028b5-0e60-482d-98b5-9d698b5ad12c","block_type":"box","text":"securities lending income (which excludes collateral investment fees); and (ii) this amount can never","page_number":50,"box":{"x":116,"y":102,"width":749,"height":13}},{"id":"29a97a22-6172-4582-9df7-2cd2afd783a2","block_type":"box","text":"be less than 70% of the sum of securities lending income plus collateral investment fees.","page_number":50,"box":{"x":117,"y":118,"width":663,"height":12}},{"id":"fb53a5d2-172b-42de-92f2-159e8f22541a","block_type":"box","text":"In addition, commencing the business day following the date that the aggregate securities lending","page_number":50,"box":{"x":117,"y":149,"width":728,"height":12}},{"id":"e9c8c259-0178-435a-9ae0-413d0de806c0","block_type":"box","text":"income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds specified","page_number":50,"box":{"x":117,"y":165,"width":717,"height":12}},{"id":"07c81007-6384-482a-b99e-5d7abed09ece","block_type":"box","text":"thresholds, the Fund, pursuant to the current securities lending agreement, will receive for the","page_number":50,"box":{"x":116,"y":180,"width":701,"height":12}},{"id":"a490e140-fc2a-4829-a443-61d5ea9d1465","block_type":"box","text":"remainder of that calendar year securities lending income as follows: (i) 85% of securities lending","page_number":50,"box":{"x":117,"y":196,"width":726,"height":12}},{"id":"d4629980-5f24-4849-846f-565dc4d28456","block_type":"box","text":"income (which excludes collateral investment fees); and (ii) this amount can never be less than 70% of","page_number":50,"box":{"x":117,"y":211,"width":766,"height":12}},{"id":"76295bea-9dde-4d7c-bae2-59bac256392a","block_type":"box","text":"the sum of securities lending income plus collateral investment fees.","page_number":50,"box":{"x":116,"y":227,"width":511,"height":12}},{"id":"e03354b0-f38a-42d8-ba55-a139d2ee735d","block_type":"box","text":"Because the Fund is newly launched, no services have been provided by BTC as the Fund’s securities","page_number":50,"box":{"x":117,"y":258,"width":767,"height":12}},{"id":"71b65297-c44a-426f-a3d1-b5162e79c71c","block_type":"box","text":"lending agent, and the Fund had no income and fees/compensation related to its securities lending","page_number":50,"box":{"x":117,"y":273,"width":738,"height":12}},{"id":"f66f154e-d80e-42dc-ad87-657f9d7a5cda","block_type":"box","text":"activities as of the date of this SAI.","page_number":50,"box":{"x":116,"y":289,"width":262,"height":9}},{"id":"35634908-0f21-483a-8495-871c492cae98","block_type":"box","text":"Payments by BFA and its Affiliates.","page_number":50,"box":{"x":117,"y":320,"width":280,"height":12}},{"id":"f00944bd-2632-47d5-ae2d-912fd6a82652","block_type":"box","text":"BFA and/or its affiliates (“BFA Entities”) pay certain broker","page_number":50,"box":{"x":398,"y":320,"width":442,"height":12}},{"id":"15b98ac5-133f-4136-b345-21d90f67cc85","block_type":"box","text":"dealers, registered investment advisers, banks and other financial intermediaries (“Intermediaries”) for","page_number":50,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"c964428a-d12f-4ab7-8384-6f30a483d640","block_type":"box","text":"certain activities related to the Fund and other funds or products sponsored and/or advised by BFA","page_number":50,"box":{"x":116,"y":351,"width":739,"height":12}},{"id":"c84ec2ba-63b8-4155-921d-5ee78a9be200","block_type":"box","text":"Entities (collectively for purposes of this section, the “Products”). BFA Entities make these payments","page_number":50,"box":{"x":117,"y":366,"width":748,"height":12}},{"id":"226b291c-a324-49c7-a537-cd88b412f1d4","block_type":"box","text":"from their own assets and not from the assets of the Fund. Although a portion of BFA Entities’ revenue","page_number":50,"box":{"x":116,"y":382,"width":766,"height":12}},{"id":"0d6f7739-a267-4138-abfd-b7641cbbb5bd","block_type":"box","text":"comes directly or indirectly in part from fees paid by the Fund or other Products (including, if","page_number":50,"box":{"x":116,"y":397,"width":688,"height":12}},{"id":"82c0f9c6-11a8-456a-8b49-475e420de187","block_type":"box","text":"applicable, any underlying Products held by the Fund), these payments do not increase the price paid","page_number":50,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"dcd5f789-8ea3-424f-b019-aee4e859abf9","block_type":"box","text":"by investors for the purchase of shares of, or the cost of owning, the Fund or other Products. BFA","page_number":50,"box":{"x":117,"y":428,"width":729,"height":12}},{"id":"5c642664-70ab-4c04-8be6-9f7e7d0aa34c","block_type":"box","text":"Entities make payments for Intermediaries’ participation in activities that are designed to make","page_number":50,"box":{"x":117,"y":444,"width":703,"height":12}},{"id":"f80538de-a418-4617-96f4-cda45dbb3463","block_type":"box","text":"registered representatives, other professionals and individual investors more knowledgeable about","page_number":50,"box":{"x":117,"y":459,"width":736,"height":12}},{"id":"45c64667-c797-476d-9b1b-59d2b8025c50","block_type":"box","text":"exchange-traded products, including the Fund and other Products, or for other activities, such as","page_number":50,"box":{"x":116,"y":475,"width":722,"height":12}},{"id":"f5d8b387-99b7-4dcd-b074-55bcbd115d46","block_type":"box","text":"participation in marketing activities and presentations, educational training programs, conferences, the","page_number":50,"box":{"x":117,"y":490,"width":763,"height":12}},{"id":"74338bf7-9b7b-489e-b824-308a44172f1d","block_type":"box","text":"development of technology platforms and reporting systems (“Education Costs”). BFA Entities also","page_number":50,"box":{"x":116,"y":506,"width":737,"height":12}},{"id":"c2a73fad-6431-4afb-8772-62e0cd41e92f","block_type":"box","text":"make payments to Intermediaries for certain printing, publishing and mailing costs or materials relating","page_number":50,"box":{"x":117,"y":521,"width":764,"height":12}},{"id":"6b66c79c-e2ce-4143-8f6c-66d094fa41ea","block_type":"box","text":"to the Fund or other Products (“Publishing Costs”). In addition, BFA Entities make payments to","page_number":50,"box":{"x":116,"y":537,"width":707,"height":12}},{"id":"a4fcf530-ae22-4d52-a0c7-ef1afa637391","block_type":"box","text":"Intermediaries that make shares of the Fund or other Products available to their clients, in some cases","page_number":50,"box":{"x":117,"y":552,"width":764,"height":11}},{"id":"26856de4-9e2e-4e4c-a0cf-915644eab429","block_type":"box","text":"at a waived or reduced commission rate or ticket charge, develop new products that feature iShares,","page_number":50,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"de2964e1-2b48-4283-a580-1f02c0f6db2a","block_type":"box","text":"create educational content about the Fund or other Products that is featured on an Intermediary’s","page_number":50,"box":{"x":116,"y":583,"width":727,"height":12}},{"id":"de647c96-ec8c-4dde-8e38-188385f841d6","block_type":"box","text":"platform, or otherwise promote the Fund or other Products. BFA Entities may also reimburse expenses","page_number":50,"box":{"x":117,"y":599,"width":767,"height":12}},{"id":"469266f4-546a-419c-8919-4d4dbc04c4df","block_type":"box","text":"or make payments from their own assets to Intermediaries or other persons in consideration of","page_number":50,"box":{"x":116,"y":614,"width":706,"height":12}},{"id":"fc49f460-2e7d-430e-aef0-724e890668c1","block_type":"box","text":"services or other activities that the BFA Entities believe may benefit the business of the BFA Entities or","page_number":50,"box":{"x":116,"y":630,"width":769,"height":12}},{"id":"93e4f429-6cb2-444e-b3ac-54579b7a6688","block_type":"box","text":"facilitate investment in the Fund or other Products. Payments of the type described above are","page_number":50,"box":{"x":116,"y":645,"width":700,"height":12}},{"id":"c8ea9ed5-73a8-4d76-99dd-beefbdf2029d","block_type":"box","text":"sometimes referred to as revenue-sharing payments.","page_number":50,"box":{"x":116,"y":661,"width":393,"height":12}},{"id":"aeb0d71b-ac2c-4a00-9a1e-f7f677a78e2a","block_type":"box","text":"Payments to an Intermediary may be significant to the Intermediary, and amounts that Intermediaries","page_number":50,"box":{"x":117,"y":692,"width":749,"height":12}},{"id":"7ee5f88a-c3b7-414e-90e1-2f765c7c3aa7","block_type":"box","text":"pay to your salesperson or other investment professional may also be significant for your salesperson","page_number":50,"box":{"x":117,"y":707,"width":753,"height":12}},{"id":"040a38d9-32c9-4162-a393-bc5dcc10afc6","block_type":"box","text":"or other investment professional. Because an Intermediary may make decisions about which","page_number":50,"box":{"x":116,"y":723,"width":686,"height":12}},{"id":"dff25bab-4beb-4ae2-8826-3cab7159163e","block_type":"box","text":"investment options it will recommend or make available to its clients, what services to provide for","page_number":50,"box":{"x":117,"y":738,"width":717,"height":12}},{"id":"01d55a77-4d2b-4a69-9e4f-2c8583f481fc","block_type":"box","text":"various products or what marketing content to make available to its clients based on payments it","page_number":50,"box":{"x":116,"y":754,"width":714,"height":12}},{"id":"719dc59e-6705-422d-a2e0-1ab6ef554de5","block_type":"box","text":"receives or is eligible to receive, such payments may create conflicts of interest between the","page_number":50,"box":{"x":117,"y":769,"width":683,"height":12}},{"id":"dd606cee-0f9f-487a-8c50-cd329789e784","block_type":"box","text":"Intermediary and its clients. These financial incentives may cause the Intermediary to recommend the","page_number":50,"box":{"x":117,"y":785,"width":753,"height":12}},{"id":"9b9bdb2b-5c62-45dc-abf6-18faedcc3433","block_type":"box","text":"Fund or other Products or otherwise promote the Fund or other Products over other investments. The","page_number":50,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"c8653d84-f0fa-4475-8639-68d9514adc15","block_type":"box","text":"same conflicts of interest and financial incentives exist with respect to your salesperson or other","page_number":50,"box":{"x":116,"y":816,"width":712,"height":12}},{"id":"aa9ff7c6-9d52-4cc4-840a-978da33efa43","block_type":"box","text":"investment professional if he or she receives similar payments from his or her Intermediary firm.","page_number":50,"box":{"x":117,"y":831,"width":716,"height":12}},{"id":"e78dd341-6c0b-4fc5-b284-c4248cbfc541","block_type":"box","text":"In addition to the payments described above, BFA Entities have developed proprietary tools,","page_number":50,"box":{"x":117,"y":862,"width":689,"height":12}},{"id":"94a6d7f7-302d-49a2-a698-bde2281152e3","block_type":"box","text":"calculators and related interactive or digital content that is made available through the","page_number":50,"box":{"x":116,"y":878,"width":641,"height":12}},{"id":"ee978d9d-2548-4cb8-af12-73a31a544e34","block_type":"box","text":"47","page_number":50,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"a1cbc15f-f43b-4334-896b-d07724bbbb99","block_type":"box","text":"NM1026U-6039989-50/256","page_number":50,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"02aed4d9-2016-4d7e-bc20-37218c8c64f7","block_type":"box","text":"www.blackrock.com website at no additional cost to Intermediaries. BlackRock may configure these","page_number":51,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"ea739e72-860f-49ee-a7e9-c9fbf99485b8","block_type":"box","text":"tools and calculators and localize the content for Intermediaries as part of its customary digital","page_number":51,"box":{"x":116,"y":102,"width":703,"height":13}},{"id":"16ff8cfa-788a-4626-912d-0845c7f8b853","block_type":"box","text":"marketing support and promotion of the Fund or other Products.","page_number":51,"box":{"x":117,"y":118,"width":479,"height":12}},{"id":"c7a2a238-d181-4352-ae61-b59414c2b2bf","block_type":"box","text":"As of March 1, 2013, BFA Entities have contractual arrangements to make payments (in addition to","page_number":51,"box":{"x":116,"y":149,"width":742,"height":12}},{"id":"141b76c6-e66f-4060-a86c-8a8c79a9e32b","block_type":"box","text":"payments for Education Costs or Publishing Costs) to one Intermediary, Fidelity Brokerage Services","page_number":51,"box":{"x":117,"y":165,"width":747,"height":12}},{"id":"b5bfc3e2-17ac-41ef-9768-4557e9f50dc5","block_type":"box","text":"LLC (“FBS”). Effective June 4, 2016, this relationship was expanded to include National Financial","page_number":51,"box":{"x":117,"y":180,"width":725,"height":12}},{"id":"19cd6f85-1a84-4027-bb3a-c15a151194e4","block_type":"box","text":"Services, LLC (“NFS”), an affiliate of FBS. Pursuant to this special, long-term and significant","page_number":51,"box":{"x":116,"y":196,"width":688,"height":12}},{"id":"eb1432a0-b595-46c7-afa4-57c9fe985027","block_type":"box","text":"arrangement (the “Marketing Program”), FBS, NFS and certain of their affiliates (collectively “Fidelity”)","page_number":51,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"5211e657-6e8e-4603-b113-6c22fa2b85ee","block_type":"box","text":"have agreed, among other things, to actively promote certain funds and Products to customers,","page_number":51,"box":{"x":117,"y":227,"width":712,"height":12}},{"id":"9dec96e7-5388-4aab-b93d-3ccc17364a5e","block_type":"box","text":"investment professionals and other intermediaries and in advertising campaigns as the preferred","page_number":51,"box":{"x":117,"y":242,"width":721,"height":12}},{"id":"e8c6785c-c724-4b7a-b428-27cfa72c0e4d","block_type":"box","text":"exchange-traded product, to offer certain funds and Products in certain Fidelity platforms and","page_number":51,"box":{"x":116,"y":258,"width":696,"height":12}},{"id":"15b4fff6-b240-4cb6-9335-d308934d4325","block_type":"box","text":"investment programs, in some cases at a waived or reduced commission rate or ticket charge, and to","page_number":51,"box":{"x":117,"y":273,"width":756,"height":12}},{"id":"05855634-130e-4ecc-acef-16e195cab433","block_type":"box","text":"provide marketing data to BFA Entities. BFA Entities have agreed to facilitate the Marketing Program","page_number":51,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"95b427e9-a9e1-43c2-99f3-8b9dfc792609","block_type":"box","text":"by, among other things, making certain payments to FBS and NFS for marketing and implementing","page_number":51,"box":{"x":117,"y":304,"width":739,"height":12}},{"id":"7ec27b85-9130-4c63-982f-30712c099e16","block_type":"box","text":"certain brokerage and investment programs. Upon termination of the arrangement, the BFA Entities","page_number":51,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"0a75ad73-dac0-45dd-a522-c24e2a0b0474","block_type":"box","text":"will make additional payments to FBS and/or NFS based upon a number of criteria, including the","page_number":51,"box":{"x":116,"y":335,"width":721,"height":12}},{"id":"ced041c3-5e71-4a56-a1c6-8bb4529ed9c9","block_type":"box","text":"overall success of the Marketing Program and the level of services provided by FBS and NFS during","page_number":51,"box":{"x":116,"y":351,"width":751,"height":12}},{"id":"1fdd4800-0c8b-454f-8fd4-566aeb612cec","block_type":"box","text":"the wind-down period.","page_number":51,"box":{"x":116,"y":366,"width":169,"height":12}},{"id":"96f980c0-bd43-4d75-8405-f7bb4f76e9b1","block_type":"box","text":"In addition, BFA Entities have entered into other contractual arrangements with Intermediaries and","page_number":51,"box":{"x":117,"y":397,"width":735,"height":12}},{"id":"1f7e95e6-a3aa-408b-9148-ebc84f9c2ffa","block_type":"box","text":"certain other third parties that the BFA Entities believe may benefit the business of the BFA Entities or","page_number":51,"box":{"x":116,"y":413,"width":761,"height":12}},{"id":"523d0017-a165-459e-b4aa-77c81574bd03","block_type":"box","text":"facilitate investment in the Fund or certain Products. Such agreements can include payments by BFA","page_number":51,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"33ed58a4-471e-478a-821a-ab12e3e49c96","block_type":"box","text":"Entities to such Intermediaries and third parties for data collection and provision, technology support,","page_number":51,"box":{"x":117,"y":444,"width":752,"height":12}},{"id":"ea294c37-b4ac-4150-978c-2ed25151bef7","block_type":"box","text":"platform enhancement, or educational content, co-marketing and cross-promotional efforts. In certain","page_number":51,"box":{"x":117,"y":459,"width":754,"height":12}},{"id":"2712cb36-c953-451d-986c-764906d882ef","block_type":"box","text":"cases, such payments to Intermediaries are subject to certain minimum payment levels or tiered","page_number":51,"box":{"x":116,"y":475,"width":718,"height":12}},{"id":"ccf26d64-5ab6-4a0d-a2c0-d3286a62cf85","block_type":"box","text":"payments. With respect to certain funds and Products, payments by the BFA Entities may take the","page_number":51,"box":{"x":117,"y":490,"width":734,"height":12}},{"id":"cd202000-232b-433f-9adc-642d0409a705","block_type":"box","text":"form of, among other things, “due diligence” payments for an Intermediary’s review of such funds and","page_number":51,"box":{"x":116,"y":506,"width":757,"height":12}},{"id":"d6ab03e3-2798-4b13-aa83-b74b2b414b45","block_type":"box","text":"Products; payment for providing employee training and information relating to such funds and","page_number":51,"box":{"x":117,"y":521,"width":697,"height":12}},{"id":"8b9ff01a-1bee-4874-bd34-9339759b2251","block_type":"box","text":"Products; fees for access (in some cases on a preferential basis) to an Intermediary’s registered","page_number":51,"box":{"x":117,"y":537,"width":719,"height":12}},{"id":"d9acb533-b61c-4c81-bc09-f3a4957f757f","block_type":"box","text":"representatives, salespersons or other personnel, fees for maintaining an Intermediary’s investor","page_number":51,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"1870e8cd-47aa-48b9-b51c-5bf3e93fabd1","block_type":"box","text":"platform, “shelf space” payments for making such funds and Products available on the Intermediary’s","page_number":51,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"64e2ee4a-4402-40b5-8abd-744c7bb94e5d","block_type":"box","text":"platform or fees for providing assistance in promoting the sale of such funds and Products. In such","page_number":51,"box":{"x":117,"y":583,"width":735,"height":12}},{"id":"78b2e5fa-89c7-42bb-a116-3cc97bdca520","block_type":"box","text":"cases, the payments to Intermediaries may be tiered or based on a percentage of the value of the","page_number":51,"box":{"x":116,"y":599,"width":731,"height":12}},{"id":"8fe5ca26-5012-446d-a382-be041dbfd615","block_type":"box","text":"funds and Products held by customers of the applicable Intermediary and may also be subject to","page_number":51,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"7674d830-9634-4a68-b90c-6299d456ef6f","block_type":"box","text":"minimum payment levels. Payments made pursuant to such arrangements may vary in any year and","page_number":51,"box":{"x":117,"y":630,"width":750,"height":12}},{"id":"162e5f17-adb3-44ac-86ad-34c0617d2971","block_type":"box","text":"may be different for different Intermediaries and third parties and may reflect different services","page_number":51,"box":{"x":117,"y":645,"width":703,"height":12}},{"id":"7d460fb2-59d2-45b9-a9f8-e34fcbc5f260","block_type":"box","text":"provided. As of the date of this SAI, the Intermediaries and other third parties (or their respective","page_number":51,"box":{"x":117,"y":661,"width":714,"height":12}},{"id":"149be6f4-a7e3-40d3-a9d8-cef2a7be70dd","block_type":"box","text":"affiliates) receiving one or more types of the contractual payments described above include (in addition","page_number":51,"box":{"x":116,"y":676,"width":763,"height":12}},{"id":"229fa8ee-96a0-4f2d-a870-b8a880f17c04","block_type":"box","text":"to FBS and NFS): &Partners, Advisor Credit Exchange, AE Wealth Management, LLC, American","page_number":51,"box":{"x":116,"y":692,"width":718,"height":12}},{"id":"45d39dfc-93a6-4363-b69b-51c4f552bb6d","block_type":"box","text":"Enterprise Investment Services, Inc., Avantax Investment Services, Inc., BNY Mellon Capital Markets,","page_number":51,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"5800b1a8-9533-4ac1-b3d7-787f5d09e287","block_type":"box","text":"LLC, BNY Mellon Performance & Risk Analytics, LLC, Cetera Financial Group, Inc., Charles Schwab &","page_number":51,"box":{"x":117,"y":723,"width":762,"height":12}},{"id":"9a84b374-83bd-48af-8413-7dd905449efc","block_type":"box","text":"Co., Inc., Clearstream Fund Centre AG, Commonwealth Equity Services, LLC, Dorsey Wright and","page_number":51,"box":{"x":117,"y":738,"width":725,"height":12}},{"id":"bde1b885-1883-4e9f-ae1f-fd99f3caa552","block_type":"box","text":"Associates, LLC, Dynasty Financial Partners LLC, E*Trade Securities LLC, Envestnet Asset","page_number":51,"box":{"x":116,"y":754,"width":683,"height":12}},{"id":"780080c0-b935-49a6-8a50-91665a7245cb","block_type":"box","text":"Management, Inc., Equitable Advisors, LLC, iCapital Markets LLC, Interactive Brokers LLC, LPL","page_number":51,"box":{"x":117,"y":769,"width":712,"height":12}},{"id":"a5af0199-4743-438a-9256-b717800f179e","block_type":"box","text":"Financial LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, MML Investors Services, LLC,","page_number":51,"box":{"x":117,"y":785,"width":721,"height":12}},{"id":"f910c377-065e-493d-b948-bc4727445ac7","block_type":"box","text":"Morgan Stanley Smith Barney LLC, Northwestern Mutual Investment Services, LLC, Orion Portfolio","page_number":51,"box":{"x":117,"y":800,"width":735,"height":12}},{"id":"38272176-7333-4022-9a7c-f215667c0eca","block_type":"box","text":"Solutions, LLC, Pershing LLC, Raymond James Financial Services, Inc., Riskalyze, Inc., Rockefeller","page_number":51,"box":{"x":116,"y":816,"width":746,"height":12}},{"id":"989e4d00-2ee5-4e8f-81ca-36b8884ac948","block_type":"box","text":"Financial LLC, Sanctuary Wealth Group, LLC, UBS Financial Services Inc., Wells Fargo Clearing","page_number":51,"box":{"x":117,"y":831,"width":724,"height":12}},{"id":"84050712-f07d-4b8b-bde5-c2388484b71a","block_type":"box","text":"Services, LLC and Wells Fargo Advisors Financial Network, LLC. Any additions, modifications, or","page_number":51,"box":{"x":116,"y":847,"width":726,"height":12}},{"id":"f33100c7-b4eb-4482-a9d3-7f98458955dd","block_type":"box","text":"deletions to Intermediaries and other third parties listed above that have occurred since the date of this","page_number":51,"box":{"x":116,"y":862,"width":768,"height":12}},{"id":"11bc95f3-2f21-4cdf-8543-f6eea71b378d","block_type":"box","text":"SAI are not included in the list.","page_number":51,"box":{"x":116,"y":878,"width":232,"height":9}},{"id":"2e4f6711-5cf1-4a39-bfe4-738355d0f9f5","block_type":"box","text":"48","page_number":51,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"735f348b-2212-4516-8e40-20eca15d2858","block_type":"box","text":"NM1026U-6039989-51/256","page_number":51,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"4bdf3101-c860-43a4-be16-3a3fd3cfa5c0","block_type":"box","text":"Further, BFA Entities make Education Costs and Publishing Costs payments to other Intermediaries","page_number":52,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"38b53507-1669-47a8-b088-c6e108e5d9f0","block_type":"box","text":"that are not listed in the immediately preceding paragraph. BFA Entities may determine to make such","page_number":52,"box":{"x":116,"y":103,"width":757,"height":12}},{"id":"900371a4-18e9-4a59-8076-c6d300d5ad17","block_type":"box","text":"payments based on any number of metrics. For example, BFA Entities may make payments at year","page_number":52,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"4b8d4a80-ae6b-4c9b-8ff1-b731af84dd07","block_type":"box","text":"end or other intervals in a fixed amount, an amount based upon an Intermediary’s services at defined","page_number":52,"box":{"x":116,"y":134,"width":756,"height":12}},{"id":"9c1989ca-01da-42b3-970c-337c9ee17a36","block_type":"box","text":"levels or an amount based on the Intermediary’s net sales of one or more Products, including the","page_number":52,"box":{"x":117,"y":149,"width":724,"height":12}},{"id":"01f5767e-ec6f-403f-b103-a967eb406458","block_type":"box","text":"Fund, in a year or other period, any of which arrangements may include an agreed-upon minimum or","page_number":52,"box":{"x":117,"y":165,"width":752,"height":12}},{"id":"0e895524-1dd3-46a6-99d8-11722b73b083","block_type":"box","text":"maximum payment, or any combination of the foregoing.","page_number":52,"box":{"x":117,"y":180,"width":424,"height":12}},{"id":"3f2aefeb-122a-4694-84a8-a2a92d5744f5","block_type":"box","text":"Please contact your salesperson or other","page_number":52,"box":{"x":542,"y":180,"width":329,"height":12}},{"id":"2c377ef9-c830-45b8-9666-3b4b0d491a9e","block_type":"box","text":"investment professional for more information regarding any such payments or financial","page_number":52,"box":{"x":117,"y":196,"width":705,"height":12}},{"id":"68543905-2793-4596-a294-93e42da12fa2","block_type":"box","text":"incentives his or her Intermediary firm may receive. Any payments made, or financial incentives","page_number":52,"box":{"x":117,"y":211,"width":770,"height":12}},{"id":"70384dfe-2847-4a33-8912-a241ac1f335b","block_type":"box","text":"offered, by the BFA Entities to an Intermediary may create the incentive for the Intermediary to","page_number":52,"box":{"x":116,"y":227,"width":760,"height":12}},{"id":"990ccaac-b2d0-4c6f-8c87-d284e08a8a5f","block_type":"box","text":"encourage customers to buy shares of the Fund or other Products.","page_number":52,"box":{"x":116,"y":242,"width":535,"height":12}},{"id":"c4617afb-3f9f-49e7-a339-ccce18a0b6e8","block_type":"box","text":"The Fund may participate in certain market maker incentive programs of a national securities","page_number":52,"box":{"x":116,"y":274,"width":695,"height":12}},{"id":"5e6adf0a-6c4e-40d5-848c-f7404a16406f","block_type":"box","text":"exchange in which an affiliate of the Fund would pay a fee to the exchange used for the purpose of","page_number":52,"box":{"x":116,"y":289,"width":739,"height":12}},{"id":"f3c4117b-074b-4b5e-8338-5d34b8a5792e","block_type":"box","text":"incentivizing one or more market makers in the securities of the Fund to enhance the liquidity and","page_number":52,"box":{"x":117,"y":305,"width":728,"height":12}},{"id":"dd03f8fa-acd4-4693-bcd3-bfd4f7eff501","block_type":"box","text":"quality of the secondary market of securities of the Fund. The fee would then be credited by the","page_number":52,"box":{"x":116,"y":320,"width":714,"height":12}},{"id":"7b04e656-2882-491e-a4dd-a0e2add2124d","block_type":"box","text":"exchange to one or more market makers that meet or exceed liquidity and market quality standards","page_number":52,"box":{"x":116,"y":336,"width":743,"height":12}},{"id":"99c4e594-9367-4374-9c40-4b7fbab5d554","block_type":"box","text":"with respect to the securities of the Fund. Each market maker incentive program is subject to approval","page_number":52,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"a4d07939-db3e-492a-8efe-c97dc9097949","block_type":"box","text":"from the SEC. Any such fee payments made to an exchange will be made by an affiliate of the Fund","page_number":52,"box":{"x":116,"y":367,"width":748,"height":12}},{"id":"49b6f76e-1974-42d6-8f05-49555bd320f2","block_type":"box","text":"solely for the benefit of the Fund and will not","page_number":52,"box":{"x":116,"y":382,"width":334,"height":12}},{"id":"8728d856-f97e-4f79-aab5-e08ba362c402","block_type":"box","text":"be paid from any Fund assets. Other funds managed by","page_number":52,"box":{"x":451,"y":382,"width":420,"height":12}},{"id":"ecbef45c-50b6-4f2f-9cfd-31c27a3860ce","block_type":"box","text":"BFA may also participate in such programs.","page_number":52,"box":{"x":117,"y":398,"width":329,"height":12}},{"id":"8bc99cce-e8d5-45e5-a72a-c0a9f4c3e1e4","block_type":"box","text":"Determination of Net Asset Value","page_number":52,"box":{"x":119,"y":451,"width":605,"height":23}},{"id":"975b97c5-8e9a-43c1-9e2f-4fdd904b9105","block_type":"box","text":"Valuation of Shares.","page_number":52,"box":{"x":116,"y":504,"width":160,"height":9}},{"id":"bdeb1c7c-7a37-4b38-876d-9957f9dbfde3","block_type":"box","text":"The NAV for the Fund is generally calculated as of the close of regular trading","page_number":52,"box":{"x":278,"y":504,"width":588,"height":12}},{"id":"e22d596b-f519-4b91-beb2-fded3f57123c","block_type":"box","text":"hours on the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. Eastern Time) on each business","page_number":52,"box":{"x":117,"y":519,"width":769,"height":13}},{"id":"0cf4e575-ea66-4f9a-b9bb-2eec09608dfc","block_type":"box","text":"day the NYSE is open. Valuation of assets held by the Fund is as follows:","page_number":52,"box":{"x":116,"y":535,"width":551,"height":12}},{"id":"ffeb19b3-64be-4fc9-8159-75944fe73f8e","block_type":"box","text":"Equity Investments.","page_number":52,"box":{"x":117,"y":567,"width":157,"height":12}},{"id":"5d09fb29-5cf8-4e48-82c0-7fb4e13ea803","block_type":"box","text":"Equity securities traded on a recognized securities exchange (e.g., NYSE), on","page_number":52,"box":{"x":275,"y":567,"width":589,"height":12}},{"id":"0fb5955f-da8b-4924-8397-17bc1367327d","block_type":"box","text":"separate trading boards of a securities exchange or through a market system that provides","page_number":52,"box":{"x":116,"y":582,"width":679,"height":12}},{"id":"a3cc27f1-efcb-4a11-bab4-28096541df7d","block_type":"box","text":"contemporaneous transaction pricing information (each, an “Exchange”) are valued using information","page_number":52,"box":{"x":116,"y":598,"width":756,"height":12}},{"id":"21933722-88c2-47fd-b2f4-febe9b5bb589","block_type":"box","text":"obtained via independent pricing services, generally at the Exchange closing price or if an Exchange","page_number":52,"box":{"x":116,"y":613,"width":751,"height":12}},{"id":"024c5ac9-7fb5-4925-bba8-0373696a0293","block_type":"box","text":"closing price is not available, the last traded price on that Exchange prior to the time as of which the","page_number":52,"box":{"x":116,"y":629,"width":745,"height":12}},{"id":"bbf837ea-03ee-4735-b448-c500f4196714","block_type":"box","text":"assets or liabilities are valued. However, under certain circumstances, other means of determining","page_number":52,"box":{"x":116,"y":644,"width":734,"height":12}},{"id":"9546e1bd-40b6-4854-86c6-36dfbccd1c60","block_type":"box","text":"current market value may be used. If an equity security is traded on more than one Exchange, the","page_number":52,"box":{"x":116,"y":660,"width":727,"height":12}},{"id":"6a8298b5-2e3f-45c7-90ee-c984e0f3ff5f","block_type":"box","text":"current market value of the security where it is primarily traded generally will be used. In the event that","page_number":52,"box":{"x":116,"y":675,"width":759,"height":12}},{"id":"cd044d18-ecbd-47b1-93fe-7676f702005a","block_type":"box","text":"there are no sales involving an equity security held by the Fund on a day on which the Fund values","page_number":52,"box":{"x":116,"y":691,"width":734,"height":12}},{"id":"dafeb089-14c2-4302-ab45-d5a64eb9fb52","block_type":"box","text":"such security, the prior day’s price will be used, unless BFA determines that such prior day’s price no","page_number":52,"box":{"x":116,"y":706,"width":749,"height":12}},{"id":"b2a08615-b9c1-4608-9775-7d2c1b3dc197","block_type":"box","text":"longer reflects the fair value of the security, in which","page_number":52,"box":{"x":117,"y":722,"width":384,"height":12}},{"id":"7e98155f-41fa-4e81-bad6-1c2056f8865b","block_type":"box","text":"case such asset would be treated as a Fair Value","page_number":52,"box":{"x":508,"y":722,"width":366,"height":9}},{"id":"967c77d2-73ee-4814-bbce-8ecc7df41922","block_type":"box","text":"Asset (as defined below).","page_number":52,"box":{"x":116,"y":737,"width":187,"height":12}},{"id":"b5777667-c797-4e62-8bd5-ee6f1d80cb28","block_type":"box","text":"Fixed-Income Investments.","page_number":52,"box":{"x":117,"y":769,"width":214,"height":10}},{"id":"5e84a0f9-e939-4d92-90c3-2aa337a3df00","block_type":"box","text":"Fixed-income securities are generally valued using prices provided by","page_number":52,"box":{"x":338,"y":769,"width":517,"height":12}},{"id":"f71173b6-4be5-4de0-9e18-5c12c801102f","block_type":"box","text":"dealers or prices (including evaluated prices) supplied by the Fund’s approved independent third-party","page_number":52,"box":{"x":116,"y":785,"width":759,"height":12}},{"id":"7ba8f092-2467-46f2-b02c-d6e93c1e47bc","block_type":"box","text":"pricing services, each in accordance with the Valuation Procedures. The pricing services may use","page_number":52,"box":{"x":117,"y":800,"width":725,"height":12}},{"id":"902a3185-ac33-4ed9-be32-a2bead9c8eb3","block_type":"box","text":"valuation models that utilize certain inputs and assumptions to derive values, including transaction data","page_number":52,"box":{"x":116,"y":816,"width":765,"height":12}},{"id":"98a35dfe-d7e6-4bfc-92d5-59663b98b0fa","block_type":"box","text":"(e.g., recent representative bids and offers), credit quality information, perceived market movements,","page_number":52,"box":{"x":117,"y":831,"width":752,"height":12}},{"id":"09885501-0a33-4af9-8d04-0318a1c5b171","block_type":"box","text":"news, and other relevant information and by other methods, which may include consideration of: yields","page_number":52,"box":{"x":117,"y":847,"width":766,"height":12}},{"id":"a37ea857-e175-4f3d-87fe-39e8f1e38ca9","block_type":"box","text":"or prices of securities of comparable quality, coupon, maturity and type; indications as to values from","page_number":52,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"c7a3ae9e-706b-4244-bc63-aa1fc0519119","block_type":"box","text":"dealers; general market conditions; and/or other factors and assumptions. Pricing services generally","page_number":52,"box":{"x":116,"y":878,"width":749,"height":12}},{"id":"4d88f8a0-d1a7-4dd3-bfd8-5907ee881e53","block_type":"box","text":"49","page_number":52,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"9183b33e-360b-4590-b93a-bdc2481d6fdf","block_type":"box","text":"NM1026U-6039989-52/256","page_number":52,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"4b573df7-ec9f-4c6e-b7ac-b05fde72f3b5","block_type":"box","text":"value fixed-income securities assuming orderly transactions of an institutional round lot size, but the","page_number":53,"box":{"x":116,"y":87,"width":745,"height":12}},{"id":"333d339f-6e02-4b93-b58b-e0d881242032","block_type":"box","text":"Fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots of securities in certain","page_number":53,"box":{"x":117,"y":102,"width":752,"height":13}},{"id":"26e7c5e2-acef-46a6-b013-a44471eaff2b","block_type":"box","text":"asset classes may trade at lower prices than institutional round lots, and the value ultimately realized","page_number":53,"box":{"x":116,"y":118,"width":753,"height":12}},{"id":"4771f60c-6ebf-4644-8d66-f50a5c864d0f","block_type":"box","text":"when the securities are sold could differ from the prices used by the Fund. The amortized cost method","page_number":53,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"e8854952-1699-4c25-8853-3a243ab13460","block_type":"box","text":"of valuation may be used with respect to debt obligations with 60 days or less remaining to maturity","page_number":53,"box":{"x":116,"y":149,"width":742,"height":12}},{"id":"f7f7e2e3-c53a-48ea-8c0b-05b1e9751f21","block_type":"box","text":"unless such method does not represent fair value. Certain fixed-income investments, including asset","page_number":53,"box":{"x":117,"y":165,"width":750,"height":12}},{"id":"95a5861f-7c8a-4247-85e8-96c7e836b6ac","block_type":"box","text":"backed and mortgage related securities, may be valued based on valuation models that consider the","page_number":53,"box":{"x":117,"y":180,"width":751,"height":12}},{"id":"ddd2f899-6e33-439d-9c75-d68d4731dbe2","block_type":"box","text":"estimated cash flows of each tranche of the issuer, establish a benchmark yield and develop an","page_number":53,"box":{"x":116,"y":196,"width":715,"height":12}},{"id":"1afa49fc-56f0-4a63-b533-8858dd9591ab","block_type":"box","text":"estimated tranche specific spread to the benchmark yield based on the unique attributes of the","page_number":53,"box":{"x":116,"y":211,"width":707,"height":12}},{"id":"42f43d30-241a-4a8f-9379-49a364ad83a1","block_type":"box","text":"tranche.","page_number":53,"box":{"x":116,"y":227,"width":65,"height":9}},{"id":"c30d8e78-a88d-41ec-9d02-edae4269a0df","block_type":"box","text":"Options, Futures, Swaps and Other Derivatives.","page_number":53,"box":{"x":116,"y":258,"width":379,"height":11}},{"id":"95be8596-1c70-42e3-8a35-63921ac680a6","block_type":"box","text":"Exchange-traded equity options (except ETF","page_number":53,"box":{"x":497,"y":258,"width":342,"height":12}},{"id":"801d0faf-59ae-4a96-86da-a64111703026","block_type":"box","text":"options, equity index options or those that are customized) for which market quotations are readily","page_number":53,"box":{"x":116,"y":273,"width":733,"height":12}},{"id":"156bbf56-25ed-40c8-add7-799341c7876e","block_type":"box","text":"available are valued at the mean of the last bid and ask prices as quoted on the Exchange or the board","page_number":53,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"f5e7b27f-f630-493b-96ea-a3183b85ae0e","block_type":"box","text":"of trade on which such options are traded. In the event that there is no mean price available for an","page_number":53,"box":{"x":116,"y":304,"width":734,"height":12}},{"id":"b9c37aeb-4c00-45be-b534-1d7a7fce0ffa","block_type":"box","text":"exchange-traded equity option held by the Fund on a day on which the Fund values such option, the","page_number":53,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"4abe9ad4-8a6b-43b4-accf-be0595c0d597","block_type":"box","text":"last bid (long positions) or ask (short positions) price, if available, will be used as the value of such","page_number":53,"box":{"x":117,"y":335,"width":732,"height":12}},{"id":"186238c6-d09e-45a7-9ebb-35aa191eeba1","block_type":"box","text":"option. If no bid or ask price is available on a day on which the Fund values such option, the prior day’s","page_number":53,"box":{"x":116,"y":351,"width":770,"height":12}},{"id":"9b87829d-e592-4d10-99d1-99575a535f00","block_type":"box","text":"price will be used, unless BFA determines that such prior day’s price no longer reflects the fair value of","page_number":53,"box":{"x":117,"y":366,"width":766,"height":12}},{"id":"dd314c5c-2a76-45f3-8093-6dad28c8fb11","block_type":"box","text":"the option, in which case such option will be treated as a Fair Value Asset. Customized exchange","page_number":53,"box":{"x":116,"y":382,"width":729,"height":12}},{"id":"f6dec32e-38b8-4670-a049-e2240666c8f8","block_type":"box","text":"traded equity options, ETF options, equity index options and OTC derivatives, may be valued using a","page_number":53,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"fb5cd156-2247-4960-8f69-72e554738dc9","block_type":"box","text":"mathematical model which may incorporate a number of market data factors. Financial futures","page_number":53,"box":{"x":117,"y":413,"width":703,"height":12}},{"id":"f0005702-8629-4a8e-b1f7-c18cc608095a","block_type":"box","text":"contracts and options thereon, which are traded on exchanges, are valued at their last sale price or","page_number":53,"box":{"x":116,"y":428,"width":741,"height":12}},{"id":"a922d247-57d3-4eaa-ac6d-18a0ffdf22fb","block_type":"box","text":"settle price as of the close of such exchanges. Swap agreements and other derivatives are generally","page_number":53,"box":{"x":116,"y":444,"width":752,"height":12}},{"id":"202612f5-fa19-4731-9a39-723a4ff8a0ab","block_type":"box","text":"valued daily based upon quotations from market makers or by a pricing service in accordance with the","page_number":53,"box":{"x":116,"y":459,"width":763,"height":12}},{"id":"023fb48c-49ac-4112-8656-e58d00c64489","block_type":"box","text":"Valuation Procedures.","page_number":53,"box":{"x":116,"y":475,"width":170,"height":9}},{"id":"fed81932-e494-4f56-aaa6-a024ef599b7e","block_type":"box","text":"Underlying Funds.","page_number":53,"box":{"x":117,"y":506,"width":145,"height":12}},{"id":"7057dc82-d542-4e5f-8ad6-9628a8e67d2f","block_type":"box","text":"Shares of underlying open-end funds that are not traded on an exchange","page_number":53,"box":{"x":263,"y":506,"width":553,"height":12}},{"id":"a603041b-e8c7-40d8-85fb-087bf23a69f9","block_type":"box","text":"(including money market funds) are valued at NAV. Shares of underlying exchange-traded closed-end","page_number":53,"box":{"x":117,"y":521,"width":761,"height":12}},{"id":"b02e1a02-67c5-444a-b95f-e0d65e67e9f0","block_type":"box","text":"funds or other ETFs will be valued at their most recent closing price.","page_number":53,"box":{"x":116,"y":537,"width":511,"height":12}},{"id":"a047886d-a1f9-4f30-860f-5c5d78f74e1f","block_type":"box","text":"General Valuation Information.","page_number":53,"box":{"x":116,"y":568,"width":244,"height":9}},{"id":"f57110e1-f16f-4793-8a90-72af48e455e0","block_type":"box","text":"Prices obtained from independent third-party pricing services, broker","page_number":53,"box":{"x":361,"y":568,"width":520,"height":12}},{"id":"160ca248-42a5-42bd-89a9-f85014ee39d5","block_type":"box","text":"dealers or market makers to value the Fund’s securities and other assets and liabilities are based on","page_number":53,"box":{"x":116,"y":583,"width":751,"height":10}},{"id":"5607270c-14b0-4801-a66d-adc036af334e","block_type":"box","text":"information available at the time the Fund values its assets and liabilities. In the event that a pricing","page_number":53,"box":{"x":117,"y":599,"width":740,"height":12}},{"id":"920af2ec-b349-412e-9fc9-5ea51ccffc34","block_type":"box","text":"service quotation is revised or updated subsequent to the day on which the Fund valued such security,","page_number":53,"box":{"x":116,"y":614,"width":767,"height":12}},{"id":"43f6a2f5-1c3b-46a2-84e2-68c3c4215d72","block_type":"box","text":"the revised pricing service quotation generally will be applied prospectively. Such determination will be","page_number":53,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"f055d621-7327-4607-aad8-32baa77c4ffa","block_type":"box","text":"made considering pertinent facts and circumstances surrounding the revision.","page_number":53,"box":{"x":117,"y":645,"width":581,"height":12}},{"id":"87c8ba54-198b-409d-bcb6-714cf92d32c8","block_type":"box","text":"The price the Fund could receive upon the sale of any particular portfolio investment may differ from","page_number":53,"box":{"x":116,"y":676,"width":742,"height":12}},{"id":"14551037-4733-41b5-96ea-a91d1acbc0a7","block_type":"box","text":"the Fund’s valuation of the investment, particularly for assets that trade in thin or volatile markets or","page_number":53,"box":{"x":116,"y":692,"width":738,"height":12}},{"id":"747b797d-cf10-483b-b54b-91633a178f90","block_type":"box","text":"that are valued using a fair valuation methodology or a price provided by an independent pricing","page_number":53,"box":{"x":116,"y":707,"width":711,"height":12}},{"id":"baf3ce88-ff96-43f4-89a4-79be9246e015","block_type":"box","text":"service. As a result, the price received upon the sale of an investment may be less than the value","page_number":53,"box":{"x":116,"y":723,"width":723,"height":12}},{"id":"a98044df-1d9f-404f-ad55-39c509cebf4c","block_type":"box","text":"ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected","page_number":53,"box":{"x":116,"y":738,"width":760,"height":12}},{"id":"cb9579d4-5f8f-4b2c-b5d3-54ff3aae86d8","block_type":"box","text":"gain upon the sale of the investment. The Fund’s ability to value its investment may also be impacted","page_number":53,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"39af7887-7725-4535-8c36-3434fbe6d3a2","block_type":"box","text":"by technological issues and/or errors by pricing services or other third-party service providers.","page_number":53,"box":{"x":117,"y":769,"width":694,"height":12}},{"id":"1794345c-dfdd-4037-9bfc-426e389aec64","block_type":"box","text":"In the event that application of the methods of valuation discussed above result in a price for a security","page_number":53,"box":{"x":117,"y":800,"width":761,"height":12}},{"id":"ea3dee7a-0ebb-4d96-9cda-f36383d8216f","block_type":"box","text":"which is deemed not to be representative of the fair market value of such security, the security will be","page_number":53,"box":{"x":116,"y":816,"width":751,"height":12}},{"id":"3cfd0cc0-08d0-4ad4-a116-ad05c57a0594","block_type":"box","text":"valued by, under the direction of or in accordance with a method approved by BFA, the Fund’s","page_number":53,"box":{"x":116,"y":831,"width":705,"height":12}},{"id":"94bdb654-83dd-499a-a17c-ec685fcaff8b","block_type":"box","text":"valuation designee, as reflecting fair value. All other assets and liabilities (including securities for which","page_number":53,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"42820f00-7f74-409c-a229-dd729892ffd8","block_type":"box","text":"market quotations are not readily available) held by the Fund (including restricted securities and private","page_number":53,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"1f27e379-ac73-4cc6-9673-1407bf25c066","block_type":"box","text":"market investments, as applicable) are valued at fair value as determined in good faith by BFA","page_number":53,"box":{"x":117,"y":878,"width":705,"height":12}},{"id":"101453d5-ae50-4b51-8fbe-8fcd1114def5","block_type":"box","text":"50","page_number":53,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"e7298bf8-1305-422d-80ca-fe6397d2c0fd","block_type":"box","text":"NM1026U-6039989-53/256","page_number":53,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ba3906c4-78bc-4022-9b21-673886a95f87","block_type":"box","text":"pursuant to the Valuation Procedures. Any assets and liabilities which are denominated in a foreign","page_number":54,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"35d1dadc-6d56-4005-a26f-9892d930d9b4","block_type":"box","text":"currency are translated into U.S. dollars at the prevailing market rates.","page_number":54,"box":{"x":116,"y":102,"width":527,"height":13}},{"id":"1ba40099-2af3-4766-9ce2-c28af884d856","block_type":"box","text":"Fair Value.","page_number":54,"box":{"x":117,"y":134,"width":83,"height":9}},{"id":"0b95495a-a73d-4cb7-ac4a-8bf7e8b6dfc0","block_type":"box","text":"When market quotations are not readily available or are believed by BFA to be unreliable,","page_number":54,"box":{"x":201,"y":134,"width":674,"height":12}},{"id":"9e43eec4-aeca-436a-a711-fc4f3105fb21","block_type":"box","text":"the Fund’s investments are valued at fair value (“Fair Value Assets”). Fair Value Assets are valued by","page_number":54,"box":{"x":116,"y":149,"width":758,"height":12}},{"id":"e6d1e6cc-4f93-47bc-8a46-9189d3088143","block_type":"box","text":"BFA in accordance with the Valuation Procedures. Pursuant to Rule 2a-5 under the Investment","page_number":54,"box":{"x":117,"y":165,"width":710,"height":9}},{"id":"cba889fe-0ef8-4323-8f40-d344c76dfffa","block_type":"box","text":"Company Act, the Board has designated BFA as the valuation designee for the Fund. BFA may","page_number":54,"box":{"x":117,"y":180,"width":712,"height":12}},{"id":"27123296-d479-494e-a739-6fa8866aecdd","block_type":"box","text":"reasonably conclude that a market quotation is not readily available or is unreliable if, among other","page_number":54,"box":{"x":117,"y":196,"width":736,"height":12}},{"id":"6b9cba82-a789-4f8f-9810-205423ef6ea4","block_type":"box","text":"things, a security or other asset or liability does not have a price source due to its complete lack of","page_number":54,"box":{"x":116,"y":211,"width":733,"height":12}},{"id":"6814ddc2-f302-4fff-80b3-0ef318ee2a7b","block_type":"box","text":"trading, if BFA believes a market quotation from a broker-dealer or other source is unreliable (e.g.,","page_number":54,"box":{"x":116,"y":227,"width":734,"height":12}},{"id":"310ed6d0-5af2-4e82-b5e9-62e5851a3625","block_type":"box","text":"where it varies significantly from a recent trade, or no longer reflects the fair value of the security or","page_number":54,"box":{"x":116,"y":242,"width":740,"height":12}},{"id":"164febd1-6d65-4c5d-9a0e-fe3045498d56","block_type":"box","text":"other asset or liability subsequent to the most recent market quotation), or where the security or other","page_number":54,"box":{"x":116,"y":258,"width":758,"height":12}},{"id":"fa6b52b8-adaa-4f49-a7bf-68eda31b8fbc","block_type":"box","text":"asset or liability is only thinly traded or due to the occurrence of a significant event subsequent to the","page_number":54,"box":{"x":116,"y":273,"width":752,"height":12}},{"id":"781ec97b-87d8-4d98-8b1f-1c9ca560331a","block_type":"box","text":"most recent market quotation. For this purpose, a “significant event” is deemed to occur if BFA","page_number":54,"box":{"x":117,"y":289,"width":705,"height":12}},{"id":"b9b37a08-763a-47f2-99ad-8a976e281f0b","block_type":"box","text":"determines, in its reasonable business judgment, that an event has occurred after the close of trading","page_number":54,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"12bc9662-3cd0-4bdc-a3e1-939bf31ba1d0","block_type":"box","text":"for an asset or liability but prior to or at the time of pricing the Fund’s assets or liabilities, is likely to","page_number":54,"box":{"x":116,"y":320,"width":735,"height":12}},{"id":"22c639f2-13a7-4867-8980-fd9caa29e414","block_type":"box","text":"cause a material change to the last exchange closing price or closing market price of one or more","page_number":54,"box":{"x":116,"y":335,"width":730,"height":12}},{"id":"29ffc260-3130-46e9-b089-368542514db5","block_type":"box","text":"assets held by, or liabilities of, the Fund. On any day the NYSE is open and a foreign market or the","page_number":54,"box":{"x":116,"y":351,"width":739,"height":12}},{"id":"c75188e5-2fcf-450b-b7fd-9164edc3d770","block_type":"box","text":"primary exchange on which a foreign asset or liability is traded is closed, such asset or liability will be","page_number":54,"box":{"x":117,"y":366,"width":753,"height":12}},{"id":"ccce9305-4fc9-49b3-bd73-6c1b0fabebce","block_type":"box","text":"valued using the prior day’s price, provided that BFA is not aware of any significant event or other","page_number":54,"box":{"x":116,"y":382,"width":729,"height":12}},{"id":"d462ea45-3642-48ba-a961-2190afc430d7","block_type":"box","text":"information that would cause such price to no longer reflect the fair value of the asset or liability, in","page_number":54,"box":{"x":117,"y":397,"width":733,"height":12}},{"id":"a6ff7383-3441-4f19-8609-42a6f70e3d9c","block_type":"box","text":"which case such asset or liability would be treated as a Fair Value Asset. For certain foreign assets, a","page_number":54,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"3686dc45-65e8-44a0-9058-01054aabeaab","block_type":"box","text":"third-party vendor supplies evaluated, systematic fair value pricing based upon the movement of a","page_number":54,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"a5570d1d-f911-4fa4-9482-cb2972046561","block_type":"box","text":"proprietary multi-factor model after the relevant foreign markets have closed. This systematic fair value","page_number":54,"box":{"x":117,"y":444,"width":767,"height":12}},{"id":"0dba3eb8-7f2b-41e3-8508-863cd82d39ec","block_type":"box","text":"pricing methodology is designed to correlate the prices of foreign assets in one or more non-U.S.","page_number":54,"box":{"x":117,"y":459,"width":723,"height":12}},{"id":"7fd3cf15-223a-4201-8075-1f03a69722aa","block_type":"box","text":"markets following the close of the local markets to the prices that might have prevailed as of the Fund’s","page_number":54,"box":{"x":117,"y":475,"width":770,"height":12}},{"id":"9c3b29a4-9ed7-4de2-b30c-598dbd7b07e3","block_type":"box","text":"pricing time.","page_number":54,"box":{"x":117,"y":490,"width":94,"height":12}},{"id":"3dee8421-6e3b-43e3-8113-48bbf971b924","block_type":"box","text":"BFA’s Rule 2a-5 Committee is responsible for reviewing and approving methodologies by investment","page_number":54,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"d3686151-0da5-409f-bd44-ac72d8a04fea","block_type":"box","text":"type and significant inputs used in the fair valuation of Fund assets or liabilities. In addition, the Fund’s","page_number":54,"box":{"x":116,"y":537,"width":763,"height":12}},{"id":"2542e700-541e-4e2c-9fb8-e2dae9bceb59","block_type":"box","text":"accounting agent assists BFA by periodically endeavoring to confirm the prices it receives from all","page_number":54,"box":{"x":116,"y":552,"width":731,"height":12}},{"id":"d2ec243f-2f69-49e3-8dca-cedf48dc5499","block_type":"box","text":"third-party pricing services, index providers and broker-dealers. BFA regularly evaluates the values","page_number":54,"box":{"x":116,"y":568,"width":740,"height":12}},{"id":"71cd4e17-45b4-444b-8f5b-d4762d7f887f","block_type":"box","text":"assigned to the securities and other assets and liabilities of the Fund.","page_number":54,"box":{"x":116,"y":583,"width":519,"height":12}},{"id":"a79f4657-0cc2-443d-819e-ca10ce61aa36","block_type":"box","text":"When determining the price for a Fair Value Asset, BFA will seek to determine the price that the Fund","page_number":54,"box":{"x":116,"y":614,"width":759,"height":12}},{"id":"3c72ea8b-51fe-4621-8de7-445b4caa3aba","block_type":"box","text":"might reasonably expect to receive from the current sale of that asset or liability in an arm’s-length","page_number":54,"box":{"x":117,"y":630,"width":732,"height":12}},{"id":"49fd64d9-209d-4373-9841-8312dad31847","block_type":"box","text":"transaction on the date on which the asset or liability is being valued, and does not seek to determine","page_number":54,"box":{"x":116,"y":645,"width":757,"height":12}},{"id":"d80618c8-750a-4744-ae80-c37efa19f60d","block_type":"box","text":"the price the Fund might reasonably expect to receive for selling an asset or liability at a later time or if","page_number":54,"box":{"x":116,"y":661,"width":760,"height":12}},{"id":"b22b18c5-9e59-41a0-a78d-2c9303009a1b","block_type":"box","text":"it holds the asset or liability to maturity. Fair value determinations will be based upon all available","page_number":54,"box":{"x":117,"y":676,"width":718,"height":12}},{"id":"75618df1-6b20-4204-9ba7-079e6ec24868","block_type":"box","text":"factors that BFA deems relevant at the time of the determination, and may be based on analytical","page_number":54,"box":{"x":116,"y":692,"width":722,"height":12}},{"id":"08b62223-2851-4367-bf37-f2c88b2cf7e2","block_type":"box","text":"values determined by BFA using proprietary or third-party valuation models.","page_number":54,"box":{"x":116,"y":707,"width":561,"height":12}},{"id":"fd6e4a31-f416-4f35-b049-ccb1877ef358","block_type":"box","text":"Fair value represents a good faith approximation of the value of an asset or liability. When determining","page_number":54,"box":{"x":117,"y":738,"width":758,"height":12}},{"id":"58654342-ecd7-416f-883f-9e0ac3f2c7e1","block_type":"box","text":"the fair value of an investment, one or more fair value methodologies may be used (depending on","page_number":54,"box":{"x":116,"y":754,"width":724,"height":12}},{"id":"5b2e3104-7feb-4ecd-9f61-f1e462d32833","block_type":"box","text":"certain factors, including the asset type). For example, the investment may be initially priced based on","page_number":54,"box":{"x":116,"y":769,"width":757,"height":12}},{"id":"4792af61-16e4-46ac-b673-e98a88d2360c","block_type":"box","text":"the original cost of the investment or, alternatively, using proprietary or third-party models that may rely","page_number":54,"box":{"x":116,"y":785,"width":764,"height":12}},{"id":"a1510287-37b0-4cc2-ada0-4903c0ee86df","block_type":"box","text":"upon one or more unobservable inputs. Prices of actual, executed or historical transactions in the","page_number":54,"box":{"x":117,"y":800,"width":721,"height":12}},{"id":"585ea07f-8a34-4dc8-8c67-38313c8eda09","block_type":"box","text":"relevant investment (or comparable instruments) or, where appropriate, an appraisal by a third-party","page_number":54,"box":{"x":117,"y":816,"width":743,"height":12}},{"id":"56be6304-aae4-4995-96fc-050afac8d223","block_type":"box","text":"experienced in the valuation of similar instruments, may also be used as a basis for establishing the","page_number":54,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"5cf4fac1-7b18-4135-b3a3-6319b9cae812","block_type":"box","text":"fair value of an investment.","page_number":54,"box":{"x":116,"y":847,"width":206,"height":9}},{"id":"168265a9-f501-47fa-a95e-b904e51a38e8","block_type":"box","text":"51","page_number":54,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"b5c61149-36b4-4b26-a0df-ddc22a2dd655","block_type":"box","text":"NM1026U-6039989-54/256","page_number":54,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"55c9194f-ac1a-4ddb-aead-2efb73ac1cf2","block_type":"box","text":"The fair value of one or more assets or liabilities may not, in retrospect, be the price at which those","page_number":55,"box":{"x":116,"y":87,"width":738,"height":12}},{"id":"19468f56-018f-47ab-b74f-85aaa2528fea","block_type":"box","text":"assets or liabilities could have been sold during the period in which the particular fair values were used","page_number":55,"box":{"x":116,"y":102,"width":767,"height":13}},{"id":"b394bd3d-5221-45af-ba95-171b4ef5dc1c","block_type":"box","text":"in determining the Fund’s NAV. As a result, the Fund’s sale or redemption of its shares at NAV, at a","page_number":55,"box":{"x":117,"y":118,"width":744,"height":12}},{"id":"1688b24b-5cf1-4c5a-b994-e2c5569ddfd3","block_type":"box","text":"time when a holding or holdings are valued at fair value, may have the effect of diluting or increasing","page_number":55,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"20bcf2c5-39b0-458d-9ab4-0fbaefbb7947","block_type":"box","text":"the economic interest of existing shareholders.","page_number":55,"box":{"x":116,"y":149,"width":352,"height":12}},{"id":"0ef3e957-cf2e-4233-87e9-f375702ec127","block_type":"box","text":"The Fund’s annual audited financial statements, which are prepared in accordance with accounting","page_number":55,"box":{"x":116,"y":181,"width":740,"height":12}},{"id":"d43c73c2-b8fb-4de1-9def-33bc49e7dea0","block_type":"box","text":"principles generally accepted in the United States of America (“U.S. GAAP”), follow the requirements","page_number":55,"box":{"x":117,"y":196,"width":752,"height":12}},{"id":"83916173-7d8e-445f-afde-51ad3ed3ed20","block_type":"box","text":"for valuation set forth in Financial Accounting Standards Board Accounting Standards Codification","page_number":55,"box":{"x":116,"y":212,"width":732,"height":12}},{"id":"c972716f-9215-41f7-924f-803b858956f0","block_type":"box","text":"Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), which defines and establishes a","page_number":55,"box":{"x":116,"y":227,"width":757,"height":12}},{"id":"866fcd2d-5cda-43cb-8cd2-6ea059990d97","block_type":"box","text":"framework for measuring fair value under U.S. GAAP and expands financial statement disclosure","page_number":55,"box":{"x":116,"y":243,"width":727,"height":12}},{"id":"739381a3-ae2b-4c57-83d9-0fdcd551f227","block_type":"box","text":"requirements relating to fair value measurements.","page_number":55,"box":{"x":117,"y":258,"width":374,"height":12}},{"id":"5875f899-0a52-4433-90cd-cd8abc2bb01d","block_type":"box","text":"Generally, ASC 820 and other accounting rules applicable to funds and various assets in which they","page_number":55,"box":{"x":117,"y":290,"width":731,"height":12}},{"id":"bc53673d-0147-4ef9-a024-08779afc1207","block_type":"box","text":"invest are evolving. Such changes may adversely affe","page_number":55,"box":{"x":117,"y":305,"width":391,"height":12}},{"id":"20f4b487-8232-46be-b5ee-8a4a35d01cb8","block_type":"box","text":"ct the Fund. For example, the evolution of rules","page_number":55,"box":{"x":509,"y":305,"width":348,"height":12}},{"id":"54e8e8be-07ae-49c9-abae-cdbbd7813a86","block_type":"box","text":"governing the determination of the fair market value of","page_number":55,"box":{"x":116,"y":321,"width":395,"height":12}},{"id":"b2a7eadd-7de3-4e70-b6ed-f20497ba33a7","block_type":"box","text":"f assets or liabilities, to the extent such rules","page_number":55,"box":{"x":510,"y":321,"width":321,"height":11}},{"id":"f1336002-795e-440d-a032-1d31e1eecc76","block_type":"box","text":"become more stringent, would tend to increase the co","page_number":55,"box":{"x":117,"y":337,"width":390,"height":11}},{"id":"4c4e7e9a-1caa-45c5-89bf-39d70dec11b9","block_type":"box","text":"st and/or reduce the availability of third-party","page_number":55,"box":{"x":508,"y":336,"width":327,"height":12}},{"id":"8b6b1e9c-1658-4e52-8ec1-c46bc9f85916","block_type":"box","text":"determinations of fair market value. This may in tu","page_number":55,"box":{"x":116,"y":352,"width":363,"height":12}},{"id":"a3a0f8c5-cc73-4c37-9f46-789b637c048a","block_type":"box","text":"rn increase the costs associated with selling assets or","page_number":55,"box":{"x":481,"y":352,"width":395,"height":12}},{"id":"7f377ef5-acbc-470a-b1a2-432624414bfb","block_type":"box","text":"affect their liquidity due to the Fund’s inability to obtai","page_number":55,"box":{"x":116,"y":367,"width":384,"height":12}},{"id":"d62dd358-d4f0-4c3b-a1d3-1c8aad8e9173","block_type":"box","text":"n a third-party determination of fair market value.","page_number":55,"box":{"x":502,"y":367,"width":358,"height":12}},{"id":"d35fba8e-26ff-42ab-baa8-74e56649be7c","block_type":"box","text":"Brokerage Transactions","page_number":55,"box":{"x":119,"y":421,"width":437,"height":28}},{"id":"f696f245-bda6-4717-b30d-fed9ad8f7381","block_type":"box","text":"Subject to policies established by the Board, BFA is primarily responsible for the execution of the","page_number":55,"box":{"x":116,"y":473,"width":724,"height":12}},{"id":"2a35928d-9562-43d3-a4eb-86d0a62b385c","block_type":"box","text":"Fund’s portfolio transactions and the allocation of brokerage. BFA does not execute transactions","page_number":55,"box":{"x":117,"y":489,"width":720,"height":12}},{"id":"077e4d38-28e7-41b8-b521-7dce1c5c3db5","block_type":"box","text":"through any particular broker or dealer, but seeks to obtain the best net results for the Fund, taking into","page_number":55,"box":{"x":116,"y":504,"width":770,"height":12}},{"id":"cf06d343-36ca-4567-8f1e-b0c9301d2b2e","block_type":"box","text":"account certain factors set out below. While BFA generally seeks reasonable trade execution costs,","page_number":55,"box":{"x":116,"y":520,"width":744,"height":12}},{"id":"c41c1546-affb-4bb2-ab7a-9305b17cdb42","block_type":"box","text":"the Fund does not necessarily pay the lowest spread or commission available, and payment of the","page_number":55,"box":{"x":116,"y":535,"width":735,"height":12}},{"id":"3b879748-4293-472e-af6c-cb219f79d7c2","block_type":"box","text":"lowest commission or spread is not necessarily consistent with obtaining the best price and execution","page_number":55,"box":{"x":117,"y":551,"width":757,"height":12}},{"id":"b549be34-a98a-4c47-aea8-b8bc185f0d28","block_type":"box","text":"in particular transactions. Subject to applicable legal requirements, BFA may select a broker based","page_number":55,"box":{"x":117,"y":566,"width":738,"height":12}},{"id":"9d87c98b-c4a5-4da5-bf3b-034f9c975637","block_type":"box","text":"partly upon brokerage or research services provided to BFA and its clients, including the Fund. In","page_number":55,"box":{"x":117,"y":582,"width":726,"height":12}},{"id":"65a69e22-1509-47cb-8ebc-c66448a46185","block_type":"box","text":"return for such services, BFA may cause the Fund to pay a higher commission than other brokers","page_number":55,"box":{"x":117,"y":597,"width":729,"height":12}},{"id":"a70ef242-3779-4e42-8cfd-1211512de482","block_type":"box","text":"would charge if BFA determines in good faith that the commission is reasonable in relation to the","page_number":55,"box":{"x":116,"y":613,"width":723,"height":12}},{"id":"4e107e88-1c93-4918-8df1-fae469f0fb3b","block_type":"box","text":"services provided.","page_number":55,"box":{"x":116,"y":628,"width":140,"height":12}},{"id":"f95fa09a-1d03-4caf-9efe-26c1025b3343","block_type":"box","text":"In selecting brokers or dealers to execute portfolio transactions, BFA seeks to obtain the best price and","page_number":55,"box":{"x":117,"y":660,"width":764,"height":12}},{"id":"9dcefc4c-841d-4483-827b-532c78ed5368","block_type":"box","text":"most favorable execution for the Fund, taking into account a variety of factors including: (i) the size,","page_number":55,"box":{"x":117,"y":675,"width":735,"height":12}},{"id":"41838725-226a-4c6c-8fc9-e7e3c861bdd3","block_type":"box","text":"nature and character of the security or instrument being traded and the markets in which it is","page_number":55,"box":{"x":117,"y":691,"width":685,"height":12}},{"id":"0de39104-56cb-4c49-9f90-9b9feadd27c9","block_type":"box","text":"purchased or sold; (ii) the desired timing of the transaction; (iii) BFA’s knowledge of the expected","page_number":55,"box":{"x":117,"y":706,"width":717,"height":12}},{"id":"5b0cc938-c1bb-493f-a348-ea3daad511cd","block_type":"box","text":"commission rates and spreads currently available; (iv) the activity existing and expected in the market","page_number":55,"box":{"x":116,"y":722,"width":755,"height":12}},{"id":"827cf548-ccf5-4b34-a4cd-4d084e303492","block_type":"box","text":"for the particular security or instrument, including any anticipated execution difficulties; (v) the full range","page_number":55,"box":{"x":116,"y":737,"width":767,"height":12}},{"id":"f3c40f2d-4e96-42db-85ef-5fb63f633a7e","block_type":"box","text":"of brokerage services provided; (vi) the broker’s or dealer’s capital; (vii) the quality of research and","page_number":55,"box":{"x":116,"y":753,"width":730,"height":12}},{"id":"fe301011-b5aa-4f24-8a12-95cc4720d4e2","block_type":"box","text":"research services provided; (viii) the reasonableness of the commission, dealer spread or its","page_number":55,"box":{"x":117,"y":768,"width":685,"height":12}},{"id":"e6ad1855-6d07-488d-95ef-ec0d1bb64339","block_type":"box","text":"equivalent for the specific transaction; and (ix) BFA’s knowledge of any actual or apparent operational","page_number":55,"box":{"x":116,"y":784,"width":755,"height":12}},{"id":"8a606b25-5411-42d3-9944-ae4c6dca7035","block_type":"box","text":"problems of a broker or dealer.","page_number":55,"box":{"x":117,"y":799,"width":227,"height":12}},{"id":"499a8009-862c-4467-94ee-a54658ae298e","block_type":"box","text":"Section 28(e) of the 1934 Act (“Section 28(e)”) permits an investment adviser, under certain","page_number":55,"box":{"x":116,"y":831,"width":686,"height":12}},{"id":"c8a9dd7a-b674-49c4-99b2-14a3e8675e21","block_type":"box","text":"circumstances, to cause an account to pay a broker or dealer a commission for effecting a transaction","page_number":55,"box":{"x":116,"y":846,"width":762,"height":13}},{"id":"434aa34a-af84-4a3d-9594-6033242b674f","block_type":"box","text":"that exceeds the amount another broker or dealer would have charged for effecting the same","page_number":55,"box":{"x":116,"y":862,"width":696,"height":12}},{"id":"815cf2fb-d503-406e-83bc-6b4156e3dee8","block_type":"box","text":"transaction in recognition of the value of brokerage and research services provided by that broker or","page_number":55,"box":{"x":116,"y":877,"width":748,"height":13}},{"id":"f70ace20-2f1d-4376-af6d-dbe3619e60ed","block_type":"box","text":"52","page_number":55,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"e82b01e6-f9ab-4635-ba9f-ad17c0eff93c","block_type":"box","text":"NM1026U-6039989-55/256","page_number":55,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ebce78d1-cafa-4719-a9af-1f6413eae090","block_type":"box","text":"dealer. This includes commissions paid on riskless principal transactions under certain conditions.","page_number":56,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"ef5c72aa-1a6f-45b0-b6d4-cc865986d621","block_type":"box","text":"Brokerage and research services include: (1) furnishing advice as to the value of securities, including","page_number":56,"box":{"x":117,"y":102,"width":754,"height":13}},{"id":"bdaca647-a2c2-4c46-a017-4a8dc5c7e017","block_type":"box","text":"pricing and appraisal advice, credit analysis, risk measurement analysis, performance and other","page_number":56,"box":{"x":117,"y":118,"width":716,"height":12}},{"id":"86bc7890-58d5-49da-9729-e9ce7620b478","block_type":"box","text":"analysis, as well as the advisability of investing in, purchasing or selling securities, and the availability","page_number":56,"box":{"x":116,"y":134,"width":758,"height":12}},{"id":"be3f4899-543b-45ff-8e31-f0abba880036","block_type":"box","text":"of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning","page_number":56,"box":{"x":116,"y":149,"width":725,"height":12}},{"id":"5aa1f8cd-75f7-4c7f-8fb3-9bcad2dffb11","block_type":"box","text":"issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of","page_number":56,"box":{"x":117,"y":165,"width":757,"height":12}},{"id":"5346027d-7c94-47e8-9615-e4ccc4337c66","block_type":"box","text":"accounts; and (3) effecting securities transactions and performing functions incidental to securities","page_number":56,"box":{"x":116,"y":180,"width":734,"height":12}},{"id":"c61f0921-abd6-424b-8a94-70895536974e","block_type":"box","text":"transactions (such as clearance, settlement, and custody). BFA believes that access to independent","page_number":56,"box":{"x":116,"y":196,"width":748,"height":12}},{"id":"5410967b-134b-4d57-98b5-51b7116f09f0","block_type":"box","text":"investment research is beneficial to its investment decision-making processes and, therefore, to the","page_number":56,"box":{"x":117,"y":211,"width":743,"height":12}},{"id":"d03eaedb-ed88-400b-ad1e-5bfa11230a57","block_type":"box","text":"Fund.","page_number":56,"box":{"x":117,"y":227,"width":46,"height":9}},{"id":"bf14bfe7-ba91-4cc6-b7bf-e3ad0d48a5b6","block_type":"box","text":"BFA, unless prohibited by applicable law, may participate in client commission arrangements under","page_number":56,"box":{"x":117,"y":258,"width":740,"height":12}},{"id":"109d967b-d18c-4433-91bf-8f2f2d8e7af6","block_type":"box","text":"which BFA may execute transactions through a broker-dealer and request that the broker-dealer","page_number":56,"box":{"x":116,"y":273,"width":720,"height":12}},{"id":"8996e92a-2716-40ec-aef9-0d90c310b1a8","block_type":"box","text":"allocate a portion of the commissions or commission credits to another firm that provides research to","page_number":56,"box":{"x":116,"y":289,"width":752,"height":12}},{"id":"35af2b9c-78e9-4951-b1c1-fff5d486bdf9","block_type":"box","text":"BFA. BFA believes that research services obtained through soft dollar or commission sharing","page_number":56,"box":{"x":117,"y":304,"width":696,"height":12}},{"id":"dd2bb978-a93a-414f-a4a5-69a16254d252","block_type":"box","text":"arrangements enhance its investment decision-making capabilities, thereby increasing the prospects","page_number":56,"box":{"x":116,"y":320,"width":752,"height":12}},{"id":"dde38646-f1b3-4607-aea3-c422f618aa07","block_type":"box","text":"for higher investment returns. BFA will engage only in soft dollar or commission sharing transactions","page_number":56,"box":{"x":116,"y":335,"width":749,"height":12}},{"id":"cad82370-e56a-47c4-b05f-c5140880e14d","block_type":"box","text":"that comply with the requirements of Section 28(e).","page_number":56,"box":{"x":116,"y":351,"width":384,"height":12}},{"id":"cee39c29-dd33-4f4d-94ff-b209d01b18bc","block_type":"box","text":"BFA regularly evaluates the soft dollar products and services utilized, as well as the overall soft dollar","page_number":56,"box":{"x":117,"y":382,"width":756,"height":12}},{"id":"345fe4e2-ccdb-427b-a25a-42e8525fa8c8","block_type":"box","text":"and commission sharing arrangements to ensure that trades are executed by firms that are regarded","page_number":56,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"76685ba1-e4c1-4354-99db-e71cfe83f273","block_type":"box","text":"as best able to execute trades for client accounts, while at the same time providing access to the","page_number":56,"box":{"x":116,"y":413,"width":723,"height":12}},{"id":"237c6cb6-1e04-4882-be21-21c25cd8f656","block_type":"box","text":"research and other services BFA views as impactful to its trading results.","page_number":56,"box":{"x":117,"y":428,"width":545,"height":12}},{"id":"6e787231-3e51-4ad1-8e51-fba57b86fa94","block_type":"box","text":"BFA, unless prohibited by applicable law, may utilize soft dollars and related services, including","page_number":56,"box":{"x":117,"y":459,"width":711,"height":12}},{"id":"b1e3e4bc-141b-4a4d-acd1-e710b7e03cc2","block_type":"box","text":"research (whether prepared by the broker-dealer or prepared by a third-party and provided to BFA by","page_number":56,"box":{"x":117,"y":475,"width":756,"height":12}},{"id":"8297f949-fad8-43c4-9e48-5e9a7f23240c","block_type":"box","text":"the broker-dealer) and execution or brokerage services within applicable rules and BFA’s policies to","page_number":56,"box":{"x":116,"y":490,"width":745,"height":12}},{"id":"0ec70666-368b-4ca1-8132-6111ff88b591","block_type":"box","text":"the extent that such permitted services do not compromise BFA’s ability to seek to obtain best","page_number":56,"box":{"x":116,"y":506,"width":703,"height":12}},{"id":"7a22ab7b-57e8-40fc-a2cf-eb25709ead04","block_type":"box","text":"execution. In this regard, the portfolio management investment and/or trading teams may consider a","page_number":56,"box":{"x":116,"y":521,"width":749,"height":12}},{"id":"3a431cae-1ae9-4b24-892b-cd5bd7f35044","block_type":"box","text":"variety of factors, including the degree to which the broker-dealer: (a) provides access to company","page_number":56,"box":{"x":116,"y":537,"width":735,"height":12}},{"id":"7436e745-f23a-4233-b169-995111bb1ee5","block_type":"box","text":"management; (b) provides access to their analysts; (c) provides meaningful/insightful research notes","page_number":56,"box":{"x":117,"y":552,"width":751,"height":12}},{"id":"8427f91a-8d83-4ee5-a9ba-856160f3ff72","block_type":"box","text":"on companies or other potential investments; (d) facilitates calls on which meaningful or insightful ideas","page_number":56,"box":{"x":116,"y":568,"width":772,"height":12}},{"id":"4447f802-0cc8-41ae-922b-96fee6e174c7","block_type":"box","text":"about companies or potential investments are discussed; (e) facilitates conferences at which","page_number":56,"box":{"x":116,"y":583,"width":691,"height":12}},{"id":"0e25319e-e3be-47d8-b41e-e0b0edd924e0","block_type":"box","text":"meaningful or insightful ideas about companies or potential investments are discussed; or (f) provides","page_number":56,"box":{"x":117,"y":599,"width":758,"height":12}},{"id":"c274d8db-fffe-4bbe-b445-22b6350e8821","block_type":"box","text":"research tools such as market data, financial analysis, and other third-party related research and","page_number":56,"box":{"x":117,"y":614,"width":722,"height":12}},{"id":"ac3ceae9-a7da-4964-a46c-369f0edf4920","block_type":"box","text":"brokerage tools that aid in the investment process.","page_number":56,"box":{"x":117,"y":630,"width":380,"height":12}},{"id":"949f9640-f58a-4c87-94a7-22d2694df333","block_type":"box","text":"Research-oriented services for which BFA, unless prohibited by applicable law, might pay with Fund","page_number":56,"box":{"x":117,"y":661,"width":741,"height":12}},{"id":"ffe68e3e-ca4a-422b-8a91-bd50336ab54e","block_type":"box","text":"commissions may be in written form or through direct contact with individuals and may include","page_number":56,"box":{"x":116,"y":676,"width":698,"height":12}},{"id":"865e552b-a190-4797-9d2e-84fb40e4a0aa","block_type":"box","text":"information as to particular companies or industries and securities or groups of securities, as well as","page_number":56,"box":{"x":117,"y":692,"width":741,"height":12}},{"id":"db19198c-0668-4eb0-a682-dfc58f2d769b","block_type":"box","text":"market, economic, or institutional advice and statistical information, political developments and","page_number":56,"box":{"x":117,"y":707,"width":699,"height":12}},{"id":"9a3e118e-9d81-48a5-9ab2-07b26e7fd229","block_type":"box","text":"technical market information that assists in the valuation of investments. Research services furnished","page_number":56,"box":{"x":116,"y":723,"width":751,"height":9}},{"id":"a6402540-fc31-4a05-b31c-91b0c81f63dd","block_type":"box","text":"by brokers may be used in servicing some or all client accounts and not all services may be used in","page_number":56,"box":{"x":117,"y":738,"width":737,"height":12}},{"id":"f30d6874-f4e6-4843-9a82-2453ca487d99","block_type":"box","text":"connection with the fund or account that paid commissions to the broker providing such services. In","page_number":56,"box":{"x":116,"y":754,"width":737,"height":12}},{"id":"2b6aae70-d1d7-4e5d-90fc-a9dee0d2a15a","block_type":"box","text":"some cases, research information received from brokers by mutual fund management personnel, or","page_number":56,"box":{"x":116,"y":769,"width":741,"height":12}},{"id":"3ab05e1c-19a1-4770-b5f7-0828c6cb04e4","block_type":"box","text":"personnel principally responsible for BFA’s individually managed portfolios, is not necessarily shared","page_number":56,"box":{"x":117,"y":785,"width":745,"height":12}},{"id":"f241c888-1406-4a6b-a3d1-53739e0f3e23","block_type":"box","text":"by and between such personnel. Any investment advisory or other fees paid by the Fund to BFA are","page_number":56,"box":{"x":117,"y":800,"width":742,"height":12}},{"id":"2c7d4204-2d18-4101-852e-b226e089fa01","block_type":"box","text":"not reduced as a result of BFA’s receipt of research services. In some cases, BFA may receive a","page_number":56,"box":{"x":117,"y":816,"width":718,"height":12}},{"id":"188c920a-72ea-42ad-bb2a-56a6b9e54ec3","block_type":"box","text":"service from a broker that has both a “research” and a “non-research” use. When this occurs BFA","page_number":56,"box":{"x":116,"y":831,"width":730,"height":10}},{"id":"c89fdd8a-2a8d-4809-b18e-7d8c3a617d49","block_type":"box","text":"makes a good faith allocation, under all the circumstances, between the research and non-research","page_number":56,"box":{"x":117,"y":847,"width":744,"height":12}},{"id":"1dfd1ff3-f57b-425f-84eb-79fa3d5a4acc","block_type":"box","text":"uses of the service. The percentage of the service that is used for research purposes may be paid for","page_number":56,"box":{"x":117,"y":862,"width":756,"height":12}},{"id":"7ac3745f-f0b2-4a9c-a946-0d17733c1638","block_type":"box","text":"with client commissions, while BFA will use its own funds to pay for the percentage of the service that","page_number":56,"box":{"x":116,"y":878,"width":757,"height":12}},{"id":"2694f123-c6b2-459b-913d-b2260b887b0b","block_type":"box","text":"53","page_number":56,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"23723234-7abe-4a42-9773-9d26ce68a1ee","block_type":"box","text":"NM1026U-6039989-56/256","page_number":56,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"e351d63b-9ac9-41d1-833c-0901dc2f4350","block_type":"box","text":"is used for non-research purposes. In making this good faith allocation, BFA faces a potential conflict","page_number":57,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"4367941b-4192-445b-9e58-20b9279e787e","block_type":"box","text":"of interest, but BFA believes that its allocation procedures are reasonably designed to ensure that it","page_number":57,"box":{"x":116,"y":102,"width":744,"height":13}},{"id":"2da1afa7-52e3-4a14-9c21-f997efa29ca2","block_type":"box","text":"appropriately allocates the anticipated use of such services to their research and non-research uses.","page_number":57,"box":{"x":116,"y":118,"width":752,"height":12}},{"id":"c3040fe0-243a-4b3e-9181-15c720e8b25a","block_type":"box","text":"Payments of commissions to brokers who are affiliated persons of the Fund will be made in","page_number":57,"box":{"x":117,"y":149,"width":681,"height":12}},{"id":"2e5900df-52ad-4c03-a516-0d07c4c19098","block_type":"box","text":"accordance with Rule 17e-1 under the Investment Company Act.","page_number":57,"box":{"x":116,"y":165,"width":486,"height":12}},{"id":"8284753a-7de2-4f19-8222-ab07dbdf9912","block_type":"box","text":"From time to time, the Fund may purchase new issues of securities in a fixed price offering. In these","page_number":57,"box":{"x":117,"y":196,"width":747,"height":12}},{"id":"5fe43a26-4929-47c7-b561-0b11b7ce4e5b","block_type":"box","text":"situations, the broker may be a member of the selling group that will, in addition to selling securities,","page_number":57,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"483150df-583b-43ad-9f37-31ecc9856d48","block_type":"box","text":"provide BFA with research services. FINRA has adopted rules expressly permitting these types of","page_number":57,"box":{"x":117,"y":227,"width":729,"height":12}},{"id":"17dbc5e0-c009-468d-aaef-180a47d504e3","block_type":"box","text":"arrangements under certain circumstances. Generally, the broker will provide research “credits” in","page_number":57,"box":{"x":116,"y":242,"width":731,"height":12}},{"id":"38d55a4a-7b09-421b-bdc0-88de0c905c9f","block_type":"box","text":"these situations at a rate that is higher than that available for typical secondary market transactions.","page_number":57,"box":{"x":116,"y":258,"width":746,"height":12}},{"id":"dfdce579-9f9b-4adb-aa5b-564514b4e5ab","block_type":"box","text":"These arrangements may not fall within the safe harbor of Section 28(e).","page_number":57,"box":{"x":116,"y":273,"width":544,"height":12}},{"id":"fe35e4f1-eabe-42ba-8e56-2f57d9c39265","block_type":"box","text":"The Fund anticipates that its brokerage transactions involving foreign securities generally will be","page_number":57,"box":{"x":116,"y":304,"width":718,"height":12}},{"id":"d929a10a-fd4f-4854-94a6-e663779c22d7","block_type":"box","text":"conducted primarily on the principal stock exchanges of the applicable country. Foreign equity","page_number":57,"box":{"x":116,"y":320,"width":702,"height":12}},{"id":"11290927-1a59-4fc6-8fcf-ef211d284fe5","block_type":"box","text":"securities may be held by the Fund in the form of depositary receipts, or other securities convertible","page_number":57,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"ca3faadc-c367-4d3a-bdc8-840978cf01a4","block_type":"box","text":"into foreign equity securities. Depositary receipts may be listed on stock exchanges, or traded in OTC","page_number":57,"box":{"x":117,"y":351,"width":758,"height":12}},{"id":"e396222f-492c-4f37-a0f7-37c99a5bce58","block_type":"box","text":"markets in the United States or Europe, as the case may be. American Depositary Receipts, like other","page_number":57,"box":{"x":117,"y":366,"width":762,"height":12}},{"id":"01f0d680-2447-41ef-9458-be8fa1ba5662","block_type":"box","text":"securities traded in the United States, will be subject to negotiated commission rates.","page_number":57,"box":{"x":116,"y":382,"width":636,"height":12}},{"id":"c1ed8cdc-4cae-44d7-abef-639d51b9f148","block_type":"box","text":"The Fund may invest in certain securities traded in the OTC market and intends to deal directly with","page_number":57,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"6d6a8388-e02b-44e9-bdf0-c2e23433c28e","block_type":"box","text":"the dealers who make a market in the particular securities, except in those circumstances in which","page_number":57,"box":{"x":116,"y":428,"width":735,"height":12}},{"id":"2c042b38-6926-4472-953b-a186e2b5c99c","block_type":"box","text":"better prices and execution are available elsewhere. Under the Investment Company Act, persons","page_number":57,"box":{"x":117,"y":444,"width":732,"height":12}},{"id":"5f6e369e-6f4b-4577-9c2d-6430648e82e1","block_type":"box","text":"affiliated with the Fund and persons who are affiliated with such affiliated persons are prohibited from","page_number":57,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"5179bdec-68fe-46f1-8766-7338bde695a1","block_type":"box","text":"dealing with the Fund as principal in the purchase and sale of securities unless a permissive order","page_number":57,"box":{"x":116,"y":475,"width":733,"height":12}},{"id":"7e27373b-8195-4ffb-9ee6-1f671ff91a01","block_type":"box","text":"allowing such transactions is obtained from the Commission. Since transactions in the OTC market","page_number":57,"box":{"x":116,"y":490,"width":740,"height":12}},{"id":"f376a40b-e870-4160-a360-da1c51f1dbcf","block_type":"box","text":"usually involve transactions with the dealers acting as principal for their own accounts, the Fund will","page_number":57,"box":{"x":117,"y":506,"width":743,"height":12}},{"id":"a38b388d-7858-46e2-b1cf-2e4d0439bb5d","block_type":"box","text":"not deal with affiliated persons in connection with such transactions. However, an affiliated person of","page_number":57,"box":{"x":117,"y":521,"width":750,"height":12}},{"id":"80b11eb5-3c7e-4802-a738-8453bc6611de","block_type":"box","text":"the Fund may serve as its broker in OTC transactions conducted on an agency basis provided that,","page_number":57,"box":{"x":116,"y":537,"width":742,"height":12}},{"id":"8ab132a6-21af-4b5b-8191-3bb0d34bd457","block_type":"box","text":"among other things, the fee or commission received by such affiliated broker is reasonable and fair","page_number":57,"box":{"x":116,"y":552,"width":739,"height":12}},{"id":"b6028e8b-2a69-497d-984e-ac7ffda150a1","block_type":"box","text":"compared to the fee or commission received by non-affiliated brokers in connection with comparable","page_number":57,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"665a4a3f-018f-423d-9274-30362f20cc20","block_type":"box","text":"transactions.","page_number":57,"box":{"x":116,"y":583,"width":100,"height":10}},{"id":"d9eb16d3-439b-4d97-83b6-a2da38006882","block_type":"box","text":"OTC issues, including most fixed-income securities such as corporate debt and U.S. Government","page_number":57,"box":{"x":116,"y":614,"width":729,"height":12}},{"id":"9e96fe49-389e-4784-98d1-739350d47738","block_type":"box","text":"securities, are normally traded on a “net” basis without a stated commission, through dealers acting for","page_number":57,"box":{"x":116,"y":630,"width":767,"height":12}},{"id":"cb93a823-513e-4e20-a7d9-634cae378b38","block_type":"box","text":"their own account and not as brokers. The Fund will primarily engage in transactions with these","page_number":57,"box":{"x":116,"y":645,"width":713,"height":12}},{"id":"c98ab081-74ee-4c96-a3ee-35629d45bfb0","block_type":"box","text":"dealers or deal directly with the issuer unless a better price or execution could be obtained by using a","page_number":57,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"4b0453a0-6de9-47f6-84e2-71293db6d3d7","block_type":"box","text":"broker. Prices paid to a dealer with respect to both foreign and domestic securities will generally","page_number":57,"box":{"x":117,"y":676,"width":712,"height":12}},{"id":"fbbecde4-5004-47c9-a0e1-1336c24ce95c","block_type":"box","text":"include a “spread,” which is the difference between the prices at which the dealer is willing to purchase","page_number":57,"box":{"x":117,"y":692,"width":761,"height":12}},{"id":"36f90dc8-cbf8-4a79-a27f-aa62c036433c","block_type":"box","text":"and sell the specific security at the time, and includes the dealer’s normal profit.","page_number":57,"box":{"x":116,"y":707,"width":590,"height":12}},{"id":"86541e8f-c7e1-4182-abea-0afa658c6473","block_type":"box","text":"Purchases of money market instruments by the Fund are made from dealers, underwriters and issuers.","page_number":57,"box":{"x":117,"y":738,"width":764,"height":12}},{"id":"ece09303-7a4a-416c-92ec-6c104ceac36f","block_type":"box","text":"The Fund does not currently expect to incur any brokerage commission expense on such transactions","page_number":57,"box":{"x":116,"y":754,"width":757,"height":12}},{"id":"e5965421-1fbb-4e1b-b189-d2149de29730","block_type":"box","text":"because money market instruments are generally traded on a “net” basis with dealers acting as","page_number":57,"box":{"x":117,"y":769,"width":706,"height":12}},{"id":"f119c3d9-313c-426e-85f2-5f5fe08aab5e","block_type":"box","text":"principal for their own accounts without a stated commission. The price of the security, however,","page_number":57,"box":{"x":117,"y":785,"width":712,"height":12}},{"id":"522b8982-8ee3-4c43-a856-eed2a98b9750","block_type":"box","text":"usually includes a profit to the dealer.","page_number":57,"box":{"x":117,"y":800,"width":275,"height":12}},{"id":"218cfc02-41a7-4300-816a-c96a28285767","block_type":"box","text":"Securities purchased in underwritten offerings include a fixed amount of compensation to the","page_number":57,"box":{"x":116,"y":831,"width":694,"height":12}},{"id":"70cf5af6-b3e6-4b07-9142-ecf0528a40a2","block_type":"box","text":"underwriter, generally referred to as the underwriter’s concession or discount. When offered securities","page_number":57,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"a585d033-9582-42a5-bfb7-f5fee673a062","block_type":"box","text":"are purchased or sold directly from or to an issuer, no commissions or discounts are paid except where","page_number":57,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"21cf432f-3cec-4db1-94be-88076363d6e7","block_type":"box","text":"required by local markets.","page_number":57,"box":{"x":117,"y":878,"width":196,"height":12}},{"id":"9e011047-bd8b-40ed-b48c-32583ca6f2d9","block_type":"box","text":"54","page_number":57,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"0b52fce7-a8dd-4dd3-b549-23c7fb69abba","block_type":"box","text":"NM1026U-6039989-57/256","page_number":57,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"c30cf218-c946-471e-bb79-427e2dcfe1ba","block_type":"box","text":"BFA may seek to obtain an undertaking from issuers of commercial paper or dealers selling","page_number":58,"box":{"x":117,"y":87,"width":684,"height":12}},{"id":"c8bbb4b1-a656-4820-9cc4-aae175272f1c","block_type":"box","text":"commercial paper to consider the repurchase of such securities from the Fund prior to maturity at their","page_number":58,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"31042f2e-b453-413c-8c1b-6260df75ed8d","block_type":"box","text":"original cost plus interest (sometimes adjusted to reflect the actual maturity of the securities), if it","page_number":58,"box":{"x":116,"y":118,"width":720,"height":12}},{"id":"be7e1937-6cfc-4164-9133-867aa870a71f","block_type":"box","text":"believes that the Fund’s anticipated need for liquidity makes such action desirable. Any such","page_number":58,"box":{"x":117,"y":134,"width":690,"height":12}},{"id":"e6fde9ba-2dce-40c6-9b87-c0c949d2a685","block_type":"box","text":"repurchase prior to maturity reduces the possibility that the Fund would incur a capital loss in","page_number":58,"box":{"x":117,"y":149,"width":693,"height":12}},{"id":"2f539192-c2c7-49cf-aeeb-08bb9f7a78da","block_type":"box","text":"liquidating commercial paper, especially if interest rates have risen since acquisition of such","page_number":58,"box":{"x":117,"y":165,"width":685,"height":12}},{"id":"403079e6-fdaf-4de2-a932-968989562f99","block_type":"box","text":"commercial paper.","page_number":58,"box":{"x":116,"y":180,"width":143,"height":12}},{"id":"096fbab7-fbcf-4306-9a20-b123d8f3515f","block_type":"box","text":"Investment decisions for the Fund and for other investment accounts managed by BFA and the other","page_number":58,"box":{"x":117,"y":211,"width":753,"height":12}},{"id":"46aa93a7-cd56-42e2-a09f-43acfb4a5fd2","block_type":"box","text":"Affiliates are made independently of each other in light of differing conditions. BFA allocates","page_number":58,"box":{"x":116,"y":227,"width":686,"height":12}},{"id":"1feb8cf1-4733-4f22-9f46-19bdd9335c4d","block_type":"box","text":"investments among client accounts in a fair and equitable manner over time. A variety of factors will be","page_number":58,"box":{"x":117,"y":242,"width":767,"height":12}},{"id":"34c94e27-e436-4f44-a10d-b749ca835bae","block_type":"box","text":"considered in making such allocations. These factors include: (i) investment objectives or strategies for","page_number":58,"box":{"x":116,"y":258,"width":769,"height":12}},{"id":"d333bf11-f460-4d46-bb15-ef54f51d08ee","block_type":"box","text":"particular accounts, including sector, industry, country or region and capitalization weightings; (ii) tax","page_number":58,"box":{"x":117,"y":273,"width":749,"height":12}},{"id":"49f0dfaa-facd-4d71-a642-b558d84faed9","block_type":"box","text":"considerations of an account; (iii) risk or investment concentration parameters for an account;","page_number":58,"box":{"x":116,"y":289,"width":699,"height":12}},{"id":"82544171-4628-457d-b5fa-e1b0628150f0","block_type":"box","text":"(iv) supply or demand for a security at a given price level; (v) size of available investment; (vi) cash","page_number":58,"box":{"x":117,"y":304,"width":737,"height":12}},{"id":"80f76244-7571-4cfc-8702-dcf9363da52e","block_type":"box","text":"availability and liquidity requirements for accounts; (vii) regulatory restrictions; (viii) minimum","page_number":58,"box":{"x":116,"y":320,"width":690,"height":12}},{"id":"86ed4bd5-6135-446e-b5d5-12cca3999a47","block_type":"box","text":"investment size of an account; (ix) relative size of account; and (x) such other factors as may be","page_number":58,"box":{"x":117,"y":335,"width":717,"height":12}},{"id":"467dea79-6908-4a8e-be44-cb1a0be0a2cc","block_type":"box","text":"approved by BlackRock’s general counsel. Moreover, investments may not be allocated to one client","page_number":58,"box":{"x":116,"y":351,"width":752,"height":12}},{"id":"27113e82-5203-486f-ab1e-2ff175e8f83d","block_type":"box","text":"account over another based on any of the following considerations: (i) to favor one client account at the","page_number":58,"box":{"x":116,"y":366,"width":771,"height":12}},{"id":"eb1fc90f-02dd-4d15-bb85-f8c94c60bf4c","block_type":"box","text":"expense of another; (ii) to generate higher fees paid by one client account over another or to produce","page_number":58,"box":{"x":116,"y":382,"width":757,"height":12}},{"id":"2f812012-239f-4ada-85ea-ff3d793dab70","block_type":"box","text":"greater performance compensation to BlackRock; (iii) to develop or enhance a relationship with a client","page_number":58,"box":{"x":116,"y":397,"width":770,"height":12}},{"id":"a6ee23f1-c611-4fe9-b41c-acc3c87cb298","block_type":"box","text":"or prospective client; (iv) to compensate a client for past services or benefits rendered to BlackRock or","page_number":58,"box":{"x":116,"y":413,"width":765,"height":12}},{"id":"e476add6-c085-4d79-b35b-5a65c6741aa4","block_type":"box","text":"to induce future services or benefits to be rendered to BlackRock; or (v) to manage or equalize","page_number":58,"box":{"x":116,"y":428,"width":707,"height":12}},{"id":"c89584c4-4ef8-42dc-8b6a-883b2d3422ba","block_type":"box","text":"investment performance among different client accounts.","page_number":58,"box":{"x":117,"y":444,"width":426,"height":12}},{"id":"3be27589-6ef3-4332-abc7-d077cfa5acc2","block_type":"box","text":"Equity securities will generally be allocated among client accounts within the same investment","page_number":58,"box":{"x":117,"y":475,"width":702,"height":12}},{"id":"ed1d32a6-a98f-40c8-a407-383475fe0e3d","block_type":"box","text":"mandate on a pro rata basis. All allocations of equity securities will be subject, where relevant, to share","page_number":58,"box":{"x":117,"y":490,"width":769,"height":12}},{"id":"06c41447-a974-4569-8191-33557c6695f2","block_type":"box","text":"minimums established for accounts and compliance constraints.","page_number":58,"box":{"x":117,"y":506,"width":479,"height":12}},{"id":"5f906bff-791a-418b-803a-f366de47975c","block_type":"box","text":"Initial public offerings (“IPOs”) of securities may be over-subscribed and subsequently trade at a","page_number":58,"box":{"x":117,"y":537,"width":716,"height":12}},{"id":"7bc4c8bd-fccf-4c44-ba94-77eb94f42d32","block_type":"box","text":"premium in the secondary market. In these situations, the supply of securities available for client","page_number":58,"box":{"x":117,"y":552,"width":718,"height":12}},{"id":"1b667261-fc2d-4716-a996-20f6cdefe2c4","block_type":"box","text":"accounts is often less than the amount of securities the accounts would otherwise take. In order to","page_number":58,"box":{"x":116,"y":568,"width":734,"height":9}},{"id":"edcbcb9c-6d13-457f-8f6f-429b2d3b16bc","block_type":"box","text":"allocate these investments fairly and equitably among client accounts over time, each portfolio","page_number":58,"box":{"x":116,"y":583,"width":704,"height":12}},{"id":"e3d79197-bec3-406f-a46f-d365aefb2141","block_type":"box","text":"manager or a member of his or her respective investment team will indicate to BFA’s trading desk their","page_number":58,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"57d02b14-6c24-405e-ae7e-920410c38a59","block_type":"box","text":"level of interest in a particular offering with respect to eligible client accounts for which that team is","page_number":58,"box":{"x":117,"y":614,"width":733,"height":12}},{"id":"d9301e4b-6386-4437-b89f-fe513f17893d","block_type":"box","text":"responsible. IPOs of U.S. equity securities will be identified as eligible for particular client accounts that","page_number":58,"box":{"x":117,"y":630,"width":768,"height":12}},{"id":"534ecb18-5cd8-4fdf-85c9-3ad344cc46ac","block_type":"box","text":"are managed by portfolio teams who have indicated interest in the offering based on market","page_number":58,"box":{"x":116,"y":645,"width":687,"height":12}},{"id":"2d04212b-a255-44bc-9822-7c2a6d8c9332","block_type":"box","text":"capitalization of the issuer of the security and the investment mandate of the client account and in the","page_number":58,"box":{"x":116,"y":661,"width":753,"height":12}},{"id":"e5524465-3b58-4352-909f-95b1e4a7519d","block_type":"box","text":"case of international equity securities, the country where the offering is taking place and the investment","page_number":58,"box":{"x":116,"y":676,"width":766,"height":12}},{"id":"f73c1b86-b196-458e-a04d-f7ee8e318e62","block_type":"box","text":"mandate of the client account. Generally, shares received during the IPO will be allocated among","page_number":58,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"2569d24f-1613-4d51-96ac-3f947ae99004","block_type":"box","text":"participating client accounts within each investment mandate on a pro rata basis. In situations where","page_number":58,"box":{"x":117,"y":707,"width":744,"height":12}},{"id":"e7e647d6-393c-4c80-b573-2352abe2b430","block_type":"box","text":"supply is too limited to be allocated among all accounts for which the investment is eligible, portfolio","page_number":58,"box":{"x":116,"y":723,"width":739,"height":12}},{"id":"f832fc5d-04cd-4cb3-b7ce-9cf0c534cdbf","block_type":"box","text":"managers may rotate such investment opportunities among one or more accounts so long as the","page_number":58,"box":{"x":117,"y":738,"width":718,"height":12}},{"id":"77593149-95a4-4d70-ae97-9d9fd26e10be","block_type":"box","text":"rotation system provides for fair access for all client accounts over time. Other allocation","page_number":58,"box":{"x":117,"y":754,"width":653,"height":12}},{"id":"94b043f7-5bdb-4507-89da-0e667bfe580a","block_type":"box","text":"methodologies that are considered by BFA to be fair and equitable to clients may be used as well.","page_number":58,"box":{"x":117,"y":769,"width":724,"height":12}},{"id":"a3e9a3e7-2d73-4173-bdc2-69169eadc251","block_type":"box","text":"Because different accounts may have differing investment objectives and policies, BFA may buy and","page_number":58,"box":{"x":117,"y":800,"width":745,"height":12}},{"id":"2ce95721-546b-42ca-8b59-4a91a49757b3","block_type":"box","text":"sell the same securities at the same time for different clients based on the particular investment","page_number":58,"box":{"x":116,"y":816,"width":708,"height":12}},{"id":"10021467-ecbe-4bcc-a3f9-434c80e26ed7","block_type":"box","text":"objective, guidelines and strategies of those accounts. For example, BFA may decide that it may be","page_number":58,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"99f37234-1a7c-49f0-9d70-cc2d0f734e7a","block_type":"box","text":"entirely appropriate for a growth fund to sell a security at the same time a value fund is buying that","page_number":58,"box":{"x":116,"y":847,"width":734,"height":12}},{"id":"5ecf6b9d-f3b7-4ef9-a417-e8220e4ee55d","block_type":"box","text":"security. To the extent that transactions on behalf of more than one client of BFA or the other Affiliates","page_number":58,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"c178fd23-ee2a-4d65-b486-7575dfe43057","block_type":"box","text":"during the same period increase the demand for securities being purchased or the supply of securities","page_number":58,"box":{"x":116,"y":878,"width":763,"height":12}},{"id":"43d0d87f-72c0-44c4-9155-a45be74f78a8","block_type":"box","text":"55","page_number":58,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"3522a53f-fa8d-4d12-bd17-e55af2ba1526","block_type":"box","text":"NM1026U-6039989-58/256","page_number":58,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"bcc2c783-f2cd-45fa-813e-dbc9fa247362","block_type":"box","text":"being sold, there may be an adverse effect on price. For example, sales of a security by BlackRock on","page_number":59,"box":{"x":117,"y":87,"width":763,"height":12}},{"id":"57497f44-704c-478a-9149-a90ceda137e3","block_type":"box","text":"behalf of one or more of its clients may decrease the market price of such security, adversely","page_number":59,"box":{"x":117,"y":102,"width":695,"height":13}},{"id":"9de0f854-5932-4394-8f2f-68343b4dd832","block_type":"box","text":"impacting other BlackRock clients that still hold the security. If purchases or sales of securities arise for","page_number":59,"box":{"x":117,"y":118,"width":769,"height":12}},{"id":"e7c71093-0fda-4612-9348-cc4b45e55213","block_type":"box","text":"consideration at or about the same time that would involve the Fund or other clients or funds for which","page_number":59,"box":{"x":116,"y":134,"width":763,"height":9}},{"id":"5f542925-c037-476e-96fd-fe75c2c6b801","block_type":"box","text":"BFA or another Affiliate act as investment manager, transactions in such securities will be made,","page_number":59,"box":{"x":117,"y":149,"width":721,"height":12}},{"id":"3e0bfea7-d0dd-4b27-9071-43777ab76a60","block_type":"box","text":"insofar as feasible, for the respective funds and clients in a manner deemed equitable to all.","page_number":59,"box":{"x":117,"y":165,"width":686,"height":11}},{"id":"1dfbc108-f1ed-4d19-93e2-623501d8b226","block_type":"box","text":"In certain instances, BFA may find it efficient for purposes of seeking to obtain best execution, to","page_number":59,"box":{"x":117,"y":196,"width":720,"height":12}},{"id":"728ff190-cefb-458f-9596-ebae1c8d38b1","block_type":"box","text":"aggregate certain contemporaneous purchases or sale orders of its advisory accounts and advisory","page_number":59,"box":{"x":116,"y":211,"width":745,"height":12}},{"id":"76009b8d-ac02-499a-8ba7-d26913de2c3b","block_type":"box","text":"accounts of affiliates. In general, all contemporaneous trades for client accounts under management by","page_number":59,"box":{"x":116,"y":227,"width":772,"height":12}},{"id":"5cc9d4e7-8c72-4a77-95eb-fbbd8b340760","block_type":"box","text":"the same portfolio manager or investment team will be aggregated in a single order if the trader","page_number":59,"box":{"x":116,"y":242,"width":713,"height":12}},{"id":"9482837e-52ac-4ed7-a9e5-dbefc784ac1e","block_type":"box","text":"believes the aggregated trade would provide each client with an opportunity to achieve a more","page_number":59,"box":{"x":117,"y":258,"width":704,"height":12}},{"id":"618f8fc5-caf5-44b1-985b-c95d6d1a17ec","block_type":"box","text":"favorable execution at a potentially lower execution cost. The costs associated with an aggregated","page_number":59,"box":{"x":116,"y":273,"width":736,"height":12}},{"id":"a21a5bf5-141c-4cb6-bcdf-2a4601cc44a5","block_type":"box","text":"order will be shared pro rata among the clients in the aggregated order. Generally, if an order for a","page_number":59,"box":{"x":116,"y":289,"width":735,"height":12}},{"id":"dac80c6f-5277-4ada-b52e-9215600ed518","block_type":"box","text":"particular portfolio manager or management team is filled at several different prices through multiple","page_number":59,"box":{"x":117,"y":304,"width":746,"height":12}},{"id":"68feec8e-b6e6-41fb-a18c-19bbaefb0455","block_type":"box","text":"trades, all accounts participating in the order will receive the average price except in the case of certain","page_number":59,"box":{"x":116,"y":320,"width":771,"height":12}},{"id":"f5bb95bb-d7cc-45ba-add9-2f30e3bee3b1","block_type":"box","text":"international markets where average pricing is not permitted. While in some cases this practice could","page_number":59,"box":{"x":117,"y":335,"width":753,"height":12}},{"id":"0a632087-d950-4e73-9244-b8919f3b1362","block_type":"box","text":"have a detrimental effect upon the price or value of the security as far as the Fund is concerned, in","page_number":59,"box":{"x":117,"y":351,"width":736,"height":12}},{"id":"f8aa0a5a-2f0b-4ba8-aa1c-371092ce7904","block_type":"box","text":"other cases it could be beneficial to the Fund. Transactions effected by BFA or the other Affiliates on","page_number":59,"box":{"x":116,"y":366,"width":751,"height":12}},{"id":"e89dad3d-54b3-4e19-8154-6bbd42c0a2dc","block_type":"box","text":"behalf of more than one of its clients during the same period may increase the demand for securities","page_number":59,"box":{"x":117,"y":382,"width":749,"height":12}},{"id":"295f8787-c6a0-4201-b8f2-482d57dc0ac3","block_type":"box","text":"being purchased or the supply of securities being sold, causing an adverse effect on price. The trader","page_number":59,"box":{"x":117,"y":397,"width":758,"height":12}},{"id":"8e00ff72-3246-4f6a-a6c4-4a2bcf51f761","block_type":"box","text":"will give the aggregated order to the broker-dealer that the trader has identified as being able to","page_number":59,"box":{"x":116,"y":413,"width":714,"height":12}},{"id":"a4a4e513-d2ef-4c76-9964-f56d952422f7","block_type":"box","text":"provide the best execution of the order. Orders for purchase or sale of securities will be placed within a","page_number":59,"box":{"x":117,"y":428,"width":767,"height":12}},{"id":"3f722740-7da3-42cd-a7fd-c450c19de2c5","block_type":"box","text":"reasonable amount of time of the order receipt and aggregated orders will be kept aggregated only","page_number":59,"box":{"x":117,"y":444,"width":737,"height":12}},{"id":"7006962e-dd28-4d6b-ae09-850b426916d2","block_type":"box","text":"long enough to execute the order.","page_number":59,"box":{"x":117,"y":459,"width":255,"height":12}},{"id":"ca7c63f0-2411-42a7-8a88-b048a6b58aeb","block_type":"box","text":"The Fund will not purchase securities during the existence of any underwriting or selling group relating","page_number":59,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"307eeab5-a821-4e7b-bff4-3c05bad8c710","block_type":"box","text":"to such securities of which BFA, BRIL or any affiliated person (as defined in the Investment Company","page_number":59,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"edde81db-7781-4ec9-a79c-96bc38d45c78","block_type":"box","text":"Act) thereof is a member except pursuant to procedures adopted by the Board in accordance with","page_number":59,"box":{"x":116,"y":521,"width":731,"height":12}},{"id":"de19bed5-a140-483f-9c2e-05977d0e458b","block_type":"box","text":"Rule 10f-3 under the Investment Company Act. In no instance will portfolio securities be purchased","page_number":59,"box":{"x":117,"y":537,"width":739,"height":12}},{"id":"f3c72162-b7b6-4e68-99cf-b0a6a45e58c6","block_type":"box","text":"from or sold to BFA, BRIL or any affiliated person of the foregoing entities except as permitted by","page_number":59,"box":{"x":116,"y":552,"width":725,"height":12}},{"id":"3374590e-d112-43b1-b76d-0f365b1aae1e","block_type":"box","text":"Commission exemptive order or by applicable law.","page_number":59,"box":{"x":117,"y":568,"width":378,"height":12}},{"id":"b4a86306-e239-474a-991e-78bc89276fa3","block_type":"box","text":"As of the date of this SAI, the Fund has not paid any brokerage commissions because the Fund has","page_number":59,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"a7c8ccde-42a4-4c13-8742-e9db792e2b9f","block_type":"box","text":"not yet commenced operations.","page_number":59,"box":{"x":117,"y":614,"width":238,"height":12}},{"id":"82a71d1c-b432-4531-8718-6024815f7ffc","block_type":"box","text":"As of the date of this SAI, the Fund has not held any securities of its regular broker-dealers (as defined","page_number":59,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"733d7eac-5711-427c-9960-241fe9edff2c","block_type":"box","text":"in Rule 10b-1 under the 1940 Act) or their parent entities because the Fund has not yet commenced","page_number":59,"box":{"x":117,"y":661,"width":741,"height":12}},{"id":"5d002123-49ab-4026-a817-75df7f9401a1","block_type":"box","text":"operations.","page_number":59,"box":{"x":116,"y":676,"width":81,"height":12}},{"id":"61a145fa-9bbb-4d81-a01f-b063faf97aa4","block_type":"box","text":"The Fund’s purchase and sale orders for securities may be combined with those of other investment","page_number":59,"box":{"x":116,"y":707,"width":744,"height":12}},{"id":"2f77da08-08f9-44af-88c4-2da748cfce45","block_type":"box","text":"companies, clients or accounts that BlackRock manages or advises. If purchases or sales of portfolio","page_number":59,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"66b28c92-b7e0-4dcd-99a1-39c286272400","block_type":"box","text":"securities of the Fund and one or more other accounts managed or advised by BlackRock are","page_number":59,"box":{"x":116,"y":738,"width":696,"height":12}},{"id":"45b5e46f-ff05-4af2-94dc-aa775e3efe5d","block_type":"box","text":"considered at or about the same time, transactions in such securities are allocated among the Fund","page_number":59,"box":{"x":116,"y":754,"width":739,"height":12}},{"id":"998dafc4-ee82-4811-b814-4a17b3719e6d","block_type":"box","text":"and the other accounts in a manner deemed equitable to all by BlackRock. In some cases, this","page_number":59,"box":{"x":116,"y":769,"width":703,"height":12}},{"id":"2cb15716-d384-4608-873f-e7f7772fea47","block_type":"box","text":"procedure could have a detrimental effect on the price or volume of the security as far as the Fund is","page_number":59,"box":{"x":117,"y":785,"width":746,"height":12}},{"id":"5bb00654-18ac-4cbe-8d91-e02ea74698b9","block_type":"box","text":"concerned. However, in other cases, it is possible that the ability to participate in volume transactions","page_number":59,"box":{"x":116,"y":800,"width":750,"height":12}},{"id":"16927ff4-8d5d-4663-ab11-c2aae6feb3ed","block_type":"box","text":"and to negotiate lower transaction costs will be beneficial to the Fund. BlackRock may deal, trade and","page_number":59,"box":{"x":116,"y":816,"width":754,"height":12}},{"id":"348e3f95-a604-4d7a-a854-f6856aa85b21","block_type":"box","text":"invest for its own account in the types of securities in which the Fund may invest. BlackRock may, from","page_number":59,"box":{"x":117,"y":831,"width":768,"height":12}},{"id":"57c0424c-eab0-4fde-a2e1-e13dbba89983","block_type":"box","text":"time to time, effect trades on behalf of and for the","page_number":59,"box":{"x":116,"y":847,"width":372,"height":11}},{"id":"3acf99e0-f52c-4279-aec7-3684ad01a795","block_type":"box","text":"account of the Fund with brokers or dealers that are","page_number":59,"box":{"x":488,"y":847,"width":390,"height":9}},{"id":"cb00fd1c-50cc-4c49-bc3e-8363eac34845","block_type":"box","text":"affiliated with BFA, in conformity with the 1940 Act and SEC rules and regulations. Under these","page_number":59,"box":{"x":116,"y":862,"width":712,"height":12}},{"id":"f24d3748-456c-4c60-aafa-d81940a5cde8","block_type":"box","text":"provisions, any commissions paid to affiliated brokers or dealers must be reasonable and fair","page_number":59,"box":{"x":117,"y":878,"width":694,"height":12}},{"id":"417e744a-d878-4478-a703-f3187bc0dc4b","block_type":"box","text":"56","page_number":59,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"622f2b72-0fe6-4024-82bb-7d08d203fff5","block_type":"box","text":"NM1026U-6039989-59/256","page_number":59,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d8b08023-910b-43b5-b5ee-117f4a5106a5","block_type":"box","text":"compared to the commissions charged by other brokers or dealers in comparable transactions. The","page_number":60,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"e5d2d80e-fe6d-4e95-93af-57460de392ef","block_type":"box","text":"Fund will not deal with affiliates in principal transactions unless permitted by applicable SEC rules or","page_number":60,"box":{"x":117,"y":102,"width":747,"height":13}},{"id":"c8559346-0cdb-4e8f-b028-885fa332fb16","block_type":"box","text":"regulations, or by SEC exemptive order.","page_number":60,"box":{"x":117,"y":118,"width":302,"height":12}},{"id":"edd5aedf-2769-4790-886e-c4303bc913a4","block_type":"box","text":"While the Fund generally does not expect to engage in trading for short-term gains, it will effect","page_number":60,"box":{"x":116,"y":149,"width":710,"height":12}},{"id":"2596e05a-0a57-4616-a5d9-ab00a2ff6b60","block_type":"box","text":"portfolio transactions without regard to any holding period if, in Fund management’s judgment, such","page_number":60,"box":{"x":117,"y":165,"width":743,"height":12}},{"id":"399f09f0-129d-4ebe-96e6-6d8c45f69ae5","block_type":"box","text":"transactions are advisable in light of a change in circumstances of a particular company or within a","page_number":60,"box":{"x":116,"y":180,"width":737,"height":12}},{"id":"08c27d6c-0970-41ec-8d71-65e4e9f255f5","block_type":"box","text":"particular industry or in general market, economic or financial conditions. The portfolio turnover rate is","page_number":60,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"c6b45199-fe6d-4da7-9b91-b1a9c596281e","block_type":"box","text":"calculated by dividing the lesser of the Fund’s annual sales or purchases of portfolio securities","page_number":60,"box":{"x":116,"y":211,"width":704,"height":12}},{"id":"17f3c566-48f7-447d-944d-0925e6b77aab","block_type":"box","text":"(exclusive of purchases or sales of U.S. Government securities and all other securities whose","page_number":60,"box":{"x":117,"y":227,"width":699,"height":12}},{"id":"08963c29-8c66-4b2c-94d4-eea3986086ee","block_type":"box","text":"maturities at the time of acquisition were one year or less) by the monthly average value of the","page_number":60,"box":{"x":117,"y":242,"width":705,"height":12}},{"id":"aed05cf3-6260-4b53-8a16-26ad56563010","block_type":"box","text":"securities in the portfolio during the year. A high rate of portfolio turnover results in certain tax","page_number":60,"box":{"x":116,"y":258,"width":698,"height":12}},{"id":"56f97239-b502-4bb1-a0d5-425d52176500","block_type":"box","text":"consequences, such as increased capital gain dividends and/or ordinary income dividends, and in","page_number":60,"box":{"x":116,"y":273,"width":731,"height":12}},{"id":"3cffb6af-5efa-47a1-8ddf-a6535d6bf49b","block_type":"box","text":"correspondingly greater transaction costs in the form of dealer spreads and brokerage commissions,","page_number":60,"box":{"x":116,"y":289,"width":751,"height":12}},{"id":"f91919e7-cace-4ced-ab2f-85e2fae95d9d","block_type":"box","text":"which are borne directly by the Fund.","page_number":60,"box":{"x":116,"y":304,"width":280,"height":12}},{"id":"6490fc5f-0e72-4ba2-8064-59246acfb622","block_type":"box","text":"Additional Information Concerning the","page_number":60,"box":{"x":116,"y":355,"width":687,"height":30}},{"id":"56f47a95-99f2-4fa1-af05-f329916728d9","block_type":"box","text":"Trust","page_number":60,"box":{"x":117,"y":389,"width":102,"height":23}},{"id":"645405db-ae53-4f9d-ba3c-25138e39def6","block_type":"box","text":"Shares.","page_number":60,"box":{"x":116,"y":441,"width":59,"height":10}},{"id":"b8054ac8-34b4-4db4-84fd-dce0394e570f","block_type":"box","text":"The Trust is an open-end management investment company registered with the SEC under","page_number":60,"box":{"x":176,"y":441,"width":689,"height":12}},{"id":"070a878f-0460-4d4f-a98c-6dac2d35fc29","block_type":"box","text":"the 1940 Act. The offering of the Trust’s shares is registered under the 1933 Act.","page_number":60,"box":{"x":116,"y":457,"width":604,"height":12}},{"id":"ff16e454-9bae-4180-a5ea-8b74edb0f5e6","block_type":"box","text":"The Trust was organized as a Delaware statutory trust on October 31, 2018 and is authorized to have","page_number":60,"box":{"x":116,"y":488,"width":760,"height":12}},{"id":"104219f5-3e05-491c-9b27-4c293a7ce7ca","block_type":"box","text":"multiple series or portfolios, each called a fund. The Trust issues shares of beneficial interests in each","page_number":60,"box":{"x":117,"y":503,"width":760,"height":12}},{"id":"9f919f47-c385-4af7-bc68-ab89fd56f688","block_type":"box","text":"fund with no par value. The Board may establish and designate additional funds. This SAI relates","page_number":60,"box":{"x":116,"y":519,"width":726,"height":12}},{"id":"01ef34f6-e16e-4ca0-b6a0-3fcea6ce9af0","block_type":"box","text":"solely to the Fund.","page_number":60,"box":{"x":116,"y":534,"width":142,"height":12}},{"id":"a9f4b3ab-0316-40c5-8314-087cf6ed7fda","block_type":"box","text":"Each whole share issued by a fund has a pro rata interest in the assets of that fund. Shares have no","page_number":60,"box":{"x":117,"y":565,"width":748,"height":12}},{"id":"97a02039-10f0-4ef2-8e81-c7cea6188cdf","block_type":"box","text":"preemptive, exchange, subscription or conversion rights and are freely transferable. Each share is","page_number":60,"box":{"x":117,"y":581,"width":732,"height":12}},{"id":"0bf165cc-487e-45a1-8c98-f3610a2b0da5","block_type":"box","text":"entitled to participate equally in dividends and distributions declared by the Board with respect to the","page_number":60,"box":{"x":116,"y":596,"width":749,"height":12}},{"id":"c7619a00-1810-435a-9b94-e2673818609b","block_type":"box","text":"relevant fund, and in the net distributable assets of such fund on liquidation.","page_number":60,"box":{"x":117,"y":612,"width":566,"height":12}},{"id":"3e3f4693-dd20-4a4e-8afb-bee3c4a8f453","block_type":"box","text":"Each share has one vote with respect to matters upon which the shareholder is entitled to vote. In any","page_number":60,"box":{"x":117,"y":643,"width":762,"height":12}},{"id":"b27e244c-86e1-4aca-982f-74c02c6ae26f","block_type":"box","text":"matter submitted to shareholders for a vote, each fund shall hold a separate vote, provided that","page_number":60,"box":{"x":117,"y":658,"width":711,"height":12}},{"id":"44f28f4f-79a6-4e3c-93fd-568d7f708142","block_type":"box","text":"shareholders of all affected funds will vote together when: (i) required by the 1940 Act, or (ii) the","page_number":60,"box":{"x":116,"y":674,"width":711,"height":12}},{"id":"56d24966-c800-449d-8e27-0e68f6e3c327","block_type":"box","text":"Trustees determine that the matter affects the interests of more than one fund.","page_number":60,"box":{"x":116,"y":689,"width":582,"height":10}},{"id":"fb85dd02-a320-422d-9f56-429797b48fca","block_type":"box","text":"Under Delaware law, the Trust is not required to hold an annual meeting of shareholders unless","page_number":60,"box":{"x":117,"y":720,"width":709,"height":12}},{"id":"74115977-96e2-46a4-b758-aa46dc955a93","block_type":"box","text":"required to do so under the 1940 Act. The policy of","page_number":60,"box":{"x":117,"y":736,"width":377,"height":12}},{"id":"5d78d8e6-7905-4323-baeb-666844d2cb82","block_type":"box","text":"the Trust is not to hold an annual meeting of","page_number":60,"box":{"x":499,"y":736,"width":329,"height":12}},{"id":"0709adea-2113-40d5-a7b5-b9c7dbcf4b08","block_type":"box","text":"shareholders unless required to do so under the 1940 Act. All shares (regardless of the fund) have","page_number":60,"box":{"x":116,"y":751,"width":731,"height":12}},{"id":"a3156045-426e-49b2-849e-1b41668143ef","block_type":"box","text":"noncumulative voting rights in the election of members of the Board. Under Delaware law, Trustees of","page_number":60,"box":{"x":117,"y":767,"width":756,"height":12}},{"id":"b4431cbb-9947-4166-b011-4b5c6531f18b","block_type":"box","text":"the Trust may be removed by vote of the shareholders.","page_number":60,"box":{"x":116,"y":782,"width":407,"height":12}},{"id":"794891cc-0c7c-4096-9a6c-6d6166ce2072","block_type":"box","text":"Following the creation of the initial Creation Unit(s) of shares of a fund and immediately prior to the","page_number":60,"box":{"x":117,"y":813,"width":731,"height":12}},{"id":"f1378464-0519-48b7-bf0d-db92301f7f5e","block_type":"box","text":"commencement of trading in such fund’s shares, a holder of shares may be a “control person” of the","page_number":60,"box":{"x":116,"y":829,"width":749,"height":12}},{"id":"d06ae454-63e9-424f-8191-05e66d622c7b","block_type":"box","text":"fund, as defined in Rule 0-1 under the 1940 Act. A","page_number":60,"box":{"x":116,"y":844,"width":378,"height":11}},{"id":"5845920c-3e0e-417e-9aac-a589e4c0a1c0","block_type":"box","text":"fund cannot predict the length of time for which one","page_number":60,"box":{"x":494,"y":844,"width":386,"height":12}},{"id":"e24dc38d-f525-4b64-a401-e1aa9573a8b9","block_type":"box","text":"or more shareholders may remain a control person of the fund.","page_number":60,"box":{"x":116,"y":860,"width":471,"height":12}},{"id":"723fd041-183a-4f06-8097-79c937edaef1","block_type":"box","text":"57","page_number":60,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"7c6e7de1-fbfa-4bdf-b986-c05a40361f2c","block_type":"box","text":"NM1026U-6039989-60/256","page_number":60,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"7452bc69-902a-4377-a3cc-0ef08934b993","block_type":"box","text":"Shareholders may make inquiries by writing to BlackRock ETF Trust, c/o BlackRock Investments, LLC,","page_number":61,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"75b181dd-ea72-4af8-8c0d-77293ff3b331","block_type":"box","text":"1 University Square Drive, Princeton, NJ 08540.","page_number":61,"box":{"x":118,"y":102,"width":360,"height":13}},{"id":"c6995685-1ec8-4b21-a164-dee77d6b6e83","block_type":"box","text":"Absent an applicable exemption or other relief from the SEC or its staff, beneficial owners of more than","page_number":61,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"5d395e1c-8422-4b6b-8a6e-e34c49968f8e","block_type":"box","text":"5% of the shares of a fund may be subject to the reporting provisions of Section 13 of the 1934 Act and","page_number":61,"box":{"x":116,"y":149,"width":771,"height":13}},{"id":"6c6a96cc-ed6e-4cc3-9c05-628f00585f87","block_type":"box","text":"the SEC’s rules promulgated thereunder. In addition, absent an applicable exemption or other relief","page_number":61,"box":{"x":116,"y":165,"width":742,"height":12}},{"id":"b577a414-cf77-490c-93a0-6a23fad8ac44","block_type":"box","text":"from the SEC or its staff, officers and trustees of a fund and beneficial owners of 10% of the shares of","page_number":61,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"c570c027-1541-4706-85d6-72f6321049ec","block_type":"box","text":"a fund (“Insiders”) may be subject to the insider reporting, short-swing profit and short sale provisions","page_number":61,"box":{"x":116,"y":196,"width":756,"height":12}},{"id":"ca4357b6-947f-489d-b168-48788b0e5585","block_type":"box","text":"of Section 16 of the 1934 Act and the SEC’s rules promulgated thereunder. Beneficial owners and","page_number":61,"box":{"x":116,"y":211,"width":732,"height":13}},{"id":"f7c1410f-66c8-4957-b2ad-c06ee8602938","block_type":"box","text":"Insiders should consult with their own legal counsel concerning their obligations under Sections 13 and","page_number":61,"box":{"x":117,"y":227,"width":767,"height":12}},{"id":"926f18b3-9ec8-447b-b81a-d2f0044f9f67","block_type":"box","text":"16 of the 1934 Act and existing guidance provided by the SEC staff.","page_number":61,"box":{"x":118,"y":242,"width":507,"height":13}},{"id":"2a1f4153-4f83-45f9-bb8f-065a13e79780","block_type":"box","text":"In accordance with the Trust’s current Agreement and Declaration of Trust (the “Declaration of Trust”),","page_number":61,"box":{"x":117,"y":274,"width":762,"height":12}},{"id":"89ce38b5-a669-4799-ae63-917f11caf0b7","block_type":"box","text":"the Board may, without shareholder approval (unless such shareholder approval is required by","page_number":61,"box":{"x":116,"y":289,"width":707,"height":13}},{"id":"695819fc-234c-44f1-9616-5e65a23e6a93","block_type":"box","text":"applicable law, including the 1940 Act), authorize certain funds to merge, reorganize, consolidate, sell","page_number":61,"box":{"x":116,"y":305,"width":759,"height":12}},{"id":"7a250329-652d-47b3-b461-d40aa5f9a4c2","block_type":"box","text":"all or substantially all of their assets, or take other similar actions with, to or into another fund. The","page_number":61,"box":{"x":116,"y":320,"width":732,"height":13}},{"id":"1d1fe60d-5afa-455d-bdaa-37905f2c9e03","block_type":"box","text":"Trust or a fund may be terminated by a majority vote of the Board. Although the shares are not","page_number":61,"box":{"x":116,"y":336,"width":708,"height":12}},{"id":"f2d47562-ba39-4ed0-8c2e-c3739c6c116c","block_type":"box","text":"automatically redeemable upon the occurrence of any specific event, the Declaration of Trust provides","page_number":61,"box":{"x":116,"y":351,"width":764,"height":13}},{"id":"a5a1baa9-0aaa-4e6b-9d7e-ca39ef11aa01","block_type":"box","text":"that the Board will have the unrestricted power to alter the number of shares in a Creation Unit.","page_number":61,"box":{"x":116,"y":367,"width":710,"height":12}},{"id":"1b3712ff-e70f-4df0-8f0d-82cf238789eb","block_type":"box","text":"Therefore, in the event of a termination of the Trust or a fund, the Board, in its sole discretion, could","page_number":61,"box":{"x":116,"y":382,"width":744,"height":12}},{"id":"ff7be553-74e6-4270-8829-ca4ad16ed54a","block_type":"box","text":"determine to permit the shares to be redeemable in aggregations smaller than Creation Units or to be","page_number":61,"box":{"x":116,"y":398,"width":758,"height":12}},{"id":"7512fac6-c23c-48e4-9700-3ab85487b397","block_type":"box","text":"individually redeemable. In such circumstance, the Trust or a fund may make redemptions, for cash or","page_number":61,"box":{"x":117,"y":413,"width":762,"height":13}},{"id":"41633ade-7192-4913-8782-9f4c4e49b21a","block_type":"box","text":"for a combination of cash and securities. Further, in the event of a termination of the Trust or a fund,","page_number":61,"box":{"x":116,"y":429,"width":748,"height":11}},{"id":"f7b32824-35b2-491a-a380-8a77467629fa","block_type":"box","text":"the Trust or a fund might elect to pay cash redemptions to all shareholders, with an in-kind election for","page_number":61,"box":{"x":116,"y":444,"width":762,"height":13}},{"id":"aa083288-d73c-4a54-a703-4d7652bf7bff","block_type":"box","text":"shareholders owning in excess of a certain stated minimum amount.","page_number":61,"box":{"x":116,"y":460,"width":511,"height":12}},{"id":"e277fc3a-cd2e-4cb4-a5ec-3d27b5b19160","block_type":"box","text":"DTC as Securities Depository for Shares of the Fund.","page_number":61,"box":{"x":117,"y":491,"width":422,"height":13}},{"id":"7941d638-81a2-484a-99ad-d67d7636056e","block_type":"box","text":"Shares of the Fund are represented by","page_number":61,"box":{"x":540,"y":491,"width":299,"height":13}},{"id":"a07a5c87-d19b-42a0-abd7-692bfbb47b20","block_type":"box","text":"securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.","page_number":61,"box":{"x":116,"y":507,"width":727,"height":12}},{"id":"5acace86-d5ee-4bc7-a630-1ae054a32b42","block_type":"box","text":"DTC was created in 1973 to enable electronic movement","page_number":61,"box":{"x":117,"y":538,"width":414,"height":10}},{"id":"3e94e3b1-f40d-4ef2-9895-5209f8d98980","block_type":"box","text":"t of securities between its participants (“DTC","page_number":61,"box":{"x":530,"y":538,"width":323,"height":13}},{"id":"5ab5f030-04bd-450a-a231-ee5284545f65","block_type":"box","text":"Participants”), and NSCC was established in 1976 to provide a single settlement system for securities","page_number":61,"box":{"x":117,"y":554,"width":741,"height":12}},{"id":"95065f47-29bd-4b03-adb0-98e0e0c574f3","block_type":"box","text":"clearing and to serve as central counterparty for se","page_number":61,"box":{"x":116,"y":569,"width":370,"height":13}},{"id":"f9785f7a-7a44-4278-ab31-d342ddb1d7f7","block_type":"box","text":"curities trades among DTC Participants. In 1999, DTC","page_number":61,"box":{"x":487,"y":569,"width":397,"height":13}},{"id":"1aa9b5d0-3700-46c2-9106-e689af8812bf","block_type":"box","text":"and NSCC were consolidated within the Depository Tr","page_number":61,"box":{"x":116,"y":585,"width":393,"height":12}},{"id":"ecd60c80-719b-41c8-b34f-1ba99152973e","block_type":"box","text":"ust & Clearing Corporation (“DTCC”) and became","page_number":61,"box":{"x":510,"y":585,"width":365,"height":12}},{"id":"b510bf6f-c20f-4dfa-9552-2e7860024b23","block_type":"box","text":"wholly-owned subsidiaries of DTCC. The common sto","page_number":61,"box":{"x":116,"y":600,"width":391,"height":13}},{"id":"671735c2-7ff5-42c8-94b0-889f8a197e03","block_type":"box","text":"ck of DTCC is owned by the DTC Participants, but","page_number":61,"box":{"x":508,"y":600,"width":370,"height":13}},{"id":"dd3d5a9e-b478-4511-8f75-7d89f97682d1","block_type":"box","text":"NYSE and FINRA, through subsidiaries, hold preferred shar","page_number":61,"box":{"x":117,"y":616,"width":435,"height":12}},{"id":"3a47133f-8073-45a7-bb47-a19afd12bc84","block_type":"box","text":"es in DTCC that provide them with the right","page_number":61,"box":{"x":552,"y":616,"width":319,"height":12}},{"id":"87f1e707-86c2-4dce-bdcf-6989f137d25a","block_type":"box","text":"to elect one member each to the DTCC board of direct","page_number":61,"box":{"x":116,"y":631,"width":396,"height":10}},{"id":"34d5f228-4967-4478-83ca-1ff613c08520","block_type":"box","text":"ors. Access to the DTC system is available to","page_number":61,"box":{"x":513,"y":631,"width":334,"height":13}},{"id":"805b6ee5-7f18-4082-8cae-c76868ffb706","block_type":"box","text":"entities, such as banks, brokers, dealers and trust co","page_number":61,"box":{"x":116,"y":647,"width":383,"height":11}},{"id":"7e53a815-3ba1-4e99-9d0c-cb78b8e0660c","block_type":"box","text":"mpanies, that clear through or maintain a custodial","page_number":61,"box":{"x":501,"y":647,"width":372,"height":12}},{"id":"39f55b53-4a0e-41d0-ac99-b934152cfc1e","block_type":"box","text":"relationship with a DTC Participant, either dire","page_number":61,"box":{"x":117,"y":662,"width":333,"height":12}},{"id":"0a895f52-dd25-48b2-9f56-6e98b1834434","block_type":"box","text":"ctly or indirectly (“Indirect Participants”).","page_number":61,"box":{"x":450,"y":662,"width":287,"height":13}},{"id":"0318967a-2506-45d6-8438-5cb09df38761","block_type":"box","text":"Beneficial ownership of shares is limited to DTC Participants, Indirect Participants and persons holding","page_number":61,"box":{"x":117,"y":694,"width":760,"height":12}},{"id":"a7792c98-72cf-43a8-82c8-3426c2444736","block_type":"box","text":"interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in","page_number":61,"box":{"x":117,"y":709,"width":710,"height":12}},{"id":"227eafea-70f1-49af-9079-b6002d337ba7","block_type":"box","text":"shares (owners of such beneficial interests are referred to herein as “Beneficial Owners”) is shown on,","page_number":61,"box":{"x":116,"y":724,"width":757,"height":12}},{"id":"ce2f6e6a-84a1-4fb6-9f75-fd030fef72a2","block_type":"box","text":"and the transfer of ownership is effected only through, records maintained by DTC (with respect to","page_number":61,"box":{"x":116,"y":739,"width":729,"height":12}},{"id":"3f5efb0d-ef8a-4794-aa20-6206fe485d88","block_type":"box","text":"DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and","page_number":61,"box":{"x":117,"y":755,"width":730,"height":12}},{"id":"5b62c601-1a3d-4c48-9c95-d5b2cd9488a3","block_type":"box","text":"Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the","page_number":61,"box":{"x":117,"y":770,"width":741,"height":12}},{"id":"b03d349e-a84e-4a10-b086-2fa22f7d6dd1","block_type":"box","text":"DTC Participant a written confirmation relating to their purchase of shares. The laws of some","page_number":61,"box":{"x":117,"y":785,"width":687,"height":12}},{"id":"f07b4990-c31d-4c25-87fb-a6b2d317ca6e","block_type":"box","text":"jurisdictions may require that certain purchasers of securities take physical delivery of such securities","page_number":61,"box":{"x":115,"y":800,"width":751,"height":12}},{"id":"0dba5dea-bcd1-4d6f-b531-e42fa54cad06","block_type":"box","text":"in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in","page_number":61,"box":{"x":117,"y":816,"width":755,"height":12}},{"id":"39e2ec20-5066-416d-8979-f3234d29300a","block_type":"box","text":"shares of the Fund.","page_number":61,"box":{"x":116,"y":831,"width":149,"height":9}},{"id":"a7200f8f-1835-4770-862d-167da59a26fb","block_type":"box","text":"Conveyance of all notices, statements and other communications to Beneficial Owners is effected as","page_number":61,"box":{"x":117,"y":862,"width":752,"height":12}},{"id":"f10b5b3b-6f84-4b2c-9764-6274b3f53dc0","block_type":"box","text":"follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make","page_number":61,"box":{"x":116,"y":877,"width":755,"height":12}},{"id":"4248fd27-a28e-444f-99eb-8b9d6e634b73","block_type":"box","text":"58","page_number":61,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"3b2631e6-2582-4761-8b5e-8a3d09ffdfb2","block_type":"box","text":"NM1026U-6039989-61/256","page_number":61,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"2eb442e8-c86e-44bf-b724-9e1bbe0dbc27","block_type":"box","text":"available to the Trust upon request and for a fee to be charged to the Trust a listing of the shares of the","page_number":62,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"26c09fa6-6cb7-452a-88b8-2e6a3f66788e","block_type":"box","text":"Fund held by each DTC Participant. The Trust shall inquire of each such DTC Participant as to the","page_number":62,"box":{"x":117,"y":102,"width":734,"height":12}},{"id":"c54740d3-983a-4070-8ee0-f2a70a82ffeb","block_type":"box","text":"number of Beneficial Owners holding shares, directly or indirectly, through such DTC Participant. The","page_number":62,"box":{"x":117,"y":117,"width":755,"height":12}},{"id":"118a7520-8235-435d-8492-74debb72b169","block_type":"box","text":"Trust shall provide each such DTC Participant with copies of such notice, statement or other","page_number":62,"box":{"x":116,"y":132,"width":689,"height":12}},{"id":"80f29800-f957-4c64-bfd8-2bfb445369db","block_type":"box","text":"communication, in such form, number and at such place as such DTC Participant may reasonably","page_number":62,"box":{"x":116,"y":148,"width":731,"height":12}},{"id":"2c43e9d9-deb9-4d6a-86bb-a9bf2691847e","block_type":"box","text":"request, in order that such notice, statement or communication may be transmitted by such DTC","page_number":62,"box":{"x":117,"y":163,"width":720,"height":12}},{"id":"b760315d-3344-4e82-949a-cc5be591073d","block_type":"box","text":"Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each","page_number":62,"box":{"x":117,"y":178,"width":734,"height":12}},{"id":"f6fddc8a-473e-4a0b-a97a-cc5faee0583c","block_type":"box","text":"such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to","page_number":62,"box":{"x":116,"y":193,"width":749,"height":12}},{"id":"8e6c6ec2-c7f7-4ddc-b373-81f17f580e23","block_type":"box","text":"such transmittal, all subject to applicable statutory and regulatory requirements.","page_number":62,"box":{"x":116,"y":209,"width":595,"height":12}},{"id":"63eceeba-101f-41c4-822a-f8cb31f818d6","block_type":"box","text":"Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all","page_number":62,"box":{"x":116,"y":238,"width":744,"height":12}},{"id":"f965f103-a7f9-485f-8aa3-98d243f43c98","block_type":"box","text":"shares of the Trust. DTC or its nominee, upon receipt of any such distributions, shall credit immediately","page_number":62,"box":{"x":116,"y":253,"width":771,"height":12}},{"id":"0f24c57a-5aea-46ad-8cab-dd4ec5a8ec77","block_type":"box","text":"DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial","page_number":62,"box":{"x":117,"y":268,"width":723,"height":12}},{"id":"8f5af124-db81-4885-8b67-01f8fa03a9f9","block_type":"box","text":"interests in shares of the Fund as shown on the records of DTC or its nominee. Payments by DTC","page_number":62,"box":{"x":117,"y":283,"width":732,"height":12}},{"id":"153489b9-cb67-4e40-8d49-da461a5f475e","block_type":"box","text":"Participants to Indirect Participants and Beneficial Owners of shares held through such DTC","page_number":62,"box":{"x":117,"y":299,"width":687,"height":12}},{"id":"69e322d7-da4c-416e-aa13-b9afc5fa333b","block_type":"box","text":"Participants will be governed by standing instructions and customary practices, as is now the case with","page_number":62,"box":{"x":117,"y":314,"width":768,"height":12}},{"id":"de8ff48f-5a8a-47e1-9e65-76545e0ed53a","block_type":"box","text":"securities held for the accounts of customers in bearer form or registered in a “street name,” and will be","page_number":62,"box":{"x":116,"y":329,"width":772,"height":12}},{"id":"ccaf339d-6e20-4a59-92a3-3dc5dcf05fdc","block_type":"box","text":"the responsibility of such DTC Participants.","page_number":62,"box":{"x":116,"y":344,"width":325,"height":12}},{"id":"ed76240a-6822-4aa7-ba4e-60978af30dab","block_type":"box","text":"The Trust has no responsibility or liability for any aspect of the records relating to or notices to","page_number":62,"box":{"x":116,"y":373,"width":702,"height":13}},{"id":"328de4c8-a5a9-49e3-95c7-275278f2ae9c","block_type":"box","text":"Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or","page_number":62,"box":{"x":117,"y":389,"width":756,"height":12}},{"id":"c1aa967f-72bd-4405-9944-8b798b17c14f","block_type":"box","text":"for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or","page_number":62,"box":{"x":116,"y":404,"width":766,"height":13}},{"id":"4223cdab-2aef-4dd4-ba37-c3a18c85b0cc","block_type":"box","text":"for any other aspect of the relationship between DTC and the DTC Participants or the relationship","page_number":62,"box":{"x":116,"y":420,"width":730,"height":12}},{"id":"f01aba9b-281e-4b90-9a90-05bb9eaa47cc","block_type":"box","text":"between such DTC Participants and the Indirect Participants and Beneficial Owners owning through","page_number":62,"box":{"x":117,"y":435,"width":745,"height":13}},{"id":"04a2e507-708f-422b-9c92-f90244d87ea6","block_type":"box","text":"such DTC Participants. DTC may decide to discontinue providing its service with respect to shares of","page_number":62,"box":{"x":116,"y":451,"width":755,"height":12}},{"id":"d400594f-0516-4251-99c2-e982f99b255a","block_type":"box","text":"the Trust at any time by giving reasonable notice to the Trust and discharging its responsibilities with","page_number":62,"box":{"x":116,"y":467,"width":751,"height":12}},{"id":"cf84914f-1da4-4233-a36e-419af80ae380","block_type":"box","text":"respect thereto under applicable law. Under such circumstances, the Trust shall take action to find a","page_number":62,"box":{"x":117,"y":482,"width":747,"height":12}},{"id":"67f51526-a191-4381-a9f8-1c2794c3cfb4","block_type":"box","text":"replacement for DTC to perform its functions at a comparable cost.","page_number":62,"box":{"x":117,"y":497,"width":500,"height":12}},{"id":"f0179d5e-b15d-4bca-a9b6-3b4a8d5a2cff","block_type":"box","text":"Distribution of Shares.","page_number":62,"box":{"x":117,"y":527,"width":178,"height":9}},{"id":"2509a234-ba14-4994-ac7f-8ff37a10bbed","block_type":"box","text":"In connection with the Fund’s launch, the Fund will be seeded through the","page_number":62,"box":{"x":296,"y":527,"width":559,"height":12}},{"id":"ac966f05-23a7-488a-b846-eac82aa9d4a2","block_type":"box","text":"sale of one or more Creation Units by the Fund to one or more initial investors. Initial investors","page_number":62,"box":{"x":116,"y":542,"width":704,"height":12}},{"id":"dce74241-1cb6-4c3d-932e-0338f8744ce0","block_type":"box","text":"participating in the seeding may be Authorized Participants, a lead market maker or other third party","page_number":62,"box":{"x":117,"y":558,"width":746,"height":12}},{"id":"5e0123a5-5c19-42e4-a8b3-348ee80e015f","block_type":"box","text":"investor or an affiliate of the Fund or the Fund’s adviser. Each such initial investor may sell some or all","page_number":62,"box":{"x":117,"y":573,"width":763,"height":12}},{"id":"e537bf59-fca0-4734-9f83-46b3a130ba70","block_type":"box","text":"of the shares underlying the Creation Unit(s) held by them pursuant to the registration statement for the","page_number":62,"box":{"x":116,"y":589,"width":772,"height":12}},{"id":"81bde11d-c02a-4f6f-b918-c635eca0ea1e","block_type":"box","text":"Fund (each, a “Selling Shareholder”), which shares have been registered to permit the resale from time","page_number":62,"box":{"x":117,"y":604,"width":770,"height":12}},{"id":"4534c5f6-bbca-4b92-9b89-5f7513d7e15d","block_type":"box","text":"to time after purchase. The Fund will not receive any of the proceeds from the resale by the Selling","page_number":62,"box":{"x":116,"y":620,"width":739,"height":12}},{"id":"8c184f43-f60c-4120-a3e8-b2c4c1292fb4","block_type":"box","text":"Shareholders of these shares.","page_number":62,"box":{"x":116,"y":635,"width":229,"height":10}},{"id":"1e2e05e8-acbd-4084-a0d1-d29682287306","block_type":"box","text":"Selling Shareholders may sell shares owned by them directly or through broker-dealers, in accordance","page_number":62,"box":{"x":116,"y":664,"width":762,"height":12}},{"id":"e2e5a8bf-fc34-457a-b766-90510af63281","block_type":"box","text":"with applicable law, on any national securities exchange on which the shares may be listed or quoted","page_number":62,"box":{"x":116,"y":680,"width":750,"height":12}},{"id":"db12281a-8f3e-4743-bdfc-188c9599334d","block_type":"box","text":"at the time of sale, through trading systems, in the OTC market or in transactions other than on these","page_number":62,"box":{"x":116,"y":695,"width":751,"height":12}},{"id":"9b83de2c-207a-4416-8724-cfd0eb08e418","block_type":"box","text":"exchanges or systems at fixed prices, at prevailing market prices at the time of the sale, at varying","page_number":62,"box":{"x":116,"y":711,"width":729,"height":12}},{"id":"0393a835-1df3-46ca-8718-2a12aa93b64f","block_type":"box","text":"prices determined at the time of sale, or at negotiated prices. These sales may be effected through","page_number":62,"box":{"x":117,"y":726,"width":731,"height":12}},{"id":"d010bd96-4901-4a0c-8069-8f4cc0136ad3","block_type":"box","text":"brokerage transactions, privately negotiated trades, block sales, entry into options or other derivatives","page_number":62,"box":{"x":117,"y":742,"width":754,"height":12}},{"id":"94d7e236-eb34-4e59-ba6c-af6f4ab59ffc","block_type":"box","text":"transactions or through any other means authorized by applicable law. Selling Shareholders may","page_number":62,"box":{"x":116,"y":757,"width":719,"height":12}},{"id":"c6b61a78-fba9-4618-ae91-206785d38515","block_type":"box","text":"redeem the shares held in Creation Unit size by them through an Authorized Participant.","page_number":62,"box":{"x":117,"y":773,"width":653,"height":12}},{"id":"87b9058a-5294-4800-b3df-9721a1cb4f99","block_type":"box","text":"Any Selling Shareholder and any broker-dealer or agents participating in the distribution of shares may","page_number":62,"box":{"x":116,"y":802,"width":762,"height":12}},{"id":"69652c37-8e6e-4ea2-b88b-ee3067c197da","block_type":"box","text":"be deemed to be “underwriters” within the meaning of Section 2(a)(11) of the 1933 Act, in connection","page_number":62,"box":{"x":117,"y":817,"width":748,"height":13}},{"id":"581557c6-b967-4aec-a0d2-f62c16e564fa","block_type":"box","text":"with such sales.","page_number":62,"box":{"x":116,"y":833,"width":123,"height":9}},{"id":"c19c8add-4396-48e5-993d-5786f3ca43e8","block_type":"box","text":"Any Selling Shareholder and any other person participating in such distribution will be subject to","page_number":62,"box":{"x":116,"y":862,"width":716,"height":12}},{"id":"3599806d-04af-452e-80ce-22e73cebfa70","block_type":"box","text":"applicable provisions of the 1934 Act and the rules and regulations thereunder.","page_number":62,"box":{"x":116,"y":878,"width":591,"height":12}},{"id":"5cedcdba-65f4-4e20-9a52-df50b6653cae","block_type":"box","text":"59","page_number":62,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6055300c-9d6b-4cb0-b2fb-8b9b14503e57","block_type":"box","text":"NM1026U-6039989-62/256","page_number":62,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"7235da98-0668-4a13-860d-4c4be83ff6e7","block_type":"box","text":"Creation and Redemption of Creation","page_number":63,"box":{"x":118,"y":92,"width":678,"height":29}},{"id":"3a5b4b23-5602-4d88-a299-37267cb3f92d","block_type":"box","text":"Units","page_number":63,"box":{"x":119,"y":126,"width":100,"height":22}},{"id":"12e81b5a-5480-4501-bf11-e31d1cd9bb79","block_type":"box","text":"General.","page_number":63,"box":{"x":116,"y":175,"width":66,"height":9}},{"id":"090e92ba-c60f-4aaa-89fb-e6195dbb1d41","block_type":"box","text":"The Trust issues and sells shares of the Fund only in Creation Units on a continuous basis","page_number":63,"box":{"x":183,"y":175,"width":682,"height":12}},{"id":"40bb0704-5b8b-4aac-81d2-162a37ae1985","block_type":"box","text":"through the Distributor or its agent, without a sales load, at a price based on the Fund’s NAV next","page_number":63,"box":{"x":116,"y":190,"width":728,"height":12}},{"id":"75862a35-fb06-4f73-bb23-88c12b0bd826","block_type":"box","text":"determined after receipt, on any Business Day (as defined below), of an order received by the","page_number":63,"box":{"x":116,"y":206,"width":702,"height":12}},{"id":"9b3149fe-c2ab-4a50-b820-8653b2648a59","block_type":"box","text":"Distributor or its agent in proper form. On days when the Listing Exchange closes earlier than normal,","page_number":63,"box":{"x":117,"y":221,"width":758,"height":12}},{"id":"d636ec0b-9378-4a5d-9b4e-95cddeb7b21c","block_type":"box","text":"the Fund may require orders to be placed earlier in the day. The following table sets forth the number","page_number":63,"box":{"x":116,"y":237,"width":756,"height":12}},{"id":"33a565f6-e559-475a-a565-458161eeca5f","block_type":"box","text":"of shares of the Fund that constitute a Creation Unit for the Fund and the approximate value of such","page_number":63,"box":{"x":116,"y":252,"width":748,"height":12}},{"id":"6aa63916-0eb9-4505-a380-3d2c9c220a09","block_type":"box","text":"Creation Unit as of September 21, 2026:","page_number":63,"box":{"x":117,"y":268,"width":305,"height":12}},{"id":"8174e429-d1a2-4d21-84bd-2e70784ed260","block_type":"box","text":"Shares Per","page_number":63,"box":{"x":374,"y":304,"width":70,"height":8}},{"id":"f366c396-b4a0-460e-bfb7-15cbff3a3b20","block_type":"box","text":"Creation","page_number":63,"box":{"x":382,"y":314,"width":53,"height":8}},{"id":"76a2e38e-736a-46e6-a8e4-a06bb97fad39","block_type":"box","text":"Unit","page_number":63,"box":{"x":396,"y":325,"width":25,"height":7}},{"id":"43e4a5d7-1093-4505-8387-35ebccb8bc19","block_type":"box","text":"Approximate","page_number":63,"box":{"x":549,"y":294,"width":82,"height":9}},{"id":"1b11b93f-3839-46ca-959a-60c2ed16a587","block_type":"box","text":"Value Per","page_number":63,"box":{"x":560,"y":304,"width":61,"height":8}},{"id":"82f3031a-fb36-41f8-8ca4-6f9965581c32","block_type":"box","text":"Creation","page_number":63,"box":{"x":564,"y":314,"width":53,"height":8}},{"id":"88b09aa2-f6c6-4505-ab95-42f2c4bec47d","block_type":"box","text":"Unit (U.S.$)","page_number":63,"box":{"x":555,"y":324,"width":71,"height":10}},{"id":"f2238898-7256-40e6-8ef8-7b031b31952f","block_type":"box","text":"40,000 $1,000,000","page_number":63,"box":{"x":383,"y":343,"width":254,"height":12}},{"id":"89d3e1a6-256c-492c-94bc-b3e9a7856083","block_type":"box","text":"In its discretion, the Trust reserves the right to increase or decrease the number of the Fund’s shares","page_number":63,"box":{"x":117,"y":373,"width":754,"height":12}},{"id":"ef0ba153-7e42-4e35-a7a3-9e89a2764b0b","block_type":"box","text":"that constitute a Creation Unit. The Board reserves the right to declare a split or a consolidation in the","page_number":63,"box":{"x":116,"y":388,"width":759,"height":12}},{"id":"86a09c38-3d6b-4ff4-a3a7-de894bf69dce","block_type":"box","text":"number of shares outstanding of the Fund, and to make a corresponding change in the number of","page_number":63,"box":{"x":117,"y":404,"width":730,"height":12}},{"id":"50557d3c-7681-4a99-ae51-58cb6f08a158","block_type":"box","text":"shares constituting a Creation Unit, in the event that the per share price in the secondary market rises","page_number":63,"box":{"x":116,"y":419,"width":761,"height":12}},{"id":"277b14a8-100f-4d91-b154-b7a0905ede5f","block_type":"box","text":"(or declines) to an amount that falls outside the range deemed desirable by the Board.","page_number":63,"box":{"x":117,"y":435,"width":644,"height":12}},{"id":"a809eac5-dcbc-4851-91cb-16c277f15b24","block_type":"box","text":"A “Business Day” with respect to the Fund is any day the Fund is open for business, including any day","page_number":63,"box":{"x":116,"y":464,"width":764,"height":12}},{"id":"85d1f975-9ace-4957-8639-24bd4bfb360f","block_type":"box","text":"when it satisfies redemption requests as required by section 22(e) of the 1940 Act. The Fund is open","page_number":63,"box":{"x":116,"y":480,"width":753,"height":12}},{"id":"4d04edf7-ea17-44c0-9c4c-f0bb81cb37b0","block_type":"box","text":"for business any day on which the Listing Exchange on","page_number":63,"box":{"x":116,"y":495,"width":414,"height":12}},{"id":"6314cdf7-b535-46b5-a300-fc1da350707f","block_type":"box","text":"which the Fund is listed for trading is open for","page_number":63,"box":{"x":530,"y":495,"width":343,"height":12}},{"id":"674bf4ec-98cb-4928-abb3-253e07bdcb67","block_type":"box","text":"business. As of the date of this SAI, the Listing Exchange observes the following holidays, as","page_number":63,"box":{"x":117,"y":511,"width":695,"height":12}},{"id":"0c56ccfd-69d2-4ded-b282-8c61eb50633a","block_type":"box","text":"observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day,","page_number":63,"box":{"x":116,"y":526,"width":760,"height":12}},{"id":"3ee2bd96-a0de-455b-8ffe-7b4d1f406461","block_type":"box","text":"Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.","page_number":63,"box":{"x":116,"y":542,"width":621,"height":12}},{"id":"b3e36e44-921c-44fa-97e7-3f21b8436280","block_type":"box","text":"Fund Deposit.","page_number":63,"box":{"x":117,"y":571,"width":110,"height":12}},{"id":"81149b6a-3fa4-43b4-a695-b9547a2cd123","block_type":"box","text":"The consideration for purchase of Creation Units of the Fund generally consists of","page_number":63,"box":{"x":228,"y":571,"width":618,"height":12}},{"id":"3c7bbba4-a79c-4637-90b1-f542d7ee4480","block_type":"box","text":"Deposit Securities and the Cash Component computed as described below. Together, the Deposit","page_number":63,"box":{"x":117,"y":586,"width":734,"height":13}},{"id":"176353ad-9113-4ea5-b786-83aef0ff2eb8","block_type":"box","text":"Securities and the Cash Component constitute the “Fund Deposit,” which will be applicable (subject to","page_number":63,"box":{"x":116,"y":602,"width":762,"height":12}},{"id":"6c96e7ea-b435-4131-a884-16816f94f942","block_type":"box","text":"possible amendment or correction) to creation requests received in proper form. The Fund Deposit","page_number":63,"box":{"x":117,"y":617,"width":736,"height":13}},{"id":"0d828f1f-c159-4a68-9a8d-e69a356b035c","block_type":"box","text":"represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund.","page_number":63,"box":{"x":117,"y":633,"width":734,"height":12}},{"id":"3cdad95a-0a3c-45f0-ae1d-7d937e7ee131","block_type":"box","text":"Such Fund Deposit is applicable, subject to any adjustments as described below, to purchases of","page_number":63,"box":{"x":116,"y":648,"width":726,"height":13}},{"id":"8589c6e9-cbf4-4e1f-894b-a1493d7d606e","block_type":"box","text":"Creation Units of shares of the Fund until such time as the next-announced Fund Deposit is made","page_number":63,"box":{"x":117,"y":664,"width":725,"height":12}},{"id":"463f1cf4-e43e-42ed-bfd4-fc207448564a","block_type":"box","text":"available.","page_number":63,"box":{"x":116,"y":680,"width":69,"height":9}},{"id":"26174367-f061-46d0-bb5d-2e6afb1c2e58","block_type":"box","text":"The Cash Component is an amount equal to the difference between the NAV of the shares (per","page_number":63,"box":{"x":116,"y":709,"width":709,"height":12}},{"id":"5e9337b9-22af-4e4f-93aa-c9f14c491c9f","block_type":"box","text":"Creation Unit) and the “Deposit Amount,” which is an amount equal to the market value of the Deposit","page_number":63,"box":{"x":117,"y":724,"width":755,"height":12}},{"id":"8187c7e8-b60d-4836-a74f-a6bac3250ba2","block_type":"box","text":"Securities, and serves to compensate for any differences between the NAV per Creation Unit and the","page_number":63,"box":{"x":116,"y":740,"width":751,"height":12}},{"id":"ff1ae4ce-88a8-46d7-bbd5-aebbc6496ee6","block_type":"box","text":"Deposit Amount. Payment of any stamp duty or other similar fees and expenses payable upon transfer","page_number":63,"box":{"x":117,"y":755,"width":762,"height":12}},{"id":"9314345a-647d-44e3-b9f8-0e95e51d0016","block_type":"box","text":"of beneficial ownership of the Deposit Securities are the sole responsibility of the Authorized","page_number":63,"box":{"x":116,"y":771,"width":683,"height":12}},{"id":"2f6fe724-2c7b-4ccd-acf9-c75eb3bc7a23","block_type":"box","text":"Participant purchasing the Creation Unit. The Fund generally offers Creation Units partially for cash,","page_number":63,"box":{"x":117,"y":786,"width":739,"height":12}},{"id":"7fa9653a-d387-47ab-8b3e-91a3ca6a11ce","block_type":"box","text":"but may, in certain circumstances, offer Creation Units solely for cash or solely in-kind. Please see the","page_number":63,"box":{"x":117,"y":802,"width":757,"height":12}},{"id":"62744374-0e57-429c-a04d-7cf970dbfeb6","block_type":"box","text":"Cash Purchase Method","page_number":63,"box":{"x":117,"y":817,"width":175,"height":10}},{"id":"85b795b9-2f8e-4328-9e70-8a4aba6bf881","block_type":"box","text":"section below and the following discussion summarizing the Deposit Security","page_number":63,"box":{"x":297,"y":817,"width":570,"height":12}},{"id":"8cd376f3-514d-480a-bec3-2f60127e52fc","block_type":"box","text":"method for further information on purchasing Creation Units of the Fund.","page_number":63,"box":{"x":117,"y":833,"width":535,"height":12}},{"id":"d6265ba8-63e4-4d4d-b0c4-6acee9d71da4","block_type":"box","text":"The identity and number or par value of the Deposit Securities change pursuant to changes in the","page_number":63,"box":{"x":116,"y":862,"width":730,"height":12}},{"id":"ca7f7165-997e-425b-ae11-a901a92ba3d0","block_type":"box","text":"composition of the Fund’s portfolio and as rebalancing adjustments and corporate action events are","page_number":63,"box":{"x":116,"y":877,"width":744,"height":13}},{"id":"daa2191b-fc5f-41ed-8b1f-a5ec838350c0","block_type":"box","text":"60","page_number":63,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d4042db0-8717-432c-a65e-4ae3d7aed2f0","block_type":"box","text":"NM1026U-6039989-63/256","page_number":63,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"9f03b5a5-ef96-47f2-b302-0231d314be05","block_type":"box","text":"reflected from time to time by BFA with a view to the investment objective of the Fund. The","page_number":64,"box":{"x":117,"y":87,"width":677,"height":12}},{"id":"886b404f-f8d5-44c0-94d6-7c6993a8d75b","block_type":"box","text":"composition of the Deposit Securities may also change in response to adjustments to the weighting or","page_number":64,"box":{"x":116,"y":102,"width":761,"height":13}},{"id":"2e335ed6-27fa-441d-ab49-b31b0d68ee4d","block_type":"box","text":"composition of the component securities constituting the Fund’s portfolio.","page_number":64,"box":{"x":116,"y":118,"width":547,"height":12}},{"id":"7ae39704-ea19-4be3-a09f-962676b5bd41","block_type":"box","text":"The Fund Deposit may also be modified to minimize the Cash Component by redistributing the cash to","page_number":64,"box":{"x":116,"y":149,"width":766,"height":12}},{"id":"c319d4e9-81c0-4adb-be9b-7b03693c9b07","block_type":"box","text":"the Deposit Securities portion of the Fund Deposit through “systematic rounding.” The rounding","page_number":64,"box":{"x":116,"y":165,"width":712,"height":12}},{"id":"7fe9fe97-dad4-4fc3-b168-66a5a6187daa","block_type":"box","text":"methodology “rounds up” position sizes of securities in the Deposit Securities (which in turn reduces","page_number":64,"box":{"x":117,"y":180,"width":746,"height":12}},{"id":"4cda74ee-5153-44b8-9b7b-31d46e939db3","block_type":"box","text":"the cash portion). However, the methodology limits the maximum allowed percentage change in weight","page_number":64,"box":{"x":116,"y":196,"width":770,"height":12}},{"id":"2a9f0dd2-aa1b-45e8-a427-605855a06992","block_type":"box","text":"and share quantity of any given security in the Fund Deposit.","page_number":64,"box":{"x":116,"y":211,"width":456,"height":12}},{"id":"c76b9014-cca1-492c-ac0d-7a7ab21251ad","block_type":"box","text":"Fund Deposits may also be modified to position a fund towards a forward index rebalance to reflect","page_number":64,"box":{"x":117,"y":242,"width":740,"height":12}},{"id":"e29e1048-8673-47ae-994f-ece914501a1c","block_type":"box","text":"revisions that account for index additions, deletions, and re-weights.","page_number":64,"box":{"x":117,"y":258,"width":509,"height":12}},{"id":"347daa9a-8554-43b9-995b-9ffe05d3fdf3","block_type":"box","text":"The Trust may, in its sole discretion, substitute a “cash in lieu” amount to be added to the Cash","page_number":64,"box":{"x":116,"y":289,"width":710,"height":12}},{"id":"6c99cca2-d0ba-4b0b-9c7b-350b3c6ace76","block_type":"box","text":"Component to replace any Deposit Security in certain circumstances, including: (i) when instruments","page_number":64,"box":{"x":117,"y":304,"width":750,"height":12}},{"id":"47fb5556-cfca-4ec9-a839-7a4a568dbe71","block_type":"box","text":"are not available in sufficient quantity for delivery, (ii) when instruments are not eligible for transfer","page_number":64,"box":{"x":116,"y":320,"width":732,"height":12}},{"id":"9244be1b-edd2-4fce-822e-8be9da5cfc9a","block_type":"box","text":"through DTC or the clearing process (as discussed below), (iii) when instruments that the Authorized","page_number":64,"box":{"x":116,"y":335,"width":752,"height":12}},{"id":"6444d197-d27a-4813-8110-f22de12714b5","block_type":"box","text":"Participant (or an investor on whose behalf the Authorized Participant is acting) are not able to be","page_number":64,"box":{"x":117,"y":351,"width":728,"height":12}},{"id":"76856546-3068-48ea-bec1-3418266d8547","block_type":"box","text":"traded due to a trading restriction, (iv) when delivery of the Deposit Security by the Authorized","page_number":64,"box":{"x":116,"y":366,"width":702,"height":12}},{"id":"2125c1cb-9a6f-4e17-af93-c5c74ba93a21","block_type":"box","text":"Participant (or by an investor on whose behalf the Authorized Participant is acting) would be restricted","page_number":64,"box":{"x":117,"y":382,"width":760,"height":12}},{"id":"0462334a-5af7-4705-9a1f-cc9ff08c10ab","block_type":"box","text":"under applicable securities or other local laws, (v) in connection with distribution payments to be made","page_number":64,"box":{"x":117,"y":397,"width":763,"height":12}},{"id":"07590141-f75c-4f51-a8c5-0d3c9023a9f6","block_type":"box","text":"by the Fund, or (vi) in certain other situations.","page_number":64,"box":{"x":117,"y":413,"width":341,"height":12}},{"id":"4803e933-78aa-446e-9df4-0348395be0b1","block_type":"box","text":"Cash Purchase Method.","page_number":64,"box":{"x":116,"y":444,"width":189,"height":9}},{"id":"5c5a3a6e-9790-40cb-9c68-9f8555a95b26","block_type":"box","text":"Although the Trust does not generally permit full cash purchases of Creation","page_number":64,"box":{"x":306,"y":444,"width":577,"height":12}},{"id":"04aed874-3f62-401e-b3dc-e4036e466d87","block_type":"box","text":"Units of its funds, when partial or full cash purchases of Creation Units are available or specified for the","page_number":64,"box":{"x":117,"y":459,"width":770,"height":12}},{"id":"02d5c5c2-c262-467a-be9e-750e74454fcd","block_type":"box","text":"Fund, they will be effected in essentially the same manner as in-kind purchases thereof. In the case of","page_number":64,"box":{"x":117,"y":475,"width":762,"height":12}},{"id":"bfb2f00e-2bcf-488b-9361-6e03b91d2b1a","block_type":"box","text":"a partial or full cash purchase, the Authorized Participant must pay the cash equivalent of the Deposit","page_number":64,"box":{"x":116,"y":490,"width":758,"height":12}},{"id":"c1762ddb-ec19-44bb-aa23-2aec950defa0","block_type":"box","text":"Securities it would otherwise be required to provide through an in-kind purchase, plus the same Cash","page_number":64,"box":{"x":116,"y":506,"width":757,"height":12}},{"id":"a9b8edcf-01ef-478c-a044-54a10b74f9ee","block_type":"box","text":"Component required to be paid by an in-kind purchaser.","page_number":64,"box":{"x":117,"y":521,"width":420,"height":12}},{"id":"45475b4f-94fc-4411-80de-ea441eb65837","block_type":"box","text":"Procedures for Creation of Creation Units.","page_number":64,"box":{"x":117,"y":552,"width":335,"height":10}},{"id":"302fb324-f913-4626-a105-cfcf89aa7225","block_type":"box","text":"To be eligible to place orders with the Distributor and to","page_number":64,"box":{"x":453,"y":552,"width":421,"height":12}},{"id":"f4112088-2e15-40b5-9aab-4abff1062fff","block_type":"box","text":"create a Creation Unit of the Fund, an entity must be: (i) a “Participating Party,”","page_number":64,"box":{"x":116,"y":568,"width":586,"height":12}},{"id":"033cb0f7-8561-4217-a7cd-a2722b03d8fb","block_type":"box","text":"i.e.","page_number":64,"box":{"x":703,"y":568,"width":25,"height":9}},{"id":"57389f7a-b6d5-43f5-be21-381258c85eb2","block_type":"box","text":", a broker-dealer or","page_number":64,"box":{"x":731,"y":568,"width":147,"height":11}},{"id":"649b863e-cf4f-49e4-9db6-95b6266de80e","block_type":"box","text":"other participant in the clearing process through the Continuous Net Settlement System of the NSCC","page_number":64,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"27a6cdfc-8753-4658-bc3e-2be2d893645b","block_type":"box","text":"(the “Clearing Process”), a clearing agency that is registered with the SEC, or (ii) a DTC Participant,","page_number":64,"box":{"x":117,"y":599,"width":744,"height":12}},{"id":"d249c315-f182-4d5a-932e-f78f2bc962a8","block_type":"box","text":"and must have executed an agreement with the Distributor, with respect to creations and redemptions","page_number":64,"box":{"x":116,"y":614,"width":762,"height":12}},{"id":"3dcaa741-c158-46e6-adeb-cda66839ccb7","block_type":"box","text":"of Creation Units (“Authorized Participant Agreement”) (discussed below). A member or participant of a","page_number":64,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"9a873231-db78-46dd-aa05-4b6033a207a5","block_type":"box","text":"clearing agency registered with the SEC which has a written agreement with the Fund or one of its","page_number":64,"box":{"x":116,"y":645,"width":735,"height":12}},{"id":"c4657cf4-a97f-499b-b288-4c111261421b","block_type":"box","text":"service providers that allows such member or participant to place orders for the purchase and","page_number":64,"box":{"x":116,"y":661,"width":694,"height":12}},{"id":"fce5c768-010c-42b1-a5bb-18df5d93abf0","block_type":"box","text":"redemption of Creation Units is referred to as an “Authorized Participant.” All shares of the Fund,","page_number":64,"box":{"x":117,"y":676,"width":715,"height":12}},{"id":"bb3cf2cc-e7e1-49a1-8ae9-f6065cd6a19a","block_type":"box","text":"however created, will be entered on the records of DTC in the name of Cede & Co. for the account of a","page_number":64,"box":{"x":117,"y":692,"width":763,"height":11}},{"id":"0fb9fe71-e0c8-4fde-869f-b9c16ea6934d","block_type":"box","text":"DTC Participant.","page_number":64,"box":{"x":117,"y":707,"width":121,"height":12}},{"id":"c025bbc4-b911-4c67-8ffb-00db4431dc41","block_type":"box","text":"Role of the Authorized Participant.","page_number":64,"box":{"x":117,"y":738,"width":274,"height":12}},{"id":"5aa65919-01a9-4130-96ec-eba9625ab861","block_type":"box","text":"Creation Units may be purchased only by or through a member","page_number":64,"box":{"x":397,"y":738,"width":469,"height":12}},{"id":"17b1089b-73ab-4b85-bb71-f8973b893cec","block_type":"box","text":"or participant of a clearing agency registered with the SEC, which has a written agreement with the","page_number":64,"box":{"x":116,"y":754,"width":734,"height":12}},{"id":"08649324-a749-4081-87bb-903bdfd21d11","block_type":"box","text":"Fund or one of its service providers that allows such member or participant to place orders for the","page_number":64,"box":{"x":117,"y":769,"width":723,"height":12}},{"id":"ebb6295c-5b9c-43ff-a638-ec3258dfa2a3","block_type":"box","text":"purchase and redemption of Creation Units. Such Authorized Participant will agree, pursuant to the","page_number":64,"box":{"x":117,"y":785,"width":734,"height":12}},{"id":"434e5192-e2c5-48d2-842c-f9331006725b","block_type":"box","text":"terms of such Authorized Participant Agreement and on behalf of itself or any investor on whose behalf","page_number":64,"box":{"x":116,"y":800,"width":765,"height":12}},{"id":"2746c72d-6d72-4c59-9eab-16dae37d8005","block_type":"box","text":"it will act, to certain conditions, including that such Authorized Participant will make available in","page_number":64,"box":{"x":117,"y":816,"width":701,"height":12}},{"id":"3c431c4a-4181-40c6-b099-74fb4fe174ef","block_type":"box","text":"advance of each purchase of shares an amount of cash sufficient to pay the Cash Component, once","page_number":64,"box":{"x":116,"y":831,"width":750,"height":12}},{"id":"c66f3d69-8dfe-4834-bcb0-ca3c499be89e","block_type":"box","text":"the net asset value of a Creation Unit is next determined after receipt of the purchase order in proper","page_number":64,"box":{"x":116,"y":847,"width":753,"height":12}},{"id":"bef77b6b-9ad7-449e-af0b-bbe1e10f5293","block_type":"box","text":"form, together with the transaction fees described below. An Authorized Participant, acting on behalf of","page_number":64,"box":{"x":116,"y":862,"width":768,"height":12}},{"id":"38ed28f6-dfec-483f-a0df-ab353025b506","block_type":"box","text":"an investor, may require the investor to enter into an agreement with such Authorized Participant with","page_number":64,"box":{"x":116,"y":878,"width":758,"height":12}},{"id":"3b349294-f8c2-458d-98d9-93fcc15d040f","block_type":"box","text":"61","page_number":64,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"bc8a03e5-41ef-40b3-8d1f-326ee408fd19","block_type":"box","text":"NM1026U-6039989-64/256","page_number":64,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d77b826e-b739-487e-b1e9-30d3ff66b8e4","block_type":"box","text":"respect to certain matters, including payment of the Cash Component. Investors who are not","page_number":65,"box":{"x":117,"y":87,"width":691,"height":12}},{"id":"0666ab73-495f-4416-958c-7cbb4df0c8b4","block_type":"box","text":"Authorized Participants must make appropriate arrangements with an Authorized Participant. Investors","page_number":65,"box":{"x":116,"y":103,"width":768,"height":12}},{"id":"dce3c271-5837-4804-9b54-6207f668d00b","block_type":"box","text":"should be aware that their particular broker may not be a DTC Participant or may not have executed an","page_number":65,"box":{"x":116,"y":118,"width":772,"height":12}},{"id":"c24095cc-ab38-48ca-9760-de7ac726a9fc","block_type":"box","text":"Authorized Participant Agreement and that orders to purchase Creation Units may have to be placed","page_number":65,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"0ceb346b-2ce3-400e-908c-5c9b2acb0a70","block_type":"box","text":"by the investor’s broker through an Authorized Participant. As a result, purchase orders placed through","page_number":65,"box":{"x":117,"y":149,"width":768,"height":12}},{"id":"2ccddf15-9421-417b-8998-b85ca5250432","block_type":"box","text":"an Authorized Participant may result in additional charges to such investor. The Trust does not expect","page_number":65,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"297b575c-52ab-491b-bf64-6994127a7f4c","block_type":"box","text":"to enter into an Authorized Participant Agreement with more than a small number of DTC Participants.","page_number":65,"box":{"x":116,"y":180,"width":763,"height":12}},{"id":"64f6ce23-0918-4f61-8218-ecc5223fc3b7","block_type":"box","text":"A list of current Authorized Participants may be obtained from the Distributor. The Distributor has","page_number":65,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"13b9c66a-d185-4a2f-a152-26b8236af291","block_type":"box","text":"adopted guidelines regarding Authorized Participants’ transactions in Creation Units that are made","page_number":65,"box":{"x":116,"y":211,"width":736,"height":12}},{"id":"d4ae1a37-402b-464b-b1d5-4b7272e035c1","block_type":"box","text":"available to all Authorized Participants. These guidelines set forth the processes and standards for","page_number":65,"box":{"x":116,"y":227,"width":736,"height":12}},{"id":"a5626963-5f0a-4ca0-8f87-9ea3aec02355","block_type":"box","text":"Authorized Participants to transact with the Distributor and its agents in connection with creation and","page_number":65,"box":{"x":116,"y":242,"width":750,"height":12}},{"id":"8f2a7863-825f-4ce4-a38f-2e8ad74bb801","block_type":"box","text":"redemption transactions. In addition, the Distributor may be appointed as the proxy of the Authorized","page_number":65,"box":{"x":117,"y":258,"width":751,"height":12}},{"id":"3f7c9a18-8956-4fac-8241-7a8fb32e1695","block_type":"box","text":"Participant and may be granted a power of attorney under its Authorized Participant Agreement.","page_number":65,"box":{"x":117,"y":273,"width":716,"height":12}},{"id":"298c32b7-4c2e-4471-b12b-4cb78fcf5018","block_type":"box","text":"Purchase Orders.","page_number":65,"box":{"x":117,"y":304,"width":138,"height":10}},{"id":"69b3d503-0048-4dea-a837-9f0165645618","block_type":"box","text":"To initiate an order for a Creation Unit, an Authorized Participant must submit to the","page_number":65,"box":{"x":256,"y":304,"width":631,"height":12}},{"id":"849c0309-f6af-40b5-b471-e09d34fa1daa","block_type":"box","text":"Distributor or its agent an irrevocable order to purchase shares of the Fund, in proper form, generally","page_number":65,"box":{"x":117,"y":320,"width":752,"height":12}},{"id":"374cc008-a74f-491b-9314-d48a9dc6b7b2","block_type":"box","text":"before 4:00 p.m., Eastern time on any Business Day to receive that day’s NAV. The Distributor or its","page_number":65,"box":{"x":117,"y":335,"width":747,"height":12}},{"id":"f229ef77-c36a-44dd-b0a7-f81eacdc6bba","block_type":"box","text":"agent will notify BFA and the custodian of such order. The custodian will then provide such information","page_number":65,"box":{"x":116,"y":351,"width":766,"height":12}},{"id":"25de275c-ce5a-4c01-95e0-21884cc36ef5","block_type":"box","text":"to any appropriate sub-custodian. Procedures and requirements governing the delivery of the Fund","page_number":65,"box":{"x":116,"y":366,"width":740,"height":12}},{"id":"1a04bc39-05ef-443d-9e02-30e878188168","block_type":"box","text":"Deposit are set forth in the procedures handbook for Authorized Participants and may change from","page_number":65,"box":{"x":117,"y":382,"width":738,"height":12}},{"id":"b8a5ee2a-8b8e-4efd-a248-67bbd59edb3f","block_type":"box","text":"time to time. Investors, other than Authorized Participants, are responsible for making arrangements","page_number":65,"box":{"x":116,"y":397,"width":749,"height":12}},{"id":"86da42fa-8595-414c-9663-7508d2160fbc","block_type":"box","text":"for a creation request to be made through an Authorized Participant. The Distributor or its agent will","page_number":65,"box":{"x":116,"y":413,"width":743,"height":12}},{"id":"295130c4-79d8-42a3-bfc7-df9a916517d9","block_type":"box","text":"provide a list of current Authorized Participants upon request. Those placing orders to purchase","page_number":65,"box":{"x":117,"y":428,"width":714,"height":12}},{"id":"f3b87bee-b28d-47d4-9a0b-24c1557c5e3b","block_type":"box","text":"Creation Units through an Authorized Participant should allow sufficient time to permit proper","page_number":65,"box":{"x":117,"y":444,"width":693,"height":12}},{"id":"c3accee9-1ee3-417d-b966-a3560c8d07f0","block_type":"box","text":"submission of the purchase order to the Distributor or its agent by the Cutoff Time (as defined below)","page_number":65,"box":{"x":116,"y":459,"width":754,"height":12}},{"id":"badb8a1b-66e7-48cc-ae0d-d0ac3de2f564","block_type":"box","text":"on such Business Day.","page_number":65,"box":{"x":116,"y":475,"width":175,"height":12}},{"id":"e8dee9e3-ad54-4305-9e9c-cdc9e592b0dd","block_type":"box","text":"The Authorized Participant must also make available on or before the contractual settlement date, by","page_number":65,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"1044bd2e-1d7c-4017-8e08-99247c909f93","block_type":"box","text":"means satisfactory to the Fund, immediately available or same day funds estimated by the Fund to","page_number":65,"box":{"x":117,"y":521,"width":737,"height":12}},{"id":"2010c3b9-eb0b-427a-9c7f-59c0d65670bf","block_type":"box","text":"be sufficient to pay the Cash Component next determined after acceptance of the purchase order,","page_number":65,"box":{"x":117,"y":537,"width":732,"height":12}},{"id":"271f55a2-d059-4c80-9c68-90901325ddd3","block_type":"box","text":"together with the applicable purchase transaction fees. Those placing orders should ascertain the","page_number":65,"box":{"x":116,"y":552,"width":728,"height":12}},{"id":"5a435c90-2596-4e0e-b69a-a8e85655d85d","block_type":"box","text":"deadline for cash transfers by contacting the operations department of the broker or depositary","page_number":65,"box":{"x":116,"y":568,"width":709,"height":12}},{"id":"37a55d31-90c0-4132-ad48-f966d8d3a238","block_type":"box","text":"institution effectuating the transfer of the Cash Component. This deadline is likely to be significantly","page_number":65,"box":{"x":117,"y":583,"width":741,"height":12}},{"id":"74514bab-f8cf-4371-8489-2df213e8b2ca","block_type":"box","text":"earlier than the Cutoff Time of the Fund. Investors should be aware that an Authorized Participant","page_number":65,"box":{"x":116,"y":599,"width":730,"height":12}},{"id":"84edef43-3f86-4c5d-9c56-37a3693b52e0","block_type":"box","text":"may require orders for purchases of shares placed with it to be in the particular form required by the","page_number":65,"box":{"x":117,"y":614,"width":745,"height":12}},{"id":"30ba7b22-dbe8-4052-801f-6e89aec16f56","block_type":"box","text":"individual Authorized Participant.","page_number":65,"box":{"x":117,"y":630,"width":247,"height":12}},{"id":"e57fa680-d2c9-4323-9355-841d606fcd51","block_type":"box","text":"The Authorized Participant is responsible for any and all expenses and costs incurred by the Fund,","page_number":65,"box":{"x":116,"y":661,"width":732,"height":12}},{"id":"8eb726c0-3183-49d6-a9b8-1a0c8e37b617","block_type":"box","text":"including any applicable cash amounts, in connection with any purchase order.","page_number":65,"box":{"x":117,"y":676,"width":583,"height":12}},{"id":"89fa1b7f-ad43-44bc-9692-ae21d57fbf41","block_type":"box","text":"Timing of Submission of Purchase Orders.","page_number":65,"box":{"x":116,"y":707,"width":340,"height":12}},{"id":"71f9c9a6-1b94-415a-9fea-e24490c57cdd","block_type":"box","text":"An Authorized Participant must submit an irrevocable","page_number":65,"box":{"x":462,"y":707,"width":395,"height":12}},{"id":"ca4c9c87-d30d-446b-a582-be40c00986c0","block_type":"box","text":"order to purchase shares of the Fund generally before 4:00 p.m., Eastern time on any Business Day in","page_number":65,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"7f8223cd-130c-48e4-b105-5eb562a634ae","block_type":"box","text":"order to receive that day’s NAV. Creation Orders must be transmitted by an Authorized Participant in","page_number":65,"box":{"x":116,"y":738,"width":746,"height":12}},{"id":"5e6480fa-30e4-43a0-b6a5-09b7e0d4d060","block_type":"box","text":"the form required by the Fund to the Distributor or its agent pursuant to procedures set forth in the","page_number":65,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"624c00a2-d318-4b7c-88eb-58c1b73b3eba","block_type":"box","text":"Authorized Participant Agreement. Economic or market disruptions or changes, or telephone or other","page_number":65,"box":{"x":116,"y":769,"width":750,"height":12}},{"id":"80288c3b-53b9-44aa-88dd-8756445b795d","block_type":"box","text":"communication failure, may impede the ability to reach the Distributor or its agent or an Authorized","page_number":65,"box":{"x":116,"y":785,"width":730,"height":12}},{"id":"7bdb3433-2971-435b-a1a2-7c56f96f51ad","block_type":"box","text":"Participant. Orders to create shares of the Fund that are submitted on the Business Day immediately","page_number":65,"box":{"x":117,"y":800,"width":747,"height":12}},{"id":"1ad2e7cc-d9d9-4021-bc3c-cb576adf25ec","block_type":"box","text":"preceding a holiday or a day (other than a weekend) when the equity markets in the relevant non-U.S.","page_number":65,"box":{"x":117,"y":816,"width":755,"height":12}},{"id":"114b857a-602c-4424-bc8c-0a8bd09e6423","block_type":"box","text":"market are closed may not be accepted. The Fund’s deadline specified above for the submission of","page_number":65,"box":{"x":117,"y":831,"width":742,"height":12}},{"id":"352066a3-f071-40ef-a160-a7bac0d62260","block_type":"box","text":"purchase orders is referred to as the Fund’s “Cutoff Time.” The Distributor or its agent, in their","page_number":65,"box":{"x":117,"y":847,"width":701,"height":12}},{"id":"2c1b6935-bcc3-41d9-9794-ae322a813ed4","block_type":"box","text":"discretion, may permit the submission of such orders and requests by or through an Authorized","page_number":65,"box":{"x":116,"y":862,"width":712,"height":12}},{"id":"6063ea1c-e28a-4542-a555-d4b22a28ebad","block_type":"box","text":"Participant at any time (including on days on which the","page_number":65,"box":{"x":117,"y":878,"width":409,"height":12}},{"id":"54a5c1f3-8f22-462e-9133-1112e0e082ec","block_type":"box","text":"Listing Exchange is not open for business) via","page_number":65,"box":{"x":528,"y":878,"width":345,"height":12}},{"id":"e39b2bb9-9747-4363-a907-792d126daeee","block_type":"box","text":"62","page_number":65,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"92a25fd2-d8e6-4e7b-9473-058cdaae6c09","block_type":"box","text":"NM1026U-6039989-65/256","page_number":65,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"f1416bf3-cdf7-4d3e-b097-8dde2e08a516","block_type":"box","text":"communication through the facilities of the Distributor’s or its agent’s proprietary website maintained for","page_number":66,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"88290eef-ebda-490c-8f71-f6b718bd4477","block_type":"box","text":"this purpose. Purchase orders and redemption requests, if accepted by the Trust, will be processed","page_number":66,"box":{"x":116,"y":102,"width":743,"height":13}},{"id":"00607154-8fe8-4a8c-a186-17e5b098c4a1","block_type":"box","text":"based on the NAV next determined after such acceptance in accordance with the Fund’s Cutoff Times","page_number":66,"box":{"x":117,"y":118,"width":762,"height":12}},{"id":"781c4ae8-a20d-4f75-88b7-869321363bd9","block_type":"box","text":"as provided in the Authorized Participant Agreement and disclosed in this SAI.","page_number":66,"box":{"x":116,"y":134,"width":586,"height":12}},{"id":"dab26f46-8316-4cf4-9b3a-e9b4f6dda17f","block_type":"box","text":"Acceptance of Orders for Creation Units.","page_number":66,"box":{"x":116,"y":165,"width":325,"height":11}},{"id":"c1f22dc9-1901-447f-a2b8-0cde8184d242","block_type":"box","text":"Subject to the conditions that (i) an irrevocable purchase","page_number":66,"box":{"x":442,"y":165,"width":430,"height":12}},{"id":"2d467490-a3de-443b-8c5b-9a92e4b2c0a2","block_type":"box","text":"order has been submitted by the Authorized Participant (either on its own or another investor’s behalf)","page_number":66,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"24372ef8-b236-494f-8313-a4c9123b3da8","block_type":"box","text":"and (ii) arrangements satisfactory to the Fund are in place for payment of the Cash Component and","page_number":66,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"844a8865-448f-4671-90db-13ade32cf21e","block_type":"box","text":"any other cash amounts which may be due, the Fund will accept the order, subject to the Fund’s right","page_number":66,"box":{"x":116,"y":211,"width":757,"height":12}},{"id":"698b93a6-632a-42f7-b819-03b262f98585","block_type":"box","text":"(and the right of the Distributor and BFA) to reject any order until acceptance, as set forth below.","page_number":66,"box":{"x":117,"y":227,"width":719,"height":12}},{"id":"626f5f4e-a724-446f-9c03-9623eccb2995","block_type":"box","text":"Once the Fund has accepted an order, upon the next determination of the net asset value of the","page_number":66,"box":{"x":116,"y":258,"width":718,"height":11}},{"id":"af7c6e76-6dd4-4fe9-a69b-f9bdf063e80f","block_type":"box","text":"shares, the Fund will confirm the issuance of a Creation Unit, against receipt of payment, at such net","page_number":66,"box":{"x":116,"y":273,"width":752,"height":12}},{"id":"96be6179-1b6f-48d7-b860-8e3c372b94e3","block_type":"box","text":"asset value. The Distributor or its agent will then transmit a confirmation of acceptance to the","page_number":66,"box":{"x":116,"y":289,"width":694,"height":12}},{"id":"40fd034f-0baa-42c2-b89c-919b4e62bb7c","block_type":"box","text":"Authorized Participant that placed the order.","page_number":66,"box":{"x":116,"y":304,"width":333,"height":12}},{"id":"55a25b58-fc38-4deb-9295-392c7ed593c2","block_type":"box","text":"The Fund reserves the right to reject or revoke a creation order transmitted to it by the Distributor or its","page_number":66,"box":{"x":116,"y":335,"width":767,"height":12}},{"id":"78081f3c-8951-4eed-8268-2f9d7872b8d8","block_type":"box","text":"agent provided that a rejection or revocation of a creation order does not violate Rule 6c-11 under the","page_number":66,"box":{"x":116,"y":351,"width":759,"height":12}},{"id":"4c2b28fc-a297-4134-93a8-652c21e06dda","block_type":"box","text":"Investment Company Act. For example, the Fund may reject or revoke a creation order transmitted to it","page_number":66,"box":{"x":117,"y":366,"width":770,"height":12}},{"id":"4a996286-5bc0-4bc8-8c04-21db420f171f","block_type":"box","text":"by the Distributor or its agent if (i) the order is not in proper form; (ii) the investor(s), upon obtaining the","page_number":66,"box":{"x":117,"y":382,"width":766,"height":12}},{"id":"520181ff-3220-44f2-8c43-dc4292111e4c","block_type":"box","text":"shares ordered, would own 80% or more of the currently outstanding shares of the Fund; (iii) the","page_number":66,"box":{"x":116,"y":397,"width":720,"height":12}},{"id":"57431fe8-edbf-4a28-952f-2e80dfc64f72","block_type":"box","text":"Deposit Securities delivered do not conform to the identity and number of shares specified, as","page_number":66,"box":{"x":117,"y":413,"width":700,"height":12}},{"id":"b070e457-8aa0-4b05-ab5c-e4f231e055ca","block_type":"box","text":"described above; (iv) acceptance of the Deposit Securities is not legally required or would, in the","page_number":66,"box":{"x":116,"y":428,"width":721,"height":12}},{"id":"43fdc941-b1cc-4d25-a86e-771bc658129f","block_type":"box","text":"opinion of counsel, be unlawful; or (v) circumstances outside the control of the Fund, the Distributor or","page_number":66,"box":{"x":116,"y":444,"width":761,"height":12}},{"id":"68033443-8fa6-4924-a2a1-facc7d1a1c71","block_type":"box","text":"its agent and BFA make it impracticable to process purchase orders. The Distributor or its agent shall","page_number":66,"box":{"x":117,"y":459,"width":756,"height":12}},{"id":"2555b7f6-babc-43e8-ab49-17d20cf918a2","block_type":"box","text":"notify a prospective purchaser of a Creation Unit and/or the Authorized Participant acting on behalf of","page_number":66,"box":{"x":117,"y":475,"width":756,"height":12}},{"id":"3acc3ab8-99c2-4ecc-b038-30ae7878cab7","block_type":"box","text":"such purchaser of its rejection of such order. The Fund, State Street, the sub-custodian and the","page_number":66,"box":{"x":116,"y":490,"width":714,"height":12}},{"id":"2cd1a072-577b-452a-9b94-054f312628a3","block_type":"box","text":"Distributor or its agent are under no duty, however, to give notification of any defects or irregularities in","page_number":66,"box":{"x":117,"y":506,"width":765,"height":12}},{"id":"cfb72961-3ce1-4709-ab27-794e0e9d4db2","block_type":"box","text":"the delivery of Fund Deposits nor shall any of them incur any liability for failure to give such notification.","page_number":66,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"d3eb902f-048e-44b7-9779-8811ad5cb9a6","block_type":"box","text":"Issuance of a Creation Unit.","page_number":66,"box":{"x":117,"y":552,"width":225,"height":10}},{"id":"1ce76b4c-6ccf-44e7-93b2-360d36586899","block_type":"box","text":"Except as provided herein, a Creation Unit will not be issued until the","page_number":66,"box":{"x":344,"y":552,"width":515,"height":12}},{"id":"71833205-94d5-4228-8317-a40bea63fde1","block_type":"box","text":"transfer of good title to the Fund of the Deposit Securities and the payment of the Cash Component","page_number":66,"box":{"x":116,"y":568,"width":743,"height":12}},{"id":"90c106b4-0dc6-403a-880f-cc5f25dbe299","block_type":"box","text":"have been completed. When the sub-custodian has confirmed to the custodian that the securities","page_number":66,"box":{"x":117,"y":583,"width":726,"height":12}},{"id":"0175baeb-1038-40fb-a171-14341e71ea58","block_type":"box","text":"included in the Fund Deposit (or the cash value thereof) have been delivered to the account of the","page_number":66,"box":{"x":117,"y":599,"width":731,"height":12}},{"id":"a33ae18d-2fbc-4085-b370-2bc23901168c","block_type":"box","text":"relevant sub-custodian or sub-custodians, the Distributor or its agent and BFA shall be notified of such","page_number":66,"box":{"x":117,"y":614,"width":763,"height":12}},{"id":"b3fda369-176d-45e1-8bd5-e2f98645b646","block_type":"box","text":"delivery and the Fund will issue and cause the delivery of the Creation Unit. Creation Units are","page_number":66,"box":{"x":116,"y":630,"width":706,"height":12}},{"id":"b603a8fd-f9d7-472b-bd26-81ea4f2189c5","block_type":"box","text":"generally issued on a “T+1 basis” (","page_number":66,"box":{"x":116,"y":645,"width":258,"height":12}},{"id":"7977ed9e-3dab-40ff-b670-ef930d9280d7","block_type":"box","text":"i.e.","page_number":66,"box":{"x":375,"y":645,"width":20,"height":10}},{"id":"ada8e0d2-a932-4fca-9d34-a6760b335bff","block_type":"box","text":", one Business Day after trade date). The Fund reserves the right","page_number":66,"box":{"x":398,"y":645,"width":489,"height":12}},{"id":"21c7705e-1ae2-44e1-b56b-1f08b495c3a1","block_type":"box","text":"to settle Creation Unit transactions on a basis other than T+1, as applicable. For example, the Fund","page_number":66,"box":{"x":116,"y":661,"width":738,"height":12}},{"id":"ab217516-687e-4be1-9397-93732178677e","block_type":"box","text":"reserves the right to settle Creation Unit transactions on a basis other than T+1 in order to","page_number":66,"box":{"x":117,"y":676,"width":667,"height":12}},{"id":"0ed59d83-7b2a-46ed-b1a1-a23f4181575b","block_type":"box","text":"accommodate non-U.S. market holiday schedules, the occurrence of a holiday in the U.S. bond market","page_number":66,"box":{"x":116,"y":692,"width":764,"height":12}},{"id":"719fb306-6508-4f3b-8411-6dfadf3fa57d","block_type":"box","text":"that is not a holiday observed in the U.S. equity market, to account for different treatment among non","page_number":66,"box":{"x":116,"y":707,"width":755,"height":12}},{"id":"0b28d46f-c9f6-4079-b01a-8c85b4661d8d","block_type":"box","text":"U.S. and U.S. markets of dividend record dates and dividend ex-dates (","page_number":66,"box":{"x":117,"y":723,"width":530,"height":12}},{"id":"c2ff0cca-87f4-43b0-8416-2fbaf5edfad9","block_type":"box","text":"i.e.","page_number":66,"box":{"x":648,"y":723,"width":20,"height":9}},{"id":"e3bd7eca-b3b0-427d-9057-0215ca85885e","block_type":"box","text":", the last date the holder of a","page_number":66,"box":{"x":671,"y":723,"width":212,"height":11}},{"id":"32dbd95e-9725-42ff-a1fd-4a7922301837","block_type":"box","text":"security can sell the security and still receive dividends payable on the security sold) and in certain","page_number":66,"box":{"x":116,"y":738,"width":730,"height":12}},{"id":"c30d8cb3-8ba8-4464-9e12-f19e79095598","block_type":"box","text":"other circumstances consistent with applicable law.","page_number":66,"box":{"x":116,"y":754,"width":379,"height":12}},{"id":"84110868-01d8-4f69-926e-df3875bd8163","block_type":"box","text":"To the extent contemplated by an Authorized Participant Agreement with the Distributor, the Fund will","page_number":66,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"b824e364-4339-4505-8c4c-b7266f9afa79","block_type":"box","text":"issue Creation Units to such Authorized Participant, notwithstanding the fact that the corresponding","page_number":66,"box":{"x":117,"y":800,"width":735,"height":12}},{"id":"45c58a60-b003-4da5-a487-b5d369882b75","block_type":"box","text":"Fund Deposits have not been received in part or in whole, in reliance on the undertaking of the","page_number":66,"box":{"x":117,"y":816,"width":701,"height":12}},{"id":"e40fe9e1-9711-4feb-8888-0806ca6ac96f","block_type":"box","text":"Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking","page_number":66,"box":{"x":116,"y":831,"width":769,"height":12}},{"id":"a92f7345-28b1-4b93-b2a0-8d738e57e9ac","block_type":"box","text":"shall be secured by such Authorized Participant’s delivery and maintenance of collateral as set forth in","page_number":66,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"85dbf427-a8b4-4328-b054-c0b0e6932b74","block_type":"box","text":"the handbook for Authorized Participants. The Trust may use such collateral at any time to buy Deposit","page_number":66,"box":{"x":116,"y":862,"width":770,"height":12}},{"id":"443b2a3a-47db-4b3f-9bfd-e6d9a44f3671","block_type":"box","text":"Securities for the Fund. Such collateral must be delivered no later than the time specified by the Fund","page_number":66,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"197a4ca0-2b0c-4cff-b356-ffa8a712f1ba","block_type":"box","text":"63","page_number":66,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"9c2af5cd-68aa-416e-aed1-a6b73bcd29e3","block_type":"box","text":"NM1026U-6039989-66/256","page_number":66,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"2a84e8f1-1851-45c3-a0aa-feac8925990a","block_type":"box","text":"or its custodian on the contractual settlement date. Information concerning the Fund’s current","page_number":67,"box":{"x":116,"y":87,"width":697,"height":12}},{"id":"671a8422-9441-404a-857e-ce3b1168e0c0","block_type":"box","text":"procedures for collateralization of missing Deposit Securities is available from the Distributor or its","page_number":67,"box":{"x":117,"y":102,"width":730,"height":13}},{"id":"ac486680-3801-421f-b95e-b6c3351f1d99","block_type":"box","text":"agent. The Authorized Participant Agreement will permit the Fund to buy the missing Deposit","page_number":67,"box":{"x":116,"y":118,"width":694,"height":12}},{"id":"993bc3c9-f6bc-48f3-afcf-b169fec9de63","block_type":"box","text":"Securities at any time and will subject the Authorized Participant to liability for any shortfall between the","page_number":67,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"aee33cd6-5352-49d4-9ef6-5fb2779fa3c9","block_type":"box","text":"cost to the Fund of purchasing such securities and the collateral including, without limitation, liability for","page_number":67,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"cb4889a1-d795-4424-970d-5d37f55ac507","block_type":"box","text":"related brokerage, borrowings and other charges.","page_number":67,"box":{"x":117,"y":165,"width":372,"height":12}},{"id":"66be669a-c8c2-4e3e-bc97-32c39fda0d40","block_type":"box","text":"In certain cases, Authorized Participants may create and redeem Creation Units on the same trade","page_number":67,"box":{"x":117,"y":196,"width":738,"height":12}},{"id":"9134b8da-1c9b-4e05-b40d-c43f6c348117","block_type":"box","text":"date and in these instances, the Fund reserves the right to settle these transactions on a net basis or","page_number":67,"box":{"x":116,"y":211,"width":754,"height":12}},{"id":"651b41c1-1913-4fe6-b9c5-f626332d4e00","block_type":"box","text":"require a representation from the Authorized Participants that the creation and redemption transactions","page_number":67,"box":{"x":117,"y":227,"width":769,"height":11}},{"id":"4b120c28-ba75-4961-bc80-a21aebb9ecd7","block_type":"box","text":"are for separate beneficial owners. All questions as to the number of shares of each security in the","page_number":67,"box":{"x":116,"y":242,"width":736,"height":12}},{"id":"306917bc-418c-44e6-94c6-63e269defd56","block_type":"box","text":"Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be","page_number":67,"box":{"x":117,"y":258,"width":747,"height":12}},{"id":"31e0b961-8605-41a9-9b6c-23130d59d7b8","block_type":"box","text":"delivered shall be determined by the Fund and the Fund’s determination shall be final and binding.","page_number":67,"box":{"x":116,"y":273,"width":735,"height":12}},{"id":"b08c6a86-d610-4b0c-965d-841689a8b812","block_type":"box","text":"Costs Associated with Creation Transactions.","page_number":67,"box":{"x":116,"y":304,"width":365,"height":10}},{"id":"d1eb795a-a9cf-4f42-9d4d-ab2ccb1d33d4","block_type":"box","text":"A standard creation transaction fee is imposed to","page_number":67,"box":{"x":482,"y":304,"width":375,"height":12}},{"id":"a954b20e-d250-4838-8db3-207ccd980e31","block_type":"box","text":"offset the transfer and other transaction costs associated with the issuance of Creation Units.","page_number":67,"box":{"x":116,"y":320,"width":696,"height":9}},{"id":"a00a8968-085b-4cf7-a84c-712e933510ca","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to perform certain","page_number":67,"box":{"x":117,"y":351,"width":764,"height":12}},{"id":"8daa47b8-0bf8-4132-a710-609211828cfa","block_type":"box","text":"order processing, Authorized Participant communications, and related services in connection with the","page_number":67,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"80703c43-1c88-4631-ac3e-4a5c8fe39336","block_type":"box","text":"issuance and redemption of Creation Units (“ETF Services”). BRIL will receive from an Authorized","page_number":67,"box":{"x":117,"y":382,"width":730,"height":12}},{"id":"ad200899-589f-4e04-bcf5-9c9eb473f8ec","block_type":"box","text":"Participant a standard transaction fee on each creation order, which consists of (1) a fee for providing","page_number":67,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"58de943a-81ee-495e-86a1-a087b8ee15d3","block_type":"box","text":"the ETF Services (the “ETF Servicing Fee”) and (2) transfer, processing and other transaction costs","page_number":67,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"211ed97d-c296-48b4-9b72-c65705862dad","block_type":"box","text":"charged by the Fund custodian in connection with the issuance of Creation Units for such creation","page_number":67,"box":{"x":116,"y":428,"width":732,"height":12}},{"id":"842f494f-f8ed-41ad-a429-26495b9498ef","block_type":"box","text":"order (“Custody Transaction Costs”). BRIL is entitled to retain the ETF Servicing Fee pursuant to the","page_number":67,"box":{"x":116,"y":444,"width":750,"height":12}},{"id":"07c5f924-54c2-4597-923e-960a5b783c7c","block_type":"box","text":"ETF Services Agreement, but BRIL will reimburse any Custody Transaction Costs to the Fund","page_number":67,"box":{"x":117,"y":459,"width":702,"height":12}},{"id":"333700f5-3be8-43bc-8e81-b4d6d71d5b10","block_type":"box","text":"custodian according to the amounts invoiced by such custodian.","page_number":67,"box":{"x":116,"y":475,"width":481,"height":12}},{"id":"9cbcbcf9-b30c-4076-ab41-f8d9ea2270fd","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being","page_number":67,"box":{"x":116,"y":506,"width":704,"height":12}},{"id":"67864f93-6205-405c-b6a6-aec40878f6f7","block_type":"box","text":"purchased, which amount will vary among different BlackRock-advised funds based on a number of","page_number":67,"box":{"x":117,"y":521,"width":743,"height":12}},{"id":"9da31e9a-4e0f-41b4-9c11-96c54ca8b1c6","block_type":"box","text":"factors, including the complexity of the order and the types of securities or instruments included in a","page_number":67,"box":{"x":116,"y":537,"width":745,"height":12}},{"id":"12106de2-4852-4bc6-9bd9-d83b59f14807","block_type":"box","text":"fund’s Creation Basket, among other variables. The ETF Servicing Fee may be equal to zero in certain","page_number":67,"box":{"x":116,"y":552,"width":767,"height":12}},{"id":"a79b165a-89e8-4199-aaa1-1bc359fe5732","block_type":"box","text":"instances, such as for creation transactions that consist solely of cash. The actual Custody Transaction","page_number":67,"box":{"x":117,"y":568,"width":770,"height":12}},{"id":"ccddad2f-e458-4c8d-a8dc-7ad3086d2137","block_type":"box","text":"Costs vary per order based on the number of trades, underlying markets and settlement locations","page_number":67,"box":{"x":117,"y":583,"width":728,"height":12}},{"id":"711bd68f-e70e-4d35-9bcb-ea18c27fa383","block_type":"box","text":"associated with the issuance of a Creation Unit. The following table sets forth the Fund’s standard","page_number":67,"box":{"x":116,"y":599,"width":731,"height":12}},{"id":"b471c624-ae06-4a72-bcb4-d7644d104353","block_type":"box","text":"creation transaction fee that would have been charged as of September 21, 2026, although the actual","page_number":67,"box":{"x":116,"y":614,"width":760,"height":12}},{"id":"14101fdb-aa97-4248-bd03-e0b5ffa709dc","block_type":"box","text":"fee charged to an Authorized Participant in connection with a creation order will vary over time","page_number":67,"box":{"x":116,"y":630,"width":704,"height":12}},{"id":"8ad730b6-7959-4053-a6ce-292d8a5d33c1","block_type":"box","text":"depending on the factors discussed above, and may be higher than the fee set forth below.","page_number":67,"box":{"x":116,"y":645,"width":681,"height":12}},{"id":"4889a992-53e2-4578-ab25-50f7aaa3f380","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":67,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"24be4ef2-f806-4ddf-bd7b-65e087c696bc","block_type":"box","text":"if a creation transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":67,"box":{"x":117,"y":692,"width":724,"height":12}},{"id":"fb8a6dd2-9d03-47f4-908b-bbab55187f4f","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":67,"box":{"x":117,"y":707,"width":756,"height":12}},{"id":"fd0a8de1-69bf-4fcd-83c7-27c23c997cc7","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":67,"box":{"x":116,"y":723,"width":697,"height":12}},{"id":"57f2a3c9-e7c3-440a-bfef-c9bc64fbb7b5","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":67,"box":{"x":116,"y":738,"width":737,"height":12}},{"id":"2f5be042-8bc6-41b7-ad88-bf7a606cc983","block_type":"box","text":"based on historical data or other inputs, at BlackRock’s discretion, and may include part or all of the","page_number":67,"box":{"x":117,"y":754,"width":738,"height":12}},{"id":"4a7ed5d4-ae65-4ccd-bf83-9bd8b9c98ff7","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":67,"box":{"x":116,"y":769,"width":695,"height":12}},{"id":"5d6e3dbd-70ea-408a-8b45-506a5232f317","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":67,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"5d027f2c-6799-4f0a-ba26-46cb85aefefa","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":67,"box":{"x":117,"y":800,"width":713,"height":12}},{"id":"c97c801b-3a32-4cbd-84bb-46c46a8a193a","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":67,"box":{"x":116,"y":816,"width":729,"height":12}},{"id":"f896a640-776d-482d-bf1c-6848769837c0","block_type":"box","text":"amounts shown below.","page_number":67,"box":{"x":116,"y":831,"width":176,"height":10}},{"id":"43813474-8ab6-46e4-ba5f-16f703abbab5","block_type":"box","text":"64","page_number":67,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"e11ab782-9fe4-457e-8fc3-9a1c63995238","block_type":"box","text":"NM1026U-6039989-67/256","page_number":67,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"34edbadc-17b1-4cc6-b4f8-dc7638a8f957","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Deposit Securities to the Fund.","page_number":68,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"cb3431b6-d543-4e0c-8672-5509872b3dec","block_type":"box","text":"Certain fees/costs associated with creation transactions may be waived in certain circumstances.","page_number":68,"box":{"x":117,"y":102,"width":725,"height":13}},{"id":"c1ffc584-f878-4c76-8549-53caf9ed619b","block_type":"box","text":"Investors who use the services of a broker or other financial intermediary to acquire Fund shares may","page_number":68,"box":{"x":117,"y":118,"width":759,"height":12}},{"id":"5496f60d-2a6f-4ba1-854c-984451da0c31","block_type":"box","text":"be charged a fee for such services.","page_number":68,"box":{"x":117,"y":134,"width":265,"height":12}},{"id":"473df027-db3b-4886-a997-18a02091beff","block_type":"box","text":"The following table sets forth the Fund’s standard creation transaction fee that would have been","page_number":68,"box":{"x":116,"y":164,"width":716,"height":12}},{"id":"31dc60c8-22c2-4317-b355-1dce0c086d8d","block_type":"box","text":"charged as of September 21, 2026 and maximum additional charge (as described above):","page_number":68,"box":{"x":116,"y":180,"width":673,"height":12}},{"id":"ccee6042-6f24-4817-9e66-f939cd4112a4","block_type":"box","text":"Standard","page_number":68,"box":{"x":364,"y":207,"width":57,"height":8}},{"id":"e3df0c70-af39-4e72-95dd-d393408655a7","block_type":"box","text":"Creation","page_number":68,"box":{"x":366,"y":218,"width":53,"height":7}},{"id":"9584619e-ab58-4dc1-9247-aecab64662ad","block_type":"box","text":"Transaction Fee*","page_number":68,"box":{"x":339,"y":228,"width":108,"height":8}},{"id":"5ce24037-03a1-48a1-9616-ebe30906d7a3","block_type":"box","text":"Maximum Additional","page_number":68,"box":{"x":530,"y":218,"width":130,"height":7}},{"id":"ed2b8545-0ebe-4d7e-b241-df95ac3783dc","block_type":"box","text":"Charge**","page_number":68,"box":{"x":567,"y":228,"width":56,"height":10}},{"id":"d4a63133-7490-4f7d-b3d4-e72cae2177cb","block_type":"box","text":"$476 7%","page_number":68,"box":{"x":375,"y":246,"width":237,"height":12}},{"id":"fa5cb394-451d-41ab-87a8-1e7968e9d952","block_type":"box","text":"* The standard creation transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The standard","page_number":68,"box":{"x":143,"y":296,"width":732,"height":10}},{"id":"7d0e1405-d3da-4f43-91d1-1756f0fc2f74","block_type":"box","text":"creation transaction fee may vary over time depending on the factors discussed above, and may be higher than the fee","page_number":68,"box":{"x":170,"y":309,"width":706,"height":10}},{"id":"138ace13-7b87-41eb-bac1-bf31d22eb243","block_type":"box","text":"set forth above.","page_number":68,"box":{"x":170,"y":322,"width":91,"height":8}},{"id":"effca484-91fd-40de-9a93-7059497fda26","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":68,"box":{"x":143,"y":337,"width":364,"height":10}},{"id":"7034699d-ada5-4597-83f3-ed45c3cda048","block_type":"box","text":"Redemption of Creation Units.","page_number":68,"box":{"x":117,"y":366,"width":240,"height":12}},{"id":"50fbb333-c215-4c02-9162-73d253d635fd","block_type":"box","text":"Shares of the Fund may be redeemed by Authorized Participants only","page_number":68,"box":{"x":358,"y":366,"width":529,"height":12}},{"id":"eb77b028-f87d-4bd2-8668-4e65c6141d7d","block_type":"box","text":"in Creation Units at their NAV next determined after receipt of a redemption request in proper form by","page_number":68,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"ca94428d-4826-4dff-afae-2eb8c26e63bc","block_type":"box","text":"the Distributor or its agent and only on a Business Day. The Fund will not redeem shares in amounts","page_number":68,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"27a08391-eaa0-4796-b622-4b5a7e75262e","block_type":"box","text":"less than Creation Units. There can be no assurance, however, that there will be sufficient liquidity in","page_number":68,"box":{"x":117,"y":413,"width":751,"height":12}},{"id":"ed7cb870-b55d-4540-bf48-09ca2a228135","block_type":"box","text":"the secondary market at any time to permit assembly of a Creation Unit. Investors should expect to","page_number":68,"box":{"x":116,"y":428,"width":740,"height":12}},{"id":"05aec088-0e20-4e08-bdb5-b27308574ac4","block_type":"box","text":"incur brokerage and other costs in connection with assembling a sufficient number of shares to","page_number":68,"box":{"x":117,"y":444,"width":708,"height":12}},{"id":"10a18e8f-f769-4544-801b-ae5420dd72d7","block_type":"box","text":"constitute a Creation Unit that could be redeemed by an Authorized Participant. Beneficial owners also","page_number":68,"box":{"x":116,"y":459,"width":767,"height":12}},{"id":"6f8b6cd6-6e17-4d29-a3a0-bdf29923334f","block_type":"box","text":"may sell shares in the secondary market.","page_number":68,"box":{"x":117,"y":475,"width":309,"height":12}},{"id":"f5683714-63a4-4deb-b170-b96cda3b9c15","block_type":"box","text":"The Fund generally redeems Creation Units for Fund Securities. Please see the","page_number":68,"box":{"x":116,"y":506,"width":597,"height":12}},{"id":"d5bc29e1-9c67-4fc4-8863-7d4cd2e31a8b","block_type":"box","text":"Cash Redemption","page_number":68,"box":{"x":715,"y":506,"width":138,"height":12}},{"id":"58911f8b-3724-44d1-ac22-e42029fe09fb","block_type":"box","text":"Method","page_number":68,"box":{"x":116,"y":521,"width":57,"height":10}},{"id":"a07ca7d8-ba8e-4f52-8ba3-480e48906755","block_type":"box","text":"d section below and the following discussion summarizing the in-kind method for further","page_number":68,"box":{"x":172,"y":521,"width":646,"height":12}},{"id":"dc26aa0f-098b-49e7-b4cd-3eae1b1b1592","block_type":"box","text":"information on redeeming Creation Units of the Fund.","page_number":68,"box":{"x":117,"y":537,"width":400,"height":12}},{"id":"8864cb41-8c9c-413d-83cb-d4123352fe9d","block_type":"box","text":"The Fund publishes the designated portfolio of securities (including any portion of such securities for","page_number":68,"box":{"x":116,"y":567,"width":750,"height":13}},{"id":"eff005a5-d1bd-4ff0-8b7e-ae646c753eb8","block_type":"box","text":"which cash may be substituted) that will be applicable to redemption requests received in proper form","page_number":68,"box":{"x":116,"y":583,"width":758,"height":12}},{"id":"22ed384e-3606-49fc-9b7a-9b899d8e5a9b","block_type":"box","text":"(as defined below) on that day (“Fund Securities” or “Redemption Basket”), and an amount of cash (the","page_number":68,"box":{"x":117,"y":598,"width":770,"height":13}},{"id":"0f4b1c61-478a-4764-abb1-d1b8d41e56a8","block_type":"box","text":"“Cash Amount,” as described below) in order to effect redemptions of Creation Units of the Fund. Such","page_number":68,"box":{"x":116,"y":614,"width":768,"height":12}},{"id":"129712e3-ec52-49a3-aa5e-824056d3296e","block_type":"box","text":"Fund Securities and Cash Amount will remain in effect until such time as the next announced","page_number":68,"box":{"x":117,"y":630,"width":695,"height":9}},{"id":"44207e49-9348-41f7-8a27-6bb7a6ad99aa","block_type":"box","text":"composition of the Fund Securities and Cash Amount is made available. The Fund Securities and","page_number":68,"box":{"x":116,"y":645,"width":729,"height":12}},{"id":"f3ee7160-2736-40a3-b3c1-f7b53fccf18b","block_type":"box","text":"Cash Amount are subject to possible amendment or correction. Fund Securities received on","page_number":68,"box":{"x":117,"y":661,"width":682,"height":12}},{"id":"6b090c30-3048-45b9-8970-ee35154afcfd","block_type":"box","text":"redemption may not be identical to Deposit Securities that are applicable to creations of Creation Units.","page_number":68,"box":{"x":117,"y":676,"width":763,"height":12}},{"id":"0c474a9c-798b-4c22-afcb-b3f57559fdc3","block_type":"box","text":"Procedures and requirements governing redemption transactions are set forth in the handbook for","page_number":68,"box":{"x":117,"y":692,"width":727,"height":12}},{"id":"0c2b3940-f6aa-46d3-a5cc-071dc88c92e3","block_type":"box","text":"Authorized Participants and may change from time to time.","page_number":68,"box":{"x":116,"y":707,"width":435,"height":12}},{"id":"b689ec25-b4a0-4bf7-87d8-2a06982faf28","block_type":"box","text":"Unless cash redemptions are available or specified for the Fund, the redemption proceeds for a","page_number":68,"box":{"x":117,"y":738,"width":707,"height":12}},{"id":"a684eb2b-a80d-4c65-bcb8-88ad5535b88e","block_type":"box","text":"Creation Unit generally consist of Fund Securities, plus the Cash Amount, which is an amount equal to","page_number":68,"box":{"x":117,"y":753,"width":760,"height":12}},{"id":"eccbda81-21d8-4b4a-b550-dcce53b2a642","block_type":"box","text":"the difference between the net asset value of the shares being redeemed, as next determined after the","page_number":68,"box":{"x":116,"y":769,"width":763,"height":12}},{"id":"9e84e82e-a3ba-4f56-9537-cb3236ec0ea9","block_type":"box","text":"receipt of a redemption request in proper form, and the value of Fund Securities, less a redemption","page_number":68,"box":{"x":117,"y":784,"width":733,"height":12}},{"id":"24d0f46c-6979-4172-980d-b2adae55ea44","block_type":"box","text":"transaction fee (as described below).","page_number":68,"box":{"x":116,"y":800,"width":273,"height":12}},{"id":"23d894ee-b9e5-4a3c-a6db-9c561be584e2","block_type":"box","text":"The Trust may, in its sole discretion, substitute a “cash in lieu” amount to replace any Fund Security in","page_number":68,"box":{"x":116,"y":831,"width":762,"height":12}},{"id":"6c61a5c0-8877-41d0-a8dc-7c0fa04c056c","block_type":"box","text":"certain circumstances, including: (i) when the delivery of a Fund Security to the Authorized Participant","page_number":68,"box":{"x":116,"y":846,"width":760,"height":12}},{"id":"39199597-5c7d-4356-9fac-233c7b818cb6","block_type":"box","text":"(or to an investor on whose behalf the Authorized Participant is acting) would be restricted under","page_number":68,"box":{"x":117,"y":862,"width":720,"height":12}},{"id":"9fbc7d9a-d791-421e-9d6e-12d980eaaf53","block_type":"box","text":"applicable securities or other local laws or due to a trading restriction, (ii) when the delivery of a Fund","page_number":68,"box":{"x":116,"y":877,"width":755,"height":12}},{"id":"7191de12-9ea7-4608-af85-7b7c90511571","block_type":"box","text":"65","page_number":68,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"05853dcf-ab25-4ee7-9eac-944e6d3a4939","block_type":"box","text":"NM1026U-6039989-68/256","page_number":68,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"721b6ecf-a523-4842-b7ad-9c1f55445542","block_type":"box","text":"Security to the Authorized Participant would result in the disposition of the Fund Security by the","page_number":69,"box":{"x":116,"y":87,"width":712,"height":12}},{"id":"d0d456e5-7450-4cb4-ad12-c9ab664df20b","block_type":"box","text":"Authorized Participant due to restrictions under applicable securities or other local laws, (iii) when the","page_number":69,"box":{"x":116,"y":102,"width":755,"height":13}},{"id":"5e342f0a-0d88-40dd-897e-a6374bd6f0e4","block_type":"box","text":"delivery of a Fund Security to the Authorized Participant would result in unfavorable tax treatment,","page_number":69,"box":{"x":116,"y":118,"width":732,"height":12}},{"id":"f2391d48-19e1-4e87-8e82-8925070574b2","block_type":"box","text":"(iv) when a Fund Security cannot be settled or otherwise delivered in time to facilitate an in-kind","page_number":69,"box":{"x":117,"y":134,"width":714,"height":12}},{"id":"9240a951-17f5-4d6a-80af-1a726e212e5e","block_type":"box","text":"redemption, or (v) in certain other situations. The amount of cash paid out in such cases will be","page_number":69,"box":{"x":117,"y":149,"width":709,"height":12}},{"id":"15876761-6876-48e4-9a96-85b253e06eb0","block_type":"box","text":"equivalent to the value of the substituted security listed as a Fund Security. In the event that the Fund","page_number":69,"box":{"x":116,"y":165,"width":759,"height":12}},{"id":"baa44e87-42c9-45b0-b0e7-5addf37f35d6","block_type":"box","text":"Securities have a value greater than the NAV of the shares, a compensating cash payment equal to","page_number":69,"box":{"x":116,"y":180,"width":745,"height":12}},{"id":"11ce5649-925c-45ff-b1e4-6a8e2875b996","block_type":"box","text":"the difference is required to be made by or through an Authorized Participant by the redeeming","page_number":69,"box":{"x":116,"y":196,"width":710,"height":12}},{"id":"ed0fb6a3-80a3-4a9e-a6f4-71552a61d718","block_type":"box","text":"shareholder. The Fund generally redeems Creation Units for Fund Securities, but the Fund reserves","page_number":69,"box":{"x":116,"y":211,"width":748,"height":12}},{"id":"97a1abde-558f-4ce5-a1ff-f4ef82012ecf","block_type":"box","text":"the right to utilize a cash option for redemption of Creation Units. The Fund may, in its sole discretion,","page_number":69,"box":{"x":116,"y":227,"width":759,"height":12}},{"id":"b90d9291-52ff-4bac-af95-d52355723d3a","block_type":"box","text":"provide such redeeming Authorized Participant a portfolio of securities that differs from the exact","page_number":69,"box":{"x":117,"y":242,"width":720,"height":12}},{"id":"3dd94bb1-67e3-4764-8ae4-051e694c1be8","block_type":"box","text":"composition of the Fund Securities, but does not differ in NAV. The Redemption Basket may also be","page_number":69,"box":{"x":116,"y":258,"width":749,"height":12}},{"id":"b749d27e-855e-4c1b-ae5f-5e55f7b62382","block_type":"box","text":"modified to minimize the Cash Component by redistributing the cash to the Fund Securities portion of","page_number":69,"box":{"x":117,"y":273,"width":756,"height":12}},{"id":"35724055-aa58-43fc-80de-c8c457d00001","block_type":"box","text":"the Redemption Basket through systematically rounding. The rounding methodology allows position","page_number":69,"box":{"x":116,"y":289,"width":744,"height":12}},{"id":"1c54d969-59ce-409d-9fe4-e68615178017","block_type":"box","text":"sizes of securities in the Fund Securities to be “rounded up,” while limiting the maximum allowed","page_number":69,"box":{"x":116,"y":304,"width":720,"height":12}},{"id":"bd23dc2b-7602-4b51-85f1-a25739f49d97","block_type":"box","text":"percentage change in weight and share quantity of any given security in the Redemption Basket.","page_number":69,"box":{"x":117,"y":320,"width":722,"height":12}},{"id":"e7a6ec39-e88d-48f7-8c3c-4aa9671e5fd6","block_type":"box","text":"Redemption Baskets may also be modified to position a fund towards a forward index rebalance to","page_number":69,"box":{"x":117,"y":335,"width":736,"height":12}},{"id":"b5172f8f-c498-42f2-8af3-192ab133087a","block_type":"box","text":"reflect revisions that account for index additions, deletions, and re-weights.","page_number":69,"box":{"x":117,"y":351,"width":559,"height":12}},{"id":"44f538a0-26f3-45a1-83c3-601883e9916e","block_type":"box","text":"Cash Redemption Method.","page_number":69,"box":{"x":116,"y":382,"width":211,"height":12}},{"id":"4dbebff1-6389-44f2-8a5d-b0908e634ba8","block_type":"box","text":"Although the Trust does not generally permit full cash redemptions of","page_number":69,"box":{"x":328,"y":382,"width":523,"height":12}},{"id":"7c4e1d8f-bc8b-4588-a9bf-7ef68c9a9063","block_type":"box","text":"Creation Units of its funds, when partial or full cash redemptions of Creation Units are available or","page_number":69,"box":{"x":117,"y":397,"width":729,"height":12}},{"id":"4a1caaaa-44d0-43c4-bdfe-645159a768ee","block_type":"box","text":"specified for the Fund, they will be effected in essentially the same manner as in-kind redemptions","page_number":69,"box":{"x":116,"y":413,"width":734,"height":12}},{"id":"ec9beccb-a3a1-4b02-927d-76c69106e748","block_type":"box","text":"thereof. In the case of partial or full cash redemption, the Authorized Participant receives the cash","page_number":69,"box":{"x":116,"y":428,"width":731,"height":12}},{"id":"b6e53557-0437-4d2a-9cea-5d0f792f33b5","block_type":"box","text":"equivalent of the Fund Securities it would otherwise receive through an in-kind redemption, plus the","page_number":69,"box":{"x":116,"y":444,"width":743,"height":12}},{"id":"b95ae2c9-3fec-4814-a53d-0e61337dbda7","block_type":"box","text":"same Cash Amount to be paid to an in-kind redeemer.","page_number":69,"box":{"x":116,"y":459,"width":409,"height":12}},{"id":"e7695d58-aef8-408c-a1e8-129ccd9d0fd7","block_type":"box","text":"Costs Associated with Redemption Transactions.","page_number":69,"box":{"x":116,"y":490,"width":394,"height":12}},{"id":"861270ba-c2af-4aeb-8147-c2cc961fdbf0","block_type":"box","text":"A standard redemption transaction fee is","page_number":69,"box":{"x":511,"y":490,"width":312,"height":12}},{"id":"978a53b1-3497-462c-9391-95707dbcddad","block_type":"box","text":"imposed to offset transfer and other transaction costs that may be incurred by the Fund.","page_number":69,"box":{"x":117,"y":506,"width":657,"height":12}},{"id":"3fb91e3d-d531-48c5-b491-ecebedd2fded","block_type":"box","text":"As described above, under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of","page_number":69,"box":{"x":116,"y":537,"width":741,"height":12}},{"id":"1ccef377-6952-4895-857c-832553593b5e","block_type":"box","text":"BFA, to perform certain ETF Services. BRIL will receive from an Authorized Participant a standard","page_number":69,"box":{"x":117,"y":552,"width":732,"height":12}},{"id":"93a97b96-c223-4935-b577-bc7f66c9f939","block_type":"box","text":"transaction fee on each redemption order, which consists of (1) the ETF Servicing Fee and (2) Custody","page_number":69,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"97bf2ca8-79cf-4c74-a1d7-352494f968f7","block_type":"box","text":"Transaction Costs. BRIL is entitled to retain the ETF Servicing Fee pursuant to the ETF Services","page_number":69,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"91ef458f-0763-4440-8aa6-337c06dd5184","block_type":"box","text":"Agreement, but BRIL will reimburse any Custody Transaction Costs to the Fund custodian according to","page_number":69,"box":{"x":116,"y":599,"width":771,"height":12}},{"id":"75b6c9b4-d787-4bbb-9337-71f83f0e7aab","block_type":"box","text":"the amounts invoiced by such custodian.","page_number":69,"box":{"x":116,"y":614,"width":308,"height":12}},{"id":"f6927331-c493-41df-8e81-8edc82f42d6c","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being","page_number":69,"box":{"x":116,"y":645,"width":704,"height":12}},{"id":"b9b29678-7269-4d6e-b676-f3bfc85aae64","block_type":"box","text":"redeemed, which amount will vary among different BlackRock-advised funds based on a number of","page_number":69,"box":{"x":117,"y":661,"width":736,"height":12}},{"id":"c4b4e8f3-2491-423d-942b-a52ec41de1f6","block_type":"box","text":"factors, including the complexity of the order and the types of securities or instruments included in a","page_number":69,"box":{"x":116,"y":676,"width":739,"height":12}},{"id":"eee0d6f3-8664-498f-becd-75433dc75e1b","block_type":"box","text":"fund’s Redemption Basket, among other variables. The ETF Servicing Fee may be equal to zero in","page_number":69,"box":{"x":116,"y":692,"width":733,"height":12}},{"id":"625ebc7f-b985-4a0d-9ca2-11cc88cc5a4c","block_type":"box","text":"certain instances, such as for redemption transactions that consist solely of cash. The actual Custody","page_number":69,"box":{"x":116,"y":707,"width":753,"height":12}},{"id":"a7f9ecd9-b0e4-4200-abce-e58a8778e808","block_type":"box","text":"Transaction Costs vary per order based on the number of trades, underlying markets, and settlement","page_number":69,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"c04e78be-d758-4e5b-a075-b2edaf3fbcbe","block_type":"box","text":"locations associated with the redemption of a Creation Unit. The following table sets forth the Fund’s","page_number":69,"box":{"x":117,"y":738,"width":744,"height":12}},{"id":"ccea09d3-6e90-4d13-9ec7-66cc02d5d9e1","block_type":"box","text":"standard redemption transaction fee that would have been charged as of September 21, 2026,","page_number":69,"box":{"x":116,"y":754,"width":701,"height":12}},{"id":"11219518-8f0f-45da-89b1-1397722bc063","block_type":"box","text":"although the actual fee charged to an Authorized Participant in connection with a redemption order will","page_number":69,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"5a7ae59c-4b79-480f-8cb2-9c76d81d0466","block_type":"box","text":"vary over time depending on the factors discussed above, and may be higher than the fee set forth","page_number":69,"box":{"x":116,"y":785,"width":732,"height":12}},{"id":"a9236086-f73f-4551-b2a0-bc61b374c11c","block_type":"box","text":"below.","page_number":69,"box":{"x":117,"y":800,"width":46,"height":10}},{"id":"f0d6c6f1-a3d5-4a57-b37f-fd4b70f3d40b","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":69,"box":{"x":117,"y":831,"width":761,"height":12}},{"id":"960abec3-93c7-4b9a-a321-246e315ac35b","block_type":"box","text":"if a redemption transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":69,"box":{"x":117,"y":847,"width":754,"height":12}},{"id":"4635d6db-e9a5-4e76-9d3f-e7cf7f9c03d0","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":69,"box":{"x":117,"y":862,"width":762,"height":12}},{"id":"acbef4ab-31ac-44dc-bb45-97c8e41d886e","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":69,"box":{"x":116,"y":878,"width":703,"height":12}},{"id":"e5040d47-7685-490f-a31d-90fe2d4856cf","block_type":"box","text":"66","page_number":69,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"2cab5f42-1e20-4397-9c15-aa0fa249f792","block_type":"box","text":"NM1026U-6039989-69/256","page_number":69,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"5d19b90f-8ea4-4867-9bc9-f12c160c63d7","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":70,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"3d3f8b91-4b2f-40c9-ae61-b665fe35fe1a","block_type":"box","text":"based on historical data or other inputs, at BlackRock’s discretion, and may include part or all of the","page_number":70,"box":{"x":117,"y":102,"width":743,"height":13}},{"id":"9f9b7780-9387-4d3f-bcfa-01c50d7b965d","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":70,"box":{"x":116,"y":118,"width":702,"height":12}},{"id":"3ad35f3c-724c-4f42-9de2-42fdf6a57423","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":70,"box":{"x":117,"y":134,"width":769,"height":12}},{"id":"bc0276fb-759d-4143-9630-4ae53ebf1d8d","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":70,"box":{"x":117,"y":149,"width":719,"height":12}},{"id":"968b71e3-2a67-47ea-b2b7-12a33cd21837","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":70,"box":{"x":116,"y":165,"width":734,"height":12}},{"id":"e05d7250-3845-4f7d-a26e-0562f0dfb155","block_type":"box","text":"amounts shown below.","page_number":70,"box":{"x":116,"y":180,"width":176,"height":10}},{"id":"d4337d84-5e0d-4d78-a603-11afee9890dd","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Fund Securities from the Fund to","page_number":70,"box":{"x":116,"y":211,"width":738,"height":12}},{"id":"f9866255-b83e-42e2-847b-3b82f4831a07","block_type":"box","text":"their account on their order. Certain fees/costs associated with redemption transactions may be waived","page_number":70,"box":{"x":116,"y":226,"width":771,"height":12}},{"id":"e0ff0793-5a07-499e-bdae-c92f66ebead0","block_type":"box","text":"in certain circumstances. Investors who use the services of a broker or other financial intermediary to","page_number":70,"box":{"x":117,"y":242,"width":754,"height":12}},{"id":"19d9c67e-d94d-4cad-a1e5-6a740120eb52","block_type":"box","text":"dispose of Fund shares may be charged a fee for such services.","page_number":70,"box":{"x":116,"y":257,"width":483,"height":12}},{"id":"58b3c525-6391-4868-974d-68e2ddf06a17","block_type":"box","text":"The following table sets forth the Fund’s standard redemption transaction fee that would have been","page_number":70,"box":{"x":116,"y":288,"width":741,"height":12}},{"id":"dfc125a0-2582-471d-9aeb-09ce956907ec","block_type":"box","text":"charged as of September 21, 2026 and maximum additional charge (as described above):","page_number":70,"box":{"x":116,"y":304,"width":673,"height":12}},{"id":"2075d88b-664e-45a4-bad7-111aef4abe24","block_type":"box","text":"Standard","page_number":70,"box":{"x":366,"y":331,"width":57,"height":8}},{"id":"f1d9a4c1-0e77-4d06-b086-716cf7914bbf","block_type":"box","text":"Redemption","page_number":70,"box":{"x":356,"y":342,"width":76,"height":9}},{"id":"116ec206-b1d2-4b88-96f6-837b2f0484d4","block_type":"box","text":"Transaction Fee*","page_number":70,"box":{"x":340,"y":352,"width":108,"height":7}},{"id":"4c74d7f9-1020-4fb0-b713-145804b46560","block_type":"box","text":"Maximum Additional","page_number":70,"box":{"x":536,"y":342,"width":129,"height":7}},{"id":"abfd2305-e9c6-42f0-802e-02f6c97a80ce","block_type":"box","text":"Charge**","page_number":70,"box":{"x":573,"y":352,"width":56,"height":10}},{"id":"0adbba5c-e59a-4cda-8d5f-783fd8e569c6","block_type":"box","text":"$476 2%","page_number":70,"box":{"x":376,"y":370,"width":241,"height":11}},{"id":"e6507e29-2d32-4fce-8afb-218675df788f","block_type":"box","text":"* The standard redemption transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The","page_number":70,"box":{"x":143,"y":420,"width":695,"height":10}},{"id":"f10ec477-6aa9-47a7-b007-b16ef1f87456","block_type":"box","text":"standard redemption transaction fee may vary over time depending on the factors discussed above, and may be higher","page_number":70,"box":{"x":170,"y":433,"width":707,"height":10}},{"id":"581a167c-8f02-4674-922e-ff4173cb9794","block_type":"box","text":"than the fee set forth above.","page_number":70,"box":{"x":170,"y":446,"width":166,"height":7}},{"id":"32da7839-9c63-413b-bfd7-a56d7c9f9e61","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":70,"box":{"x":143,"y":461,"width":364,"height":10}},{"id":"6f5f402e-a96c-47e9-b1c2-be4ab79be027","block_type":"box","text":"Placement of Redemption Orders.","page_number":70,"box":{"x":117,"y":490,"width":269,"height":12}},{"id":"f9604b0e-f232-45d8-9e2b-826e9989de93","block_type":"box","text":"Redemption requests for Creation Units of the Fund must be","page_number":70,"box":{"x":387,"y":490,"width":460,"height":12}},{"id":"44570325-0d5a-4ebc-a14b-8ea7cac9643f","block_type":"box","text":"submitted to the Distributor or its agent by or through an Authorized Participant. An Authorized","page_number":70,"box":{"x":116,"y":506,"width":705,"height":12}},{"id":"14f2d18a-31cc-4ecd-ad7e-a6c8b3480597","block_type":"box","text":"Participant must submit an irrevocable request to redeem shares of the Fund generally before","page_number":70,"box":{"x":117,"y":521,"width":701,"height":12}},{"id":"68aefb53-3e91-4e56-af35-dfc2d1b9f8b1","block_type":"box","text":"4:00 p.m., Eastern time on any Business Day in order to receive that day’s NAV. On days when the","page_number":70,"box":{"x":116,"y":537,"width":742,"height":12}},{"id":"e50dcb2c-9e86-43e2-8f0c-d432e02198d8","block_type":"box","text":"Listing Exchange closes earlier than normal, the Fund may require orders to redeem Creation Units to","page_number":70,"box":{"x":117,"y":552,"width":761,"height":12}},{"id":"9d09dab2-f50b-428f-b0cb-c03348ec010c","block_type":"box","text":"be placed earlier that day. Investors, other than Authorized Participants, are responsible for making","page_number":70,"box":{"x":117,"y":568,"width":741,"height":12}},{"id":"38b5b70c-672d-4bc7-bb5d-4d60f0656c2f","block_type":"box","text":"arrangements for a redemption request to be made through an Authorized Participant. The Distributor","page_number":70,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"7eda4290-8df6-4e92-a0b6-84b38602a01f","block_type":"box","text":"or its agent will provide a list of current Authorized Participants upon request.","page_number":70,"box":{"x":116,"y":599,"width":576,"height":12}},{"id":"0340a29b-1cb7-4a12-9b8a-ef5a48ce43ca","block_type":"box","text":"The Authorized Participant must transmit the request for redemption in the form required by the Fund","page_number":70,"box":{"x":116,"y":629,"width":755,"height":13}},{"id":"4ede44f6-c37d-444d-8e09-8f799294cb7d","block_type":"box","text":"to the Distributor or its agent in accordance with procedures set forth in the Authorized Participant","page_number":70,"box":{"x":116,"y":645,"width":730,"height":12}},{"id":"d9e826f3-8bf7-499e-86eb-ee48d22abe3b","block_type":"box","text":"Agreement. Investors should be aware that their particular broker may not have executed an","page_number":70,"box":{"x":116,"y":661,"width":686,"height":12}},{"id":"b63f7d65-2511-40f9-a03c-9de46d0a932e","block_type":"box","text":"Authorized Participant Agreement and that, therefore, requests to redeem Creation Units may have to","page_number":70,"box":{"x":116,"y":676,"width":755,"height":12}},{"id":"2d2c5903-fd1e-4c93-9b83-7157d1f1522d","block_type":"box","text":"be placed by the investor’s broker through an Authorized Participant who has executed an Authorized","page_number":70,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"81ed25ef-fb12-42e3-be58-24dcdfdf3af6","block_type":"box","text":"Participant Agreement. At any time, only a limited number of broker-dealers will have an Authorized","page_number":70,"box":{"x":117,"y":707,"width":737,"height":12}},{"id":"b6b61d39-b51c-4c44-bb7d-53e45db3fec6","block_type":"box","text":"Participant Agreement in effect. Investors making a redemption request should be aware that such","page_number":70,"box":{"x":117,"y":723,"width":730,"height":12}},{"id":"35eac6b1-1d6d-427f-b125-1dfb6f29bc18","block_type":"box","text":"request must be in the form specified by such Authorized Participant. Investors making a request to","page_number":70,"box":{"x":117,"y":738,"width":737,"height":12}},{"id":"44058ace-ea8e-49d1-ada8-c845bef52d07","block_type":"box","text":"redeem Creation Units should allow sufficient time to permit proper submission of the request by an","page_number":70,"box":{"x":117,"y":754,"width":737,"height":12}},{"id":"ba29f766-395d-482e-9515-6945f933316a","block_type":"box","text":"Authorized Participant and transfer of the shares to the Fund’s transfer agent; such investors should","page_number":70,"box":{"x":116,"y":769,"width":742,"height":12}},{"id":"70b4c72a-2d41-4e5c-a792-dea8c3f7beb7","block_type":"box","text":"allow for the additional time that may be required to effect redemptions through their banks, brokers or","page_number":70,"box":{"x":116,"y":785,"width":759,"height":12}},{"id":"1ef66126-cb6d-4b90-9a48-2a7b52cb3ff1","block_type":"box","text":"other financial intermediaries if such intermediaries are not Authorized Participants.","page_number":70,"box":{"x":116,"y":800,"width":617,"height":12}},{"id":"f4bd3b25-f06d-4150-9db8-f73f95b93dc6","block_type":"box","text":"A redemption request is considered to be in “proper form” if: (i) an Authorized Participant has","page_number":70,"box":{"x":116,"y":831,"width":694,"height":12}},{"id":"67becd3e-d67a-4dfa-8991-6a9c5cd0f480","block_type":"box","text":"transferred or caused to be transferred to the Fund’s transfer agent the Creation Unit redeemed","page_number":70,"box":{"x":116,"y":846,"width":715,"height":12}},{"id":"6f65c354-7ac4-42bc-aa0f-839caa99d781","block_type":"box","text":"through the book-entry system of DTC so as to be effective by the Listing Exchange closing time on","page_number":70,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"52603354-274e-401a-a60c-81d695f84180","block_type":"box","text":"any Business Day on which the redemption request is submitted; (ii) a request in form satisfactory to","page_number":70,"box":{"x":116,"y":877,"width":750,"height":12}},{"id":"4065aee8-ca76-4c8d-8ffa-ca4f948e5ace","block_type":"box","text":"67","page_number":70,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"261442b2-b1c4-49eb-bedd-59922940c564","block_type":"box","text":"NM1026U-6039989-70/256","page_number":70,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1a6a0053-35ba-456b-952d-0cc04645a913","block_type":"box","text":"the Fund is received by the Distributor or its agent from the Authorized Participant on behalf of itself or","page_number":71,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"807ca415-a2c2-4d4d-af63-85a14ad93a18","block_type":"box","text":"another redeeming investor within the time periods specified above; and (iii) all other procedures set","page_number":71,"box":{"x":116,"y":102,"width":748,"height":13}},{"id":"b4997055-ba2a-4eb2-a075-4da696fa4c9e","block_type":"box","text":"forth in the Authorized Participant Agreement are properly followed.","page_number":71,"box":{"x":116,"y":118,"width":506,"height":12}},{"id":"6bb5f7c4-5c98-417d-8717-7cef12ca1f2a","block_type":"box","text":"Upon receiving a redemption request, the Distributor or its agent shall notify the Fund and the Fund’s","page_number":71,"box":{"x":117,"y":149,"width":753,"height":12}},{"id":"2d39185b-14a1-4e23-a98c-38f7937f227c","block_type":"box","text":"transfer agent of such redemption request. The tender of an investor’s shares for redemption and the","page_number":71,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"dad4ad82-3591-48c7-8c50-c618c44a677e","block_type":"box","text":"distribution of the securities and/or cash included in the redemption payment made in respect of","page_number":71,"box":{"x":116,"y":180,"width":716,"height":12}},{"id":"9c7d9810-e71c-4d05-a097-031e21b75363","block_type":"box","text":"Creation Units redeemed will be made through DTC and the relevant Authorized Participant to the","page_number":71,"box":{"x":117,"y":196,"width":731,"height":12}},{"id":"49421f8c-92a2-4386-a347-aeb0505b0143","block_type":"box","text":"Beneficial Owner thereof as recorded on the book-entry system of DTC or the DTC Participant through","page_number":71,"box":{"x":117,"y":211,"width":766,"height":12}},{"id":"e8e8c9d4-34cd-4deb-b9b2-a69aa309da23","block_type":"box","text":"which such investor holds, as the case may be, or by such other means specified by the Authorized","page_number":71,"box":{"x":116,"y":227,"width":744,"height":12}},{"id":"7bcd7843-2cad-472e-9399-9053546ee5b8","block_type":"box","text":"Participant submitting the redemption request.","page_number":71,"box":{"x":117,"y":242,"width":347,"height":12}},{"id":"0a2de9e3-ab07-4235-a3ed-89655a57ca04","block_type":"box","text":"A redeeming Authorized Participant, whether on its own account or acting on behalf of a Beneficial","page_number":71,"box":{"x":116,"y":273,"width":736,"height":12}},{"id":"4410bc47-37a5-4174-ac47-c7a4a2d5739b","block_type":"box","text":"Owner, must maintain appropriate security arrangements with a qualified broker-dealer, bank or other","page_number":71,"box":{"x":116,"y":289,"width":759,"height":12}},{"id":"d5fa1cd9-a570-454c-8532-e4c372ade1cf","block_type":"box","text":"custody providers in each jurisdiction in which any of the portfolio securities are customarily traded, to","page_number":71,"box":{"x":116,"y":304,"width":758,"height":12}},{"id":"78f99a7a-55e0-40e6-b57a-67a04f7d3d8e","block_type":"box","text":"which account such portfolio securities will be delivered.","page_number":71,"box":{"x":116,"y":320,"width":421,"height":12}},{"id":"b76cb597-68e7-4532-b5a5-d77d7c334449","block_type":"box","text":"Deliveries of redemption proceeds by the Fund are generally made within one Business Day (","page_number":71,"box":{"x":117,"y":351,"width":694,"height":12}},{"id":"c31699eb-328b-434e-a3e8-ebbd8fa62b0f","block_type":"box","text":"i.e.","page_number":71,"box":{"x":812,"y":351,"width":20,"height":9}},{"id":"06cd900c-9b59-4cde-ba5e-4eef418347ae","block_type":"box","text":",","page_number":71,"box":{"x":835,"y":359,"width":8,"height":3}},{"id":"c2414c0a-75d5-461b-b2e1-45d0a22b55fe","block_type":"box","text":"“T+1”). However, the Fund reserves the right to settle redemption transactions on a basis other than","page_number":71,"box":{"x":116,"y":366,"width":747,"height":12}},{"id":"eb008a74-5a29-457e-b5d7-965cf809e2ad","block_type":"box","text":"T+1, including a shorter settlement period, if necessary or appropriate under the circumstances and","page_number":71,"box":{"x":116,"y":382,"width":738,"height":12}},{"id":"4985ae73-de46-4e92-aadc-167fc68e1cf0","block_type":"box","text":"compliant with applicable law. Delayed settlement may occur due to a number of different reasons,","page_number":71,"box":{"x":116,"y":397,"width":738,"height":12}},{"id":"3df9e639-9924-4ecd-b2c4-efcbab7cc4c5","block_type":"box","text":"including, without limitation, settlement cycles for the underlying securities, unscheduled market","page_number":71,"box":{"x":117,"y":413,"width":713,"height":12}},{"id":"6c94aee2-e4f4-413f-83f8-bea677fb30fb","block_type":"box","text":"closings, an effort to link distribution to dividend record dates and ex-dates and newly announced","page_number":71,"box":{"x":116,"y":428,"width":726,"height":12}},{"id":"4ebb051a-e551-410f-9bde-e7e4444339f5","block_type":"box","text":"holidays. For example, the Fund reserves the right to settle redemption transactions on a basis other","page_number":71,"box":{"x":117,"y":444,"width":751,"height":12}},{"id":"362e4a5d-4172-45db-8aa2-082f035c0063","block_type":"box","text":"than T+1 in order to accommodate non-U.S. market holiday schedules, the occurrence of a holiday in","page_number":71,"box":{"x":116,"y":459,"width":757,"height":12}},{"id":"f72a78cb-e60c-41dd-96a0-55c41d6829f6","block_type":"box","text":"the U.S. bond market that is not a holiday observed in the U.S. equity market, to account for different","page_number":71,"box":{"x":116,"y":475,"width":749,"height":12}},{"id":"7636f779-60bb-42cf-a412-b92b1f5289c5","block_type":"box","text":"treatment among non-U.S. and U.S. markets of dividend record dates and dividend ex-dates (","page_number":71,"box":{"x":116,"y":490,"width":696,"height":12}},{"id":"59f94f1b-52f6-4352-a311-048158872b01","block_type":"box","text":"i.e.","page_number":71,"box":{"x":813,"y":490,"width":21,"height":10}},{"id":"ca9e5ad2-e9c9-441e-8595-e60988b7ae9c","block_type":"box","text":", the","page_number":71,"box":{"x":837,"y":490,"width":36,"height":11}},{"id":"2113ad5a-33e0-47c4-a0a8-bfde073c4526","block_type":"box","text":"last date the holder of a security can sell the security and still receive dividends payable on the security","page_number":71,"box":{"x":117,"y":506,"width":769,"height":12}},{"id":"fe55e245-88cd-4c8a-80bf-07b61bf9fa8a","block_type":"box","text":"sold) and in certain other circumstances consistent with applicable law.","page_number":71,"box":{"x":116,"y":521,"width":526,"height":12}},{"id":"fcaed787-6232-4513-9d2c-a1ce9e85f37b","block_type":"box","text":"If the Fund includes a foreign investment in its basket, and if a local market holiday, or series of","page_number":71,"box":{"x":117,"y":552,"width":711,"height":12}},{"id":"b0ae74ce-e0fe-4851-bcdb-719f78d18187","block_type":"box","text":"consecutive holidays, or the extended delivery cycles for transferring foreign investments to redeeming","page_number":71,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"9baf8c8a-53e2-4bdf-9125-18c71953a413","block_type":"box","text":"Authorized Participants prevents timely delivery of the foreign investment in response to a redemption","page_number":71,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"15662838-09ab-4ce9-a90f-3d88d16091ef","block_type":"box","text":"request, the Fund may delay delivery of the foreign investment more than seven days if the Fund","page_number":71,"box":{"x":117,"y":599,"width":723,"height":12}},{"id":"778d55ff-7410-4a8c-a2fe-9e77e3d28a7b","block_type":"box","text":"delivers the foreign investment as soon as practicable, but in no event later than 15 days.","page_number":71,"box":{"x":116,"y":614,"width":668,"height":12}},{"id":"7076521b-576c-4c0a-9ec8-e6bd319e352b","block_type":"box","text":"If neither the Authorized Participant nor the Beneficial Owner on whose behalf the Authorized","page_number":71,"box":{"x":117,"y":645,"width":696,"height":12}},{"id":"e9d6ea29-077e-41cd-b0da-d9a514a87328","block_type":"box","text":"Participant is acting has appropriate arrangements to take delivery of Fund Securities in the applicable","page_number":71,"box":{"x":117,"y":661,"width":759,"height":12}},{"id":"a258add3-88df-4f40-9ed2-a85795487fd1","block_type":"box","text":"non-U.S. jurisdiction and it is not possible to make other such arrangements, or if it is not possible to","page_number":71,"box":{"x":117,"y":676,"width":743,"height":12}},{"id":"8d386ce8-7e10-47dd-b82f-59b30b106f90","block_type":"box","text":"effect deliveries of Fund Securities in such jurisdiction, the Fund may in its discretion exercise its option","page_number":71,"box":{"x":116,"y":692,"width":766,"height":12}},{"id":"b9ab880f-eaa6-436c-ad37-fecdb0756b07","block_type":"box","text":"to redeem such shares in cash, and the Beneficial Owner will be required to receive its redemption","page_number":71,"box":{"x":116,"y":707,"width":731,"height":12}},{"id":"94b23aa4-2da8-4a89-a1dd-39c33b215cee","block_type":"box","text":"proceeds in cash. In such case, the investor will receive a cash payment equal to the net asset value of","page_number":71,"box":{"x":117,"y":723,"width":767,"height":12}},{"id":"1cf76b76-3746-488a-b204-e585d6cfc687","block_type":"box","text":"its shares based on the NAV of the Fund next determined after the redemption request is received in","page_number":71,"box":{"x":117,"y":738,"width":745,"height":12}},{"id":"97cb891d-96b3-404c-8770-cf1aea38260d","block_type":"box","text":"proper form (minus a redemption transaction fee and additional charges specified above to offset the","page_number":71,"box":{"x":117,"y":754,"width":747,"height":12}},{"id":"b8e6c200-8f0e-4693-b35a-ab712d3827ab","block_type":"box","text":"Fund’s brokerage and other transaction costs associated with the disposition of Fund Securities).","page_number":71,"box":{"x":117,"y":769,"width":718,"height":12}},{"id":"5df3921e-97d2-4eb8-a7ad-ce2de8c15f7f","block_type":"box","text":"Redemptions of shares for Fund Securities will be subject to compliance with applicable U.S. federal","page_number":71,"box":{"x":117,"y":785,"width":743,"height":12}},{"id":"de2a530e-925e-42c3-b30c-c04236192f05","block_type":"box","text":"and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves","page_number":71,"box":{"x":116,"y":800,"width":766,"height":12}},{"id":"48762a5d-12c3-4004-8bd4-eafbfb2e9f64","block_type":"box","text":"the right to redeem Creation Units for cash to the extent that the Fund cannot lawfully deliver specific","page_number":71,"box":{"x":116,"y":816,"width":748,"height":12}},{"id":"825e0555-71e3-4411-bd3e-7bc54f3c6fa2","block_type":"box","text":"Fund Securities upon redemptions or cannot do so without first registering the Fund Securities under","page_number":71,"box":{"x":117,"y":831,"width":751,"height":12}},{"id":"ee21b70a-a906-4a44-9f9c-1254609c37e0","block_type":"box","text":"such laws.","page_number":71,"box":{"x":116,"y":847,"width":83,"height":9}},{"id":"a3b3a5a1-0b12-426e-9cc6-95d99f3fb269","block_type":"box","text":"68","page_number":71,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5e23aa08-8933-494b-876a-2250c78b0200","block_type":"box","text":"NM1026U-6039989-71/256","page_number":71,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"c57cc413-d577-4ca9-be6f-451812f1592a","block_type":"box","text":"To the extent contemplated by an Authorized Participant’s agreement with the Distributor or its agent,","page_number":72,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"7d39ab2a-34be-43a5-8d51-083d6fcf7959","block_type":"box","text":"in the event an Authorized Participant has submitted a redemption request in proper form but is unable","page_number":72,"box":{"x":117,"y":102,"width":766,"height":12}},{"id":"3d7425d5-b27c-47cc-bccb-e30dd0c06fce","block_type":"box","text":"to transfer all or part of the Creation Unit to be redeemed to the Fund, at or prior to the time specified","page_number":72,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"5b5a267b-d4ae-4437-bd31-ebe245fe1979","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":72,"box":{"x":117,"y":134,"width":729,"height":12}},{"id":"28f8aa6d-0088-45e7-8e6e-b72cf0bd313d","block_type":"box","text":"request, the Distributor or its agent will accept the redemption request in reliance on the undertaking by","page_number":72,"box":{"x":117,"y":149,"width":770,"height":12}},{"id":"109bc058-ffff-4d7c-a7b1-4ae633693994","block_type":"box","text":"the Authorized Participant to deliver the missing shares as soon as possible. Such undertaking shall be","page_number":72,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"73a94ae3-7400-45ed-a368-0119c3e9bbc6","block_type":"box","text":"secured by the Authorized Participant’s delivery and maintenance of collateral as set forth in the","page_number":72,"box":{"x":116,"y":180,"width":717,"height":12}},{"id":"35aca6be-940d-457f-9032-1cd93623f4a6","block_type":"box","text":"handbook for Authorized Participants. Such collateral must be delivered no later than the time specified","page_number":72,"box":{"x":117,"y":196,"width":771,"height":11}},{"id":"9331dd29-ae11-4046-9e21-63a67bd2cfa0","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":72,"box":{"x":117,"y":211,"width":729,"height":12}},{"id":"ef454265-b02c-4ef1-8b14-fce986566d42","block_type":"box","text":"request and shall be held by State Street and marked-to-market daily. The fees of State Street and any","page_number":72,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"b5f7a8cd-20a2-4824-998f-9d133dc60c30","block_type":"box","text":"sub-custodians in respect of the delivery, maintenance and redelivery of the collateral shall be payable","page_number":72,"box":{"x":116,"y":242,"width":766,"height":12}},{"id":"9935079c-850a-4bc2-b95a-4e7317311734","block_type":"box","text":"by the Authorized Participant. The Authorized Participant Agreement permits the Fund to acquire","page_number":72,"box":{"x":117,"y":258,"width":723,"height":12}},{"id":"df052442-e7fb-47b8-8a4a-677fc9f4c509","block_type":"box","text":"shares of the Fund at any time and subjects the Authorized Participant to liability for any shortfall","page_number":72,"box":{"x":116,"y":273,"width":722,"height":12}},{"id":"0d36fe37-0453-4ebc-9001-bf54ffea37e3","block_type":"box","text":"between the aggregate of the cost to the Fund of purchasing such shares, plus the value of the Cash","page_number":72,"box":{"x":117,"y":289,"width":753,"height":12}},{"id":"afa33d1c-a27a-47b5-8c97-42092c478697","block_type":"box","text":"Amount, and the value of the collateral together with liability for related brokerage and other charges.","page_number":72,"box":{"x":116,"y":304,"width":754,"height":12}},{"id":"5f93e34a-1b34-4e46-8b3a-62314d8145f4","block_type":"box","text":"Because the portfolio securities of the Fund may trade on exchange(s) on days that the Listing","page_number":72,"box":{"x":117,"y":331,"width":705,"height":12}},{"id":"543f5a3e-e4f8-41ab-a761-ad66dc66f91b","block_type":"box","text":"Exchange is closed or are otherwise not Business Days for the Fund, shareholders may not be able to","page_number":72,"box":{"x":117,"y":347,"width":763,"height":12}},{"id":"d7fcfff3-238d-4473-91f6-3b6ff69441b6","block_type":"box","text":"redeem their shares of the Fund, or purchase or sell shares of the Fund on the Listing Exchange on","page_number":72,"box":{"x":117,"y":362,"width":744,"height":12}},{"id":"00c9fb29-f530-49ba-a3c8-eb49a2c8194e","block_type":"box","text":"days when the NAV of the Fund could be significantly affected by events in the relevant non-U.S.","page_number":72,"box":{"x":116,"y":378,"width":725,"height":12}},{"id":"a806976c-c9dc-4278-8c9f-d70d0db6210d","block_type":"box","text":"markets.","page_number":72,"box":{"x":117,"y":393,"width":68,"height":10}},{"id":"7aea2250-655c-4a22-9e8a-0ce2a7e1df50","block_type":"box","text":"The right of redemption may be suspended or the date of payment postponed with respect to the Fund:","page_number":72,"box":{"x":116,"y":420,"width":771,"height":12}},{"id":"15b6db7e-6cf1-4176-ac83-3f8fe8982c2c","block_type":"box","text":"(i) for any period during which the Listing Exchange is closed (other than customary weekend and","page_number":72,"box":{"x":117,"y":436,"width":729,"height":12}},{"id":"9b48e34c-160a-4a98-8e99-5f0231864e23","block_type":"box","text":"holiday closings); (ii) for any period during which trading on the Listing Exchange is suspended or","page_number":72,"box":{"x":117,"y":451,"width":726,"height":12}},{"id":"9095aa30-6ad2-4413-9c1a-6581ccbb9c06","block_type":"box","text":"restricted; (iii) for any period during which an emergency exists as a result of which disposal of the","page_number":72,"box":{"x":117,"y":467,"width":732,"height":12}},{"id":"1b2c38f4-032c-4594-90a3-e9773bcd4171","block_type":"box","text":"shares of the Fund’s portfolio securities or determination of its net asset value is not reasonably","page_number":72,"box":{"x":116,"y":482,"width":714,"height":12}},{"id":"42f67659-27f1-4b3a-9c30-89af2849832c","block_type":"box","text":"practicable; or (iv) in such other circumstance as is permitted by the SEC.","page_number":72,"box":{"x":117,"y":498,"width":551,"height":12}},{"id":"8f172897-b48a-4259-8118-8403e3b37902","block_type":"box","text":"Custom Baskets.","page_number":72,"box":{"x":116,"y":525,"width":135,"height":10}},{"id":"cd1fa917-1ec8-4875-a253-d3e03d8df55d","block_type":"box","text":"Creation and redemption baskets may differ and the Fund may accept “custom","page_number":72,"box":{"x":252,"y":525,"width":595,"height":12}},{"id":"87d5b174-f64c-49a0-b8f2-c2f3ba2c99d6","block_type":"box","text":"baskets.” A custom basket may include any of the following: (i) a basket that is composed of a non","page_number":72,"box":{"x":117,"y":540,"width":735,"height":13}},{"id":"de7ceb32-f5af-4321-bbdd-6ad12307df34","block_type":"box","text":"representative selection of the Fund’s portfolio holdings; (ii) a representative basket that is different","page_number":72,"box":{"x":117,"y":556,"width":738,"height":12}},{"id":"b7d60188-1c28-4e12-8c92-e63e21cc089e","block_type":"box","text":"from the initial basket used in transactions on the same business day; or (iii) a basket that contains","page_number":72,"box":{"x":116,"y":571,"width":738,"height":13}},{"id":"4e750673-390e-4144-8429-6271f763dc1f","block_type":"box","text":"bespoke cash substitutions for a single Authorized Participant. The Fund has adopted policies and","page_number":72,"box":{"x":117,"y":587,"width":734,"height":12}},{"id":"8a8f128e-b938-47fe-a159-4f53652426d5","block_type":"box","text":"procedures that govern the construction and acceptance of baskets, including heightened","page_number":72,"box":{"x":117,"y":602,"width":669,"height":13}},{"id":"b9c150c7-4212-4445-b181-aff65e117d47","block_type":"box","text":"requirements for certain types of custom baskets. Such policies and procedures provide the","page_number":72,"box":{"x":117,"y":618,"width":685,"height":12}},{"id":"b5f3dd7d-b0fd-4b01-a85c-394de9a04c40","block_type":"box","text":"parameters for the construction and acceptance of custom baskets that are in the best interests of the","page_number":72,"box":{"x":117,"y":634,"width":760,"height":11}},{"id":"322e0092-c4c1-4f96-aa50-4808a2509992","block_type":"box","text":"Fund and its shareholders, establish processes for revisions to, or deviations from, such parameters,","page_number":72,"box":{"x":117,"y":649,"width":752,"height":12}},{"id":"008778d3-e21d-4ec2-99b6-7c5131ece385","block_type":"box","text":"and specify the titles and roles of the employees of BFA who are required to review each custom","page_number":72,"box":{"x":116,"y":665,"width":717,"height":12}},{"id":"b3695ff7-bb6c-4088-81b7-daf189f7b609","block_type":"box","text":"basket for compliance with those parameters. In addition, when constructing custom baskets for","page_number":72,"box":{"x":117,"y":680,"width":711,"height":12}},{"id":"0880692a-93f6-41a4-a5dc-c0250346733e","block_type":"box","text":"redemptions, the tax efficiency of the Fund may be taken into account. The policies and procedures","page_number":72,"box":{"x":117,"y":696,"width":737,"height":12}},{"id":"07700d05-1679-4976-bbfc-60b9145a50ca","block_type":"box","text":"distinguish among different types of custom baskets that may be used and impose different","page_number":72,"box":{"x":116,"y":711,"width":677,"height":12}},{"id":"70c566bb-253d-4c99-83e3-9c91fab210a4","block_type":"box","text":"requirements for different types of custom baskets in order to seek to mitigate against potential risks of","page_number":72,"box":{"x":117,"y":727,"width":761,"height":12}},{"id":"b4d11ed2-0ac0-4453-8bd5-664652b0101c","block_type":"box","text":"conflicts and/or overreaching by an Authorized Participant. BlackRock has established a governance","page_number":72,"box":{"x":116,"y":742,"width":747,"height":12}},{"id":"a7afe480-5915-45a9-b59f-6117050dfef3","block_type":"box","text":"process to oversee basket compliance for the Fund, as set forth in the Fund’s policies and procedures.","page_number":72,"box":{"x":117,"y":758,"width":760,"height":12}},{"id":"7af82608-8b8d-40aa-99b7-ff7704991819","block_type":"box","text":"Taxation on Creations and Redemptions of Creation Units.","page_number":72,"box":{"x":116,"y":785,"width":466,"height":12}},{"id":"28b29481-7882-4167-8006-ea495cc5ace2","block_type":"box","text":"An Authorized Participant generally will","page_number":72,"box":{"x":588,"y":785,"width":290,"height":12}},{"id":"d71ad108-6625-46ad-8106-b9e38e97eb44","block_type":"box","text":"recognize either gain or loss upon the exchange of Deposit Securities for Creation Units. This gain or","page_number":72,"box":{"x":117,"y":800,"width":749,"height":12}},{"id":"03537afc-5945-4d81-bc2f-d35ea1b2bc84","block_type":"box","text":"loss is calculated by taking the market value of the Creation Units purchased over the Authorized","page_number":72,"box":{"x":117,"y":816,"width":718,"height":12}},{"id":"d8b88842-3dcf-4e29-9234-86ebc58fa401","block_type":"box","text":"Participant’s aggregate basis in the Deposit Securities exchanged therefor. However, the IRS may","page_number":72,"box":{"x":117,"y":831,"width":733,"height":12}},{"id":"11ebf2a4-22e8-4ac7-8170-d11d0d65c402","block_type":"box","text":"apply the wash sales rules to determine that any loss realized upon the exchange of Deposit Securities","page_number":72,"box":{"x":116,"y":847,"width":770,"height":12}},{"id":"122de658-010a-413e-a424-bca15a42d60a","block_type":"box","text":"for Creation Units is not currently deductible. Authorized Participants should consult their own tax","page_number":72,"box":{"x":116,"y":862,"width":726,"height":12}},{"id":"6485b179-5f8f-452e-b45a-3f5abab38a74","block_type":"box","text":"advisors.","page_number":72,"box":{"x":116,"y":878,"width":72,"height":9}},{"id":"dd31605a-064e-4828-85e0-199e6f902485","block_type":"box","text":"69","page_number":72,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ad6d7086-1200-4359-a759-8cb53195041e","block_type":"box","text":"NM1026U-6039989-72/256","page_number":72,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d559924d-31bb-4591-bb16-90027c411241","block_type":"box","text":"Similarly, an Authorized Participant generally will recognize either gain or loss upon the redemption of","page_number":73,"box":{"x":116,"y":87,"width":759,"height":12}},{"id":"e511f74b-ecb4-4898-b34b-f2d5475a6736","block_type":"box","text":"the Creation Units. If the Creation Units are held as capital assets, current U.S. federal income tax laws","page_number":73,"box":{"x":116,"y":102,"width":772,"height":12}},{"id":"9566fb13-98f0-4fe6-9516-328f68b3d026","block_type":"box","text":"dictate that capital gain or loss realized from the redemption of the Creation Units will generally create","page_number":73,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"af6c6bfd-56da-4de2-84db-38c2fa2e476e","block_type":"box","text":"long-term capital gain or loss if the Authorized Participant held the Creation Units for more than one","page_number":73,"box":{"x":117,"y":134,"width":743,"height":12}},{"id":"a2fc20f9-a5f9-4dd4-a14f-d8e5267f8890","block_type":"box","text":"year and short-term capital gain or loss if the Authorized Participant held the Creation Units for one","page_number":73,"box":{"x":116,"y":149,"width":739,"height":12}},{"id":"5b1391b1-5e9b-481f-99d2-5865abdf71a8","block_type":"box","text":"year or less.","page_number":73,"box":{"x":116,"y":165,"width":96,"height":12}},{"id":"2b1e2c75-6707-4fa6-ad1d-bacf69421521","block_type":"box","text":"Taxes","page_number":73,"box":{"x":117,"y":208,"width":120,"height":23}},{"id":"c8addf78-ba77-4bb0-a738-32c86f49c166","block_type":"box","text":"The following is a summary of certain material U.S. federal income tax considerations regarding the","page_number":73,"box":{"x":116,"y":254,"width":743,"height":12}},{"id":"67e2adb7-debb-4468-a5c3-01861a0fc054","block_type":"box","text":"purchase, ownership and disposition of shares of the Fund. This summary does not address all of the","page_number":73,"box":{"x":117,"y":269,"width":757,"height":12}},{"id":"7f400169-0175-4cab-bc25-25dba9d71851","block_type":"box","text":"potential U.S. federal income tax consequences that may be applicable to the Fund or to all categories","page_number":73,"box":{"x":117,"y":285,"width":765,"height":12}},{"id":"bc28fe2c-df53-402b-b625-3ce773e7751a","block_type":"box","text":"of investors, some of which may be subject to special tax rules. Current and prospective shareholders","page_number":73,"box":{"x":116,"y":300,"width":761,"height":12}},{"id":"0ac15f16-5094-48c9-8e5f-11fffbe85f46","block_type":"box","text":"are urged to consult their own tax advisors with respect to the specific U.S. federal, state, local and","page_number":73,"box":{"x":116,"y":316,"width":739,"height":12}},{"id":"a6828dea-772b-439f-89c1-3c0d93bb1236","block_type":"box","text":"non-U.S. tax consequences of investing in the Fund. The summary is based on the laws and judicial","page_number":73,"box":{"x":117,"y":331,"width":747,"height":12}},{"id":"8da2fcf5-df1b-4306-91fc-d00c61ed77e1","block_type":"box","text":"and administrative interpretations thereof in effect on the date of this SAI, all of which are subject to","page_number":73,"box":{"x":116,"y":347,"width":742,"height":12}},{"id":"001a14ec-92d6-40ac-80f7-9ae19fb8525c","block_type":"box","text":"change, possibly with retroactive effect.","page_number":73,"box":{"x":116,"y":362,"width":298,"height":12}},{"id":"0c2f2702-ffd3-4224-bd55-0aaecec3ac03","block_type":"box","text":"Regulated Investment Company Qualifications.","page_number":73,"box":{"x":117,"y":389,"width":374,"height":12}},{"id":"a29c295f-9c17-43b0-bdfa-f9fcd0be4235","block_type":"box","text":"The Fund intends to qualify for treatment as a","page_number":73,"box":{"x":493,"y":389,"width":349,"height":12}},{"id":"f5e57e5b-13c9-4464-a277-9e846da13970","block_type":"box","text":"separate RIC under Subchapter M of the Internal Revenue Code. To qualify for treatment as a RIC, the","page_number":73,"box":{"x":116,"y":405,"width":771,"height":12}},{"id":"5c6b7c21-6361-47b8-abb3-6d4cfaa3a64c","block_type":"box","text":"Fund must annually distribute at least 90% of its investment company taxable income (which includes","page_number":73,"box":{"x":117,"y":420,"width":757,"height":12}},{"id":"2afeaa1d-0731-4565-8557-ce6ac426f4eb","block_type":"box","text":"dividends, interest and net short-term capital gains) and meet several other requirements. Among such","page_number":73,"box":{"x":116,"y":436,"width":769,"height":12}},{"id":"41dd982e-2291-405b-87e0-578ea5b7cc24","block_type":"box","text":"other requirements are the following: (i) at least 90% of the Fund’s annual gross income must be","page_number":73,"box":{"x":116,"y":451,"width":721,"height":13}},{"id":"8f4cf88c-e247-4f14-a414-7155f0959048","block_type":"box","text":"derived from dividends, interest, payments with respect to securities loans, gains from the sale or other","page_number":73,"box":{"x":116,"y":467,"width":769,"height":12}},{"id":"6be579cb-063f-44e7-a272-e4162236c21c","block_type":"box","text":"disposition of stock or securities or non-U.S. currencies, other income (including, but not limited to,","page_number":73,"box":{"x":116,"y":482,"width":736,"height":13}},{"id":"ada53fa8-35ba-4095-82e7-ae19ca7ecdd4","block_type":"box","text":"gains from options, futures or forward contracts) derived with respect to its business of investing in","page_number":73,"box":{"x":116,"y":498,"width":735,"height":12}},{"id":"6c663ca7-398a-4b93-8c76-b1ae25b32a29","block_type":"box","text":"such stock, securities or currencies, and net income derived from interests in qualified publicly-traded","page_number":73,"box":{"x":116,"y":513,"width":757,"height":13}},{"id":"5275f0b1-bf99-4741-a983-b8a2e048754c","block_type":"box","text":"partnerships (","page_number":73,"box":{"x":117,"y":529,"width":101,"height":12}},{"id":"bbd6908b-7c0c-4776-b237-e5d6722ea0b9","block_type":"box","text":"i.e.,","page_number":73,"box":{"x":219,"y":529,"width":25,"height":11}},{"id":"4f9a50c1-f6b1-4d63-9955-0f58dc32509f","block_type":"box","text":"partnerships that are traded on an established securities market or tradable on a","page_number":73,"box":{"x":246,"y":529,"width":607,"height":12}},{"id":"43144aef-3de6-401e-869a-cc766aa2c8d0","block_type":"box","text":"secondary market, other than partnerships that derive at least 90% of their income from interest,","page_number":73,"box":{"x":116,"y":544,"width":720,"height":13}},{"id":"01ab6f74-1fe8-43dc-ab0d-61cfe0dca86d","block_type":"box","text":"dividends, capital gains and other traditionally permitted RIC income); and (ii) at the close of each","page_number":73,"box":{"x":116,"y":560,"width":729,"height":12}},{"id":"3a6ef201-2992-4151-bd03-e170d522ccdf","block_type":"box","text":"quarter of the Fund’s taxable year, (a) at least 50% of the market value of the Fund’s total assets must","page_number":73,"box":{"x":116,"y":575,"width":765,"height":13}},{"id":"84c42a76-d271-4f9e-9577-de8106b0c0b4","block_type":"box","text":"be represented by cash and cash items, U.S. government securities, securities of other RICs and other","page_number":73,"box":{"x":117,"y":591,"width":769,"height":12}},{"id":"942c9113-ea7b-4738-b0d9-a711ee000cba","block_type":"box","text":"securities, with such other securities limited for purposes of this calculation in respect of any one issuer","page_number":73,"box":{"x":116,"y":606,"width":770,"height":13}},{"id":"ca599434-58db-4cb7-b844-fff239edc791","block_type":"box","text":"to an amount not greater than 5% of the value of the Fund’s assets and not greater than 10% of the","page_number":73,"box":{"x":116,"y":622,"width":744,"height":12}},{"id":"59d4642c-3418-4de7-be18-45ca8369b433","block_type":"box","text":"outstanding voting securities of such issuer, and (b) not more than 25% of the value of the Fund’s total","page_number":73,"box":{"x":116,"y":637,"width":765,"height":13}},{"id":"100bde73-e6e3-491e-a714-70d7ef31794b","block_type":"box","text":"assets may be invested in the securities (other than U.S. government securities or the securities of","page_number":73,"box":{"x":116,"y":653,"width":737,"height":12}},{"id":"3f51aff1-5785-48a2-a99b-75a9a8b26eeb","block_type":"box","text":"other RICs) of any one issuer, of two or more issuers of which 20% or more of the voting stock is held","page_number":73,"box":{"x":116,"y":668,"width":754,"height":13}},{"id":"8958f150-c324-4492-ab1d-9dca60df48c8","block_type":"box","text":"by the Fund and that are engaged in the same or similar trades or businesses or related trades or","page_number":73,"box":{"x":117,"y":684,"width":724,"height":12}},{"id":"acc331a5-ca66-4408-9212-2567edba6f1c","block_type":"box","text":"businesses, or the securities of one or more qualified publicly-traded partnerships.","page_number":73,"box":{"x":117,"y":699,"width":607,"height":13}},{"id":"2dd53319-4506-4b6b-83fb-f50ca45abafd","block_type":"box","text":"The Fund may be able to cure a failure to derive at least 90% of its income from the sources specified","page_number":73,"box":{"x":116,"y":726,"width":755,"height":13}},{"id":"eee23f88-ed68-4c50-85a9-b3ff340fb6a0","block_type":"box","text":"above or a failure to diversify its holdings in the manner described above by paying a tax and/or by","page_number":73,"box":{"x":116,"y":742,"width":732,"height":12}},{"id":"87a7cdc9-ef53-488c-bc97-f0dc10dd864d","block_type":"box","text":"disposing of certain assets. If, in any taxable year, the Fund fails one of these tests and does not timely","page_number":73,"box":{"x":116,"y":757,"width":766,"height":13}},{"id":"7e8d1d64-9d49-41bb-b9cb-3eb26d2a3717","block_type":"box","text":"cure the failure, the Fund will be taxed in the same manner as an ordinary corporation and distributions","page_number":73,"box":{"x":116,"y":773,"width":764,"height":12}},{"id":"81287311-bfa2-4866-a8f9-aad8d14767dd","block_type":"box","text":"to its shareholders will not be deductible by the Fund in computing its taxable income.","page_number":73,"box":{"x":116,"y":789,"width":634,"height":12}},{"id":"3a0eaf8d-f96d-4f6f-b0ab-8404db0599e6","block_type":"box","text":"Although, in general, the passive loss rules of the Internal Revenue Code do not apply to RICs, such","page_number":73,"box":{"x":116,"y":815,"width":745,"height":13}},{"id":"dc944872-75a2-42d0-a9d2-8e57dd5ba986","block_type":"box","text":"rules do apply to a RIC with respect to items attributable to interests in qualified publicly-traded","page_number":73,"box":{"x":117,"y":831,"width":707,"height":12}},{"id":"8fa4c088-35e0-442a-89bf-3e1f1aa1dc55","block_type":"box","text":"partnerships. The Fund’s investments in partnerships, including in qualified publicly-traded","page_number":73,"box":{"x":117,"y":846,"width":674,"height":13}},{"id":"47c70d0f-14c4-4d27-b396-14e997430b87","block_type":"box","text":"partnerships, may result in the Fund being subject to state, local, or non-U.S. income, franchise or","page_number":73,"box":{"x":117,"y":862,"width":732,"height":12}},{"id":"a77f41b9-e257-4005-9a41-296b8bd7b322","block_type":"box","text":"withholding tax liabilities.","page_number":73,"box":{"x":116,"y":878,"width":189,"height":12}},{"id":"39694380-34e8-4321-8104-ba1c0dcaa7c9","block_type":"box","text":"70","page_number":73,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b98f1a7d-56bf-413f-a07c-154686579475","block_type":"box","text":"NM1026U-6039989-73/256","page_number":73,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"f012649b-1ea3-497d-bfe2-3a6d43eab9da","block_type":"box","text":"Taxation of RICs.","page_number":74,"box":{"x":116,"y":87,"width":136,"height":10}},{"id":"c1077b90-e632-4002-aac3-496beb4c489b","block_type":"box","text":"As a RIC, the Fund will not be subject to U.S. federal income tax on the portion of","page_number":74,"box":{"x":253,"y":87,"width":615,"height":12}},{"id":"21cce156-6314-4678-91ad-fd1ff26380be","block_type":"box","text":"its taxable investment income and capital gains that it distributes to its shareholders, provided that it","page_number":74,"box":{"x":117,"y":103,"width":744,"height":12}},{"id":"19821b1c-8f9c-4da2-9a25-e1cf4e3aaeca","block_type":"box","text":"satisfies a minimum distribution requirement. To satisfy the minimum distribution requirement, the Fund","page_number":74,"box":{"x":116,"y":118,"width":772,"height":12}},{"id":"96c63e82-8ccd-4de6-a745-2731879dbeb6","block_type":"box","text":"must distribute to its shareholders at least the sum of (i) 90% of its “investment company taxable","page_number":74,"box":{"x":117,"y":134,"width":720,"height":12}},{"id":"989f509c-6e27-4ccd-b320-8c9368e17008","block_type":"box","text":"income” (","page_number":74,"box":{"x":117,"y":149,"width":68,"height":12}},{"id":"ba618f59-d3d8-4004-81a3-d3c0ad3d8303","block_type":"box","text":"i.e.","page_number":74,"box":{"x":186,"y":149,"width":21,"height":10}},{"id":"644a8fc7-aa64-486a-9f0e-32184f90b5fe","block_type":"box","text":", income other than the excess of its net realized long-term capital gain over its net","page_number":74,"box":{"x":210,"y":149,"width":617,"height":12}},{"id":"4b36a25b-2f64-4bb8-b884-9ffb231a82e1","block_type":"box","text":"realized short-term capital loss), plus or minus certain adjustments, and (ii) 90% of its net tax-exempt","page_number":74,"box":{"x":117,"y":165,"width":753,"height":12}},{"id":"0f5311ae-30df-4ac6-a428-4b5c6cfbcafc","block_type":"box","text":"income for the taxable year. The Fund will be subject to income tax at regular corporate rates on any","page_number":74,"box":{"x":117,"y":180,"width":751,"height":12}},{"id":"5456bdc0-4762-4494-9cd2-55a2ea88dfa3","block_type":"box","text":"taxable income or gains that it does not distribute to","page_number":74,"box":{"x":116,"y":196,"width":389,"height":12}},{"id":"40ac9c85-509d-4c07-ac1b-1b69576fdec3","block_type":"box","text":"its shareholders. If the Fund fails to qualify for any","page_number":74,"box":{"x":506,"y":196,"width":375,"height":12}},{"id":"dd32973f-90aa-4a9b-9019-85b393f567f9","block_type":"box","text":"taxable year as a RIC or fails to meet the distribution requirement, all of its taxable income will be","page_number":74,"box":{"x":116,"y":211,"width":726,"height":12}},{"id":"977ea46f-92cc-48a4-934a-3dc3ea090bb1","block_type":"box","text":"subject to tax at regular corporate income tax rates without any deduction for distributions to","page_number":74,"box":{"x":116,"y":227,"width":689,"height":12}},{"id":"bd4359c5-50b0-4794-8f53-05c0b7a10ca4","block_type":"box","text":"shareholders, and such distributions generally will be taxable to shareholders as ordinary dividends to","page_number":74,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"f7864e95-d547-4dd6-8d04-7cccc167073d","block_type":"box","text":"the extent of the Fund’s current and accumulated earnings and profits. In such event, distributions to","page_number":74,"box":{"x":116,"y":258,"width":750,"height":12}},{"id":"af7088af-9774-4f71-94be-88bcc56ba61f","block_type":"box","text":"individuals should be eligible to be treated as qualified dividend income and distributions to corporate","page_number":74,"box":{"x":117,"y":273,"width":753,"height":12}},{"id":"3df40166-af85-4601-90a0-6e60930e4a33","block_type":"box","text":"shareholders generally should be eligible for the dividends received deduction. Although the Fund","page_number":74,"box":{"x":116,"y":289,"width":730,"height":12}},{"id":"72e8b5bf-e2bc-45fc-a03e-dd57de79859a","block_type":"box","text":"intends to distribute substantially all of its net investment income and its capital gains for each taxable","page_number":74,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"a5ab64be-db7b-45a5-b554-381088f9e9fb","block_type":"box","text":"year, the Fund may decide to retain a portion of its income or gains. The Fund will be subject to U.S.","page_number":74,"box":{"x":116,"y":320,"width":750,"height":12}},{"id":"6daf4f7b-d049-449d-93e5-4bb471d75483","block_type":"box","text":"federal income taxation and excise taxation (as described below) to the extent it does not distribute all","page_number":74,"box":{"x":116,"y":335,"width":761,"height":12}},{"id":"a3c12d95-dbe0-41c0-ac09-197e064aeb22","block_type":"box","text":"(or, in the case of the excise tax, substantially all) of such income or gains. In certain circumstances,","page_number":74,"box":{"x":117,"y":351,"width":748,"height":12}},{"id":"cef580b0-dbef-4566-9529-5d0d34fc748b","block_type":"box","text":"including in instances where the operational cost of the distribution would exceed the amount of the","page_number":74,"box":{"x":117,"y":366,"width":741,"height":12}},{"id":"944c4a0c-94cd-4fc8-86b3-256ab362d7ae","block_type":"box","text":"income or excise tax, BFA or an affiliate may voluntarily pay the tax on behalf of the Fund or reimburse","page_number":74,"box":{"x":117,"y":382,"width":767,"height":12}},{"id":"8c2b0244-278c-4eae-bcf2-3b0437308388","block_type":"box","text":"the Fund for the tax. If the Fund fails to qualify as","page_number":74,"box":{"x":116,"y":397,"width":370,"height":12}},{"id":"67113de0-5d9b-4ddd-af39-5fec6dd7a025","block_type":"box","text":"a RIC in any year, it must pay out its earnings and","page_number":74,"box":{"x":486,"y":397,"width":377,"height":12}},{"id":"36f2ef38-e6c6-40e5-9e34-0fb9d5aa4106","block_type":"box","text":"profits accumulated in that year in order to qualify again as","page_number":74,"box":{"x":117,"y":413,"width":439,"height":12}},{"id":"996cb3fa-a5db-43bc-a48e-3e2c447b5022","block_type":"box","text":"a RIC. If the Fund fails to qualify as a RIC","page_number":74,"box":{"x":557,"y":413,"width":314,"height":12}},{"id":"65f1672b-8f26-477f-a669-975bea9fa6ed","block_type":"box","text":"for a period greater than two taxable years, the Fund may be required to recognize any net built-in","page_number":74,"box":{"x":116,"y":428,"width":734,"height":12}},{"id":"c79e1e74-dc43-457e-9c83-80cb5803ba47","block_type":"box","text":"gains with respect to certain of its assets (i.e., the excess of the aggregate gains, including items of","page_number":74,"box":{"x":116,"y":444,"width":741,"height":12}},{"id":"d0db6c3b-9c91-42f0-93f6-d4503ad40860","block_type":"box","text":"income, over aggregate losses that would have been realized with respect to such assets if the Fund","page_number":74,"box":{"x":117,"y":459,"width":752,"height":12}},{"id":"6c6e40e1-5378-4694-982e-6b40c230127d","block_type":"box","text":"had been liquidated) if it qualifies as a RIC in a subsequent year.","page_number":74,"box":{"x":117,"y":475,"width":484,"height":12}},{"id":"cfb685c4-30af-4d5f-8fdf-c939353aa6b7","block_type":"box","text":"Excise Tax.","page_number":74,"box":{"x":117,"y":506,"width":89,"height":9}},{"id":"989e592e-ced8-4326-ae23-91e71ba50641","block_type":"box","text":"The Fund will be subject to a 4% excise tax on certain undistributed income if it does not","page_number":74,"box":{"x":207,"y":506,"width":667,"height":12}},{"id":"9099d3cd-f549-4fbd-8e49-45b7d00b9af9","block_type":"box","text":"distribute to its shareholders in each calendar year at least 98% of its ordinary income for the calendar","page_number":74,"box":{"x":116,"y":521,"width":764,"height":12}},{"id":"2f38f702-9fd4-48aa-b41f-3f321885fd09","block_type":"box","text":"year plus at least 98.2% of its capital gain net","page_number":74,"box":{"x":116,"y":537,"width":342,"height":12}},{"id":"7e65ffc3-8aaa-4ea2-bab3-a44dc0fc137a","block_type":"box","text":"income for the 12 months ended October 31 of such","page_number":74,"box":{"x":459,"y":537,"width":393,"height":9}},{"id":"9630051d-fb87-403f-b064-8f364d37f3be","block_type":"box","text":"year. For this purpose, however, any ordinary income or capital gain net income retained by the Fund","page_number":74,"box":{"x":116,"y":552,"width":758,"height":12}},{"id":"d6413731-cb0a-4a05-8973-90509c691758","block_type":"box","text":"that is subject to corporate income tax will be considered to have been distributed by year-end. In","page_number":74,"box":{"x":116,"y":568,"width":728,"height":12}},{"id":"d0830f0f-3d5f-4383-abcc-417eedcd24bb","block_type":"box","text":"addition, the minimum amounts that must be distributed in any year to avoid the excise tax will be","page_number":74,"box":{"x":116,"y":583,"width":728,"height":12}},{"id":"7fd9b240-3ed9-4849-a200-93d0ce475339","block_type":"box","text":"increased or decreased to reflect any underdistribution or overdistribution, as the case may be, from","page_number":74,"box":{"x":117,"y":599,"width":746,"height":12}},{"id":"974e7745-165b-4692-a8cf-855e7f6a4457","block_type":"box","text":"the previous year.","page_number":74,"box":{"x":116,"y":614,"width":138,"height":12}},{"id":"651e825f-dc5e-4378-81e2-0d679e2405fd","block_type":"box","text":"Net Capital Loss Carryforwards.","page_number":74,"box":{"x":117,"y":645,"width":254,"height":12}},{"id":"b0f51d2e-e24f-43e4-9f62-1819f9e82b35","block_type":"box","text":"Net capital loss carryforwards may be applied against any net","page_number":74,"box":{"x":372,"y":645,"width":468,"height":12}},{"id":"0d67838b-b5d6-4d71-b1fa-61397739d8d0","block_type":"box","text":"realized capital gains in each succeeding year, until they have been reduced to zero.","page_number":74,"box":{"x":117,"y":661,"width":627,"height":12}},{"id":"685cb524-62c8-4993-ab1e-3a4f3f3199ca","block_type":"box","text":"In the event that the Fund were to experience an ownership change as defined under the Internal","page_number":74,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"84d6fc59-90d3-4f52-bc5c-48d7a4713bc3","block_type":"box","text":"Revenue Code, the loss carryforwards and other favorable tax attributes of the Fund, if any, may be","page_number":74,"box":{"x":117,"y":707,"width":740,"height":12}},{"id":"17768fb6-a3a9-4266-920c-828fcddad9ea","block_type":"box","text":"subject to limitation.","page_number":74,"box":{"x":116,"y":723,"width":146,"height":12}},{"id":"e798c09f-46e2-42fc-bf32-926836ad6898","block_type":"box","text":"Taxation of U.S. Shareholders.","page_number":74,"box":{"x":116,"y":754,"width":243,"height":9}},{"id":"975ec664-e4ff-467e-80f4-49b5188894a3","block_type":"box","text":"Dividends and other distributions by the Fund are generally treated","page_number":74,"box":{"x":366,"y":754,"width":494,"height":12}},{"id":"fb4805f3-98d1-4f5a-930d-f62b1fe42600","block_type":"box","text":"under the Internal Revenue Code as received by the shareholders at the time the dividend or","page_number":74,"box":{"x":117,"y":769,"width":689,"height":12}},{"id":"aad560be-7f9c-449c-86cb-fdb02c4df497","block_type":"box","text":"distribution is made. However, any dividend or distribution declared by the Fund in October, November","page_number":74,"box":{"x":116,"y":785,"width":762,"height":12}},{"id":"41a8eecc-f05c-439a-88f6-cb10bd89df86","block_type":"box","text":"or December of any calendar year and payable to shareholders of record on a specified date in such a","page_number":74,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"f9bac21d-1825-4f6d-b38b-64bbb56cde81","block_type":"box","text":"month shall be deemed to have been received by each shareholder on December 31 of such calendar","page_number":74,"box":{"x":117,"y":816,"width":759,"height":12}},{"id":"d1564511-e89e-4cce-9a60-c2849e163930","block_type":"box","text":"year and to have been paid by the Fund not later than such December 31, provided such dividend is","page_number":74,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"e39e1db4-b6af-4aa4-bd0f-59bce9e7bd81","block_type":"box","text":"actually paid by the Fund during January of the following calendar year.","page_number":74,"box":{"x":116,"y":847,"width":536,"height":12}},{"id":"e3c06524-ff6a-41a0-81c8-7617c9982e10","block_type":"box","text":"71","page_number":74,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"83b53d26-0dd4-4bf8-bde2-00e8fc7a54a6","block_type":"box","text":"NM1026U-6039989-74/256","page_number":74,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"9211120d-29de-41dd-add7-cb7b0f8b8e83","block_type":"box","text":"The Fund intends to distribute annually to its shareholder","page_number":75,"box":{"x":116,"y":87,"width":414,"height":12}},{"id":"75afaa31-8f65-429f-973c-a655611ac78f","block_type":"box","text":"s substantially all of its investment company","page_number":75,"box":{"x":530,"y":87,"width":323,"height":12}},{"id":"32f871b3-a8cd-49c2-8a37-3159f2419246","block_type":"box","text":"taxable income and any net realized long-term capital","page_number":75,"box":{"x":116,"y":103,"width":394,"height":12}},{"id":"1ec28edf-885e-44aa-9874-1ceea1d7d3de","block_type":"box","text":"gains in excess of net realized short-term capital","page_number":75,"box":{"x":510,"y":102,"width":356,"height":13}},{"id":"873ecea2-b049-4b52-9865-85839e4d86a4","block_type":"box","text":"losses (including any capital loss carryovers). However, if the Fund retains for investment an amount","page_number":75,"box":{"x":117,"y":118,"width":734,"height":12}},{"id":"4c46e800-5bc7-416d-bcc4-bc8d5b8b8e17","block_type":"box","text":"equal to all or a portion of its net long-term capital","page_number":75,"box":{"x":116,"y":134,"width":364,"height":12}},{"id":"e712d7d6-03bf-4c8c-ae47-7153c206b38d","block_type":"box","text":"gains in excess of its net short-term capital losses","page_number":75,"box":{"x":480,"y":134,"width":367,"height":12}},{"id":"98f0bbae-5871-487c-909a-9608a69d91f6","block_type":"box","text":"(including any capital loss carryovers), it will be subject to a corporate tax (at a flat rate of 21%) on the","page_number":75,"box":{"x":117,"y":149,"width":742,"height":12}},{"id":"90f44b0a-e3f2-4058-bda8-d4ab25aa900b","block_type":"box","text":"amount retained. In that event, unless the retai","page_number":75,"box":{"x":116,"y":165,"width":338,"height":11}},{"id":"e7189375-06d2-43b3-8ae0-a55c046d3a1c","block_type":"box","text":"ned amount is deemed to be de minimis or the applicable","page_number":75,"box":{"x":456,"y":165,"width":421,"height":11}},{"id":"ad399843-ff6c-4700-9dbf-a45d103f0969","block_type":"box","text":"tax is otherwise reimbursed by BFA or an aff","page_number":75,"box":{"x":116,"y":180,"width":324,"height":12}},{"id":"01ccbea1-3dee-417e-bce5-b6b67d3f4946","block_type":"box","text":"iliate, the Fund will generally designate such retained","page_number":75,"box":{"x":441,"y":180,"width":389,"height":12}},{"id":"9ef84f2b-e5a1-4f86-bbfa-74bda3da95ed","block_type":"box","text":"amounts as undistributed capital gains in a notice to","page_number":75,"box":{"x":116,"y":196,"width":382,"height":12}},{"id":"d8417f6f-f94d-4e72-b382-577ec25f0380","block_type":"box","text":"its shareholders who (a) will be required to include in","page_number":75,"box":{"x":499,"y":196,"width":386,"height":12}},{"id":"bc2cfdde-1089-44d1-865a-c3576661cc3c","block_type":"box","text":"income for U.S. federal income tax purposes, as l","page_number":75,"box":{"x":117,"y":211,"width":358,"height":12}},{"id":"284ee699-9c7f-4cc1-8d5b-9338d63a6630","block_type":"box","text":"ong-term capital gains, their proportionate shares of the","page_number":75,"box":{"x":476,"y":211,"width":408,"height":12}},{"id":"4d3d8629-1df7-4a74-b471-8f29590b7ae7","block_type":"box","text":"undistributed amount, (b) will be entitled to credit thei","page_number":75,"box":{"x":117,"y":227,"width":382,"height":12}},{"id":"f04c4896-d054-469e-a5e5-2700d848c3df","block_type":"box","text":"r proportionate shares of the tax paid by the Fund","page_number":75,"box":{"x":501,"y":227,"width":364,"height":12}},{"id":"697331b0-7cfe-4b3d-96da-0fff3a8ed443","block_type":"box","text":"on the undistributed amount against their U.","page_number":75,"box":{"x":116,"y":242,"width":318,"height":12}},{"id":"d43d1f90-0ad3-44fd-8efd-02c1aeb6a441","block_type":"box","text":"S. federal income tax liabilities, if any, and to claim refunds to","page_number":75,"box":{"x":436,"y":242,"width":448,"height":12}},{"id":"9829ebbe-a100-4fd8-9e31-2702fe5ceeb4","block_type":"box","text":"the extent their credits exceed their liabilities, if","page_number":75,"box":{"x":116,"y":258,"width":344,"height":11}},{"id":"505771d0-2b58-4484-b225-5e1b393fed85","block_type":"box","text":"any, and (c) will be entitled to increase their tax basis, for","page_number":75,"box":{"x":460,"y":258,"width":418,"height":12}},{"id":"e4b47482-e704-41ed-a0b5-01524d698aa7","block_type":"box","text":"U.S. federal income tax purposes, in their shares","page_number":75,"box":{"x":117,"y":273,"width":354,"height":12}},{"id":"144aec99-9a52-4b96-968b-694d94232824","block_type":"box","text":"by an amount equal to the excess of the amount in","page_number":75,"box":{"x":471,"y":273,"width":379,"height":12}},{"id":"cee0d323-eaa0-43bc-beee-1a2783442951","block_type":"box","text":"clause (a) over the amount in clause (b). Organizations or","page_number":75,"box":{"x":116,"y":289,"width":420,"height":12}},{"id":"a3654004-6f97-4452-9f21-0438abb0898f","block_type":"box","text":"r persons not subject to U.S. federal income tax","page_number":75,"box":{"x":536,"y":289,"width":346,"height":12}},{"id":"ae279fa4-f0d7-4c4a-83d4-fa3e7eb2c1aa","block_type":"box","text":"on such capital gains will be entitled to a refund of t","page_number":75,"box":{"x":116,"y":304,"width":371,"height":12}},{"id":"e1bc30ab-1243-4200-bb53-1f42457644fc","block_type":"box","text":"heir pro rata share of such taxes paid by the Fund","page_number":75,"box":{"x":488,"y":304,"width":367,"height":12}},{"id":"cb21e857-ac30-4246-ac0c-c52a6a3be838","block_type":"box","text":"upon filing appropriate returns or claims for refund with the IRS.","page_number":75,"box":{"x":117,"y":320,"width":465,"height":12}},{"id":"92759cec-f389-4a91-a683-fc456b45808a","block_type":"box","text":"Distributions of net long-term capital gains, if any, that the Fund reports as capital gains dividends are","page_number":75,"box":{"x":117,"y":351,"width":758,"height":12}},{"id":"5877b75d-f631-4b12-bd79-72d9d25ff138","block_type":"box","text":"taxable as long-term capital gains, whether paid in cash or in shares and regardless of how long a","page_number":75,"box":{"x":116,"y":366,"width":732,"height":12}},{"id":"672f68f9-5907-4b59-ae6f-a5152b8a74c7","block_type":"box","text":"shareholder has held shares of the Fund. All other dividends of the Fund (including dividends from","page_number":75,"box":{"x":116,"y":382,"width":734,"height":12}},{"id":"83e9e696-db4d-46b2-9e0d-383b790ef2ad","block_type":"box","text":"short-term capital gains) from its current and accumulated earnings and profits (“regular dividends”) are","page_number":75,"box":{"x":116,"y":397,"width":772,"height":12}},{"id":"a09baf4d-36e9-47d7-977d-9d500adbded5","block_type":"box","text":"generally subject to tax as ordinary income, subject to the discussion of qualified dividend income","page_number":75,"box":{"x":116,"y":413,"width":728,"height":12}},{"id":"b073454e-960e-4246-8b94-d3bef095f62a","block_type":"box","text":"below. Long-term capital gains are eligible for taxation at a maximum rate of 15% or 20% for non","page_number":75,"box":{"x":117,"y":428,"width":723,"height":12}},{"id":"661f1c3f-1a8c-41ec-bc76-6d6a3a4f58f8","block_type":"box","text":"corporate shareholders, depending on whether their income exceeds certain threshold amounts.","page_number":75,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"9c423209-1565-4b28-b967-46205883ad90","block_type":"box","text":"If an individual receives a regular dividend qualifyi","page_number":75,"box":{"x":117,"y":475,"width":359,"height":12}},{"id":"03de3b47-2214-4c16-8dad-eef7a161dac5","block_type":"box","text":"ng for the long-term capital gains rates and such","page_number":75,"box":{"x":478,"y":475,"width":356,"height":12}},{"id":"43a191da-2278-482b-bcb4-ca9f47691fa2","block_type":"box","text":"dividend constitutes an “extraordinary dividend,” and the individual subsequently recognizes a loss on the","page_number":75,"box":{"x":116,"y":490,"width":769,"height":12}},{"id":"3296ed79-ad3f-49a2-bc2c-4c936ae87487","block_type":"box","text":"sale or exchange of stock in respect of which t","page_number":75,"box":{"x":116,"y":506,"width":332,"height":12}},{"id":"2b44daae-0b7f-4acd-8fe3-3584fc1551c2","block_type":"box","text":"the extraordinary dividend was paid, then the loss will be","page_number":75,"box":{"x":448,"y":506,"width":415,"height":12}},{"id":"87f55c1f-f48b-49b6-ba6b-c3f749af294d","block_type":"box","text":"long-term capital loss to the extent of such ex","page_number":75,"box":{"x":117,"y":521,"width":329,"height":12}},{"id":"309ca9ec-274f-4f9b-abf1-7a7e6dbcf13f","block_type":"box","text":"traordinary dividend. An “extraordinary dividend” on","page_number":75,"box":{"x":446,"y":521,"width":378,"height":12}},{"id":"f11a18ec-0534-437b-b758-db60e74e3b02","block_type":"box","text":"common stock for this purpose is generally a dividend","page_number":75,"box":{"x":116,"y":537,"width":396,"height":12}},{"id":"62e3c5ab-31e6-48ed-9256-4da34f7ed238","block_type":"box","text":"(i) in an amount greater than or equal to 10% of","page_number":75,"box":{"x":513,"y":537,"width":349,"height":12}},{"id":"7560190f-afc9-42d3-80c0-5ee8872d7f01","block_type":"box","text":"the taxpayer’s tax basis (or trading value) in a","page_number":75,"box":{"x":116,"y":552,"width":336,"height":12}},{"id":"5f5b2544-4588-44c1-bb7d-49f9ad303586","block_type":"box","text":"share of stock, aggregating dividends with ex-dividend","page_number":75,"box":{"x":452,"y":552,"width":400,"height":12}},{"id":"f07c7b03-6721-4e74-901a-4e9f8046810a","block_type":"box","text":"dates within an 85-day period, or (ii)","page_number":75,"box":{"x":116,"y":568,"width":260,"height":12}},{"id":"e091d424-4242-4b5c-92af-db3013de7194","block_type":"box","text":"in an amount greater than 20% of the taxpayer’s tax basis (or trading","page_number":75,"box":{"x":377,"y":568,"width":510,"height":12}},{"id":"2782c972-fa43-495c-b446-03236c366c2e","block_type":"box","text":"value) in a share of stock, aggregating dividends","page_number":75,"box":{"x":116,"y":583,"width":352,"height":12}},{"id":"fec7233c-5a1c-4d05-903f-f9c16a2c6737","block_type":"box","text":"with ex-dividend dates within a 365-day period.","page_number":75,"box":{"x":469,"y":583,"width":351,"height":12}},{"id":"da668007-b462-4001-abf5-896d7dbce0bd","block_type":"box","text":"Distributions in excess of the Fund’s current and accumulated earnings and profits will, as to each","page_number":75,"box":{"x":117,"y":614,"width":730,"height":12}},{"id":"49cf51e4-b6f1-46ed-a89a-8398febf9d7d","block_type":"box","text":"shareholder, be treated as a tax-free return of capital to the extent of a shareholder’s basis in shares of","page_number":75,"box":{"x":116,"y":630,"width":769,"height":12}},{"id":"6042567d-d6f8-4424-93f0-0f94d3f544cc","block_type":"box","text":"the Fund, and as a capital gain thereafter (if the shareholder holds shares of the Fund as capital","page_number":75,"box":{"x":116,"y":645,"width":718,"height":12}},{"id":"9f5fb700-9785-413c-9da0-584c16a3b989","block_type":"box","text":"assets). Distributions in excess of the Fund’s minimum distribution requirements, but not in excess of","page_number":75,"box":{"x":116,"y":661,"width":750,"height":12}},{"id":"4951b1b0-66ee-46b5-9b2e-6c6850d82cc9","block_type":"box","text":"the Fund’s current and accumulated earnings and profits, will be taxable to shareholders and will not","page_number":75,"box":{"x":116,"y":676,"width":745,"height":12}},{"id":"2f4e2a72-8fc8-4f20-81f7-52985d0c9fda","block_type":"box","text":"constitute nontaxable returns of capital. Shareholders receiving dividends or distributions in the form of","page_number":75,"box":{"x":116,"y":692,"width":763,"height":12}},{"id":"3f23889a-bebf-47c9-830f-fc61da26ab25","block_type":"box","text":"additional shares should be treated for U.S. federal income tax purposes as receiving a distribution in","page_number":75,"box":{"x":116,"y":707,"width":751,"height":12}},{"id":"08cf0f52-c2e8-44cd-bf30-0e0a3858cf6a","block_type":"box","text":"an amount equal to the amount of money that the shareholders receiving cash dividends or","page_number":75,"box":{"x":116,"y":723,"width":677,"height":12}},{"id":"7e6dd93d-1e81-46ba-9de5-c27440fef8a7","block_type":"box","text":"distributions will receive and should have a cost basis in the shares received equal to such amount.","page_number":75,"box":{"x":116,"y":738,"width":736,"height":12}},{"id":"fb514e2c-fb92-4ef2-ae98-08b38f92a90c","block_type":"box","text":"A 3.8% U.S. federal Medicare contribution tax is imposed on net investment income, including, but not","page_number":75,"box":{"x":116,"y":769,"width":758,"height":12}},{"id":"314368aa-5e04-4f12-b0f6-3cd5d806c0e1","block_type":"box","text":"limited to, interest, dividends, and net gain from investments, of U.S. individuals with income exceeding","page_number":75,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"b302fe75-d8a6-4752-a13f-b06ec60b1472","block_type":"box","text":"$200,000 (or $250,000 if married and filing jointly) and of estates and trusts to the extent their income","page_number":75,"box":{"x":116,"y":799,"width":753,"height":13}},{"id":"012813e3-5a20-4440-a622-271ff4b9bb0f","block_type":"box","text":"exceeds certain threshold amounts.","page_number":75,"box":{"x":116,"y":816,"width":264,"height":9}},{"id":"8fca6737-57a3-4d2f-a54e-6e954098b6a9","block_type":"box","text":"Investors considering buying shares just prior to a dividend or capital gain distribution should be aware","page_number":75,"box":{"x":117,"y":847,"width":765,"height":12}},{"id":"2910cd3d-130c-44f4-a613-fd8d0a807d6b","block_type":"box","text":"that, although the price of shares purchased at that time may reflect the amount of the forthcoming","page_number":75,"box":{"x":116,"y":862,"width":731,"height":12}},{"id":"061839eb-6025-4cf7-80e2-d338448f78c0","block_type":"box","text":"distribution, such dividend or distribution may nevertheless be taxable to them. If the Fund is the holder","page_number":75,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"f8401edc-89de-422e-9a85-88e615f2a33e","block_type":"box","text":"72","page_number":75,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"1bc52ed9-92f7-4a80-afca-d1d078ae3acd","block_type":"box","text":"NM1026U-6039989-75/256","page_number":75,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"8ada361d-a51a-4078-9364-69cf5e33b802","block_type":"box","text":"of record of any security on the record date for any dividends payable with respect to such security,","page_number":76,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"534c78ee-9dea-445c-a81f-526e8283a4e5","block_type":"box","text":"such dividends will be included in the Fund’s gross income not as of the date received but as of the","page_number":76,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"23f0a08e-4530-48e9-a388-a6ef6b995dd3","block_type":"box","text":"later of (a) the date such security became ex-dividend with respect to such dividends (","page_number":76,"box":{"x":117,"y":118,"width":638,"height":12}},{"id":"a24ef41f-f8b9-44e4-bbac-44e5be491b35","block_type":"box","text":"i.e.","page_number":76,"box":{"x":756,"y":118,"width":21,"height":10}},{"id":"2edef9c4-5676-422c-839e-0922e56b3977","block_type":"box","text":", the date on","page_number":76,"box":{"x":780,"y":118,"width":97,"height":11}},{"id":"8a607fcd-5c6c-4d4c-804a-e396284faab6","block_type":"box","text":"which a buyer of the security would not be entitled to receive the declared, but unpaid, dividends); or","page_number":76,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"cb673393-9633-46de-985f-e7ae454ef01a","block_type":"box","text":"(b) the date the Fund acquired such security. Accordingly, in order to satisfy its income distribution","page_number":76,"box":{"x":117,"y":149,"width":728,"height":12}},{"id":"a33eb78e-f2fb-489c-a667-d5f98bbdf9f7","block_type":"box","text":"requirements, the Fund may be required to pay dividends based on anticipated earnings, and","page_number":76,"box":{"x":117,"y":165,"width":697,"height":12}},{"id":"da637b52-3123-4d81-8df4-67ba2717c941","block_type":"box","text":"shareholders may receive dividends in an earlier year than would otherwise be the case.","page_number":76,"box":{"x":116,"y":180,"width":656,"height":12}},{"id":"3be15cc4-3f0a-4ed0-bba3-17cc3d6bb644","block_type":"box","text":"In certain situations, the Fund may, for a taxable year, defer all or a portion of its net capital loss (or if","page_number":76,"box":{"x":117,"y":211,"width":754,"height":12}},{"id":"b0c7c555-c21f-4bdc-a6f4-672a3952c53f","block_type":"box","text":"there is no net capital loss, then any net long-term or short-term capital loss) realized after October and","page_number":76,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"07172e50-b307-4502-b7f9-d44d2d32ada4","block_type":"box","text":"its late-year ordinary loss (defined as the sum of (i) the excess of post-October foreign currency and","page_number":76,"box":{"x":117,"y":242,"width":746,"height":12}},{"id":"de105016-1939-47a2-8881-8647a014e0ef","block_type":"box","text":"passive foreign investment company (“PFIC”) losses over post-October foreign currency and PFIC","page_number":76,"box":{"x":117,"y":258,"width":734,"height":12}},{"id":"de6f52df-f171-471b-a397-45e513aa91f5","block_type":"box","text":"gains and (ii) the excess of post-December ordinary losses over post-December ordinary income) until","page_number":76,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"7ad2ca75-e15d-469f-84b1-4a18a1b0f286","block_type":"box","text":"the next taxable year in computing its investment company taxable income and net capital gain, which","page_number":76,"box":{"x":116,"y":289,"width":762,"height":12}},{"id":"c839b294-f11e-42fa-b28a-c4ae41a3c349","block_type":"box","text":"will defer the recognition of such realized losses. Such deferrals and other rules regarding gains and","page_number":76,"box":{"x":116,"y":304,"width":749,"height":12}},{"id":"a502e4a1-af7e-4663-88bb-ddd07f0512d4","block_type":"box","text":"losses realized after October (or December) may affect the tax character of shareholder distributions.","page_number":76,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"a1c66086-5940-44a2-87ed-5a0a71a395c3","block_type":"box","text":"Sales of Shares.","page_number":76,"box":{"x":116,"y":351,"width":129,"height":9}},{"id":"f5f3dc5b-de65-4596-b0ce-18eba7b542ef","block_type":"box","text":"Upon the sale or exchange of shares of the Fund, a shareholder will realize a taxable","page_number":76,"box":{"x":246,"y":351,"width":642,"height":12}},{"id":"a735d0d0-f0f3-47c1-9c23-c7a667854264","block_type":"box","text":"gain or loss equal to the difference between the amount realized and the shareholder’s basis in shares","page_number":76,"box":{"x":116,"y":366,"width":766,"height":12}},{"id":"356c80da-12eb-4d86-a412-2de8ded5fb4f","block_type":"box","text":"of the Fund. A redemption of shares by the Fund will be treated as a sale for this purpose. Such gain or","page_number":76,"box":{"x":116,"y":382,"width":772,"height":12}},{"id":"1d1c42fb-b8a6-4aaa-99d2-0e25b5c54ac5","block_type":"box","text":"loss will be treated as capital gain or loss if the shares are capital assets in the shareholder’s hands","page_number":76,"box":{"x":117,"y":397,"width":742,"height":12}},{"id":"2d5c108b-1f57-414f-b715-bfa68a8b9a85","block_type":"box","text":"and will be long-term capital gain or loss if the shares are held for more than one year and short-term","page_number":76,"box":{"x":116,"y":413,"width":755,"height":12}},{"id":"c732b873-c0f1-4754-989f-c750d0d78258","block_type":"box","text":"capital gain or loss if the shares are held for one year or less. Any loss realized on a sale or exchange","page_number":76,"box":{"x":116,"y":428,"width":761,"height":12}},{"id":"30131fed-1906-4eb9-b2c7-057a611d91c4","block_type":"box","text":"will be disallowed to the extent the shares disposed of are replaced, including replacement through the","page_number":76,"box":{"x":116,"y":444,"width":767,"height":12}},{"id":"d373a0a5-4bd1-4e40-8af0-8b417a6ea08d","block_type":"box","text":"reinvesting of dividends or capital gains distributions, or by an option or contract to acquire","page_number":76,"box":{"x":117,"y":459,"width":675,"height":12}},{"id":"bc860836-4d08-4323-aa28-d5b87026a707","block_type":"box","text":"substantially identical shares, within a 61-day period beginning 30 days before and ending 30 days","page_number":76,"box":{"x":116,"y":475,"width":738,"height":12}},{"id":"ef138159-f678-425d-bbcd-734d4519de2d","block_type":"box","text":"after the disposition of the shares. In such a case, the basis of the shares acquired will be increased to","page_number":76,"box":{"x":116,"y":490,"width":766,"height":12}},{"id":"89d6fe5d-365a-493f-9cd1-af106f49966c","block_type":"box","text":"reflect the disallowed loss. Any loss realized by a shareholder on the sale of Fund shares held by the","page_number":76,"box":{"x":117,"y":506,"width":753,"height":12}},{"id":"acbb493b-c7af-4d47-8e75-4401739e04f2","block_type":"box","text":"shareholder for six months or less will be treated for U.S. federal income tax purposes as a long-term","page_number":76,"box":{"x":116,"y":521,"width":756,"height":12}},{"id":"fed1e106-51d9-4e46-89e9-2bab2d70ba52","block_type":"box","text":"capital loss to the extent of any distributions or deemed distributions of long-term capital gains received","page_number":76,"box":{"x":116,"y":537,"width":771,"height":12}},{"id":"2df84881-6af7-4539-92d1-475d0215c751","block_type":"box","text":"by the shareholder with respect to such share. The Medicare contribution tax described above will","page_number":76,"box":{"x":117,"y":552,"width":730,"height":12}},{"id":"492cc99c-a7a6-437e-b521-8cf10cb9ce31","block_type":"box","text":"apply to the sale of Fund shares.","page_number":76,"box":{"x":116,"y":568,"width":249,"height":12}},{"id":"2dba16f4-0d14-4c14-8e58-7e561b4c2d87","block_type":"box","text":"If a shareholder incurs a sales charge in acquiring shares of the Fund, disposes of those shares within","page_number":76,"box":{"x":117,"y":599,"width":763,"height":12}},{"id":"65cc020d-446d-45c5-8c30-15e87f084bb7","block_type":"box","text":"90 days and then, on or before January 31 of the following calendar year, acquires shares in a mutual","page_number":76,"box":{"x":116,"y":614,"width":755,"height":12}},{"id":"dafb5747-cd4a-4be4-8986-287b7be3e9bb","block_type":"box","text":"fund for which the otherwise applicable sales charge is reduced by reason of a reinvestment right (","page_number":76,"box":{"x":116,"y":630,"width":732,"height":12}},{"id":"be734c42-c83a-4794-8345-5ad98288902e","block_type":"box","text":"e.g.","page_number":76,"box":{"x":849,"y":632,"width":26,"height":10}},{"id":"cb520ad4-0f6d-4872-9fcb-0f8bd8053db6","block_type":"box","text":",","page_number":76,"box":{"x":878,"y":638,"width":8,"height":3}},{"id":"12ce1da0-cc4f-456f-b28f-1e8d0e250e21","block_type":"box","text":"an exchange privilege), the original sales charge will not be taken into account in computing gain or","page_number":76,"box":{"x":116,"y":645,"width":742,"height":12}},{"id":"4a228328-f8ab-4a6f-90be-558a99cabd05","block_type":"box","text":"loss on the disposition of the original shares to the extent the subsequent sales charge is reduced.","page_number":76,"box":{"x":117,"y":661,"width":728,"height":12}},{"id":"4b347b16-c58a-4b5e-a955-a4b97cb1295c","block_type":"box","text":"Instead, the disregarded portion of the original sales charge will be added to the tax basis of the newly","page_number":76,"box":{"x":117,"y":676,"width":757,"height":12}},{"id":"5ecd7c8d-598f-4623-8adf-816622021f08","block_type":"box","text":"acquired shares. Furthermore, the same rule also applies to a disposition of the newly acquired shares","page_number":76,"box":{"x":116,"y":692,"width":762,"height":12}},{"id":"80bf4555-ec19-4fe4-a413-fe0993c7f2a9","block_type":"box","text":"made within 90 days of the second acquisition. This provision prevents shareholders from immediately","page_number":76,"box":{"x":117,"y":707,"width":759,"height":12}},{"id":"4db8fcd3-8cf4-4238-9d94-7fa86821b3ac","block_type":"box","text":"deducting the sales charge by shifting their investments within a family of mutual funds.","page_number":76,"box":{"x":116,"y":723,"width":647,"height":12}},{"id":"83340b2e-224b-4f92-be38-14638192042c","block_type":"box","text":"Backup Withholding.","page_number":76,"box":{"x":117,"y":754,"width":165,"height":12}},{"id":"2fc66232-107c-4e47-938d-5e821ab45b38","block_type":"box","text":"In certain cases, the Fund will be required to withhold at a 24% rate and remit to","page_number":76,"box":{"x":289,"y":754,"width":593,"height":12}},{"id":"1c6a2fa6-9d4d-4c8b-965f-e79f6eb339c9","block_type":"box","text":"the U.S. Treasury such amounts withheld from any distributions paid to a shareholder who: (i) has","page_number":76,"box":{"x":116,"y":769,"width":726,"height":12}},{"id":"632b3dfe-64cc-4997-9015-b8aec4fcffc2","block_type":"box","text":"failed to provide a correct taxpayer identification number; (ii) is subject to backup withholding by the","page_number":76,"box":{"x":116,"y":785,"width":737,"height":12}},{"id":"10a9a055-2fa8-4ac3-9026-05633400c44d","block_type":"box","text":"IRS; (iii) has failed to certify to the Fund that such shareholder is not subject to backup withholding; or","page_number":76,"box":{"x":117,"y":800,"width":754,"height":12}},{"id":"b33a0264-22a7-4c44-9901-beb6365f7090","block_type":"box","text":"(iv) has not certified that such shareholder is a U.S. person (including a U.S. resident alien). Backup","page_number":76,"box":{"x":117,"y":816,"width":740,"height":12}},{"id":"6665e93e-5b26-4ab5-9bab-bec4a82e63e0","block_type":"box","text":"withholding is not an additional tax and any amount withheld may be credited against a shareholder’s","page_number":76,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"842bd2f2-2289-48aa-a504-927ef148b4b8","block_type":"box","text":"U.S. federal income tax liability.","page_number":76,"box":{"x":117,"y":847,"width":238,"height":12}},{"id":"2ed7b626-29a3-4767-b963-17f327e760a9","block_type":"box","text":"73","page_number":76,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"c39faf0a-9901-46bc-98f3-bf7dbf106ae4","block_type":"box","text":"NM1026U-6039989-76/256","page_number":76,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"519f70fa-5478-4b46-851f-ed62efcebf3a","block_type":"box","text":"Sections 351 and 362.","page_number":77,"box":{"x":116,"y":87,"width":173,"height":10}},{"id":"32141781-8454-43b1-90c0-d770ca2c0580","block_type":"box","text":"The Trust, on behalf of the Fund, has the right to reject an order to create","page_number":77,"box":{"x":291,"y":87,"width":554,"height":12}},{"id":"81e77d98-210d-40b9-bb71-faedd1a06da1","block_type":"box","text":"Creation Units of the Fund if the Authorized Participant (or group of Authorized Participants) would,","page_number":77,"box":{"x":117,"y":102,"width":739,"height":13}},{"id":"fe60ecc7-4d0e-40a7-8634-5b35329e4482","block_type":"box","text":"upon obtaining the Creation Units, own 80% or more of the outstanding shares of the Fund and if,","page_number":77,"box":{"x":117,"y":118,"width":729,"height":12}},{"id":"7d451d12-8453-411b-824b-f2933a7b3efb","block_type":"box","text":"pursuant to Sections 351 and 362 of the Internal Revenue Code, the Fund would have a basis in the","page_number":77,"box":{"x":117,"y":134,"width":749,"height":11}},{"id":"dfdc01de-58d4-4480-826d-2934a2edfacf","block_type":"box","text":"Deposit Securities different from the market value of such Deposit Securities on the date of deposit. If","page_number":77,"box":{"x":117,"y":149,"width":757,"height":12}},{"id":"b3175292-ecc6-4612-a38d-1fdf77b29c90","block_type":"box","text":"the Fund’s basis in such Deposit Securities on the date of deposit was less than market value on such","page_number":77,"box":{"x":116,"y":165,"width":763,"height":11}},{"id":"b649060c-b8d5-4170-bc73-e064d01d6de8","block_type":"box","text":"date, the Fund, upon disposition of the Deposit Securities, would recognize more taxable gain or less","page_number":77,"box":{"x":116,"y":180,"width":755,"height":12}},{"id":"c4aa9665-9a6e-4cc5-acc4-4b9bc3b39ee9","block_type":"box","text":"taxable loss than if its basis in the Deposit Securities had been equal to market value. It is not","page_number":77,"box":{"x":116,"y":196,"width":700,"height":11}},{"id":"f06e2315-a0fd-4a95-8f9f-2b84a24d8770","block_type":"box","text":"anticipated that the Trust will exercise the right of rejection except in a case where the Trust","page_number":77,"box":{"x":116,"y":211,"width":686,"height":12}},{"id":"f92aab1a-6fd5-4065-95c8-cec5ed9ce38d","block_type":"box","text":"determines that accepting the order could result in material adverse tax consequences to the Fund or","page_number":77,"box":{"x":116,"y":227,"width":757,"height":12}},{"id":"403f6803-fc84-42fb-849f-d9b528bb9eb6","block_type":"box","text":"its shareholders. The Trust also has the right to require information necessary to determine beneficial","page_number":77,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"5e9341de-05d6-4db2-9345-cecdaea9aeb6","block_type":"box","text":"share ownership for purposes of the 80% determination.","page_number":77,"box":{"x":116,"y":258,"width":423,"height":11}},{"id":"6866b032-f6eb-48c1-a376-b082b3f5fb27","block_type":"box","text":"Taxation of Certain Derivatives.","page_number":77,"box":{"x":116,"y":289,"width":250,"height":9}},{"id":"27975b79-8769-427c-8264-f6cea9eafb4f","block_type":"box","text":"The Fund’s transactions in zero coupon securities, non-U.S.","page_number":77,"box":{"x":367,"y":289,"width":456,"height":12}},{"id":"7808e9c2-754c-41d3-8d09-f40c006b572c","block_type":"box","text":"currencies, forward contracts, swaps, options and futures contracts (including swaps, options and","page_number":77,"box":{"x":116,"y":304,"width":729,"height":12}},{"id":"ec1681b8-6266-4537-a51f-60dc94b0b1ad","block_type":"box","text":"futures contracts on non-U.S. currencies) and other derivatives, to the extent permitted, will be subject","page_number":77,"box":{"x":116,"y":320,"width":764,"height":12}},{"id":"1edb3441-efef-404c-863e-9e0ab06c4413","block_type":"box","text":"to special provisions of the Internal Revenue Code (including provisions relating to “hedging","page_number":77,"box":{"x":116,"y":335,"width":686,"height":12}},{"id":"992bc255-3325-4d5b-bfe8-18da4409b918","block_type":"box","text":"transactions” and “straddles”) that, among other consequences, may affect the character of gains and","page_number":77,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"c3542717-6877-4c32-8cf9-2f4c5ad13044","block_type":"box","text":"losses realized by the Fund (","page_number":77,"box":{"x":117,"y":366,"width":213,"height":12}},{"id":"b5c03ed7-cf21-4598-9ad1-00734096ae56","block_type":"box","text":"i.e.","page_number":77,"box":{"x":331,"y":366,"width":21,"height":10}},{"id":"837a4c58-7a2f-4ed5-9651-28cddc3f1b1a","block_type":"box","text":", may affect whether gains or losses are ordinary or capital), accelerate","page_number":77,"box":{"x":355,"y":366,"width":532,"height":12}},{"id":"184e35c0-6184-476d-86fb-678fe319bf0d","block_type":"box","text":"recognition of income to the Fund and defer Fund losses. These rules could therefore affect the","page_number":77,"box":{"x":117,"y":382,"width":713,"height":12}},{"id":"e3f91dad-1f26-4f82-8763-811774c5fce9","block_type":"box","text":"character, amount and timing of distributions to shareholders. These provisions also (a) may require","page_number":77,"box":{"x":116,"y":397,"width":747,"height":12}},{"id":"194f24f4-3174-457e-ba59-8e39054bcc50","block_type":"box","text":"the Fund to mark-to-market certain types of the positions in its portfolio (","page_number":77,"box":{"x":116,"y":413,"width":536,"height":12}},{"id":"49d58597-2707-4f91-90b4-864d5e2880fc","block_type":"box","text":"i.e.","page_number":77,"box":{"x":653,"y":413,"width":20,"height":9}},{"id":"2117fba3-a823-478d-9712-84ea5ec6f592","block_type":"box","text":", treat them as if they were","page_number":77,"box":{"x":676,"y":413,"width":202,"height":12}},{"id":"e6c28236-34fb-4ed3-bca9-ac9735cd632b","block_type":"box","text":"closed out at the end of each year) and (b) may cause the Fund to recognize income without receiving","page_number":77,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"218dcfa6-7c00-4551-8337-07f1be7e56f1","block_type":"box","text":"cash with which to pay dividends or make distributions in amounts necessary to satisfy the distribution","page_number":77,"box":{"x":116,"y":444,"width":762,"height":12}},{"id":"1d5a2d73-341d-425b-9d52-9e609145a10c","block_type":"box","text":"requirements for avoiding income and excise taxes. The Fund will monitor its transactions, will make","page_number":77,"box":{"x":117,"y":459,"width":748,"height":12}},{"id":"067c7a17-224f-471d-b509-548ab3e79c69","block_type":"box","text":"the appropriate tax elections and will make the appropriate entries in its books and records in order to","page_number":77,"box":{"x":116,"y":475,"width":759,"height":12}},{"id":"acc7f481-0153-4cc1-a943-8023a5b34108","block_type":"box","text":"mitigate the effect of these rules and prevent disqualification of the Fund as a RIC.","page_number":77,"box":{"x":117,"y":490,"width":615,"height":12}},{"id":"b9f84570-fa94-4f99-aec4-f9ee16dcd151","block_type":"box","text":"The Fund’s investments in so-called “Section 1256 contracts,” such as regulated futures contracts,","page_number":77,"box":{"x":116,"y":521,"width":736,"height":12}},{"id":"a2bc9da5-90e8-4d74-a4a5-840a22c818ee","block_type":"box","text":"most non-U.S. currency forward contracts traded in the interbank market and options on most security","page_number":77,"box":{"x":117,"y":537,"width":762,"height":12}},{"id":"7b76c0c5-b19b-4e0a-82ca-9a6c0ce4114a","block_type":"box","text":"indexes, are subject to special tax rules. All Section 1256 contracts held by the Fund at the end of its","page_number":77,"box":{"x":117,"y":552,"width":751,"height":12}},{"id":"e858574d-d0ae-4587-8b8f-770049b4b700","block_type":"box","text":"taxable year are required to be marked to their market value, and any unrealized gain or loss on those","page_number":77,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"2af5cf24-7ea7-4dbb-abda-5f1882887a7d","block_type":"box","text":"positions will be included in the Fund’s income as if each position had been sold for its fair market","page_number":77,"box":{"x":117,"y":583,"width":728,"height":12}},{"id":"443430a7-08bc-4142-98c4-098eb0b946fe","block_type":"box","text":"value at the end of the taxable year. The resulting gain","page_number":77,"box":{"x":116,"y":599,"width":411,"height":12}},{"id":"11660395-b4bb-4ae4-9f4e-58c2089bf9b3","block_type":"box","text":"or loss will be combined with any gain or loss","page_number":77,"box":{"x":527,"y":599,"width":340,"height":12}},{"id":"2cb8cc96-4078-4c44-8738-df35186aa83a","block_type":"box","text":"realized by the Fund from positions in Section 1256 contracts closed during the taxable year. Provided","page_number":77,"box":{"x":117,"y":614,"width":764,"height":12}},{"id":"c9a556fd-ee92-44a2-96d3-462bce9b4030","block_type":"box","text":"such positions were held as capital assets and were not","page_number":77,"box":{"x":116,"y":630,"width":420,"height":12}},{"id":"afa4d2b8-cbd8-4980-ba34-540ca6bd5510","block_type":"box","text":"part of a “hedging transaction” nor part of a","page_number":77,"box":{"x":537,"y":630,"width":324,"height":12}},{"id":"d3060af0-1612-487f-831f-1e58ac134ac6","block_type":"box","text":"“straddle,” 60% of the resulting net gain or loss will be treated as long-term capital gain or loss, and","page_number":77,"box":{"x":116,"y":645,"width":741,"height":12}},{"id":"da8d3a88-aacc-4175-8273-53902a570289","block_type":"box","text":"40% of such net gain or loss will be treated as short-term capital gain or loss, regardless of the period","page_number":77,"box":{"x":116,"y":661,"width":753,"height":12}},{"id":"c41ebf60-83fe-47e7-a87b-0f79c688bac4","block_type":"box","text":"of time the positions were actually held by the Fund.","page_number":77,"box":{"x":116,"y":676,"width":386,"height":12}},{"id":"ce81c4ae-1590-4f68-85e7-b863ecc72e15","block_type":"box","text":"As a result of entering into swap contracts, the Fund may make or receive periodic net payments. The","page_number":77,"box":{"x":116,"y":707,"width":756,"height":12}},{"id":"39b63773-1ed9-405d-8172-e17237208b11","block_type":"box","text":"Fund may also make or receive a payment when a swap is terminated prior to maturity through an","page_number":77,"box":{"x":117,"y":723,"width":727,"height":12}},{"id":"2e2596c5-9c5d-475f-b7ee-765af2a01e32","block_type":"box","text":"assignment of the swap or other closing transaction. Periodic net payments will generally constitute","page_number":77,"box":{"x":116,"y":738,"width":736,"height":12}},{"id":"5c32f8d5-dea6-4e9c-bfad-7c9082b3d330","block_type":"box","text":"ordinary income or deductions, while termination of a swap will generally result in capital gain or loss","page_number":77,"box":{"x":116,"y":754,"width":745,"height":12}},{"id":"068e8b57-b00e-4cd4-a77b-9402fff2c716","block_type":"box","text":"(which will be a long-term capital gain or loss if the Fund has been a party to the swap for more than","page_number":77,"box":{"x":117,"y":769,"width":742,"height":12}},{"id":"eeea48ef-fd78-4a9c-939a-5edfc73737a7","block_type":"box","text":"one year). With respect to certain types of swaps, the Fund may be required to currently recognize","page_number":77,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"03f0897b-3ee4-4a80-beec-1462fcfe04c5","block_type":"box","text":"income or loss with respect to future payments on such swaps or may elect under certain","page_number":77,"box":{"x":117,"y":800,"width":660,"height":12}},{"id":"fcc35f7f-42cd-43b9-a74e-f4ac26a7813e","block_type":"box","text":"circumstances to mark such swaps to market annually for tax purposes as ordinary income or loss.","page_number":77,"box":{"x":116,"y":816,"width":733,"height":12}},{"id":"26060dab-8c32-401e-b0b0-3fefc5a8e347","block_type":"box","text":"Qualified Dividend Income and Qualified REIT Dividends.","page_number":77,"box":{"x":116,"y":847,"width":454,"height":10}},{"id":"80292d40-9ae1-41a1-bffd-390c2a892720","block_type":"box","text":"For non-corporate shareholders,","page_number":77,"box":{"x":571,"y":847,"width":251,"height":12}},{"id":"682846cf-4a77-45b0-bb0b-2fff6bb269b1","block_type":"box","text":"distributions by the Fund of investment company taxable income (including any short-term capital","page_number":77,"box":{"x":116,"y":862,"width":727,"height":12}},{"id":"627d45ea-b7fa-4502-83cb-525a9fe084a9","block_type":"box","text":"gains), whether received in cash or shares, will be taxable either as ordinary income or as qualified","page_number":77,"box":{"x":116,"y":878,"width":739,"height":12}},{"id":"7965daa9-bb43-4a47-92bf-12efdb6b804e","block_type":"box","text":"74","page_number":77,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ef294225-0694-40fc-bd40-27528baa088a","block_type":"box","text":"NM1026U-6039989-77/256","page_number":77,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"b2d26e83-3ef2-4250-a12d-337f309a5d41","block_type":"box","text":"dividend income, which is eligible to be taxed at long-term capital gain rates to the extent the Fund","page_number":78,"box":{"x":116,"y":87,"width":735,"height":12}},{"id":"e49c46c3-7573-40bd-8817-0e64f77d0b33","block_type":"box","text":"receives qualified dividend income on the securities it holds and the Fund reports the distribution as","page_number":78,"box":{"x":117,"y":102,"width":742,"height":12}},{"id":"e978d836-9019-4ece-af37-ad25277b6a41","block_type":"box","text":"qualified dividend income. Qualified dividend income is, in general, dividend income from taxable U.S.","page_number":78,"box":{"x":116,"y":118,"width":761,"height":12}},{"id":"86bc48c6-538e-483c-a541-3e4972609c87","block_type":"box","text":"corporations and certain non-U.S. corporations (","page_number":78,"box":{"x":116,"y":134,"width":358,"height":12}},{"id":"27117cc1-961e-400a-b3c2-5e7ec70fecd2","block_type":"box","text":"e.g.","page_number":78,"box":{"x":476,"y":136,"width":25,"height":10}},{"id":"c177964a-46db-4b0d-9466-60fc46d36df8","block_type":"box","text":", non-U.S. corporations that are not PFICs and","page_number":78,"box":{"x":505,"y":134,"width":350,"height":11}},{"id":"7967d321-e272-41f1-9730-67642d914260","block_type":"box","text":"which are incorporated in a possession of the U.S. or in certain countries with a comprehensive tax","page_number":78,"box":{"x":116,"y":149,"width":740,"height":12}},{"id":"8a721db3-a284-40a1-b134-b15eb7cfa098","block_type":"box","text":"treaty with the U.S., or the stock of which is readily tradable on an established securities market in the","page_number":78,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"53b19cbd-28f9-4574-9146-b5508240aeab","block_type":"box","text":"U.S. (where the dividends are paid with respect to such stock)). Substitute payments received by the","page_number":78,"box":{"x":117,"y":180,"width":751,"height":12}},{"id":"ac69c568-1fda-4d92-934a-12d9fc847f49","block_type":"box","text":"Fund with respect to dividends paid on securities lent out will not be qualified dividend income.","page_number":78,"box":{"x":117,"y":196,"width":704,"height":11}},{"id":"433f81b1-778f-4ec6-8a97-f71740afb48b","block_type":"box","text":"A dividend from the Fund will not be treated as qualified dividend income to the extent that: (i) the","page_number":78,"box":{"x":116,"y":227,"width":728,"height":12}},{"id":"e28843a5-551d-4e02-9ef6-5e6dadfcefa8","block_type":"box","text":"shareholder has not held the shares on which the dividend was paid for 61 days during the 121-day","page_number":78,"box":{"x":116,"y":242,"width":743,"height":12}},{"id":"b37d3f26-b464-41a9-a693-3dcfa063f551","block_type":"box","text":"period that begins on the date that is 60 days before the date on which the shares become ex-dividend","page_number":78,"box":{"x":117,"y":258,"width":767,"height":12}},{"id":"b3be889c-a55d-419e-8df7-9e420a0663b6","block_type":"box","text":"with respect to such dividend or the Fund fails to satisfy those holding period requirements with respect","page_number":78,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"569c7c19-ec7c-4a52-9b96-c712185f1748","block_type":"box","text":"to the securities it holds that paid the dividends distributed to the shareholder (or, in the case of certain","page_number":78,"box":{"x":116,"y":289,"width":766,"height":12}},{"id":"1827006c-1ebd-4b48-b754-82b0a7463c70","block_type":"box","text":"preferred stocks, the holding requirement of 91 days during the 181-day period beginning on the date","page_number":78,"box":{"x":117,"y":304,"width":756,"height":12}},{"id":"24f0374e-d7f1-4694-8825-929c7f2d3c55","block_type":"box","text":"that is 90 days before the date on which the stock becomes ex-dividend with respect to such dividend);","page_number":78,"box":{"x":116,"y":320,"width":769,"height":12}},{"id":"7b0801be-9a4c-47fa-9873-c2bd1ebc5a37","block_type":"box","text":"(ii) the Fund or the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to","page_number":78,"box":{"x":117,"y":335,"width":771,"height":12}},{"id":"3f6413b3-2e56-4c57-b4bd-8be4dafe1a97","block_type":"box","text":"make related payments with respect to substantially similar or related property; or (iii) the shareholder","page_number":78,"box":{"x":117,"y":351,"width":758,"height":12}},{"id":"81f0254c-141c-4552-864b-9ecf6e66da89","block_type":"box","text":"elects to treat such dividend as investment income under Section 163(d)(4)(B) of the Internal Revenue","page_number":78,"box":{"x":116,"y":366,"width":765,"height":12}},{"id":"d15a27b5-040e-45cd-ba55-0f811f0e4b25","block_type":"box","text":"Code.","page_number":78,"box":{"x":117,"y":382,"width":48,"height":9}},{"id":"55f05ec4-a93c-4bdb-90c3-fbdaa349bc1f","block_type":"box","text":"Dividends received by the Fund from a REIT or another RIC may be treated as qualified dividend","page_number":78,"box":{"x":117,"y":413,"width":724,"height":12}},{"id":"19dcd639-a4e3-44e9-a418-fc958e7dedc5","block_type":"box","text":"income only to the extent the dividend distributions are attributable to qualified dividend income","page_number":78,"box":{"x":117,"y":428,"width":710,"height":12}},{"id":"115d0a4a-1da8-4f7e-9150-1136eb01137d","block_type":"box","text":"received by such REIT or other RIC. It is expected that dividends received by the Fund from a REIT","page_number":78,"box":{"x":117,"y":444,"width":744,"height":12}},{"id":"b332379a-cbe5-4d2b-abd2-ec020b545046","block_type":"box","text":"and distributed to a shareholder generally will be taxable to the shareholder as ordinary income.","page_number":78,"box":{"x":116,"y":459,"width":716,"height":12}},{"id":"c6e20a07-7e82-4995-88f1-c4e08005a6a0","block_type":"box","text":"However, a non-corporate taxpayer who is a direct REIT shareholder may claim a 20% “qualified","page_number":78,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"350174da-0c13-4cfe-bc55-69f45e58338f","block_type":"box","text":"business income” deduction for ordinary REIT dividends, and a RIC may report dividends as eligible for","page_number":78,"box":{"x":117,"y":490,"width":770,"height":12}},{"id":"de755dc4-6510-4948-931e-ee413523815e","block_type":"box","text":"this deduction to the extent the RIC’s income is derived from ordinary REIT dividends (reduced by","page_number":78,"box":{"x":116,"y":506,"width":731,"height":12}},{"id":"80264ad5-ad70-4328-9421-61d121b41a43","block_type":"box","text":"allocable RIC expenses). A shareholder may treat the dividends as such provided the RIC and the","page_number":78,"box":{"x":116,"y":521,"width":734,"height":12}},{"id":"c1b1e0dc-dd3f-4956-8c08-b727b86b1afb","block_type":"box","text":"shareholder satisfy applicable holding period requirements. A dividend from the Fund will not be","page_number":78,"box":{"x":116,"y":537,"width":716,"height":12}},{"id":"1fdfa60a-9e71-4535-9219-1a10e57e60b1","block_type":"box","text":"treated as qualified REIT dividend income to the extent that: (i) the shareholder has not held the shares","page_number":78,"box":{"x":116,"y":552,"width":772,"height":12}},{"id":"8ba469d3-af67-4351-b717-28096fe8a943","block_type":"box","text":"on which the dividend was paid for at least 46 days during the 91-day period that begins on the date","page_number":78,"box":{"x":116,"y":568,"width":747,"height":12}},{"id":"17fd50f9-c488-49a6-8d73-638038f561ef","block_type":"box","text":"that is 45 days before the date on which the shares become ex-dividend with respect to such dividend","page_number":78,"box":{"x":116,"y":583,"width":761,"height":12}},{"id":"a08a4662-b648-484a-a5cb-97cdd6fe4c4d","block_type":"box","text":"or the Fund fails to satisfy those holding period requirements with respect to the share of REIT stock it","page_number":78,"box":{"x":116,"y":599,"width":763,"height":12}},{"id":"e996aeeb-7d23-4048-8088-5ae2869981a3","block_type":"box","text":"holds that paid the dividends distributed to the shareholder; or (ii) the Fund or the shareholder is under","page_number":78,"box":{"x":117,"y":614,"width":764,"height":12}},{"id":"6ae63360-ee19-4968-906d-c8ab3669994a","block_type":"box","text":"an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to","page_number":78,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"9fc63ade-50e7-44f5-82c8-c6115b5a52b5","block_type":"box","text":"substantially similar or related property. Distributions by the Fund of its net short-term capital gains will","page_number":78,"box":{"x":116,"y":645,"width":764,"height":12}},{"id":"23fe1df1-b073-4c5b-a613-e7e01362150a","block_type":"box","text":"be taxable as ordinary income.","page_number":78,"box":{"x":117,"y":661,"width":226,"height":12}},{"id":"454f938c-ba9c-4ea1-8a2f-af2f185dfd73","block_type":"box","text":"Constructive Sales.","page_number":78,"box":{"x":116,"y":692,"width":155,"height":9}},{"id":"981f1efa-447e-4ee4-b162-b9d0f65e0be7","block_type":"box","text":"If the Fund enters into a “constructive sale” of any appreciated financial position","page_number":78,"box":{"x":278,"y":692,"width":589,"height":12}},{"id":"748fcaa4-d206-4a57-b658-b7f544e01f80","block_type":"box","text":"in stock, a partnership interest, or certain debt instruments, the Fund will be treated as if it had sold and","page_number":78,"box":{"x":117,"y":707,"width":765,"height":12}},{"id":"75fc81da-6b88-44f8-bfe6-ba20bb1b6dd5","block_type":"box","text":"immediately repurchased the property and must recognize gain (but not loss) with respect to that","page_number":78,"box":{"x":117,"y":723,"width":717,"height":12}},{"id":"9cbcafbf-f5ab-4f05-b83f-cf92aee91ec0","block_type":"box","text":"position. A constructive sale occurs when the Fund enters into one of the following transactions with","page_number":78,"box":{"x":117,"y":738,"width":740,"height":12}},{"id":"b910a8ea-613d-4ac5-979c-530834271a82","block_type":"box","text":"respect to the same or substantially identical property: (i) a short sale; (ii) an offsetting notional","page_number":78,"box":{"x":117,"y":754,"width":700,"height":12}},{"id":"c825f044-f91b-40b7-858b-b0ade41ce386","block_type":"box","text":"principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in Treasury","page_number":78,"box":{"x":117,"y":769,"width":725,"height":12}},{"id":"67085a11-7fe4-4fb6-9c3d-da7302063037","block_type":"box","text":"Regulations that may be promulgated in the future. The character of the gain from constructive sales","page_number":78,"box":{"x":117,"y":785,"width":745,"height":12}},{"id":"83db17e1-6a6b-47d5-ae7b-79cfcc2859cc","block_type":"box","text":"will depend upon the Fund’s holding period in the property. Losses from a constructive sale of property","page_number":78,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"422c8f1e-d13e-4431-acfe-64a76c05b19c","block_type":"box","text":"will be recognized when the property is subsequently disposed of. The character of such losses will","page_number":78,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"7411f7b3-eea3-431f-8d88-2e4348c45ac1","block_type":"box","text":"depend upon the Fund’s holding period in the property and the application of various loss deferral","page_number":78,"box":{"x":116,"y":831,"width":728,"height":12}},{"id":"1c8a3472-0eee-42d1-b471-199d318119b0","block_type":"box","text":"provisions in the Code. Constructive sale treatment does not apply to a transaction if such transaction","page_number":78,"box":{"x":117,"y":847,"width":759,"height":12}},{"id":"43450c87-1b92-414d-bbbd-9adefa95adcd","block_type":"box","text":"is closed before the end of the 30th day after the","page_number":78,"box":{"x":117,"y":862,"width":365,"height":12}},{"id":"8af9ab75-6e28-4c82-9833-3d97664b91a2","block_type":"box","text":"close of the Fund’s taxable year, the Fund holds the","page_number":78,"box":{"x":482,"y":862,"width":391,"height":12}},{"id":"f2a55c41-d75e-4c42-af96-fe2a93c3863a","block_type":"box","text":"75","page_number":78,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5a93b187-d10e-434b-9e65-00b9e46ed98a","block_type":"box","text":"NM1026U-6039989-78/256","page_number":78,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ef27cd63-d662-4153-9ea5-1fcda28dfc7a","block_type":"box","text":"appreciated financial position throughout the 60-day period beginning with the day such transaction","page_number":79,"box":{"x":116,"y":87,"width":741,"height":12}},{"id":"ccbf9d37-04a0-4200-b20b-f2ae32921afa","block_type":"box","text":"was closed, and the Fund’s risk of loss with respect to such position is not reduced at any time during","page_number":79,"box":{"x":116,"y":102,"width":758,"height":13}},{"id":"8e57a72b-a478-4298-880c-d687cf16bcfa","block_type":"box","text":"such 60-day period.","page_number":79,"box":{"x":116,"y":118,"width":152,"height":12}},{"id":"7a9d05e3-2526-4f09-aae2-cbe0e7cdfabe","block_type":"box","text":"Corporate Dividends Received Deduction.","page_number":79,"box":{"x":116,"y":149,"width":334,"height":12}},{"id":"61d3ec30-cbf4-4184-b32e-a374d802be67","block_type":"box","text":"For corporate shareholders, dividends paid by the Fund","page_number":79,"box":{"x":451,"y":149,"width":423,"height":12}},{"id":"50e413f5-e889-4c31-a36a-552e945d93df","block_type":"box","text":"that are attributable to dividends received by the Fund from U.S. corporations may qualify for the U.S.","page_number":79,"box":{"x":116,"y":165,"width":759,"height":12}},{"id":"b4c63c98-1e85-46a7-931c-df2f787c9e6b","block_type":"box","text":"federal dividends received deduction and the Fund reports the distribution as eligible for such","page_number":79,"box":{"x":116,"y":180,"width":697,"height":12}},{"id":"aa7f3d55-7ea5-4ca2-b752-4b347a6628b7","block_type":"box","text":"deduction. A 46-day minimum holding period during the 90-day period that begins 45 days prior to ex","page_number":79,"box":{"x":116,"y":196,"width":755,"height":12}},{"id":"58242035-c995-4476-a1a3-72163b40c530","block_type":"box","text":"dividend date (or 91-day minimum holding period during the 180-day period beginning 90 days prior to","page_number":79,"box":{"x":116,"y":211,"width":764,"height":12}},{"id":"85e0acff-6710-46cb-8968-7471aeb94d8d","block_type":"box","text":"ex-dividend date for certain preference dividends) during which risk of loss may not be diminished is","page_number":79,"box":{"x":116,"y":227,"width":747,"height":12}},{"id":"cea429cc-889b-402c-81d2-60a6ed9ca987","block_type":"box","text":"required for the applicable shares, at both the Fund and shareholder level, for a dividend to be eligible","page_number":79,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"08044b94-6757-4f90-9b99-f3223d45aac4","block_type":"box","text":"for the dividends received deduction. Dividends received by the Fund from a REIT are not eligible for","page_number":79,"box":{"x":116,"y":258,"width":753,"height":12}},{"id":"8b9f8622-a447-404e-93f8-6a45d0335648","block_type":"box","text":"the dividends received deduction. In addition, dividends received by the Fund from another RIC may","page_number":79,"box":{"x":116,"y":273,"width":749,"height":12}},{"id":"7b289746-da1a-43e6-810a-0473d01ed7ca","block_type":"box","text":"be eligible for such deduction only to the extent the dividends received from such RIC would","page_number":79,"box":{"x":117,"y":289,"width":687,"height":12}},{"id":"dc096403-48bd-437d-8256-6a10b573c661","block_type":"box","text":"themselves qualify for the dividends received deduction.","page_number":79,"box":{"x":116,"y":304,"width":422,"height":12}},{"id":"3ce5c511-d68b-4af0-991c-0d8bf9472075","block_type":"box","text":"Tax-Exempt Investors and Excess Inclusion Income.","page_number":79,"box":{"x":116,"y":335,"width":418,"height":12}},{"id":"9bce11e6-6cbc-4dad-9627-ae718df75ef3","block_type":"box","text":"Under current law, the Fund serves to block","page_number":79,"box":{"x":535,"y":335,"width":335,"height":11}},{"id":"98a84684-d3d5-48ba-b6b4-d0ccd7bfca99","block_type":"box","text":"unrelated business taxable income (“UBTI”) from being realized by its tax-exempt shareholders. UBTI","page_number":79,"box":{"x":117,"y":351,"width":758,"height":12}},{"id":"af17cafb-505b-46ba-a38f-77e261c6f3fd","block_type":"box","text":"includes unrelated debt-financed income, which generally consists of income and gains derived by a","page_number":79,"box":{"x":117,"y":366,"width":748,"height":12}},{"id":"3f9ac71e-2054-406a-a689-59bcbaa7fed7","block_type":"box","text":"tax-exempt investor from the disposition of property that has been acquired with borrowed money. A","page_number":79,"box":{"x":116,"y":382,"width":748,"height":12}},{"id":"90cff5c3-d37a-4172-8bb0-eb9f9aa4d6b5","block_type":"box","text":"tax-exempt shareholder could realize UBTI by virtue of its investment in the Fund if the shareholder","page_number":79,"box":{"x":116,"y":397,"width":742,"height":12}},{"id":"ebcc37c5-da25-4780-b2b4-20d28bd476e4","block_type":"box","text":"borrows money to acquire its shares of the Fund.","page_number":79,"box":{"x":117,"y":413,"width":368,"height":12}},{"id":"cbfd08a0-c58b-452c-bd9f-e8af2d68a55b","block_type":"box","text":"Certain types of income received by the Fund from REITs, real estate mortgage investment conduits,","page_number":79,"box":{"x":117,"y":444,"width":754,"height":12}},{"id":"29d95192-d995-437b-af7e-06103e8f60d1","block_type":"box","text":"taxable mortgage pools or other investments may cause the Fund to report some or all of its","page_number":79,"box":{"x":116,"y":459,"width":689,"height":12}},{"id":"30dc7f59-03d5-4c06-b450-4b7e21624255","block_type":"box","text":"distributions as “excess inclusion income.” To Fund shareholders, such excess inclusion income may:","page_number":79,"box":{"x":116,"y":475,"width":760,"height":12}},{"id":"29cc2420-53e2-411d-a171-09ab7bbdcb88","block_type":"box","text":"(i) constitute taxable income, as UBTI for those shareholders who would otherwise be tax-exempt such","page_number":79,"box":{"x":117,"y":490,"width":768,"height":12}},{"id":"ebc21421-e9e0-4e15-8e17-bb9e6f3cebdf","block_type":"box","text":"as individual retirement accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable","page_number":79,"box":{"x":116,"y":506,"width":760,"height":12}},{"id":"9e222520-9488-4a81-bf40-95900dd3355f","block_type":"box","text":"entities; (ii) not be offset by otherwise allowable deductions for tax purposes; (iii) not be eligible for","page_number":79,"box":{"x":116,"y":521,"width":733,"height":12}},{"id":"9761f9c1-ef78-4d8d-9d26-70a394f6e0ac","block_type":"box","text":"reduced U.S. withholding for non-U.S. shareholders even from tax treaty countries; and (iv) cause the","page_number":79,"box":{"x":117,"y":537,"width":758,"height":12}},{"id":"6d7765a9-238b-4190-9ad6-a1a37fc62478","block_type":"box","text":"Fund to be subject to tax if certain “disqualified organizations,” as defined by the Internal Revenue","page_number":79,"box":{"x":117,"y":552,"width":731,"height":12}},{"id":"d3cc7e82-fa21-4641-8c21-95c122d6229c","block_type":"box","text":"Code, are Fund shareholders. If a charitable remainder annuity trust or a charitable remainder unitrust","page_number":79,"box":{"x":117,"y":568,"width":761,"height":12}},{"id":"82a21bf5-5ff8-4989-bce6-f8a7ea081807","block_type":"box","text":"(each as defined in Section 664 of the Internal Revenue Code) has UBTI for a taxable year, a 100%","page_number":79,"box":{"x":117,"y":583,"width":745,"height":12}},{"id":"a632a3e1-145a-4cc7-84bb-505cb520a304","block_type":"box","text":"excise tax on the UBTI is imposed on the trust.","page_number":79,"box":{"x":116,"y":599,"width":352,"height":12}},{"id":"bfa52f18-a292-4aa0-bf86-e1ab7243ebb1","block_type":"box","text":"The Fund tries to avoid investing in REITs that are expected to generate excess inclusion income, but","page_number":79,"box":{"x":116,"y":630,"width":760,"height":12}},{"id":"6331b4ee-4fe8-4890-a01d-0416a426045e","block_type":"box","text":"the Fund may not always be successful in doing so. Because information about a REIT’s investments","page_number":79,"box":{"x":116,"y":645,"width":757,"height":12}},{"id":"6d3466d0-f9df-47ac-9667-02379b1abbd3","block_type":"box","text":"may be inadequate or inaccurate, or because a REIT may change its investment program, the Fund","page_number":79,"box":{"x":117,"y":661,"width":740,"height":12}},{"id":"486e8f41-dab1-42e4-9749-ad3b4fa285b2","block_type":"box","text":"may not be successful in avoiding the consequences described above. Avoidance of investments in","page_number":79,"box":{"x":117,"y":676,"width":738,"height":12}},{"id":"9164ff75-8c4f-437a-bc06-82e7bba1dfb0","block_type":"box","text":"REITs that generate excess inclusion income may require the Fund to forego otherwise attractive","page_number":79,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"fd5b170f-7f9e-4957-99d7-a5457a6734a7","block_type":"box","text":"investment opportunities.","page_number":79,"box":{"x":117,"y":707,"width":184,"height":12}},{"id":"7b31f3c2-b49e-42d0-bb3a-ea7345439a27","block_type":"box","text":"Non-U.S. Investments.","page_number":79,"box":{"x":117,"y":738,"width":173,"height":10}},{"id":"f58af533-9592-408e-9bb7-0e3207e706c4","block_type":"box","text":"Under Section 988 of the Internal Revenue Code, gains or losses attributable to","page_number":79,"box":{"x":297,"y":738,"width":577,"height":12}},{"id":"f0185135-e405-4dd0-80bd-2823637ac87d","block_type":"box","text":"fluctuations in exchange rates between the time the","page_number":79,"box":{"x":116,"y":754,"width":374,"height":12}},{"id":"30001ed4-ea0f-44f5-92ee-f346147c668a","block_type":"box","text":"Fund accrues income or receivables or expenses or","page_number":79,"box":{"x":497,"y":754,"width":377,"height":12}},{"id":"22f84f08-3bde-424b-8fda-76425eac88d0","block_type":"box","text":"other liabilities denominated in a non-","page_number":79,"box":{"x":116,"y":769,"width":271,"height":10}},{"id":"bc9cfeec-8229-426f-93f0-526715919c92","block_type":"box","text":"U.S. currency and the time the Fund actually collects such income","page_number":79,"box":{"x":389,"y":769,"width":480,"height":12}},{"id":"d53421a2-d7e1-4d3f-bb45-ee1a916f0f2c","block_type":"box","text":"or pays such liabilities are generally treated as ordi","page_number":79,"box":{"x":116,"y":785,"width":368,"height":12}},{"id":"5b61dcb5-c1e0-4ba2-a080-44485e112b99","block_type":"box","text":"nary income or ordinary loss. In general, gains (and","page_number":79,"box":{"x":486,"y":785,"width":373,"height":12}},{"id":"661ccbf9-6261-4c02-9e9d-63140cbcae1d","block_type":"box","text":"losses) realized on debt instruments will be treated as Se","page_number":79,"box":{"x":117,"y":800,"width":414,"height":12}},{"id":"0ad77a78-b17c-4ff0-bf98-9d32ac354d0d","block_type":"box","text":"ction 988 gain (or loss) to the extent attributable","page_number":79,"box":{"x":532,"y":800,"width":346,"height":12}},{"id":"b2a581d9-a5d9-4ad6-8927-dcac81c701d0","block_type":"box","text":"to changes in exchange rates between the U.S. dollar","page_number":79,"box":{"x":116,"y":816,"width":391,"height":12}},{"id":"18b85908-0928-47ea-879d-8042a84c6a58","block_type":"box","text":"and the currencies in which the instruments are","page_number":79,"box":{"x":512,"y":816,"width":343,"height":9}},{"id":"88c9e714-41c0-4705-9a6c-a7584b616b9c","block_type":"box","text":"denominated. Similarly, gains or losses on non-U.S.","page_number":79,"box":{"x":116,"y":831,"width":382,"height":12}},{"id":"ff82c44b-6a58-40c1-8f33-036b27a5924c","block_type":"box","text":"currency, non-U.S. currency forward contracts and","page_number":79,"box":{"x":499,"y":831,"width":372,"height":12}},{"id":"4dff2c49-2ca4-4aa4-9f69-1007204822f4","block_type":"box","text":"certain non-U.S. currency options or futures contra","page_number":79,"box":{"x":116,"y":847,"width":368,"height":12}},{"id":"99314576-8933-4f5d-a04d-1fc29e68b871","block_type":"box","text":"cts denominated in non-U.S. cu","page_number":79,"box":{"x":485,"y":847,"width":228,"height":9}},{"id":"7eb69095-760f-4f5c-929e-98db6a8f8f83","block_type":"box","text":"rrency, to the extent","page_number":79,"box":{"x":715,"y":847,"width":149,"height":12}},{"id":"665170dc-a9a4-4e63-9db2-4ee74ec16c47","block_type":"box","text":"attributable to fluctuations in exchange rates betw","page_number":79,"box":{"x":116,"y":862,"width":361,"height":12}},{"id":"8abb41e6-0a90-4da3-aca9-5cd1bb72a87f","block_type":"box","text":"een the acquisition and disposition dates, are also","page_number":79,"box":{"x":477,"y":862,"width":368,"height":12}},{"id":"39e72ff0-e1a9-474b-9654-7b515eac6353","block_type":"box","text":"treated as ordinary income or loss unless the Fund were to elect otherwise.","page_number":79,"box":{"x":116,"y":878,"width":552,"height":12}},{"id":"1c646092-4937-4dfd-9d34-12f52a71904e","block_type":"box","text":"76","page_number":79,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"94920a4e-0744-4a3e-8dfc-76397fa04df5","block_type":"box","text":"NM1026U-6039989-79/256","page_number":79,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"0c4b50ba-9bd9-41db-97b8-d71ee57b15b3","block_type":"box","text":"The Fund may be subject to non-U.S. income taxes withheld at the source. The Fund, if permitted to","page_number":80,"box":{"x":116,"y":87,"width":749,"height":12}},{"id":"80a4d12e-08a6-47a6-9d0b-e973b3004089","block_type":"box","text":"do so, may elect to “pass through” to its investors the amount of non-U.S. income taxes paid by the","page_number":80,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"876bf39c-49d0-4a97-8ba2-76c87e93ac2f","block_type":"box","text":"Fund provided that the Fund held the security on the dividend settlement date and for at least 15","page_number":80,"box":{"x":117,"y":118,"width":720,"height":12}},{"id":"82e22e12-916e-4e1c-816b-f29868585546","block_type":"box","text":"additional days immediately before and/or thereafter, with the result that each investor with respect to","page_number":80,"box":{"x":116,"y":134,"width":757,"height":12}},{"id":"e74889c6-300d-4788-856e-27bd922de5fe","block_type":"box","text":"shares of the Fund held for a minimum 16-day holding period at the time of deemed distribution will","page_number":80,"box":{"x":116,"y":149,"width":741,"height":12}},{"id":"34f5c901-e830-4ecc-a503-11e243946432","block_type":"box","text":"(i) include in gross income, even though not actually received, the investor’s pro rata share of the","page_number":80,"box":{"x":117,"y":165,"width":724,"height":12}},{"id":"703047d4-782c-47a8-8db2-df342a1bbe60","block_type":"box","text":"Fund’s non-U.S. income taxes, and (ii) either deduct (in calculating U.S. taxable income, but only for","page_number":80,"box":{"x":117,"y":180,"width":747,"height":12}},{"id":"729d4f83-6bb6-4a79-a1e6-6f17155dfe37","block_type":"box","text":"investors who itemize their deductions on their personal tax returns) or credit (in calculating U.S.","page_number":80,"box":{"x":117,"y":196,"width":718,"height":12}},{"id":"026abc6c-6b7f-4c86-983c-8a5c9c5fc407","block_type":"box","text":"federal income tax) the investor’s pro rata share of the Fund’s non-U.S. income taxes. Withholding","page_number":80,"box":{"x":116,"y":211,"width":735,"height":12}},{"id":"c56de848-b6de-4ea1-a54b-f2e034c5ebda","block_type":"box","text":"taxes on dividends on non-U.S. securities while such securities are lent out by the Fund are not eligible","page_number":80,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"81dd775a-22c9-46a3-a2c1-5940c9d54303","block_type":"box","text":"for non-U.S. tax credit pass through. Taxes not “passed through” for tax purposes will not be available","page_number":80,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"4c88a1f4-93d2-47a2-b22b-f6f799e95f40","block_type":"box","text":"to shareholders for foreign tax credit purposes. A non-U.S. person invested in the Fund in a year that","page_number":80,"box":{"x":116,"y":258,"width":754,"height":12}},{"id":"a3e844ec-8a9e-4730-88d8-f493bdcd565e","block_type":"box","text":"the Fund elects to “pass through” its non-U.S. taxes may be treated as receiving additional dividend","page_number":80,"box":{"x":116,"y":273,"width":745,"height":12}},{"id":"10cda8e4-1163-4fb1-a1af-75a3417b6403","block_type":"box","text":"income subject to U.S. withholding tax. A non-U.S. tax credit may not exceed the investor’s U.S.","page_number":80,"box":{"x":117,"y":289,"width":717,"height":12}},{"id":"1ca34c27-f401-46e7-857a-a9320b511efe","block_type":"box","text":"federal income tax otherwise payable with respect to the investor’s non-U.S. source income. For this","page_number":80,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"b5b23217-eaae-4878-9f0a-bee1348ce01b","block_type":"box","text":"purpose, shareholders must treat as non-U.S. source gross income (i) their proportionate shares of","page_number":80,"box":{"x":117,"y":320,"width":739,"height":12}},{"id":"8da3fa79-dbed-4d33-a418-bb76e054f234","block_type":"box","text":"non-U.S. taxes paid by the Fund and (ii) the portion of any dividend paid by the Fund that represents","page_number":80,"box":{"x":117,"y":335,"width":750,"height":12}},{"id":"079742ca-1df4-4b7e-b5d4-9cb38d45c7e7","block_type":"box","text":"income derived from non-U.S. sources; the Fund’s gain from the sale of securities will generally be","page_number":80,"box":{"x":117,"y":351,"width":736,"height":12}},{"id":"6c3a3a97-d29c-40fc-a3dd-bab98dfa2929","block_type":"box","text":"treated as U.S.-source income. Certain limitations will be imposed to the extent to which the non-U.S.","page_number":80,"box":{"x":116,"y":366,"width":758,"height":12}},{"id":"fc4d76f2-f8bd-4443-975a-6680b293d36e","block_type":"box","text":"tax credit may be claimed. If your Fund shares are loaned pursuant to securities lending arrangements,","page_number":80,"box":{"x":116,"y":382,"width":771,"height":12}},{"id":"27a1401d-3b39-4822-8ab9-12a66f7a9045","block_type":"box","text":"you may lose the ability to use any non-U.S. tax credits passed through by the Fund or to treat Fund","page_number":80,"box":{"x":116,"y":397,"width":749,"height":12}},{"id":"0a09c3cb-0fac-420f-9dcd-4edca2211877","block_type":"box","text":"dividends (paid while the shares are held by the borrower) as qualified dividends. Regarding a short","page_number":80,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"4f034e6f-8a26-41e4-937a-92faf5e05d87","block_type":"box","text":"sale with respect to shares of the Fund, substitute payments made to the lender of such shares may","page_number":80,"box":{"x":116,"y":428,"width":749,"height":12}},{"id":"8947a431-7949-443c-b1f6-b837040c22f2","block_type":"box","text":"not be deductible under certain circumstances. Consult your financial intermediary or tax advisor.","page_number":80,"box":{"x":117,"y":444,"width":725,"height":12}},{"id":"71a0b34c-f045-494e-8eeb-bf6d9dc53f6f","block_type":"box","text":"The Fund may file refund claims in various countries to recover taxes withheld on dividend income.","page_number":80,"box":{"x":116,"y":475,"width":739,"height":12}},{"id":"3e11084b-05e2-49d7-a36b-63451277051a","block_type":"box","text":"Whether or when the Fund will receive a tax refund is within the control of the individual country.","page_number":80,"box":{"x":116,"y":490,"width":718,"height":12}},{"id":"f09e1362-81fb-4c29-9d25-6f2f078a970d","block_type":"box","text":"Pending confirmatory guidance from the IRS, the refunds received may reduce the Fund’s pass","page_number":80,"box":{"x":117,"y":506,"width":713,"height":12}},{"id":"4930f242-a4a7-497a-b314-3f43a9a6643c","block_type":"box","text":"through of foreign tax credits in such year and potentially future years or may result in the Fund paying","page_number":80,"box":{"x":116,"y":521,"width":765,"height":12}},{"id":"d6bffe19-11fb-4c41-8eee-2427171e84bd","block_type":"box","text":"an IRS compliance fee to cover the effect of the tax credits previously passed through to shareholders","page_number":80,"box":{"x":116,"y":537,"width":763,"height":12}},{"id":"a8166fc7-a481-4ed0-9d2c-c905bbf5be77","block_type":"box","text":"on refunded foreign taxes.","page_number":80,"box":{"x":116,"y":552,"width":200,"height":12}},{"id":"a902abca-19c4-41ff-8b06-648cc67fdf6f","block_type":"box","text":"Passive Foreign Investment Companies.","page_number":80,"box":{"x":117,"y":583,"width":320,"height":12}},{"id":"0cc7e67c-75f4-4568-aac9-14bc887c8d32","block_type":"box","text":"If the Fund purchases shares in PFICs, it may be subject","page_number":80,"box":{"x":438,"y":583,"width":433,"height":12}},{"id":"0ac8dd08-3b63-4f86-985e-6caa5064bf91","block_type":"box","text":"to U.S. federal income tax on a portion of any “excess distribution” or gain from the disposition of such","page_number":80,"box":{"x":116,"y":599,"width":763,"height":12}},{"id":"9bbc18b7-c9fa-420d-b7fa-9be6b805c24f","block_type":"box","text":"shares even if such income is distributed as a taxable dividend by the Fund to its shareholders.","page_number":80,"box":{"x":116,"y":614,"width":711,"height":12}},{"id":"9c21b25f-719d-44e7-92a7-58b02d62115d","block_type":"box","text":"Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes","page_number":80,"box":{"x":116,"y":630,"width":751,"height":12}},{"id":"1e910d7e-d2ba-465d-a1cb-44894d4ddf5c","block_type":"box","text":"arising from such distributions or gains.","page_number":80,"box":{"x":116,"y":645,"width":296,"height":12}},{"id":"8f81fc47-1b6e-4b9c-8586-22b8aa9bc3a1","block_type":"box","text":"If the Fund were to invest in a PFIC and elect to treat the PFIC as a “qualified electing fund” under the","page_number":80,"box":{"x":117,"y":676,"width":754,"height":12}},{"id":"73004e1b-e0d4-4865-8efc-05bc613ff8cf","block_type":"box","text":"Internal Revenue Code, in lieu of the foregoing requirements, the Fund would be required to include in","page_number":80,"box":{"x":117,"y":692,"width":757,"height":12}},{"id":"159b6a6f-cdfd-47be-9446-9c6f38f889a1","block_type":"box","text":"income each year a portion of the ordinary earnings and net capital gains of the qualified electing fund,","page_number":80,"box":{"x":117,"y":707,"width":760,"height":12}},{"id":"276f3463-14f6-4821-ae93-69d5ddc4317a","block_type":"box","text":"even if not distributed to the Fund, and such amounts would be subject to the 90% and excise tax","page_number":80,"box":{"x":116,"y":723,"width":724,"height":12}},{"id":"c74a53ad-34c3-4536-8817-85186c39c185","block_type":"box","text":"distribution requirements described above. In order to make this election, the Fund would be required","page_number":80,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"101245e2-d8f0-461c-86e2-5a146e748ebd","block_type":"box","text":"to obtain certain annual information from the PFICs in which it invests, which may be difficult or","page_number":80,"box":{"x":116,"y":754,"width":705,"height":12}},{"id":"b7209df5-f720-4cb7-b773-c12d85ea1944","block_type":"box","text":"impossible to obtain.","page_number":80,"box":{"x":117,"y":769,"width":151,"height":12}},{"id":"0ceed06c-e834-47c0-b37d-65d4cb43acea","block_type":"box","text":"Alternatively, the Fund may make a mark-to-market election that would result in the Fund being treated","page_number":80,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"91c09abf-0aa2-481b-b96e-cab13f1f6869","block_type":"box","text":"as if it had sold and repurchased its PFIC stock at the end of each year. In such case, the Fund would","page_number":80,"box":{"x":116,"y":816,"width":756,"height":12}},{"id":"dafda283-0627-43ad-aa67-18bee92af1be","block_type":"box","text":"report any such gains as ordinary income and would deduct any such losses as ordinary losses to the","page_number":80,"box":{"x":117,"y":831,"width":759,"height":12}},{"id":"1defd04a-a7dd-4bdc-a646-e81175166893","block_type":"box","text":"extent of previously recognized gains. The election must be made separately for each PFIC owned by","page_number":80,"box":{"x":116,"y":847,"width":761,"height":12}},{"id":"4c7ab51c-36f5-405e-9246-82e0c7d55943","block_type":"box","text":"the Fund and, once made, would be effective for all subsequent taxable years, unless revoked with the","page_number":80,"box":{"x":116,"y":862,"width":768,"height":12}},{"id":"bc5f18f6-eaac-4653-b695-d006baf0bec7","block_type":"box","text":"consent of the IRS. By making the election, the Fund could potentially ameliorate the adverse tax","page_number":80,"box":{"x":116,"y":878,"width":726,"height":12}},{"id":"5f0df6fa-ee08-4c82-b1d8-37788205528d","block_type":"box","text":"77","page_number":80,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"9f0bb7ca-8fef-4d56-be07-a820c0ce7d5b","block_type":"box","text":"NM1026U-6039989-80/256","page_number":80,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"7ffac55f-58c8-43ea-89a0-c7108c09aa42","block_type":"box","text":"consequences with respect to its ownership of shares in a PFIC, but in any particular year may be","page_number":81,"box":{"x":116,"y":87,"width":731,"height":12}},{"id":"91508140-47c8-4058-b363-cbdca263d916","block_type":"box","text":"required to recognize income in excess of the distributions it receives from PFICs and its proceeds","page_number":81,"box":{"x":117,"y":102,"width":735,"height":13}},{"id":"f12cd82f-0d80-4f20-94dc-838a59ce5a4d","block_type":"box","text":"from dispositions of PFIC stock. The Fund may have to distribute this “phantom” income and gain to","page_number":81,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"07b79b23-e082-429c-81c5-f4f984caf769","block_type":"box","text":"satisfy the 90% distribution requirement and to avoid imposition of the 4% excise tax.","page_number":81,"box":{"x":116,"y":134,"width":636,"height":12}},{"id":"b257a69e-bd0b-4df7-8ddb-91107679b97d","block_type":"box","text":"The Fund will make the appropriate tax elections, if possible, and take any additional steps that are","page_number":81,"box":{"x":116,"y":165,"width":740,"height":12}},{"id":"769e5e08-a2bf-4b75-b1b0-d8c4c786edac","block_type":"box","text":"necessary to mitigate the effects of these rules.","page_number":81,"box":{"x":117,"y":180,"width":355,"height":12}},{"id":"cb115719-af79-4efa-a3f5-6c8faee4c70e","block_type":"box","text":"Reporting.","page_number":81,"box":{"x":117,"y":211,"width":82,"height":12}},{"id":"23b45135-ba0e-495c-b954-4670e9e90a02","block_type":"box","text":"If a shareholder recognizes a loss with respect to the Fund’s shares of at least $2 million in","page_number":81,"box":{"x":200,"y":210,"width":684,"height":13}},{"id":"99cb49eb-6f36-4656-a2e4-3385a7fcd819","block_type":"box","text":"any single taxable year or $4 million in any combination of taxable years for an individual shareholder","page_number":81,"box":{"x":116,"y":226,"width":756,"height":13}},{"id":"ec53ae96-44e5-4707-aeca-670f4dd93676","block_type":"box","text":"or at least $10 million in any single taxable year or","page_number":81,"box":{"x":116,"y":241,"width":378,"height":13}},{"id":"3fa5371b-9124-408e-abfd-8cea44e746d5","block_type":"box","text":"$20 million in any combination of taxable years for a","page_number":81,"box":{"x":494,"y":241,"width":392,"height":13}},{"id":"438c5e34-61ea-4861-94fc-04f99a1dc353","block_type":"box","text":"corporate shareholder, the shareholder must file with the IRS a disclosure statement on IRS Form","page_number":81,"box":{"x":116,"y":258,"width":731,"height":11}},{"id":"83044373-28b9-493b-ae5a-2303dabb7b8f","block_type":"box","text":"8886. Direct shareholders of portfolio securities are in many cases exempted from this reporting","page_number":81,"box":{"x":116,"y":273,"width":717,"height":12}},{"id":"adf931a3-190d-46e9-af76-252823117687","block_type":"box","text":"requirement, but under current guidance, shareholders of a RIC are not exempted. The fact that a loss","page_number":81,"box":{"x":117,"y":289,"width":764,"height":12}},{"id":"60ff1c67-6ba2-4dee-936c-64ad5b928d03","block_type":"box","text":"is reportable under these regulations does not affect the legal determination of whether the taxpayer’s","page_number":81,"box":{"x":117,"y":304,"width":760,"height":12}},{"id":"bf5774ca-adb8-4356-a4f3-574404bc442c","block_type":"box","text":"treatment of the loss is proper. Shareholders should consult their tax advisors to determine the","page_number":81,"box":{"x":116,"y":320,"width":707,"height":12}},{"id":"71cd9fd2-25d1-477f-a3d8-f3101dcd972b","block_type":"box","text":"applicability of these regulations in light of their individual circumstances.","page_number":81,"box":{"x":116,"y":335,"width":544,"height":12}},{"id":"0cb73c08-f255-4bac-be3f-bb4d442d3a60","block_type":"box","text":"Other Taxes.","page_number":81,"box":{"x":116,"y":366,"width":101,"height":10}},{"id":"1b623f6d-813c-4315-a924-1d4f1ec46391","block_type":"box","text":"Dividends, distributions and redemption proceeds may also be subject to additional","page_number":81,"box":{"x":218,"y":366,"width":627,"height":12}},{"id":"8289fcf0-21b9-4fd8-9de3-14c71c183af6","block_type":"box","text":"state, local and non-U.S. taxes depending on each shareholder’s particular situation.","page_number":81,"box":{"x":116,"y":382,"width":633,"height":12}},{"id":"3c503073-4919-4bb2-a88b-d99b26304135","block_type":"box","text":"Taxation of Non-U.S. Shareholders.","page_number":81,"box":{"x":116,"y":413,"width":281,"height":9}},{"id":"20e13fc4-546a-4a3b-b8a4-7036d1d9f1a9","block_type":"box","text":"Dividends paid by the Fund to non-U.S. shareholders (other","page_number":81,"box":{"x":398,"y":413,"width":454,"height":12}},{"id":"2f47e1d1-db86-4157-91b0-1cb2946b80ff","block_type":"box","text":"than a pass-through entity to the extent owned by U.S. persons) are generally subject to withholding","page_number":81,"box":{"x":116,"y":428,"width":748,"height":12}},{"id":"0e0b4da5-8343-4bbb-af31-6445fe364bc9","block_type":"box","text":"tax at a 30% rate or a reduced rate specified by an applicable income tax treaty to the extent derived","page_number":81,"box":{"x":116,"y":444,"width":752,"height":12}},{"id":"8e3466f6-2c54-46b3-8500-99b4fcd444d5","block_type":"box","text":"from investment income and short-term capital gains. Dividends paid by the Fund from net tax-exempt","page_number":81,"box":{"x":116,"y":459,"width":763,"height":12}},{"id":"145db206-a68b-4f77-98a9-6cfc622e871c","block_type":"box","text":"income or long-term capital gains are generally not subject to such withholding tax. In order to obtain a","page_number":81,"box":{"x":117,"y":475,"width":765,"height":12}},{"id":"77864270-f7e8-4d26-ab60-3af6b07b3980","block_type":"box","text":"reduced rate of withholding, a non-U.S. shareholder will be required to provide an IRS Form W-8BEN","page_number":81,"box":{"x":117,"y":490,"width":756,"height":12}},{"id":"4fc75563-f84a-4d38-a02c-7287fbd57e13","block_type":"box","text":"or IRS Form W-8BEN-E certifying its entitlement to benefits under a treaty. The withholding tax does","page_number":81,"box":{"x":116,"y":506,"width":750,"height":12}},{"id":"e515feea-9de4-4b33-9c24-332df9a89610","block_type":"box","text":"not apply to regular dividends paid to a non-U.S. shareholder who provides an IRS Form W-8ECI,","page_number":81,"box":{"x":117,"y":521,"width":729,"height":12}},{"id":"05025f5a-604d-4f76-ab57-d0972748ddd1","block_type":"box","text":"certifying that the dividends are effectively connected with the non-U.S. shareholder’s conduct of a","page_number":81,"box":{"x":116,"y":537,"width":735,"height":12}},{"id":"a0c03e1d-483b-4c8e-bb18-b757ba0666e3","block_type":"box","text":"trade or business within the U.S. Instead, the effectively connected dividends will be subject to regular","page_number":81,"box":{"x":116,"y":552,"width":762,"height":12}},{"id":"1753d669-393f-44e6-8a67-41ac4b87fecf","block_type":"box","text":"U.S. income tax as if the non-U.S. shareholder were a U.S. shareholder. A non-U.S. corporation","page_number":81,"box":{"x":117,"y":568,"width":717,"height":12}},{"id":"c864717f-0f47-4a41-8400-d74c1f9be4ff","block_type":"box","text":"receiving effectively connected dividends may also be subject to additional “branch profits tax” imposed","page_number":81,"box":{"x":117,"y":583,"width":771,"height":12}},{"id":"32e3f67f-2696-4e77-8ee8-e400fd1049ed","block_type":"box","text":"at a rate of 30% (or lower treaty rate).","page_number":81,"box":{"x":116,"y":599,"width":284,"height":12}},{"id":"da9e832e-c39b-47c0-8aff-bb275d523a3c","block_type":"box","text":"A non-U.S. shareholder who fails to provide an IRS","page_number":81,"box":{"x":401,"y":599,"width":385,"height":12}},{"id":"5c5b9ba2-2ebe-43f8-949c-7191f9a3a758","block_type":"box","text":"Form W-8BEN, IRS Form W-8BEN-E or other applicable form may be subject to backup withholding at","page_number":81,"box":{"x":117,"y":614,"width":766,"height":12}},{"id":"d0dd2e87-adee-4431-8a96-f06a9ddb23f9","block_type":"box","text":"the appropriate rate.","page_number":81,"box":{"x":116,"y":630,"width":156,"height":12}},{"id":"7b4a7111-04ca-4d9d-a6b3-cb4815c87513","block_type":"box","text":"Except as discussed below, properly-reported dividends are generally exempt from U.S. federal","page_number":81,"box":{"x":117,"y":661,"width":708,"height":12}},{"id":"849a5ead-f2a6-49ed-86e0-8573825214b0","block_type":"box","text":"withholding tax where they (i) are paid in respect of the Fund’s “qualified net interest income”","page_number":81,"box":{"x":116,"y":676,"width":688,"height":12}},{"id":"0648e7d8-a54d-4cb0-a692-e810ef622a52","block_type":"box","text":"(generally, the Fund’s U.S. source interest income, other than certain contingent interest and interest","page_number":81,"box":{"x":117,"y":692,"width":747,"height":12}},{"id":"c0fb4f17-cb98-487a-817f-da316013a473","block_type":"box","text":"from obligations of a corporation or partnership in which the Fund is at least a 10% shareholder or","page_number":81,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"da15e9e4-400a-4996-bfd0-9b18a9702a36","block_type":"box","text":"partner, reduced by expenses that are allocable to such income), (ii) are paid in respect of the Fund’s","page_number":81,"box":{"x":117,"y":723,"width":751,"height":12}},{"id":"260afb04-ed0b-4dc3-9472-d7f008b75791","block_type":"box","text":"“qualified short-term capital gains” (generally, the excess of the Fund’s net short-term capital gain over","page_number":81,"box":{"x":116,"y":738,"width":761,"height":12}},{"id":"c1505a1b-3379-4dad-9c90-b0b9dacffe14","block_type":"box","text":"the Fund’s long-term capital loss for such taxable year) or (iii) are paid in respect of the Fund’s interest","page_number":81,"box":{"x":116,"y":754,"width":760,"height":12}},{"id":"cfc34f1a-c87e-4d66-932f-9e4985987714","block_type":"box","text":"income earned on municipal and other tax-exempt securities. However, depending on its","page_number":81,"box":{"x":117,"y":769,"width":657,"height":12}},{"id":"7ec74fa6-bd6b-49fb-a09a-c2a612a7c7ba","block_type":"box","text":"circumstances, the Fund may report all, some or none of its potentially eligible dividends as interest","page_number":81,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"a4e057f7-3fa0-4f42-81cb-84466f6c7822","block_type":"box","text":"related dividends, short-term capital gains dividends or exempt-interest dividends and/or treat such","page_number":81,"box":{"x":117,"y":800,"width":732,"height":12}},{"id":"1d5569f9-b1a5-4241-9555-bfef77ee5609","block_type":"box","text":"dividends, in whole or in part, as ineligible for this exemption from withholding. In order to qualify for","page_number":81,"box":{"x":116,"y":816,"width":739,"height":12}},{"id":"fad650cf-83a4-48df-936b-b16984d37aaa","block_type":"box","text":"this exemption from withholding, a non-U.S. shareholder will need to comply with applicable","page_number":81,"box":{"x":116,"y":831,"width":685,"height":12}},{"id":"2beca98a-4710-41b5-848b-8a6a59c306bd","block_type":"box","text":"certification requirements relating to its non-U.S. status (including, in general, furnishing an IRS","page_number":81,"box":{"x":116,"y":847,"width":712,"height":12}},{"id":"c298eecf-f99a-4842-af35-30edb9a80cc1","block_type":"box","text":"Form W-8BEN, IRS Form W-8BEN-E or substitute Form). In the case of shares held through an","page_number":81,"box":{"x":117,"y":862,"width":715,"height":12}},{"id":"8bc79469-7a8e-4408-8f21-b00a0156507e","block_type":"box","text":"intermediary, the intermediary may withhold even if the Fund reports the payment as qualified net","page_number":81,"box":{"x":117,"y":878,"width":727,"height":12}},{"id":"f780ce01-919e-4f8d-9d5f-29ac390521e9","block_type":"box","text":"78","page_number":81,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"14e06c36-4f9f-4fd1-8a32-b2d94bf59797","block_type":"box","text":"NM1026U-6039989-81/256","page_number":81,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"61be9b13-68e7-4e86-8f8c-539dd620a1bd","block_type":"box","text":"interest income or qualified short-term capital gain. Non-U.S. shareholders should contact their","page_number":82,"box":{"x":117,"y":87,"width":707,"height":12}},{"id":"933dcc26-fe92-4ca1-8bd6-5e511455ec43","block_type":"box","text":"intermediaries with respect to the application of these rules to their accounts.","page_number":82,"box":{"x":117,"y":102,"width":574,"height":12}},{"id":"09878a04-b187-471c-b1e8-01a4fdb102e3","block_type":"box","text":"Special rules may apply to a foreign shareholder receiving a Fund distribution if at least 50% of the","page_number":82,"box":{"x":116,"y":134,"width":737,"height":12}},{"id":"ea90b064-dfac-41e9-9ae9-0794ada531fb","block_type":"box","text":"Fund’s assets consist of U.S. real property interests, including certain REITs and U.S. real property","page_number":82,"box":{"x":117,"y":149,"width":740,"height":12}},{"id":"dc1d85bc-7274-4118-87ac-6d3139df1ecf","block_type":"box","text":"holding corporations (as defined in the Internal Revenue Code and Treasury regulations). Fund","page_number":82,"box":{"x":117,"y":165,"width":711,"height":12}},{"id":"1d26e16d-af8e-43f4-b099-260184960db3","block_type":"box","text":"distributions that are attributable to gain from the disposition of a U.S. real property interest will be","page_number":82,"box":{"x":116,"y":180,"width":731,"height":12}},{"id":"825005a9-8642-4a56-af9b-b203dc44afc4","block_type":"box","text":"taxable as ordinary dividends and subject to withholding at a 30% or lower treaty rate if the foreign","page_number":82,"box":{"x":116,"y":196,"width":734,"height":12}},{"id":"877f61e4-2e56-4570-b761-8170b4648029","block_type":"box","text":"shareholder held no more than 5% of the Fund’s shares at all times during the one-year period ending","page_number":82,"box":{"x":116,"y":211,"width":762,"height":12}},{"id":"2fed399f-a8d5-4375-b769-2eb54a386a92","block_type":"box","text":"on the date of the distribution. If the foreign shareholder held at least 5% of the Fund’s shares at any","page_number":82,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"58b9fb88-7211-40ae-8a6a-79e7decf116e","block_type":"box","text":"time during the one-year testing period, the distribution would be treated as income effectively","page_number":82,"box":{"x":116,"y":242,"width":701,"height":12}},{"id":"f1babe8a-90c3-406e-8654-a1f240d85d55","block_type":"box","text":"connected with a trade or business within the U.S. and the foreign shareholder would be subject to","page_number":82,"box":{"x":116,"y":258,"width":737,"height":12}},{"id":"7d1c25a9-8861-4198-b430-bdd25049ae5a","block_type":"box","text":"withholding tax at a rate of 21% and would generally be required to file a U.S. federal income tax","page_number":82,"box":{"x":116,"y":273,"width":722,"height":12}},{"id":"52ca7584-5497-48b4-bdca-cf78af4277c9","block_type":"box","text":"return.","page_number":82,"box":{"x":117,"y":289,"width":52,"height":9}},{"id":"5a8ffdca-e9b9-4914-9704-e93e8f978c20","block_type":"box","text":"Similar consequences would generally apply to a foreign shareholder’s gain on the sale of Fund shares","page_number":82,"box":{"x":116,"y":320,"width":770,"height":12}},{"id":"3a941f0e-3a9b-468b-8d10-a9362ead0254","block_type":"box","text":"if at least 50% of the Fund’s assets consist of U.S. real property interests, unless the Fund is","page_number":82,"box":{"x":117,"y":335,"width":692,"height":12}},{"id":"1738265c-c83d-4d07-9ead-21a0ab3e2206","block_type":"box","text":"domestically controlled (meaning that more than 50% of the value of the Fund’s shares is held by U.S.","page_number":82,"box":{"x":116,"y":351,"width":763,"height":12}},{"id":"d27302f7-940f-4986-9c28-5e82103088de","block_type":"box","text":"shareholders) or the foreign shareholder owns no more than 5% of the Fund’s shares at all times","page_number":82,"box":{"x":116,"y":366,"width":724,"height":12}},{"id":"152a078c-8f71-47c5-a7ac-3ba43ecbcfaf","block_type":"box","text":"during the five-year period ending on the date of sale. Finally, a domestically controlled Fund may be","page_number":82,"box":{"x":116,"y":382,"width":753,"height":12}},{"id":"c791bc69-79fd-435b-985b-6f3764efe583","block_type":"box","text":"required to recognize a portion of its gain on the in-kind distribution of certain U.S. real property","page_number":82,"box":{"x":117,"y":397,"width":711,"height":12}},{"id":"0f452f77-ff7d-4cb1-a66b-03b8c8ab640d","block_type":"box","text":"interests. Shareholders that are nonresident aliens or foreign entities are urged to consult their own tax","page_number":82,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"c000e17d-94a4-432c-b100-f4f42b493752","block_type":"box","text":"advisors concerning the particular tax consequences to them of an investment in the Fund.","page_number":82,"box":{"x":116,"y":428,"width":679,"height":12}},{"id":"2ee0465c-48f8-41fb-be50-8e754ff9ce83","block_type":"box","text":"A foreign shareholder may also be subject to certain “wash sale” rules to prevent the avoidance of the","page_number":82,"box":{"x":116,"y":459,"width":760,"height":12}},{"id":"65a38729-6186-47f8-85cf-86cb64ac249f","block_type":"box","text":"tax filing and payment obligations discussed above through the sale and repurchase of Fund shares.","page_number":82,"box":{"x":116,"y":475,"width":752,"height":12}},{"id":"1fd4345c-2fa5-4345-ab63-323ae91ccc54","block_type":"box","text":"Separately, a 30% withholding tax is currently imposed on U.S.-source dividends, interest and other","page_number":82,"box":{"x":116,"y":506,"width":745,"height":12}},{"id":"18d57ab2-0e25-409c-a087-b100532a3908","block_type":"box","text":"income items paid to: (i) foreign financial institutions, including non-U.S. investment funds; and","page_number":82,"box":{"x":117,"y":521,"width":705,"height":12}},{"id":"107c221a-1a75-4c8e-8c90-c56c6c7a5ddc","block_type":"box","text":"(ii) certain other foreign entities. To avoid withholding, foreign financial institutions will need to: (i) enter","page_number":82,"box":{"x":117,"y":537,"width":765,"height":12}},{"id":"fb9b9d90-b4b2-4ee1-a9e9-c436446b07de","block_type":"box","text":"into agreements with the IRS that state that they will provide the IRS information, including the names,","page_number":82,"box":{"x":117,"y":552,"width":763,"height":12}},{"id":"8093db0d-d6c0-4846-88b3-2a0b8ce812b4","block_type":"box","text":"addresses and taxpayer identification numbers of direct and indirect U.S. account holders; comply with","page_number":82,"box":{"x":116,"y":568,"width":767,"height":12}},{"id":"7f74fcc0-6326-4252-a209-4026ed58a094","block_type":"box","text":"due diligence procedures with respect to the identification of U.S. accounts; report to the IRS certain","page_number":82,"box":{"x":116,"y":583,"width":748,"height":12}},{"id":"2d6fb925-6b28-4449-885b-8ea8a56ded6a","block_type":"box","text":"information with respect to U.S. accounts maintained; agree to withhold tax on certain payments made","page_number":82,"box":{"x":117,"y":599,"width":764,"height":12}},{"id":"bfedb672-4183-4aaa-bcf0-b1d5685aed38","block_type":"box","text":"to non-compliant foreign financial institutions or to account holders who fail to provide the required","page_number":82,"box":{"x":116,"y":614,"width":732,"height":12}},{"id":"47e21aad-be42-4ce9-9f41-b637e181ebf9","block_type":"box","text":"information; and determine certain other information concerning their account holders, or (ii) in the","page_number":82,"box":{"x":117,"y":630,"width":731,"height":12}},{"id":"62043198-3ceb-4b02-8859-7efa622a6231","block_type":"box","text":"event an intergovernmental agreement and implementing legislation are adopted, provide local","page_number":82,"box":{"x":116,"y":645,"width":709,"height":12}},{"id":"dc3289b4-b0e8-4569-9468-217f780f9140","block_type":"box","text":"revenue authorities with similar account holder information. Other foreign entities may need to report","page_number":82,"box":{"x":117,"y":661,"width":744,"height":12}},{"id":"57ed8484-2713-4d68-b14e-26fec8070b87","block_type":"box","text":"the name, address, and taxpayer identification number of each substantial U.S. owner or provide","page_number":82,"box":{"x":116,"y":676,"width":718,"height":12}},{"id":"19305e76-9da0-4ce4-ae9d-31736381694e","block_type":"box","text":"certifications of no substantial U.S. ownership unless certain exceptions apply.","page_number":82,"box":{"x":116,"y":692,"width":581,"height":12}},{"id":"8ea44a4f-667d-4191-9f09-9108b35d8e9d","block_type":"box","text":"Shares of the Fund held by a non-U.S. shareholder at death will be considered situated within the U.S.","page_number":82,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"dc2849e7-f36c-47f4-b384-5d86c5ce0953","block_type":"box","text":"and subject to the U.S. estate tax.","page_number":82,"box":{"x":116,"y":738,"width":251,"height":12}},{"id":"b616e42e-3a77-4392-b60b-dcdef31a2af7","block_type":"box","text":"The foregoing discussion is a summary of certain material U.S. federal income tax considerations only","page_number":82,"box":{"x":116,"y":769,"width":758,"height":12}},{"id":"3ecb7e03-71fa-476b-a23c-e7733a77e0c5","block_type":"box","text":"and is not intended as a substitute for careful tax planning. Purchasers of shares should consult their","page_number":82,"box":{"x":116,"y":785,"width":749,"height":12}},{"id":"5d278bc1-6f92-496a-b8e4-aa60f7bfcecc","block_type":"box","text":"own tax advisors as to the tax consequences of investing in such shares, including consequences","page_number":82,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"2abc1f85-e249-43b1-b4ec-297a8a7775c2","block_type":"box","text":"under state, local and non-U.S. tax laws. Finally, the foregoing discussion is based on applicable","page_number":82,"box":{"x":117,"y":816,"width":716,"height":12}},{"id":"3e99a58f-c77c-4ba4-9c22-b7d55379afa4","block_type":"box","text":"provisions of the Internal Revenue Code, regulations, judicial authority and administrative","page_number":82,"box":{"x":117,"y":831,"width":667,"height":12}},{"id":"19071d2a-9d4c-44c7-ac30-3a71d3724488","block_type":"box","text":"interpretations in effect on the date of this SAI. Changes in applicable authority could materially affect","page_number":82,"box":{"x":117,"y":847,"width":756,"height":12}},{"id":"671bc416-e034-457a-bb7f-35ef711c9a4a","block_type":"box","text":"the conclusions discussed above, and such changes often occur.","page_number":82,"box":{"x":116,"y":862,"width":489,"height":12}},{"id":"db79a3d1-d4f4-476b-b46a-affc2c884d43","block_type":"box","text":"79","page_number":82,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"2ba019d4-4ba1-4c9e-9643-0be886781dd5","block_type":"box","text":"NM1026U-6039989-82/256","page_number":82,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"e0b3c92e-bd20-44c1-b137-0d898cd9bfc9","block_type":"box","text":"Miscellaneous Information","page_number":83,"box":{"x":119,"y":92,"width":477,"height":23}},{"id":"604e1daf-f5d0-442c-9afb-c558e435d639","block_type":"box","text":"Counsel.","page_number":83,"box":{"x":116,"y":144,"width":70,"height":9}},{"id":"2c0685db-e418-4b09-a08b-321cc2c47776","block_type":"box","text":"Ropes & Gray LLP, located at 1211 Avenue of the Americas, New York, New York 10036, is","page_number":83,"box":{"x":187,"y":144,"width":695,"height":12}},{"id":"4ea30200-d20a-4c94-8674-1d9e9fc1990b","block_type":"box","text":"counsel to the Trust.","page_number":83,"box":{"x":116,"y":160,"width":157,"height":9}},{"id":"06ebd3f2-ca0b-4aa4-9771-87f48009b829","block_type":"box","text":"Independent Registered Public Accounting Firm.","page_number":83,"box":{"x":117,"y":191,"width":387,"height":11}},{"id":"f79c885f-702f-4b13-b68f-32ed3476a54a","block_type":"box","text":"PricewaterhouseCoopers LLP, located at Two","page_number":83,"box":{"x":506,"y":190,"width":351,"height":12}},{"id":"0c796b83-dd19-4795-b1e7-afa65f4890d1","block_type":"box","text":"Commerce Square, 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103, serves as the","page_number":83,"box":{"x":117,"y":206,"width":758,"height":12}},{"id":"38cb740b-c76c-4221-84fe-422beb25f808","block_type":"box","text":"Trust’s independent registered public accounting firm, audits the Fund’s financial statements, and may","page_number":83,"box":{"x":116,"y":221,"width":764,"height":12}},{"id":"b68dba2b-9277-46eb-ad0d-f0d29fb8a941","block_type":"box","text":"perform other services.","page_number":83,"box":{"x":117,"y":237,"width":176,"height":12}},{"id":"dd910853-d383-4ac0-b1c1-ec812dfe16d6","block_type":"box","text":"Investors’ Rights.","page_number":83,"box":{"x":117,"y":268,"width":139,"height":12}},{"id":"4f98c16c-98ab-4135-8a27-e60b7161beb2","block_type":"box","text":"The Fund relies on the services of BFA and its other service providers, including","page_number":83,"box":{"x":257,"y":268,"width":605,"height":12}},{"id":"b155ad06-554e-4380-bbfc-36505d68f98e","block_type":"box","text":"the Distributor, administrator, custodian and transfer agent. Further information about the duties and","page_number":83,"box":{"x":116,"y":283,"width":748,"height":12}},{"id":"cbf67b11-63a3-418f-b852-b77b7ff619c1","block_type":"box","text":"roles of these service providers is set out in this SAI. Investors who acquire shares of the Fund are not","page_number":83,"box":{"x":117,"y":299,"width":764,"height":12}},{"id":"7be75529-74dd-4f5d-a56b-c52365b404f2","block_type":"box","text":"parties to the relevant agreement with these service providers and do not have express contractual","page_number":83,"box":{"x":117,"y":315,"width":739,"height":11}},{"id":"52de727f-bb68-428d-a23a-e12680eec0a3","block_type":"box","text":"rights against the Fund or its service providers, except certain institutional investors that are Authorized","page_number":83,"box":{"x":117,"y":330,"width":770,"height":12}},{"id":"2b3e107b-651c-4929-93a0-1190a7621a39","block_type":"box","text":"Participants may have certain express contractual rights with respect to the Distributor under the terms","page_number":83,"box":{"x":117,"y":346,"width":766,"height":11}},{"id":"2b32455a-bb1b-4283-9fba-e208ee51430b","block_type":"box","text":"of the relevant Authorized Participant Agreement. Investors may have certain legal rights under federal","page_number":83,"box":{"x":116,"y":361,"width":768,"height":12}},{"id":"a3437b9a-69a8-4f7a-995d-fbe629b0e3f5","block_type":"box","text":"or state law against the Fund or its service providers. In the event that an investor considers that it may","page_number":83,"box":{"x":116,"y":377,"width":770,"height":12}},{"id":"81893a90-8f70-480a-bb46-6f3ec3fdec57","block_type":"box","text":"have a claim against the Fund, or against any service provider in connection with its investment in the","page_number":83,"box":{"x":117,"y":392,"width":758,"height":12}},{"id":"72f11291-b018-41c2-b7c0-a5724aaaaa7c","block_type":"box","text":"Fund, such investor should consult its own legal advisor.","page_number":83,"box":{"x":117,"y":408,"width":423,"height":12}},{"id":"42c4bc74-741d-412e-bf0b-38bd6628c7b5","block_type":"box","text":"By contract, Authorized Participants irrevocably submit to the non-exclusive jurisdiction of any New","page_number":83,"box":{"x":117,"y":438,"width":738,"height":13}},{"id":"bb66056d-5636-4d22-b8c1-0766cda7d324","block_type":"box","text":"York State or U.S. federal court sitting in New York City over any suit, action or proceeding arising out","page_number":83,"box":{"x":116,"y":454,"width":760,"height":12}},{"id":"abeea11f-dd9c-4b11-9693-bae2ca5ea2db","block_type":"box","text":"of or relating to the Authorized Participant Agreement. Jurisdiction over other claims, whether by","page_number":83,"box":{"x":116,"y":469,"width":719,"height":13}},{"id":"3f024331-2db4-4383-8f29-454853f02c4a","block_type":"box","text":"investors or Authorized Participants, will turn on the facts of the particular case and the law of the","page_number":83,"box":{"x":117,"y":485,"width":725,"height":12}},{"id":"f15c9e8d-5df1-42be-b5bb-00bfbd128b2e","block_type":"box","text":"jurisdiction in which the proceeding is brought.","page_number":83,"box":{"x":115,"y":501,"width":349,"height":12}},{"id":"07ead829-9da0-48b8-8bbf-523e0a749007","block_type":"box","text":"Financial Statements","page_number":83,"box":{"x":119,"y":552,"width":385,"height":23}},{"id":"51dd8ebb-3d28-4be8-981c-4e8a2055e4a4","block_type":"box","text":"Financial statements for the Fund are not available because, as of the date of this SAI, the Fund has","page_number":83,"box":{"x":117,"y":604,"width":750,"height":11}},{"id":"8d942cc6-1b11-4e34-b491-290e33a5cda8","block_type":"box","text":"no financial information to report.","page_number":83,"box":{"x":117,"y":619,"width":248,"height":12}},{"id":"70008b86-93d6-4690-b5b2-187d43e5c210","block_type":"box","text":"80","page_number":83,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"68ccd6b3-9796-4eef-a293-7ed1389ec4fd","block_type":"box","text":"NM1026U-6039989-83/256","page_number":83,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"f9baff50-ffd6-4204-8379-1d449ed35292","block_type":"box","text":"PART II","page_number":84,"box":{"x":432,"y":92,"width":149,"height":22}},{"id":"d4bb7180-def9-4395-8a27-41ad97b0c1f8","block_type":"box","text":"Throughout this Statement of Additional Information (“SAI”), each BlackRock-advised fund may be","page_number":84,"box":{"x":116,"y":143,"width":734,"height":12}},{"id":"93361766-592c-4127-afca-044b3156a9cf","block_type":"box","text":"referred to as a “Fund” or collectively with others as the “Funds.” Certain Funds may also be referred to","page_number":84,"box":{"x":117,"y":158,"width":770,"height":13}},{"id":"1bea0a9c-a11d-4410-9048-d3c72501f515","block_type":"box","text":"as “Municipal Funds” if they invest certain of their assets in municipal investments described below.","page_number":84,"box":{"x":116,"y":174,"width":743,"height":12}},{"id":"fa4ae929-c5f6-425b-8966-e24e9ed10027","block_type":"box","text":"Each Fund is organized either as a Maryland corporation, a Massachusetts business trust or a","page_number":84,"box":{"x":117,"y":205,"width":704,"height":11}},{"id":"07536a93-c97a-4f16-ba69-8539b74ff60c","block_type":"box","text":"Delaware statutory trust. In each jurisdiction, nomenclature varies. For ease and clarity of presentation,","page_number":84,"box":{"x":117,"y":220,"width":769,"height":12}},{"id":"ddb29400-386d-4cfa-a5f9-b02d5e809ef7","block_type":"box","text":"shares of common stock and shares of beneficial interest are referred to herein as “shares” or","page_number":84,"box":{"x":116,"y":235,"width":701,"height":10}},{"id":"e8867aac-96e7-4924-abd9-a38a484f3584","block_type":"box","text":"“Common Stock,” holders of shares of Common Stock are referred to as “shareholders,” the trustees","page_number":84,"box":{"x":116,"y":251,"width":752,"height":11}},{"id":"5d80481d-c4e0-4cef-80d4-9807233501ed","block_type":"box","text":"or directors of each Fund are referred to as “Directors,” the boards of trustees/directors of each Fund","page_number":84,"box":{"x":116,"y":266,"width":754,"height":12}},{"id":"a8aa448e-ea0a-4715-8916-5f9a9a46948f","block_type":"box","text":"are referred to as the “Board of Directors” or the “Board,” BlackRock Advisors, LLC, BlackRock Fund","page_number":84,"box":{"x":116,"y":282,"width":752,"height":11}},{"id":"0e4358f4-d6ea-4365-8e70-a311a1548059","block_type":"box","text":"Advisors or their respective affiliates is the investment adviser or manager of each Fund and is referred","page_number":84,"box":{"x":116,"y":297,"width":771,"height":12}},{"id":"25ad9b81-bab0-47e6-87e2-557cc6f58c79","block_type":"box","text":"to herein as the “Manager” or “BlackRock,” and the investment advisory agreement or management","page_number":84,"box":{"x":116,"y":313,"width":745,"height":12}},{"id":"74dbb958-0ed4-4517-b592-8bcdf6608646","block_type":"box","text":"agreement applicable to each Fund is referred to as the “Management Agreement.” Each Fund’s","page_number":84,"box":{"x":116,"y":328,"width":722,"height":13}},{"id":"9f67e4ab-5792-4f8a-b04b-a0898e4106f6","block_type":"box","text":"Articles of Incorporation or Declaration of Trust, together with all amendments thereto, is referred to as","page_number":84,"box":{"x":116,"y":344,"width":765,"height":12}},{"id":"e4e1b900-6d2e-4ccd-a1fb-719e9588b0d6","block_type":"box","text":"its “charter.” The Investment Company Act of 1940, as amended, is referred to herein as the","page_number":84,"box":{"x":117,"y":359,"width":689,"height":13}},{"id":"29a52ced-e81c-49c6-a798-970453ca3b52","block_type":"box","text":"“Investment Company Act.” The Securities Act of 1933, as amended, is referred to herein as the","page_number":84,"box":{"x":116,"y":375,"width":719,"height":12}},{"id":"83909be6-a7fa-455f-a9db-7aa67f1e669c","block_type":"box","text":"“Securities Act.” The Securities and Exchange Commission is referred to herein as the “Commission”","page_number":84,"box":{"x":116,"y":390,"width":755,"height":13}},{"id":"33adbfbd-b050-4348-9d3e-9412dad9135e","block_type":"box","text":"or the “SEC.”","page_number":84,"box":{"x":116,"y":406,"width":103,"height":9}},{"id":"2c6e7f4a-ed78-41b7-87ad-54f370cb2742","block_type":"box","text":"Certain Funds are “feeder” funds (each, a “Feeder Fund”) that invest all or a portion of their assets in a","page_number":84,"box":{"x":117,"y":436,"width":765,"height":12}},{"id":"61dc4649-8df2-45de-8311-0bf5f655b524","block_type":"box","text":"corresponding “master” portfolio (each, a “Master Portfolio”) of a master limited liability company (each,","page_number":84,"box":{"x":116,"y":452,"width":770,"height":12}},{"id":"8cc70a29-a49d-45a8-81d5-62bf6773721b","block_type":"box","text":"a “Master LLC”), a mutual fund that has the same objective and strategies as the Feeder Fund. All","page_number":84,"box":{"x":116,"y":467,"width":734,"height":12}},{"id":"59d2f4c1-ea83-4afd-9c59-f12f3e3a7910","block_type":"box","text":"investments are generally made at the level of the Master Portfolio. This structure is sometimes called","page_number":84,"box":{"x":117,"y":483,"width":761,"height":12}},{"id":"7fc47675-98d7-4150-838c-bc8bbcb6764f","block_type":"box","text":"a “master/feeder” structure. A Feeder Fund’s investment results will correspond directly to the","page_number":84,"box":{"x":116,"y":498,"width":700,"height":12}},{"id":"736cf56a-76f8-467b-b364-50d967d2071c","block_type":"box","text":"investment results of the underlying Master Portfolio in which it invests. For simplicity, this SAI uses the","page_number":84,"box":{"x":117,"y":514,"width":770,"height":12}},{"id":"65d1be8f-d30c-4ab8-b6e5-d02d54918d6a","block_type":"box","text":"term “Fund” to include both a Feeder Fund and its Master Portfolio.","page_number":84,"box":{"x":116,"y":529,"width":503,"height":10}},{"id":"763fe1fe-ded0-4ae8-8109-7c79a2c914c8","block_type":"box","text":"Certain information contained herein may not be relevant to a particular Fund.","page_number":84,"box":{"x":117,"y":560,"width":582,"height":12}},{"id":"c47fece5-3c1a-42fc-be29-a53c6fdab9ae","block_type":"box","text":"Investment Risks and Considerations","page_number":84,"box":{"x":119,"y":610,"width":675,"height":23}},{"id":"4dacdf00-5a84-4a14-99e9-5ef119eeb9b1","block_type":"box","text":"Set forth below are descriptions of some of the types of investments and investment strategies that one","page_number":84,"box":{"x":116,"y":661,"width":767,"height":12}},{"id":"f0e904ae-4af6-4644-a8c1-d699cb05f8c9","block_type":"box","text":"or more of the Funds may use, and the risks and considerations associated with those investments","page_number":84,"box":{"x":116,"y":677,"width":735,"height":12}},{"id":"66db11db-5554-40d5-b7cc-dc0dd62211e1","block_type":"box","text":"and investment strategies. Please see each Fund’s prospectuses (the “Prospectus”) and the","page_number":84,"box":{"x":116,"y":692,"width":685,"height":12}},{"id":"c1a4f505-1bd9-447e-955d-b53f1254efc8","block_type":"box","text":"“Investment Objective and Policies,” “Investment Objectives and Policies” or “Investment Strategies","page_number":84,"box":{"x":116,"y":708,"width":737,"height":12}},{"id":"8db40921-3d6f-4cd9-97ed-ad786cb0b5c0","block_type":"box","text":"and Risks of the Fund” section, as applicable, of Part I of this SAI for further information on each","page_number":84,"box":{"x":116,"y":723,"width":714,"height":12}},{"id":"d7d78d22-390e-4275-b08b-d6eac61403d4","block_type":"box","text":"Fund’s investment policies and risks. Information contained in this section about the risks and","page_number":84,"box":{"x":117,"y":739,"width":692,"height":12}},{"id":"fc98695a-96df-42a3-ae50-d702f3b9c523","block_type":"box","text":"considerations associated with a Fund’s investments and/or investment strategies applies only to those","page_number":84,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"e9495947-aa99-4d99-9fd6-2ff6be36d970","block_type":"box","text":"Funds specifically identified in Part I of this SAI as making each type of investment or using each","page_number":84,"box":{"x":117,"y":770,"width":716,"height":12}},{"id":"f66966ce-0520-4412-8f55-0dd0599127d4","block_type":"box","text":"investment strategy (each, a “Covered Fund”). Information that does not apply to a Covered Fund does","page_number":84,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"2873c4ed-1902-4351-b631-345c142c713e","block_type":"box","text":"not form a part of that Covered Fund’s SAI and should not be relied on by investors in that Covered","page_number":84,"box":{"x":117,"y":801,"width":735,"height":12}},{"id":"d4730891-19fd-417d-95a1-1195436d7198","block_type":"box","text":"Fund. Only information that is clearly identified as applicable to a Covered Fund is considered to form a","page_number":84,"box":{"x":117,"y":816,"width":765,"height":12}},{"id":"d205ceaa-ce68-4ebc-ac06-2bb6e5c35bb3","block_type":"box","text":"part of that Covered Fund’s SAI.","page_number":84,"box":{"x":117,"y":832,"width":244,"height":12}},{"id":"4e18f4a1-f9af-43ad-a650-0ce099c9ec4f","block_type":"box","text":"Asset-Backed Securities.","page_number":84,"box":{"x":116,"y":862,"width":200,"height":10}},{"id":"6bcbe1a9-b20a-4b55-8490-d7d9faa48028","block_type":"box","text":"Asset-backed securities are securities backed by home equity loans,","page_number":84,"box":{"x":317,"y":862,"width":519,"height":12}},{"id":"1143d37d-a0b2-4ebf-a695-27a110e1829c","block_type":"box","text":"installment sale contracts, credit card receivables or other assets. Asset-backed securities are","page_number":84,"box":{"x":117,"y":878,"width":702,"height":11}},{"id":"65a4e562-c3f8-4887-8795-4df19faa4fcd","block_type":"box","text":"II-1","page_number":84,"box":{"x":489,"y":909,"width":20,"height":9}},{"id":"dec581b9-96fc-407f-aa28-433456687d01","block_type":"box","text":"NM1026U-6039989-84/256","page_number":84,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"0e7e4489-39e9-453b-96ab-c0cee3be2397","block_type":"box","text":"“pass-through” securities, meaning that principal and interest payments — net of expenses — made by","page_number":85,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"0176c5b2-7592-482c-b897-1506404087c8","block_type":"box","text":"the borrower on the underlying assets (such as credit card receivables) are passed through to a Fund.","page_number":85,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"3ae7f93c-42f8-4c64-80c4-4f55c16fb895","block_type":"box","text":"The value of asset-backed securities, like that of traditional fixed-income securities, typically increases","page_number":85,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"686209a1-de3e-4112-aa11-6e41e70ad9cc","block_type":"box","text":"when interest rates fall and decreases when interest rates rise. However, asset-backed securities differ","page_number":85,"box":{"x":116,"y":134,"width":770,"height":11}},{"id":"86f34f0d-1637-4ccd-b204-57672844acb2","block_type":"box","text":"from traditional fixed-income securities because of their potential for prepayment. The price paid by a","page_number":85,"box":{"x":116,"y":149,"width":755,"height":12}},{"id":"d60ad98c-d55d-4c94-8a8e-e44404d88829","block_type":"box","text":"Fund for its asset-backed securities, the yield the Fund expects to receive from such securities and the","page_number":85,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"10ebc23f-6587-4c68-8b73-11f9fa724461","block_type":"box","text":"average life of the securities are based on a number of factors, including the anticipated rate of","page_number":85,"box":{"x":116,"y":180,"width":709,"height":12}},{"id":"06099f1e-4e29-4ec9-b2d3-264f428aef37","block_type":"box","text":"prepayment of the underlying assets. In a period of declining interest rates, borrowers may prepay the","page_number":85,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"ba1fe95f-63da-4718-8c95-45b3c27b162f","block_type":"box","text":"underlying assets more quickly than anticipated, thereby reducing the yield to maturity and the average","page_number":85,"box":{"x":117,"y":211,"width":769,"height":12}},{"id":"4405b991-72c9-411d-841d-19cc4f187957","block_type":"box","text":"life of the asset-backed securities. Moreover, when a Fund reinvests the proceeds of a prepayment in","page_number":85,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"35f1ac74-f701-409c-b9dd-b4e700890081","block_type":"box","text":"these circumstances, it will likely receive a rate of interest that is lower than the rate on the security that","page_number":85,"box":{"x":116,"y":242,"width":772,"height":12}},{"id":"5cc357a2-0b0f-4522-9986-72d684348708","block_type":"box","text":"was prepaid. To the extent that a Fund purchases asset-backed securities at a premium, prepayments","page_number":85,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"8629e406-2695-4048-8bb5-50fe9e9afcbe","block_type":"box","text":"may result in a loss to the extent of the premium paid. If a Fund buys such securities at a discount,","page_number":85,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"ae8cf9dc-6e02-4adf-8690-beaac575ab3a","block_type":"box","text":"both scheduled payments and unscheduled prepayments will increase current and total returns and","page_number":85,"box":{"x":117,"y":289,"width":742,"height":12}},{"id":"305a40f3-9ade-4107-bc3f-86d3efcedb09","block_type":"box","text":"unscheduled prepayments will also accelerate the recognition of income which, when distributed to","page_number":85,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"413c2414-367d-428a-afdd-5ad85efe813b","block_type":"box","text":"shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of the","page_number":85,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"6b36b3e0-a42b-4d62-8f4c-9a1f8e172e26","block_type":"box","text":"underlying assets may occur at a slower than expected rate, creating maturity extension risk. This","page_number":85,"box":{"x":117,"y":335,"width":730,"height":12}},{"id":"79fe951c-4620-4f6e-ba36-b6413a959a7f","block_type":"box","text":"particular risk may effectively change a security that was considered short- or intermediate-term at the","page_number":85,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"c71bea39-6af4-4de2-aa2e-102febcf6f11","block_type":"box","text":"time of purchase into a longer term security. Since the value of longer-term securities generally","page_number":85,"box":{"x":116,"y":366,"width":710,"height":12}},{"id":"80bae6df-def1-4185-9e28-a864835cb0e9","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than does the value of shorter-term","page_number":85,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"f79edc34-8c87-43a7-b9c3-187181caa9bd","block_type":"box","text":"securities, maturity extension risk could increase the volatility of the Fund. When interest rates decline,","page_number":85,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"ebbca729-29d1-48fe-8ef3-c7d4af3ce3e3","block_type":"box","text":"the value of an asset-backed security with prepayment features may not increase as much as that of","page_number":85,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"0e520503-66d5-470e-8436-57910138a156","block_type":"box","text":"other fixed-income securities, and, as noted above, changes in market rates of interest may accelerate","page_number":85,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"e05d4866-e82e-4c9a-99b1-5dfbea50c506","block_type":"box","text":"or retard prepayments and thus affect maturities.","page_number":85,"box":{"x":116,"y":444,"width":368,"height":12}},{"id":"034aa794-2ec6-428d-a6da-d1e4e6139e96","block_type":"box","text":"Asset-Based Securities.","page_number":85,"box":{"x":116,"y":475,"width":190,"height":9}},{"id":"a0b1f85b-34ef-40b4-b8b8-9f664204e043","block_type":"box","text":"Certain Funds may invest in debt, preferred or convertible securities, the","page_number":85,"box":{"x":307,"y":475,"width":548,"height":12}},{"id":"b48ccaed-abca-4b53-bd58-6725e1b7e1c7","block_type":"box","text":"principal amount, redemption terms or conversion terms of which are related to the market price of","page_number":85,"box":{"x":117,"y":490,"width":734,"height":12}},{"id":"20215359-ed30-47e4-8494-e4f266e014df","block_type":"box","text":"some natural resource asset such as gold bullion. These securities are referred to as “asset-based","page_number":85,"box":{"x":116,"y":506,"width":737,"height":12}},{"id":"04e9b6d6-d02a-4806-9149-f340df9c82e2","block_type":"box","text":"securities.” A Fund will purchase only asset-based securities that are rated, or are issued by issuers","page_number":85,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"7af65cc1-d165-422b-bf64-aba2feaabb3e","block_type":"box","text":"that have outstanding debt obligations rated, investment grade (for example, AAA, AA, A or BBB by","page_number":85,"box":{"x":116,"y":537,"width":744,"height":12}},{"id":"b2a2d113-0476-4994-89c1-653aacb489dc","block_type":"box","text":"S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), or Baa by Moody’s Investors Service, Inc.","page_number":85,"box":{"x":116,"y":552,"width":719,"height":12}},{"id":"af8499aa-ab09-4062-a072-1451cfda395c","block_type":"box","text":"(“Moody’s”) or commercial paper rated A-1 by S&P or Prime-1 by Moody’s) or by issuers that the","page_number":85,"box":{"x":117,"y":568,"width":721,"height":12}},{"id":"27b716d1-46ef-4cb9-ab5f-176dbf9c743e","block_type":"box","text":"Manager has determined to be of similar creditworthiness. Obligations ranked in the fourth highest","page_number":85,"box":{"x":117,"y":583,"width":733,"height":12}},{"id":"a39e9736-e677-401d-ae1b-6798d622a0ac","block_type":"box","text":"rating category, while considered “investment grade,” may have certain speculative characteristics and","page_number":85,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"f2cb8eb0-6c70-44d2-9e41-6bdc72af9f1d","block_type":"box","text":"may be more likely to be downgraded than securities rated in the three highest rating categories. If an","page_number":85,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"bbc716b7-42d0-407f-8689-e83bafcd791d","block_type":"box","text":"asset-based security is backed by a bank letter of credit or other similar facility, the Manager may take","page_number":85,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"494f9926-d4a7-4aa2-822a-8f975e405fb9","block_type":"box","text":"such backing into account in determining the creditworthiness of the issuer. While the market prices for","page_number":85,"box":{"x":116,"y":645,"width":769,"height":12}},{"id":"de62f469-56fb-4de3-bbb2-35ba83eaf274","block_type":"box","text":"an asset-based security and the related natural resource asset generally are expected to move in the","page_number":85,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"9188fced-063f-47a7-9865-2bb6a0918b2c","block_type":"box","text":"same direction, there may not be perfect correlation in the two price movements. Asset-based","page_number":85,"box":{"x":116,"y":676,"width":696,"height":12}},{"id":"1b04c4b9-968f-4dc1-8ee4-1cb6f10df11e","block_type":"box","text":"securities may not be secured by a security interest in or claim on the underlying natural resource","page_number":85,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"8e33bda8-56c4-4671-a4c6-65043e7ed375","block_type":"box","text":"asset. The asset-based securities in which a Fund may invest may bear interest or pay preferred","page_number":85,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"90de07d9-fc51-456c-ba28-5614e7490844","block_type":"box","text":"dividends at below market (or even relatively nominal) rates. Certain asset-based securities may be","page_number":85,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"1414701f-009b-4ec0-8944-2bab4b286ca7","block_type":"box","text":"payable at maturity in cash at the stated principal amount or, at the option of the holder, directly in a","page_number":85,"box":{"x":117,"y":738,"width":738,"height":12}},{"id":"84b952e5-ee92-458b-96b0-5bea6c9e7cae","block_type":"box","text":"stated amount of the asset to which it is related. In such instance, because no Fund presently intends","page_number":85,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"b02b5c7c-a4cd-4ce1-af7b-e152fa91bc52","block_type":"box","text":"to invest directly in natural resource assets, a Fund would sell the asset-based security in the","page_number":85,"box":{"x":116,"y":769,"width":691,"height":12}},{"id":"9126f810-4f1d-405b-b96f-e55a8f2f2107","block_type":"box","text":"secondary market, to the extent one exists, prior to maturity if the value of the stated amount of the","page_number":85,"box":{"x":116,"y":785,"width":733,"height":12}},{"id":"7cd0f731-9cde-41fa-a5df-cb1a0b767fa4","block_type":"box","text":"asset exceeds the stated principal amount and thereby realize the appreciation in the underlying asset.","page_number":85,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"6c8972d1-c009-4576-a9be-7b4a9f4d583e","block_type":"box","text":"Precious Metal-Related Securities.","page_number":85,"box":{"x":116,"y":831,"width":256,"height":10}},{"id":"fd1c47de-224d-4294-9466-111b6a864a12","block_type":"box","text":"A Fund may invest in the equity and other securities of companies","page_number":85,"box":{"x":374,"y":831,"width":500,"height":12}},{"id":"2baae3fa-305c-47ae-8ec9-81418c5a10bf","block_type":"box","text":"that explore for, extract, process or deal in precious metals (","page_number":85,"box":{"x":116,"y":847,"width":447,"height":12}},{"id":"695a1e22-393c-4f68-b458-f97239403b93","block_type":"box","text":"e.g.","page_number":85,"box":{"x":564,"y":849,"width":26,"height":10}},{"id":"bd25612b-8edf-466e-8a25-c8f0cc78d294","block_type":"box","text":", gold, silver and platinum), and in","page_number":85,"box":{"x":593,"y":847,"width":255,"height":12}},{"id":"bfa6f99a-da44-4339-a3d5-80ba496c83e0","block_type":"box","text":"asset-based securities indexed to the value of such metals. Such securities may be purchased when","page_number":85,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"6975e154-76fd-4f29-a349-7ff20b9787d2","block_type":"box","text":"they are believed to be attractively priced in relation to the value of a company’s precious metal-related","page_number":85,"box":{"x":116,"y":878,"width":769,"height":12}},{"id":"cb4190cf-b08d-413c-8111-a4ac93b5a9bb","block_type":"box","text":"II-2","page_number":85,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"389b4ca4-7c67-4e75-8c4b-e68e3bab3f36","block_type":"box","text":"NM1026U-6039989-85/256","page_number":85,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"0a2dcbef-6fc9-4d12-992d-2382a12d322a","block_type":"box","text":"assets or when the values of precious metals are expected to benefit from inflationary pressure or","page_number":86,"box":{"x":116,"y":87,"width":731,"height":12}},{"id":"83ba35f4-1638-49b2-80cc-633038ace3ad","block_type":"box","text":"other economic, political or financial uncertainty or instability. Based on historical experience, during","page_number":86,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"e3e92e84-21b5-4a8f-9a49-11a43aef637f","block_type":"box","text":"periods of economic or financial instability the securities of companies involved in precious metals may","page_number":86,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"5b2f42d1-6c7b-416e-8d1a-5456891b2e9e","block_type":"box","text":"be subject to extreme price fluctuations, reflecting the high volatility of precious metal prices during","page_number":86,"box":{"x":117,"y":134,"width":736,"height":12}},{"id":"8d6919e8-5cc9-4411-8f2d-e3167855666e","block_type":"box","text":"such periods. In addition, the instability of precious metal prices may result in volatile earnings of","page_number":86,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"57de7391-8b3e-4b04-b759-a97b8b0d549c","block_type":"box","text":"precious metal-related companies, which may, in turn, adversely affect the financial condition of such","page_number":86,"box":{"x":117,"y":165,"width":754,"height":12}},{"id":"1e2ba82e-69fa-484b-9e6f-0d2a3aafa1c0","block_type":"box","text":"companies. The major producers of gold include the Republic of South Africa, Russia, Canada, the","page_number":86,"box":{"x":116,"y":180,"width":739,"height":12}},{"id":"afdaf2cd-26fe-484c-9d0d-c07e82a50c92","block_type":"box","text":"United States, Brazil and Australia. Sales of gold by Russia are largely unpredictable and often relate","page_number":86,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"78a0415e-758f-4186-85ef-2b2104e8f5d7","block_type":"box","text":"to political and economic considerations rather than to market forces. Economic, financial, social and","page_number":86,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"2c05ae2a-3c4b-4f78-bc85-b3b0516660b2","block_type":"box","text":"political factors within South Africa may significantly affect South African gold production.","page_number":86,"box":{"x":117,"y":227,"width":663,"height":12}},{"id":"e57a0b3c-ebe7-47c9-9913-c4d9d5f9cb07","block_type":"box","text":"Borrowing and Leverage.","page_number":86,"box":{"x":116,"y":258,"width":201,"height":12}},{"id":"684277dc-a344-4562-abf2-5cfae4553e71","block_type":"box","text":"Each Fund may borrow as a temporary measure for extraordinary or","page_number":86,"box":{"x":318,"y":258,"width":517,"height":12}},{"id":"484c4253-6d2d-4e25-9f2e-91dc29f3fbe9","block_type":"box","text":"emergency purposes, including to meet redemptions or to settle securities transactions. Certain Funds","page_number":86,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"ca5c1eb5-8fa7-4f59-8d0b-535656b21334","block_type":"box","text":"will not purchase securities at any time when borrowings exceed 5% of their total assets, except (a) to","page_number":86,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"dffbc07e-385f-4b5b-9c5c-f4165482a6e0","block_type":"box","text":"honor prior commitments or (b) to exercise subscription rights when outstanding borrowings have been","page_number":86,"box":{"x":117,"y":304,"width":768,"height":12}},{"id":"0644994b-651a-4bab-b4fd-34b0aadea93d","block_type":"box","text":"obtained exclusively for settlements of other securities transactions.","page_number":86,"box":{"x":116,"y":320,"width":508,"height":12}},{"id":"ab0f3a3b-2905-4b53-a121-d9c2fa89c17f","block_type":"box","text":"Certain Funds may also borrow in order to make investments, to the extent disclosed in such Fund’s","page_number":86,"box":{"x":117,"y":351,"width":748,"height":12}},{"id":"c291bd4c-c4ff-403a-8198-93327bce4857","block_type":"box","text":"Prospectus. The purchase of securities while borrowings are outstanding will have the effect of","page_number":86,"box":{"x":117,"y":366,"width":707,"height":12}},{"id":"e43988b9-71f1-4c73-999a-59d055331edf","block_type":"box","text":"leveraging the Fund. Such leveraging increases the Fund’s exposure to capital risk, and borrowed","page_number":86,"box":{"x":117,"y":382,"width":731,"height":12}},{"id":"06abd14d-7e9f-4f6d-be06-d59a0a4366ff","block_type":"box","text":"funds are subject to interest costs that will reduce net income. The use of leverage by a Fund creates","page_number":86,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"fcb800d5-018f-4905-8885-d56eeb16d729","block_type":"box","text":"an opportunity for greater total return, but, at the same time, creates special risks. For example,","page_number":86,"box":{"x":116,"y":413,"width":714,"height":12}},{"id":"34384076-278a-4f70-a67b-70225cd25e98","block_type":"box","text":"leveraging may exaggerate changes in the net asset value (“NAV”) of Fund shares and in the yield on","page_number":86,"box":{"x":117,"y":428,"width":758,"height":12}},{"id":"840e9afc-f8c6-4e01-ab33-ab43b4cb2a64","block_type":"box","text":"the Fund’s portfolio. Although the principal of such borrowings will be fixed, the Fund’s assets may","page_number":86,"box":{"x":116,"y":444,"width":734,"height":12}},{"id":"3c23c36a-dd6e-42e1-bc6d-5e2a5c668ce1","block_type":"box","text":"change in value during the time the borrowings are outstanding. Borrowings will create interest","page_number":86,"box":{"x":116,"y":459,"width":707,"height":12}},{"id":"65f9743e-ba8e-4cdd-bc63-04da3a2a1c8f","block_type":"box","text":"expenses for the Fund that can exceed the income from the assets purchased with the borrowings. To","page_number":86,"box":{"x":116,"y":475,"width":764,"height":12}},{"id":"b0852529-1cf9-4694-ac55-f55482c3c492","block_type":"box","text":"the extent the income or capital appreciation derived from securities purchased with borrowed funds","page_number":86,"box":{"x":116,"y":490,"width":747,"height":12}},{"id":"9f85760b-fd76-4fd4-ad60-9ba41ece4dee","block_type":"box","text":"exceeds the interest the Fund will have to pay on the borrowings, the Fund’s return will be greater than","page_number":86,"box":{"x":116,"y":506,"width":768,"height":12}},{"id":"334b9f65-43d9-470e-a4c9-c1ffa3444031","block_type":"box","text":"if leverage had not been used. Conversely, if the income or capital appreciation from the securities","page_number":86,"box":{"x":117,"y":521,"width":735,"height":12}},{"id":"d7748727-1f1e-4eec-a8da-66cf67e8e216","block_type":"box","text":"purchased with such borrowed funds is not sufficient to cover the cost of borrowing, the return to the","page_number":86,"box":{"x":117,"y":537,"width":748,"height":12}},{"id":"4820c772-cdf8-4764-8ede-c66924e88d51","block_type":"box","text":"Fund will be less than if leverage had not been used and, therefore, the amount available for","page_number":86,"box":{"x":117,"y":552,"width":690,"height":12}},{"id":"789b4ad6-ab9e-4d67-8e19-cfd3adb5d077","block_type":"box","text":"distribution to shareholders as dividends will be reduced. In the latter case, the Manager in its best","page_number":86,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"944bbc8d-43ba-480d-8fad-28aa55e9153c","block_type":"box","text":"judgment nevertheless may determine to maintain the Fund’s leveraged position if it expects that the","page_number":86,"box":{"x":115,"y":583,"width":752,"height":12}},{"id":"e3243d8b-9375-44c2-b0ee-53ac8e8742ed","block_type":"box","text":"benefits to the Fund’s shareholders of maintaining the leveraged position will outweigh the current","page_number":86,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"f5de1769-9fed-4aba-ab1a-eb580f4aa353","block_type":"box","text":"reduced return.","page_number":86,"box":{"x":117,"y":614,"width":117,"height":10}},{"id":"f24aa5f2-200f-484b-8593-63f20a528b70","block_type":"box","text":"Certain types of borrowings by a Fund may result in the Fund being subject to covenants in credit","page_number":86,"box":{"x":117,"y":645,"width":727,"height":12}},{"id":"273aa3fb-f2bb-42c6-a001-8daaad20f011","block_type":"box","text":"agreements relating to asset coverage, portfolio composition requirements and other matters. It is not","page_number":86,"box":{"x":116,"y":661,"width":753,"height":12}},{"id":"8d2253f3-057c-4ccc-9423-279a3512711d","block_type":"box","text":"anticipated that observance of such covenants would impede the Manager from managing a Fund’s","page_number":86,"box":{"x":116,"y":676,"width":739,"height":12}},{"id":"701cd9e0-b20b-431a-afc6-bdd900b21664","block_type":"box","text":"portfolio in accordance with the Fund’s investment objectives and policies. However, a breach of any","page_number":86,"box":{"x":117,"y":692,"width":746,"height":12}},{"id":"08ac9cc3-3deb-4abc-9b8e-f2d6417c6fc1","block_type":"box","text":"such covenants not cured within the specified cure period may result in acceleration of outstanding","page_number":86,"box":{"x":116,"y":707,"width":732,"height":12}},{"id":"89fe0473-34aa-48da-96a3-12adb8c2fa20","block_type":"box","text":"indebtedness and require the Fund to dispose of portfolio investments at a time when it may be","page_number":86,"box":{"x":117,"y":723,"width":706,"height":12}},{"id":"326f0f94-e94b-4ed0-be55-f4a25da42282","block_type":"box","text":"disadvantageous to do so.","page_number":86,"box":{"x":116,"y":738,"width":195,"height":12}},{"id":"a5c14bbc-2fae-4206-8640-153eb1481a3e","block_type":"box","text":"Each Fund may at times borrow from affiliates of the Manager, provided that the terms of such","page_number":86,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"9209d382-44c4-4a34-b704-12782c092c3b","block_type":"box","text":"borrowings are no less favorable than those available from comparable sources of funds in the","page_number":86,"box":{"x":117,"y":785,"width":701,"height":12}},{"id":"c7da9522-84bb-4a59-9343-5be0be8cb120","block_type":"box","text":"marketplace.","page_number":86,"box":{"x":117,"y":800,"width":94,"height":12}},{"id":"7825b28e-927c-407f-9641-e0d610961fae","block_type":"box","text":"Cash Management.","page_number":86,"box":{"x":117,"y":831,"width":151,"height":12}},{"id":"d2447e7d-eb88-4e04-b11a-e97423ab963e","block_type":"box","text":"Generally, the Manager will employ futures and options on futures to provide","page_number":86,"box":{"x":269,"y":831,"width":578,"height":12}},{"id":"bc01230e-46fb-4e54-8558-fc015510935e","block_type":"box","text":"liquidity necessary to meet anticipated redemptions or for day-to-day operating purposes. However, if","page_number":86,"box":{"x":117,"y":847,"width":756,"height":12}},{"id":"a778ad1b-cf24-4f8d-99c6-86c24a7c7963","block_type":"box","text":"considered appropriate in the opinion of the Manager, a portion of a Fund’s assets may be invested in","page_number":86,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"f9eaed90-5b71-4635-93da-ba2b44033c73","block_type":"box","text":"certain types of instruments with remaining maturities of 397 days or less for liquidity purposes. Such","page_number":86,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"c325b5bc-ea6d-491c-a874-8b6cd57ad53f","block_type":"box","text":"II-3","page_number":86,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"2726d119-7cda-4440-85db-33659d522f87","block_type":"box","text":"NM1026U-6039989-86/256","page_number":86,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"a698dfe9-b009-4fb8-a9f7-8a90671c3aa8","block_type":"box","text":"instruments would consist of: (i) obligations of the U.S. Government, its agencies, instrumentalities,","page_number":87,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"113e14fc-1c13-4955-a2e7-4b9f3bfebd7b","block_type":"box","text":"authorities or political subdivisions (“U.S. Government Securities”); (ii) other fixed-income securities","page_number":87,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"85bbcd26-6b62-4295-8080-d6f7661af2cd","block_type":"box","text":"rated Aa or higher by Moody’s or AA or higher by S&P or, if unrated, of comparable quality in the","page_number":87,"box":{"x":117,"y":118,"width":721,"height":12}},{"id":"62cead12-9f3f-4bd3-a7c2-2eb2be43803f","block_type":"box","text":"opinion of the Manager; (iii) commercial paper; (iv) bank obligations, including negotiable certificates of","page_number":87,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"494805af-f299-4541-87f4-0c1545a564a6","block_type":"box","text":"deposit, time deposits and bankers’ acceptances; and (v) repurchase agreements. At the time the","page_number":87,"box":{"x":116,"y":149,"width":730,"height":12}},{"id":"9962e6ac-75a9-4628-829a-66c66c2cffac","block_type":"box","text":"Fund invests in commercial paper, bank obligations or repurchase agreements, the issuer or the","page_number":87,"box":{"x":117,"y":165,"width":718,"height":12}},{"id":"30e81c29-34d4-45f7-886c-b47c9f6fd371","block_type":"box","text":"issuer’s parent must have outstanding debt rated Aa or higher by Moody’s or AA or higher by S&P or","page_number":87,"box":{"x":117,"y":180,"width":752,"height":12}},{"id":"cb214cb8-990c-4f3f-880d-65bbed846d50","block_type":"box","text":"outstanding commercial paper, bank obligations or other short-term obligations rated Prime-1 by","page_number":87,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"2cce94c5-b110-4a06-bd7d-1d699c17f39b","block_type":"box","text":"Moody’s or A-1 by S&P; or, if no such ratings are available, the instrument must be of comparable","page_number":87,"box":{"x":117,"y":211,"width":731,"height":12}},{"id":"81a31b00-2a7d-47c9-80c8-a15c99dafbda","block_type":"box","text":"quality in the opinion of the Manager. For more information on money market instruments, see “Money","page_number":87,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"e2a8beb7-bcc2-41cf-a5fb-162d678e99f6","block_type":"box","text":"Market Securities” below.","page_number":87,"box":{"x":117,"y":242,"width":192,"height":10}},{"id":"81ffe62c-52a9-400e-994b-3a73d9832983","block_type":"box","text":"Collateralized Debt Obligations.","page_number":87,"box":{"x":117,"y":273,"width":251,"height":12}},{"id":"49c9996c-3f71-478c-aaf8-eeda65ab8db4","block_type":"box","text":"Certain Funds may invest in collateralized debt obligations","page_number":87,"box":{"x":369,"y":273,"width":444,"height":12}},{"id":"bafc6b92-3760-4d6d-b20a-a2d6b6eef6fe","block_type":"box","text":"(“CDOs”), which include collateralized bond obligations (“CBOs”), collateralized loan obligations","page_number":87,"box":{"x":117,"y":289,"width":713,"height":12}},{"id":"8a342863-7f35-46cb-8db5-8130f81f9dff","block_type":"box","text":"(“CLOs”) and other similarly structured securities. CDOs are types of asset-backed securities. A CBO","page_number":87,"box":{"x":117,"y":304,"width":756,"height":12}},{"id":"19fd9fd1-1c77-499a-b39b-3dcbe15229d1","block_type":"box","text":"is ordinarily issued by a trust or other special purpose entity (“SPE”) and is typically backed by a","page_number":87,"box":{"x":117,"y":320,"width":716,"height":12}},{"id":"2856119f-6c67-478a-8d24-e60f1f769fd3","block_type":"box","text":"diversified pool of fixed-income securities (which may include high risk, below investment grade","page_number":87,"box":{"x":116,"y":335,"width":713,"height":12}},{"id":"a5b9291b-703d-4095-94f9-558f64fe0be5","block_type":"box","text":"securities) held by such issuer. A CLO is ordinarily issued by a trust or other SPE and is typically","page_number":87,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"0ae5a48a-2eea-4792-a191-ce0a1febfcd5","block_type":"box","text":"collateralized by a pool of loans, which may include, among others, domestic and non-U.S. senior","page_number":87,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"1d1f8f21-4bf3-4c7e-b717-ab7b55c667f4","block_type":"box","text":"secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be","page_number":87,"box":{"x":116,"y":382,"width":756,"height":12}},{"id":"9ee55122-ba29-4cdb-8f84-8f8abb345b9f","block_type":"box","text":"rated below investment grade or equivalent unrated loans, held by such issuer. Investments in a CLO","page_number":87,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"34bb2f99-57a0-4ac1-877a-6f6cfdcd8f2c","block_type":"box","text":"organized outside of the United States may not be deemed to be foreign securities if the CLO is","page_number":87,"box":{"x":116,"y":413,"width":715,"height":12}},{"id":"e58bcd01-3f20-4c98-b2a5-3e83ba15739e","block_type":"box","text":"collateralized by a pool of loans, a substantial portion of which are U.S. loans. Although certain CDOs","page_number":87,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"bee3de74-e51a-4887-979c-7b836a6cdb2a","block_type":"box","text":"may benefit from credit enhancement in the form of a senior-subordinate structure, over","page_number":87,"box":{"x":117,"y":444,"width":655,"height":12}},{"id":"b5080a7d-6d64-4f19-965b-32922611cab8","block_type":"box","text":"collateralization or bond insurance, such enhancement may not always be present, and may fail to","page_number":87,"box":{"x":116,"y":459,"width":735,"height":12}},{"id":"d4cba78f-49ad-4c8a-b2a9-d0bd395f106b","block_type":"box","text":"protect a Fund against the risk of loss on default of the collateral. Certain CDO issuers may use","page_number":87,"box":{"x":117,"y":475,"width":713,"height":12}},{"id":"b5d25b5f-9c82-406b-8982-94199bfe84b9","block_type":"box","text":"derivatives contracts to create “synthetic” exposure to assets rather than holding such assets directly,","page_number":87,"box":{"x":116,"y":490,"width":758,"height":12}},{"id":"791f7e8f-fe94-4bea-a8f9-e0432c9ed8ec","block_type":"box","text":"which entails the risks of derivative instruments described elsewhere in this SAI. CDOs may charge","page_number":87,"box":{"x":116,"y":506,"width":742,"height":12}},{"id":"ed0df5b7-6b2b-404d-993d-1755841e0b4a","block_type":"box","text":"management fees and administrative expenses, which are in addition to those of a Fund.","page_number":87,"box":{"x":117,"y":521,"width":664,"height":12}},{"id":"d3e2429c-90a1-4033-968e-c8204f477156","block_type":"box","text":"For both CBOs and CLOs, the cash flows from the SPE are split into two or more portions, called","page_number":87,"box":{"x":117,"y":552,"width":724,"height":12}},{"id":"4f682831-99af-4aab-a452-6a85060bf5a8","block_type":"box","text":"tranches, varying in risk and yield. The riskiest portion is the “equity” tranche, which bears the first loss","page_number":87,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"900260a3-c09e-4381-867e-ed6261f63a97","block_type":"box","text":"from defaults from the bonds or loans in the SPE and serves to protect the other, more senior tranches","page_number":87,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"b7a68c5f-712e-4e19-b0a7-64981e003022","block_type":"box","text":"from default (though such protection is not complete). Since it is partially protected from defaults, a","page_number":87,"box":{"x":116,"y":599,"width":737,"height":12}},{"id":"07b7f7e1-674f-4403-a1b6-f8568a915bdd","block_type":"box","text":"senior tranche from a CBO or CLO typically has higher ratings and lower yields than its underlying","page_number":87,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"4baee058-ca7e-4208-a2b6-5883fe4d042e","block_type":"box","text":"securities, and may be rated investment grade. Despite the protection from the equity tranche, CBO or","page_number":87,"box":{"x":116,"y":630,"width":765,"height":12}},{"id":"ba1b33f9-ca83-4f81-8f40-e7ca15e7a224","block_type":"box","text":"CLO tranches can experience substantial losses due to actual defaults, downgrades of the underlying","page_number":87,"box":{"x":117,"y":645,"width":758,"height":12}},{"id":"330073a0-7f81-41de-8462-85086614fded","block_type":"box","text":"collateral by rating agencies, forced liquidation of the collateral pool due to a failure of coverage tests,","page_number":87,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"fa9872e3-87a7-4921-b29b-dfb7a68004de","block_type":"box","text":"increased sensitivity to defaults due to collateral default and disappearance of protecting tranches,","page_number":87,"box":{"x":117,"y":676,"width":728,"height":12}},{"id":"0e1e4f03-df30-40e0-8d60-efe449809a26","block_type":"box","text":"market anticipation of defaults as well as investor aversion to CBO or CLO securities as a class.","page_number":87,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"efb95c2f-dc6a-4209-8e3e-e4f8ea09a6a1","block_type":"box","text":"Interest on certain tranches of a CDO may be paid in kind or deferred and capitalized (paid in the form","page_number":87,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"46387148-75fe-4976-8bcb-86057d3821cd","block_type":"box","text":"of obligations of the same type rather than cash), which involves continued exposure to default risk","page_number":87,"box":{"x":116,"y":723,"width":734,"height":12}},{"id":"c70e0f81-c9fb-46bf-83ba-2ac4d2ce2bd8","block_type":"box","text":"with respect to such payments.","page_number":87,"box":{"x":116,"y":738,"width":229,"height":12}},{"id":"aa8c88a4-e62d-43e4-90f5-f20fc62bdfc8","block_type":"box","text":"The risks of an investment in a CDO depend largely on the type of the collateral securities and the","page_number":87,"box":{"x":116,"y":769,"width":728,"height":12}},{"id":"55bd8886-e994-4f21-858e-2509d10ca9fe","block_type":"box","text":"class of the CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately","page_number":87,"box":{"x":116,"y":785,"width":712,"height":12}},{"id":"ee5096d6-5b75-4418-b0f8-234585689b2b","block_type":"box","text":"offered and sold, and thus are not registered under the securities laws. However, an active dealer","page_number":87,"box":{"x":116,"y":800,"width":725,"height":12}},{"id":"168d2e23-8658-43df-ab65-2783adb67492","block_type":"box","text":"market may exist for CDOs, allowing a CDO to qualify for Rule 144A transactions. In addition to the","page_number":87,"box":{"x":117,"y":816,"width":736,"height":12}},{"id":"5a9d75e1-fb42-45f5-8f6e-4da69e2e0f60","block_type":"box","text":"normal risks associated with fixed-income securities and asset-backed securities generally discussed","page_number":87,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"668f8722-16eb-4e04-9a2a-878a3da3a8c3","block_type":"box","text":"elsewhere in this SAI, CDOs carry additional risks including, but not limited to: (i) the possibility that","page_number":87,"box":{"x":116,"y":847,"width":742,"height":12}},{"id":"c18065f9-258d-4d12-b7e5-e359c0edd7e9","block_type":"box","text":"distributions from collateral securities will not be adequate to make interest or other payments; (ii) the","page_number":87,"box":{"x":116,"y":862,"width":756,"height":12}},{"id":"8213a704-9dd9-45fb-9cac-a18ea3c61122","block_type":"box","text":"risk that the collateral may default or decline in value or be downgraded, if rated by a nationally","page_number":87,"box":{"x":117,"y":878,"width":708,"height":12}},{"id":"56aab24d-e639-47e9-ad75-e83015a0a2b6","block_type":"box","text":"II-4","page_number":87,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"f45fbe99-9d44-433f-baee-f7c1ba11e1d1","block_type":"box","text":"NM1026U-6039989-87/256","page_number":87,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"9353dc34-909f-4916-9f45-3bc3300f8dfe","block_type":"box","text":"recognized statistical rating organization (“NRSRO”); (iii) a Fund may invest in tranches of CDOs that","page_number":88,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"f7454877-0585-4f42-8add-5b05949a2ae0","block_type":"box","text":"are subordinate to other tranches; (iv) the structure and complexity of the transaction and the legal","page_number":88,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"66aa7b2d-6df2-4b3d-ae0e-938885a4abf1","block_type":"box","text":"documents could lead to disputes among investors regarding the characterization of proceeds; (v) the","page_number":88,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"37044afb-1e8c-4013-b543-75380059ba0a","block_type":"box","text":"investment return achieved by the Fund could be significantly different than those predicted by financial","page_number":88,"box":{"x":117,"y":134,"width":771,"height":12}},{"id":"72f9a70c-7730-4a71-9f4e-c8a51cb35909","block_type":"box","text":"models; (vi) the lack of a readily available secondary market for CDOs; (vii) the risk of forced “fire sale”","page_number":88,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"3b5abf7f-8400-4a5f-86b0-d2fb278758fa","block_type":"box","text":"liquidation due to technical defaults such as coverage test failures; and (viii) the CDO’s manager may","page_number":88,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"aa967e63-ba87-408a-bc17-2c6ef5f2aa2f","block_type":"box","text":"perform poorly.","page_number":88,"box":{"x":117,"y":180,"width":117,"height":12}},{"id":"22a6ad52-2ca8-4dc3-9564-3c208d9b0f57","block_type":"box","text":"Commercial Paper.","page_number":88,"box":{"x":117,"y":211,"width":150,"height":12}},{"id":"d96368f0-f401-4769-8e40-2af3b61af52e","block_type":"box","text":"Certain Funds may purchase commercial paper. Commercial paper purchasable","page_number":88,"box":{"x":268,"y":211,"width":607,"height":12}},{"id":"ce3b5b13-94ee-4b99-b241-ea0ace4a792e","block_type":"box","text":"by each Fund includes “Section 4(a)(2) paper,” a term that includes debt obligations issued in reliance","page_number":88,"box":{"x":117,"y":227,"width":760,"height":12}},{"id":"ea2e9bfc-30ee-46f7-a2b7-80521d479958","block_type":"box","text":"on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities","page_number":88,"box":{"x":116,"y":242,"width":739,"height":12}},{"id":"c119332a-1b71-4a84-b335-5376ac38b86c","block_type":"box","text":"Act. Section 4(a)(2) paper is restricted as to disposition under the Federal securities laws, and is","page_number":88,"box":{"x":116,"y":258,"width":719,"height":12}},{"id":"53f47a4a-326c-40cd-bc47-030232f907d1","block_type":"box","text":"frequently sold (and resold) to institutional investors such as the Fund through or with the assistance of","page_number":88,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"36b1fde0-bcb4-45c3-8251-5fcecd2e7335","block_type":"box","text":"investment dealers who make a market in the Section 4(a)(2) paper, thereby providing liquidity. Certain","page_number":88,"box":{"x":117,"y":289,"width":769,"height":12}},{"id":"cab0da59-bd61-44d6-8a00-d21c6bdb30b8","block_type":"box","text":"transactions in Section 4(a)(2) paper may qualify for the registration exemption provided in Rule 144A","page_number":88,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"6d774828-d3d7-442e-a343-0bb5e6366b03","block_type":"box","text":"under the Securities Act. Most Funds can purchase commercial paper rated (at the time of purchase)","page_number":88,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"b962ad9b-b0c9-4206-a901-0f3db6c51158","block_type":"box","text":"“A-1” by S&P or “Prime-1” by Moody’s or when deemed advisable by a Fund’s Manager or sub-adviser,","page_number":88,"box":{"x":116,"y":335,"width":772,"height":12}},{"id":"74dc97f0-e443-47a7-8e70-b96fb17a9fbf","block_type":"box","text":"“high quality” issues rated “A-2”, “Prime-2” or “F-2” by S&P, Moody’s or Fitch, respectively.","page_number":88,"box":{"x":116,"y":351,"width":675,"height":12}},{"id":"8052d9d2-ac74-491d-9346-9aaa682c5200","block_type":"box","text":"Commercial paper is generally considered to be short-term unsecured debt of corporations. Like all","page_number":88,"box":{"x":117,"y":382,"width":740,"height":12}},{"id":"fba80b0c-ea6b-40ad-9e5d-7205dae4e878","block_type":"box","text":"fixed income securities, commercial paper prices are susceptible to fluctuations in interest rates. If","page_number":88,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"7f4ccac3-94fa-45e6-90e6-449440f9b6a9","block_type":"box","text":"interest rates rise, commercial paper prices will decline and vice versa. However, the short-term nature","page_number":88,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"440dfde3-676a-43e6-97f6-3c653100fc33","block_type":"box","text":"of a commercial paper investment generally makes it less susceptible to volatility than many other fixed","page_number":88,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"8346cd3e-9ccf-428a-a243-2e760d83aad2","block_type":"box","text":"income securities because interest rate risk typically increases as maturity lengths increase.","page_number":88,"box":{"x":117,"y":444,"width":686,"height":12}},{"id":"6bded6cd-3d6c-49d1-8e4a-6e5caf7c1baa","block_type":"box","text":"Commercial paper tends to yield smaller returns than longer-term corporate debt because securities","page_number":88,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"ffa84415-d4db-4f55-b172-93613d9a6018","block_type":"box","text":"with shorter maturities typically have lower effective yields than those with longer maturities.","page_number":88,"box":{"x":116,"y":475,"width":686,"height":12}},{"id":"b451acfa-be2a-4dc1-96b9-ae09a9c7a7d3","block_type":"box","text":"Commodity-Linked Derivative Instruments and Hybrid Instruments.","page_number":88,"box":{"x":117,"y":506,"width":535,"height":12}},{"id":"e9ce7936-0ff4-4811-ac93-b7cb8b22e6b1","block_type":"box","text":"Certain Funds seek to gain","page_number":88,"box":{"x":653,"y":506,"width":210,"height":12}},{"id":"ec1f68e9-ded4-4d8d-852f-c5589fd7ebc6","block_type":"box","text":"exposure to the commodities markets primarily through investments in hybrid instruments. Hybrid","page_number":88,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"5e61f747-4181-456e-aa06-da409bc5e46d","block_type":"box","text":"instruments are either equity or debt derivative securities with one or more commodity-dependent","page_number":88,"box":{"x":117,"y":537,"width":727,"height":12}},{"id":"3283b142-bdf3-46c9-a2ad-7ec14c50bf6b","block_type":"box","text":"components that have payment features similar to a commodity futures contract, a commodity option","page_number":88,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"3c629639-4837-4427-a5e8-858089cdefa3","block_type":"box","text":"contract, or a combination of both. Therefore, these instruments are “commodity-linked.” They are","page_number":88,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"f2963bfd-2ff5-4d97-8ef2-dbc0187fb159","block_type":"box","text":"considered “hybrid” instruments because they have both commodity-like and security-like","page_number":88,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"37e9fbbf-497c-47a7-8845-5e40b057fb0f","block_type":"box","text":"characteristics. Hybrid instruments are derivative instruments because at least part of their value is","page_number":88,"box":{"x":116,"y":599,"width":738,"height":12}},{"id":"6e6568b3-0bde-4fcf-b75f-62d4076fb187","block_type":"box","text":"derived from the value of an underlying commodity, futures contract, index or other readily measurable","page_number":88,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"f63d6d3e-1a63-4565-bc79-d819b12a531b","block_type":"box","text":"economic variable.","page_number":88,"box":{"x":116,"y":630,"width":145,"height":9}},{"id":"80587d92-e2fc-48de-ade6-4ad56da4f9b8","block_type":"box","text":"The prices of commodity-linked derivative instruments may move in different directions than","page_number":88,"box":{"x":116,"y":661,"width":680,"height":12}},{"id":"dee916d5-9a3e-4ecb-b41e-aa871e7f1d39","block_type":"box","text":"investments in traditional equity and debt securities when the value of those traditional securities is","page_number":88,"box":{"x":117,"y":676,"width":731,"height":12}},{"id":"eee4168a-65a6-474f-8b51-05ca2c9bcda3","block_type":"box","text":"declining due to adverse economic conditions. As an example, during periods of rising inflation, debt","page_number":88,"box":{"x":116,"y":692,"width":744,"height":12}},{"id":"af15ec02-bae0-4e51-a97c-8b30d3d05f8e","block_type":"box","text":"securities have historically tended to decline in value due to the general increase in prevailing interest","page_number":88,"box":{"x":116,"y":707,"width":753,"height":12}},{"id":"f3111a5e-9ad3-4b12-8dbd-65546448608c","block_type":"box","text":"rates. Conversely, during those same periods of rising inflation, the prices of certain commodities, such","page_number":88,"box":{"x":117,"y":723,"width":763,"height":12}},{"id":"9c730a66-2918-4e40-8dad-296bfb1810cd","block_type":"box","text":"as oil and metals, have historically tended to increase. Of course, there cannot be any guarantee that","page_number":88,"box":{"x":116,"y":738,"width":752,"height":12}},{"id":"150434c5-af46-4b2b-bcd8-c6d4bece0fb6","block_type":"box","text":"these investments will perform in that manner in the future, and at certain times the price movements","page_number":88,"box":{"x":116,"y":754,"width":749,"height":12}},{"id":"b33731ff-fed9-4839-926b-b178e3d6bce0","block_type":"box","text":"of commodity-linked instruments have been parallel to those of debt and equity securities.","page_number":88,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"363f30f0-8bfd-4a7b-8f4d-4e506dc13bb3","block_type":"box","text":"Commodities have historically tended to increase and decrease in value during different parts of the","page_number":88,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"2cb43795-ed45-478d-8e08-e6c651b31c27","block_type":"box","text":"business cycle than financial assets. Nevertheless, at various times, commodities prices may move in","page_number":88,"box":{"x":117,"y":800,"width":753,"height":12}},{"id":"36936f8b-33f2-45c9-a1d1-6e70c213ea2e","block_type":"box","text":"tandem with the prices of financial assets and thus may not provide overall portfolio diversification","page_number":88,"box":{"x":116,"y":816,"width":725,"height":12}},{"id":"3ff661d0-1181-42cf-9855-eb12e798fc42","block_type":"box","text":"benefits. Under favorable economic conditions, the Fund’s investments may be expected to under","page_number":88,"box":{"x":117,"y":831,"width":731,"height":12}},{"id":"47edb4f5-ce04-4dbe-a899-a2efa053d923","block_type":"box","text":"perform an investment in traditional securities. Over the long term, the returns on the Fund’s","page_number":88,"box":{"x":117,"y":847,"width":688,"height":12}},{"id":"06f86076-8c7d-412d-8501-a2f57c8c1a82","block_type":"box","text":"investments are expected to exhibit low or negative correlation with stocks and bonds.","page_number":88,"box":{"x":117,"y":862,"width":643,"height":12}},{"id":"7c4c6def-71db-4ff0-b750-097ca3d1d05d","block_type":"box","text":"II-5","page_number":88,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"f6d4a43e-a9f1-4075-9d2b-3c8a2ecc11b5","block_type":"box","text":"NM1026U-6039989-88/256","page_number":88,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"eaf0cdfc-8941-4a6d-8a5e-b6d102f25e3f","block_type":"box","text":"Qualifying Hybrid Instruments.","page_number":89,"box":{"x":117,"y":87,"width":218,"height":12}},{"id":"a674f66e-dfcb-4eea-8606-1aba94dbd457","block_type":"box","text":"Certain Funds may invest in hybrid instruments that qualify for exclusion","page_number":89,"box":{"x":336,"y":87,"width":533,"height":12}},{"id":"42562ada-6a22-418b-a8ff-85f186a11735","block_type":"box","text":"from regulation under the Commodity Exchange Act","page_number":89,"box":{"x":116,"y":102,"width":383,"height":13}},{"id":"efbd9bf6-fbce-4761-abb1-dc83c0eb2ceb","block_type":"box","text":"and the regulations adopted thereunder. A hybrid","page_number":89,"box":{"x":499,"y":103,"width":362,"height":12}},{"id":"10804e33-f691-4652-8b21-d885a64f0f57","block_type":"box","text":"instrument that qualifies for this exclusion from r","page_number":89,"box":{"x":117,"y":118,"width":347,"height":12}},{"id":"f49a9181-99aa-41d1-9754-4335dfb55887","block_type":"box","text":"egulation must be “predominantly a security.” A hybrid","page_number":89,"box":{"x":464,"y":118,"width":398,"height":12}},{"id":"4e68ccc5-00fb-4f97-aac6-9a117d470147","block_type":"box","text":"instrument is considered to be predominantly a security if","page_number":89,"box":{"x":117,"y":134,"width":415,"height":12}},{"id":"31fd392e-a1b1-4c35-9e53-6e27b99c378e","block_type":"box","text":"f (a) the issuer of the hybrid instrument receives","page_number":89,"box":{"x":531,"y":134,"width":347,"height":12}},{"id":"3e360ae9-f749-47e7-a965-26b3fdfe11a5","block_type":"box","text":"payment in full of the purchase price of the hybr","page_number":89,"box":{"x":117,"y":149,"width":346,"height":12}},{"id":"8835fa49-96b4-4f01-be9b-f247cfdcecce","block_type":"box","text":"id instrument, substantially contemporaneously with","page_number":89,"box":{"x":463,"y":149,"width":380,"height":12}},{"id":"2aca5ed0-8817-45c4-929c-4fc2d4ae7a01","block_type":"box","text":"delivery of the hybrid instrument; (b) the purchaser or","page_number":89,"box":{"x":116,"y":165,"width":387,"height":12}},{"id":"312af717-74cb-4d9f-8f68-6253898ebcf9","block_type":"box","text":"r holder of the hybrid instrument is not required to","page_number":89,"box":{"x":502,"y":165,"width":359,"height":12}},{"id":"0db4076f-9077-4adb-8306-389f1412bb66","block_type":"box","text":"make any payment to the issuer in addition to t","page_number":89,"box":{"x":117,"y":180,"width":335,"height":12}},{"id":"8adf6d81-defa-4241-b920-0fe9a1781c08","block_type":"box","text":"the purchase price paid under subparagraph (a), whether","page_number":89,"box":{"x":452,"y":180,"width":421,"height":12}},{"id":"295c59cd-a229-4a6e-b033-40d95c1ba61b","block_type":"box","text":"as margin, settlement payment, or otherwise, during the life","page_number":89,"box":{"x":116,"y":196,"width":423,"height":12}},{"id":"23b2a444-184f-46ec-933a-ea2556f36192","block_type":"box","text":"fe of the hybrid instrument or at maturity; (c) the","page_number":89,"box":{"x":539,"y":196,"width":346,"height":12}},{"id":"e9af687f-aaec-41d4-8fc0-d2d8c0e42b33","block_type":"box","text":"issuer of the hybrid instrument is not subject by t","page_number":89,"box":{"x":117,"y":211,"width":351,"height":12}},{"id":"3468c49c-90b6-43c4-a9f6-3ec400040456","block_type":"box","text":"he terms of the instrument to mark-to-market margining","page_number":89,"box":{"x":469,"y":211,"width":406,"height":12}},{"id":"94573725-f3f1-402f-a415-6fd6db179eba","block_type":"box","text":"requirements; and (d) the hybrid instrument is not ma","page_number":89,"box":{"x":117,"y":227,"width":385,"height":12}},{"id":"925a4e5b-db98-43c2-a406-f46e6fb27a27","block_type":"box","text":"rketed as a contract of sale of a commodity for","page_number":89,"box":{"x":504,"y":227,"width":341,"height":12}},{"id":"32c822ff-408c-45fc-b53a-6f21bd89b2f3","block_type":"box","text":"future delivery (or option on such a contract) subjec","page_number":89,"box":{"x":116,"y":242,"width":374,"height":12}},{"id":"33eadad1-1753-49be-9942-93a76e913c16","block_type":"box","text":"t to applicable provisions of the Commodity Exchange","page_number":89,"box":{"x":490,"y":242,"width":396,"height":12}},{"id":"b875a1c8-b7e6-4020-8a2c-7a9486f2de77","block_type":"box","text":"Act. Hybrid instruments may be principal protected, parti","page_number":89,"box":{"x":116,"y":258,"width":408,"height":12}},{"id":"b9df2135-466e-4d23-8ce5-f3a554b78a00","block_type":"box","text":"ally protected, or offer no principal protection. A","page_number":89,"box":{"x":525,"y":258,"width":349,"height":12}},{"id":"8793b766-f125-472d-bd62-09c67e4ae475","block_type":"box","text":"principal protected hybrid instrument means that t","page_number":89,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"96ae8b82-ca56-4c4c-8f32-2723df1aaef9","block_type":"box","text":"he issuer will pay, at a minimum, the par value of the","page_number":89,"box":{"x":477,"y":273,"width":387,"height":12}},{"id":"d3886aa2-3f68-463f-937e-34a82aed36d1","block_type":"box","text":"note at maturity. Therefore, if the commodity value to w","page_number":89,"box":{"x":117,"y":289,"width":389,"height":12}},{"id":"e0014b9d-3ea0-4b19-ac3c-ccfcea74bcc2","block_type":"box","text":"which the hybrid instrument is linked declines over","page_number":89,"box":{"x":505,"y":289,"width":371,"height":12}},{"id":"e438d18f-b5c0-41b0-9124-0615053a140b","block_type":"box","text":"the life of the note, the Fund will receive","page_number":89,"box":{"x":116,"y":304,"width":294,"height":11}},{"id":"b204d42f-6caf-4cdb-bbfd-96223f10bf75","block_type":"box","text":"at maturity the face or stated value of the note. With a principal","page_number":89,"box":{"x":410,"y":304,"width":461,"height":12}},{"id":"8cf8d191-c679-43e5-953f-5cbc888d1214","block_type":"box","text":"protected hybrid instrument, the Fund will receive at matu","page_number":89,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"465e7453-ff9f-4292-9cd6-72e39bef41f0","block_type":"box","text":"rity the greater of the","page_number":89,"box":{"x":535,"y":320,"width":155,"height":12}},{"id":"278d9de5-dd56-4656-8f20-dd390fb2a569","block_type":"box","text":"par value of the note or","page_number":89,"box":{"x":691,"y":320,"width":173,"height":12}},{"id":"f3115c3d-6f48-49ca-b22d-72b755d0c701","block_type":"box","text":"the increase in its value based on the underlying comm","page_number":89,"box":{"x":116,"y":335,"width":400,"height":12}},{"id":"e85aeaa7-1abe-4ae0-a63a-eba5f57e7f80","block_type":"box","text":"odity or index. This protection is, in effect, an","page_number":89,"box":{"x":518,"y":335,"width":329,"height":12}},{"id":"f0fc1120-4208-4298-ba27-539571cfa275","block_type":"box","text":"option whose value is subject to the volatility and","page_number":89,"box":{"x":116,"y":351,"width":359,"height":12}},{"id":"48fe37b5-6150-480f-a903-728967c03fe0","block_type":"box","text":"price level of the underlying commodity. The Manager’s","page_number":89,"box":{"x":476,"y":351,"width":407,"height":12}},{"id":"f07c5280-02ff-43a6-9870-3b2c32c1caf8","block_type":"box","text":"decision whether to use principal protection depends in","page_number":89,"box":{"x":116,"y":366,"width":405,"height":12}},{"id":"80184dc2-bd29-46ed-9c56-980051ba4c13","block_type":"box","text":"part on the cost of the protection. In addition, the","page_number":89,"box":{"x":522,"y":366,"width":356,"height":12}},{"id":"ca235fe1-dddf-4328-be45-d344ac719c06","block_type":"box","text":"protection feature depends upon the ability","page_number":89,"box":{"x":117,"y":382,"width":314,"height":12}},{"id":"b598d6f9-5c0b-4d02-998a-ef35faa7b062","block_type":"box","text":"of the issuer to meet its obligation to buy back the security,","page_number":89,"box":{"x":432,"y":382,"width":431,"height":12}},{"id":"5fdd639a-7b9f-4a3d-bac0-2dd985bd2ace","block_type":"box","text":"and, therefore, depends on the creditworthiness of the","page_number":89,"box":{"x":116,"y":397,"width":399,"height":12}},{"id":"368fd3e1-c29d-4206-9564-ab9b2fe60422","block_type":"box","text":"issuer. With full principal protection, the Fund will","page_number":89,"box":{"x":516,"y":397,"width":358,"height":12}},{"id":"aed01e85-73fb-49f8-9ece-e5754e48f90d","block_type":"box","text":"receive at maturity of the hybrid instrument either","page_number":89,"box":{"x":117,"y":413,"width":356,"height":12}},{"id":"c7a928c7-4b95-4b31-b162-d0266d276ccd","block_type":"box","text":"r the stated par value of the hybrid instrument, or","page_number":89,"box":{"x":472,"y":413,"width":354,"height":12}},{"id":"c2b1db10-5ad9-4366-a097-97e371d86257","block_type":"box","text":"potentially, an amount greater than","page_number":89,"box":{"x":117,"y":428,"width":258,"height":12}},{"id":"b7c5948d-b7db-4a03-88a4-e1f289f6f63d","block_type":"box","text":"the stated par value if the underlying commodity, index, futures","page_number":89,"box":{"x":375,"y":428,"width":461,"height":12}},{"id":"0b88cf12-f827-4076-95da-347c675da9bc","block_type":"box","text":"contract or economic variable to which the hybrid in","page_number":89,"box":{"x":116,"y":444,"width":373,"height":12}},{"id":"631d11de-afa4-4b2f-b6dd-c715628ff0f1","block_type":"box","text":"strument is linked has increased in value. Partially","page_number":89,"box":{"x":490,"y":444,"width":368,"height":12}},{"id":"ddc22fb4-175f-49e1-a545-383b6b54149d","block_type":"box","text":"protected hybrid instruments may suffer some loss of","page_number":89,"box":{"x":117,"y":459,"width":386,"height":12}},{"id":"27e1c40e-a2b8-4c56-a04c-7d4bf8114dae","block_type":"box","text":"f principal if the underlying commodity, index, futures","page_number":89,"box":{"x":502,"y":459,"width":383,"height":12}},{"id":"cbdbc8c5-4979-44d1-a9aa-9209959d9e99","block_type":"box","text":"contract or economic variable to which the hybrid ins","page_number":89,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"a08252d1-eddb-4fcb-bd94-f6ad20bf836a","block_type":"box","text":"trument is linked declines in value during the term of","page_number":89,"box":{"x":498,"y":475,"width":384,"height":12}},{"id":"b28b7918-f62e-4f41-8ebd-f4c7cf6b00d3","block_type":"box","text":"the hybrid instrument. However, partially protected hy","page_number":89,"box":{"x":116,"y":490,"width":388,"height":12}},{"id":"74ac1205-4a75-48a8-b37f-d4ef22ebc11f","block_type":"box","text":"brid instruments have a specified limit as to the","page_number":89,"box":{"x":505,"y":490,"width":346,"height":12}},{"id":"853e5b2c-a1c0-4972-9166-fa1d1d42d2fd","block_type":"box","text":"amount of principal that they may lose.","page_number":89,"box":{"x":116,"y":506,"width":286,"height":12}},{"id":"fdfc7972-0cb7-4fd7-ac30-b64f05b79e49","block_type":"box","text":"Hybrid Instruments Without Principal Protection.","page_number":89,"box":{"x":116,"y":537,"width":355,"height":12}},{"id":"cccbe0f5-9a02-43e8-839c-8263ccf00799","block_type":"box","text":"Certain Funds may invest in hybrid instruments that","page_number":89,"box":{"x":473,"y":537,"width":393,"height":12}},{"id":"4c32dc1a-4d82-4d54-bdc5-ffd555f6c9c0","block_type":"box","text":"offer no principal protection. At maturity, there is a risk that the underlying commodity price, futures","page_number":89,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"ca00e308-0b74-4bbd-a9ff-63394fba2efd","block_type":"box","text":"contract, index or other economic variable may have declined sufficiently in value such that some or all","page_number":89,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"dd7094de-e977-4de6-857d-3811417b3fd0","block_type":"box","text":"of the face value of the hybrid instrument might not be returned. The Manager, at its discretion, may","page_number":89,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"f602c238-ef71-4367-ad42-fce9def6c047","block_type":"box","text":"invest in a partially protected principal structured note or a note without principal protection. In deciding","page_number":89,"box":{"x":117,"y":599,"width":767,"height":12}},{"id":"ada180b4-927c-4025-86aa-7f5996bbfac7","block_type":"box","text":"to purchase a note without principal protection, the Manager may consider, among other things, the","page_number":89,"box":{"x":116,"y":614,"width":743,"height":12}},{"id":"3fca4edc-0e8c-43f4-ad6e-1555e9237cbf","block_type":"box","text":"expected performance of the underlying commodity futures contract, index or other economic variable","page_number":89,"box":{"x":116,"y":630,"width":761,"height":12}},{"id":"c5ecfcdc-bae5-4422-8d29-c5b6b09fcf43","block_type":"box","text":"over the term of the note, the cost of the note, and any other economic factors that the Manager","page_number":89,"box":{"x":116,"y":645,"width":717,"height":12}},{"id":"31b12552-da0e-4a83-8c36-a50b49fe3e79","block_type":"box","text":"believes are relevant.","page_number":89,"box":{"x":117,"y":661,"width":157,"height":9}},{"id":"5bea7438-1e04-4137-94e3-a68b862843cb","block_type":"box","text":"Limitations on Leverage.","page_number":89,"box":{"x":116,"y":692,"width":177,"height":12}},{"id":"f69353b4-4e30-4471-98b6-a5288b5ecab2","block_type":"box","text":"Some of the hybrid instruments in which a Fund may invest may involve","page_number":89,"box":{"x":300,"y":692,"width":522,"height":12}},{"id":"c4f80b5e-17c9-4a54-881f-cbf190e0852b","block_type":"box","text":"leverage. To avoid being subject to undue leverage risk,","page_number":89,"box":{"x":117,"y":707,"width":405,"height":12}},{"id":"56b9602e-7371-4ac3-a6dc-0cad457c1ad1","block_type":"box","text":"a Fund will seek to limit the amount of economic","page_number":89,"box":{"x":529,"y":707,"width":349,"height":10}},{"id":"67f792d9-6576-461d-b539-5367f9d47c40","block_type":"box","text":"leverage it has under any one hybrid instrument t","page_number":89,"box":{"x":117,"y":723,"width":356,"height":12}},{"id":"cc02c7d5-eecc-4773-9f47-9057a271831a","block_type":"box","text":"hat it buys and the leverage of the Fund’s overall","page_number":89,"box":{"x":474,"y":723,"width":352,"height":12}},{"id":"d30c1565-5c71-4255-aa36-c174ddb4d1ee","block_type":"box","text":"portfolio. A Fund will not invest in a hybrid instrument i","page_number":89,"box":{"x":117,"y":738,"width":390,"height":12}},{"id":"5493ebac-510b-4070-8569-028c7d8fb755","block_type":"box","text":"f, at the time of purchase: (i) that instrument’s","page_number":89,"box":{"x":508,"y":738,"width":330,"height":12}},{"id":"84c4cff1-eb2f-4a28-8059-9b2ba6c09452","block_type":"box","text":"“leverage ratio” exceeds 300% of the price increase","page_number":89,"box":{"x":116,"y":754,"width":375,"height":12}},{"id":"3e586ebf-4747-4f9b-94ac-09a5adcf10bc","block_type":"box","text":"in the underlying commodity, futures contract, index","page_number":89,"box":{"x":497,"y":754,"width":375,"height":12}},{"id":"4d261e68-bcd9-45e4-b586-34a969f57994","block_type":"box","text":"or other economic variable or (ii) the Fund’s “portfo","page_number":89,"box":{"x":116,"y":769,"width":369,"height":12}},{"id":"8181d094-1176-4326-8a4f-b31c36e69369","block_type":"box","text":"lio leverage ratio” exceeds 150%, measured at the","page_number":89,"box":{"x":486,"y":769,"width":366,"height":12}},{"id":"309cf0f2-d85f-4aca-8089-e188a1293932","block_type":"box","text":"time of purchase. “Leverage ratio” is the expected in","page_number":89,"box":{"x":116,"y":785,"width":378,"height":12}},{"id":"c070920a-2a7f-4605-95d7-f8e12abd8472","block_type":"box","text":"crease in the value of a hybrid instrument, assuming","page_number":89,"box":{"x":496,"y":785,"width":379,"height":12}},{"id":"923f1c88-b738-4465-9f7d-0e3572ac4958","block_type":"box","text":"a one percent price increase in the underlying commodi","page_number":89,"box":{"x":116,"y":800,"width":403,"height":12}},{"id":"87311e50-5ec8-4cf1-8f32-89450485bb25","block_type":"box","text":"ty, futures contract, index or other economic","page_number":89,"box":{"x":520,"y":800,"width":320,"height":12}},{"id":"3a296286-6dc2-4ff0-bf47-6c3c26e79e0d","block_type":"box","text":"factor. In other words, for a hybrid instrument wit","page_number":89,"box":{"x":116,"y":816,"width":352,"height":12}},{"id":"b419f1bd-e7b1-4076-84a9-2c31aed60ee4","block_type":"box","text":"h a leverage factor of 150%, a 1% gain in the underlying","page_number":89,"box":{"x":469,"y":816,"width":407,"height":12}},{"id":"f3dd8ac6-51e2-41fc-b23f-efdb59f923d7","block_type":"box","text":"economic variable would be expected to result in a","page_number":89,"box":{"x":116,"y":831,"width":373,"height":12}},{"id":"768173de-1a1f-4660-902c-8e4d3ef8dc98","block_type":"box","text":"1.5% gain in value for the hybrid instrument.","page_number":89,"box":{"x":491,"y":831,"width":323,"height":12}},{"id":"5c1aed40-da7c-452d-b0f5-b1b700a70f5d","block_type":"box","text":"Conversely, a hybrid instrument with a leverage fact","page_number":89,"box":{"x":117,"y":847,"width":376,"height":12}},{"id":"d1222f8f-ab46-412e-950c-1722e24a1333","block_type":"box","text":"or of 150% would suffer a 1.5% loss if the underlying","page_number":89,"box":{"x":494,"y":847,"width":387,"height":12}},{"id":"2fa6e5aa-8c59-406e-ac37-0b4f727cc7ee","block_type":"box","text":"economic variable lost 1% of its value. “Portfolio","page_number":89,"box":{"x":116,"y":862,"width":348,"height":10}},{"id":"8f5cd19e-033f-432c-af0c-f5dcf1ed2186","block_type":"box","text":"leverage ratio” is defined as the average (mean)","page_number":89,"box":{"x":465,"y":862,"width":359,"height":12}},{"id":"51243e67-afa7-4f2d-a65b-663e4d6cb47e","block_type":"box","text":"leverage ratio of all instruments in a Fund’s portfolio, we","page_number":89,"box":{"x":117,"y":878,"width":405,"height":12}},{"id":"2e3a5393-9d9a-445a-90de-6398291e7eaa","block_type":"box","text":"ighted by the market values of such instruments","page_number":89,"box":{"x":523,"y":878,"width":353,"height":12}},{"id":"1948dddb-ebf8-4811-8087-875d1537a0a7","block_type":"box","text":"II-6","page_number":89,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"e91f7b39-2778-4206-baaf-63e52fa9ec9a","block_type":"box","text":"NM1026U-6039989-89/256","page_number":89,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"2ed5fd0e-62f8-4b9b-b1ea-0b0d809bbdc3","block_type":"box","text":"or, in the case of futures contracts, their notional v","page_number":90,"box":{"x":116,"y":87,"width":355,"height":11}},{"id":"906e26bc-f131-4a22-a7bd-8e73eaf6fd61","block_type":"box","text":"values. A Fund may at times or from time to time decide","page_number":90,"box":{"x":471,"y":87,"width":412,"height":12}},{"id":"8d44afed-d5bd-4fe6-93cc-c706e66dd6f2","block_type":"box","text":"not to use leverage in its investments or us","page_number":90,"box":{"x":117,"y":103,"width":310,"height":12}},{"id":"09161b58-fef6-4c5a-a18a-7661b31a9164","block_type":"box","text":"e less leverage than may otherwise be allowable.","page_number":90,"box":{"x":428,"y":103,"width":363,"height":12}},{"id":"148202c2-d446-4bee-942f-917ba80515bf","block_type":"box","text":"Counterparty Risk.","page_number":90,"box":{"x":117,"y":134,"width":136,"height":12}},{"id":"e472359f-fdd8-40eb-8aa8-09086f2fefbc","block_type":"box","text":"A significant risk of hybrid instruments is counterparty risk. Unlike exchange-traded","page_number":90,"box":{"x":255,"y":134,"width":625,"height":12}},{"id":"a7fce538-1974-4a1a-911f-8bd8810f7aa5","block_type":"box","text":"futures and options, which are standard contracts, hybrid instruments are customized securities, tailor","page_number":90,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"f9b9bfdb-6730-4c6b-8fb2-d1fbddf18192","block_type":"box","text":"made by a specific issuer. With a listed futures or options contract, an investor’s counterparty is the","page_number":90,"box":{"x":117,"y":165,"width":740,"height":12}},{"id":"7da544a3-15fe-40be-b9f1-b9591027b163","block_type":"box","text":"exchange clearinghouse. Exchange clearinghouses are capitalized by the exchange members and","page_number":90,"box":{"x":116,"y":180,"width":738,"height":12}},{"id":"f3f99994-3001-4062-9d41-e1bfe8bd2f2b","block_type":"box","text":"typically have high investment grade ratings (","page_number":90,"box":{"x":116,"y":196,"width":336,"height":12}},{"id":"de9201e6-2512-425d-be4c-6baf3fe10545","block_type":"box","text":"e.g.","page_number":90,"box":{"x":453,"y":198,"width":26,"height":10}},{"id":"585c7446-7302-40b3-8afd-03f89d27d71a","block_type":"box","text":", ratings of AAA or AA by S&P). Therefore, the risk is","page_number":90,"box":{"x":482,"y":196,"width":396,"height":12}},{"id":"cedd4424-b89a-4afc-8258-1201065a2079","block_type":"box","text":"small that an exchange clearinghouse might be unable to meet its obligations at maturity. However,","page_number":90,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"efa9fd09-1171-4f60-9735-d3115c7b3883","block_type":"box","text":"with a hybrid instrument, a Fund will take on the counterparty credit risk of the issuer. That is, at","page_number":90,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"129c2e2e-a667-4b31-a04a-eec52c13c5bb","block_type":"box","text":"maturity of the hybrid instrument, there is a risk that the issuer may be unable to perform its obligations","page_number":90,"box":{"x":117,"y":242,"width":767,"height":12}},{"id":"fce60a14-9f82-4787-868d-069904ae124b","block_type":"box","text":"under the structured note.","page_number":90,"box":{"x":117,"y":258,"width":196,"height":9}},{"id":"67c0d1db-d21e-4028-baa2-9c46274ee0ff","block_type":"box","text":"Convertible Securities.","page_number":90,"box":{"x":117,"y":289,"width":180,"height":9}},{"id":"bf205c8d-da25-4d62-9d7e-3675371d0069","block_type":"box","text":"A convertible security is a bond, debenture, note, preferred stock or other","page_number":90,"box":{"x":298,"y":289,"width":554,"height":12}},{"id":"42ff663d-47e6-4668-8583-39e929f71f8b","block_type":"box","text":"security that may be converted into or exchanged for a prescribed amount of common stock or other","page_number":90,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"ed8f9721-e463-41dd-9b15-932e6def4070","block_type":"box","text":"equity security of the same or a different issuer within a particular period of time at a specified price or","page_number":90,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"bf7ad53c-17f9-4ab2-9cda-8a8064afa756","block_type":"box","text":"formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the","page_number":90,"box":{"x":116,"y":335,"width":734,"height":12}},{"id":"d67bf449-14ea-4c96-827b-9b2bd9671bc8","block_type":"box","text":"dividend paid on preferred stock until the convertible security matures or is redeemed, converted or","page_number":90,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"25da4d3e-c71d-4d1c-8143-a336885ddb2d","block_type":"box","text":"exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible","page_number":90,"box":{"x":116,"y":366,"width":738,"height":12}},{"id":"4dddc15d-5ab7-4a1f-93b6-6b2bad7cf7a9","block_type":"box","text":"income securities in that they ordinarily provide a stable stream of income with generally higher yields","page_number":90,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"e313fd11-2d4f-4ec5-868c-fa74815f560c","block_type":"box","text":"than those of common stocks of the same or similar issuers, but lower yields than comparable","page_number":90,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"1f9fec33-3314-4fc2-ae8f-e292d95e1024","block_type":"box","text":"nonconvertible securities. The value of a convertible security is influenced by changes in interest rates,","page_number":90,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"dca8beee-64f5-4d1a-a989-2e22f0a59f44","block_type":"box","text":"with investment value declining as interest rates increase and increasing as interest rates decline. The","page_number":90,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"51c67102-1e8f-4752-995e-a289516bb5b8","block_type":"box","text":"credit standing of the issuer and other factors also may have an effect on the convertible security’s","page_number":90,"box":{"x":116,"y":444,"width":736,"height":12}},{"id":"caea1ee7-3f3f-42fd-80dd-54193f3f66c7","block_type":"box","text":"investment value. Convertible securities rank senior to common stock in a corporation’s capital","page_number":90,"box":{"x":117,"y":459,"width":706,"height":12}},{"id":"23421f2f-9ab6-4fe8-ab0a-9713e43aaeb7","block_type":"box","text":"structure but are usually subordinated to comparable nonconvertible securities. Convertible securities","page_number":90,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"27df5b32-0854-4578-9f47-7c25cc88ed58","block_type":"box","text":"may be subject to redemption at the option of the issuer at a price established in the convertible","page_number":90,"box":{"x":117,"y":490,"width":714,"height":12}},{"id":"be263b39-404d-4bc9-9ba4-0870ea5f85f5","block_type":"box","text":"security’s governing instrument.","page_number":90,"box":{"x":116,"y":506,"width":241,"height":12}},{"id":"20bba929-2d59-4ddf-b0c4-6d115d5a72f2","block_type":"box","text":"The characteristics of convertible securities make them potentially attractive investments for an","page_number":90,"box":{"x":116,"y":537,"width":710,"height":12}},{"id":"16ccabf7-eea8-4c05-846b-a295c8d6aaf8","block_type":"box","text":"investment company seeking a high total return from capital appreciation and investment income.","page_number":90,"box":{"x":117,"y":552,"width":727,"height":12}},{"id":"a17d8fb2-7e41-454a-bd32-109fc3262218","block_type":"box","text":"These characteristics include the potential for capital appreciation as the value of the underlying","page_number":90,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"956f8e63-a4b8-4743-adbd-f6f1a7f6fe5a","block_type":"box","text":"common stock increases, the relatively high yield received from dividend or interest payments as","page_number":90,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"ce15e77e-55d4-4ae4-ba66-15543dbe2f05","block_type":"box","text":"compared to common stock dividends and decreased risks of decline in value relative to the underlying","page_number":90,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"db945a97-5746-409e-a9e5-4a6ad1fd768a","block_type":"box","text":"common stock due to their fixed-income nature. As a result of the conversion feature, however, the","page_number":90,"box":{"x":116,"y":614,"width":739,"height":11}},{"id":"0b6005c2-6ca1-4b55-a6ce-da80463bb8a0","block_type":"box","text":"interest rate or dividend preference on a convertible security is generally less than would be the case if","page_number":90,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"846a62aa-a27d-4b6f-b76c-46d71aae7a00","block_type":"box","text":"the securities were issued in nonconvertible form.","page_number":90,"box":{"x":116,"y":645,"width":373,"height":10}},{"id":"2d429f8b-098f-4383-9432-bda5a113667c","block_type":"box","text":"In analyzing convertible securities, the Manager will consider both the yield on the convertible security","page_number":90,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"006f35e5-54d9-4cbc-b680-67c1f1bc3ffc","block_type":"box","text":"relative to its credit quality and the potential capital appreciation that is offered by the underlying","page_number":90,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"6ab55e48-a9f3-4f4f-b8e5-b44d2cdba1f5","block_type":"box","text":"common stock, among other things.","page_number":90,"box":{"x":116,"y":707,"width":265,"height":12}},{"id":"74ba63a3-d2c9-4059-9fde-d2c70c1de276","block_type":"box","text":"Convertible securities are issued and traded in a number of securities markets. Even in cases where a","page_number":90,"box":{"x":117,"y":738,"width":758,"height":10}},{"id":"6714f9c6-6806-4237-9a59-a3cef066dad7","block_type":"box","text":"substantial portion of the convertible securities held by a Fund are denominated in U.S. dollars, the","page_number":90,"box":{"x":116,"y":754,"width":734,"height":12}},{"id":"c27f6127-fc0b-45b2-9839-4c77b812bc08","block_type":"box","text":"underlying equity securities may be quoted in the currency of the country where the issuer is domiciled.","page_number":90,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"927fdd39-583f-4bdc-b25d-b2b4f6996502","block_type":"box","text":"As a result, fluctuations in the exchange rate between the currency in which the debt security is","page_number":90,"box":{"x":116,"y":785,"width":707,"height":12}},{"id":"744c647c-3295-4338-aade-c407d32df4e1","block_type":"box","text":"denominated and the currency in which the share price is quoted will affect the value of the convertible","page_number":90,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"cbe9e6d1-2e2d-469f-9d15-2e30fceeff7f","block_type":"box","text":"security. With respect to convertible securities denominated in a currency different from that of the","page_number":90,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"ffa5819e-d35e-4bb2-85fb-d60ead2e49b2","block_type":"box","text":"underlying equity securities, the conversion price may be based on a fixed exchange rate established","page_number":90,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"1d80bf07-6857-4446-b530-6db73de56246","block_type":"box","text":"at the time the security is issued, which may increase the effects of currency risk. As described below,","page_number":90,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"becff1c3-a983-4f88-a400-9e4b13c2aee3","block_type":"box","text":"a Fund is authorized to enter into foreign currency hedging transactions in which it may seek to reduce","page_number":90,"box":{"x":116,"y":862,"width":766,"height":12}},{"id":"9a82c479-fad5-4429-b462-70568ff03246","block_type":"box","text":"the effect of exchange rate fluctuations.","page_number":90,"box":{"x":116,"y":878,"width":298,"height":12}},{"id":"8726e09c-7ad9-4842-8187-2e4f2df90331","block_type":"box","text":"II-7","page_number":90,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"7835aeb0-f6a7-4ff8-8421-f5034e5d59de","block_type":"box","text":"NM1026U-6039989-90/256","page_number":90,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"6ccd3e3e-c7ba-486a-82a2-d68295d6959a","block_type":"box","text":"Apart from currency considerations, the value of convertible securities is influenced by both the yield","page_number":91,"box":{"x":116,"y":87,"width":749,"height":12}},{"id":"66e44b21-44c1-44fd-9aa9-3679e6674d6e","block_type":"box","text":"on nonconvertible securities of comparable issuers and by the value of the underlying common stock.","page_number":91,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"b6888f5d-ed69-4565-ab65-9e4d04ab4311","block_type":"box","text":"The value of a convertible security viewed without regard to its conversion feature (","page_number":91,"box":{"x":116,"y":118,"width":617,"height":12}},{"id":"373bc199-9937-4c2c-ab0f-b9a011736410","block_type":"box","text":"i.e.","page_number":91,"box":{"x":734,"y":118,"width":20,"height":10}},{"id":"75bc08f4-889d-433c-93ce-4e878d3c3c4e","block_type":"box","text":", strictly on the","page_number":91,"box":{"x":757,"y":118,"width":112,"height":12}},{"id":"0cba2345-7d17-4843-8203-99c53874f7e6","block_type":"box","text":"basis of its yield) is sometimes referred to as its “investment value.” To the extent interest rates","page_number":91,"box":{"x":117,"y":134,"width":709,"height":12}},{"id":"53ba95e1-a53e-4dc2-89f1-ef81bf555d67","block_type":"box","text":"change, the investment value of the convertible security typically will fluctuate. At the same time,","page_number":91,"box":{"x":116,"y":149,"width":720,"height":12}},{"id":"b9df6560-cfbb-4200-9df4-8052f8347c3b","block_type":"box","text":"however, the value of the convertible security will be influenced by its “conversion value,” which is the","page_number":91,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"52582b23-687f-4749-9094-3fd90bb6af33","block_type":"box","text":"market value of the underlying common stock that would be obtained if the convertible security were","page_number":91,"box":{"x":117,"y":180,"width":747,"height":12}},{"id":"5e4281c8-393f-44f7-bff8-2083a84de8fd","block_type":"box","text":"converted. Conversion value fluctuates directly with the price of the underlying common stock. If the","page_number":91,"box":{"x":116,"y":196,"width":746,"height":12}},{"id":"4fbcae5a-1ed7-4353-a2fb-5015d959e0d1","block_type":"box","text":"conversion value of a convertible security is substantially below its investment value, the price of the","page_number":91,"box":{"x":116,"y":211,"width":748,"height":12}},{"id":"5e9ef717-7282-4786-a49d-127942b2199c","block_type":"box","text":"convertible security is governed principally by its investment value. To the extent the conversion value","page_number":91,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"9f69d026-dac4-482d-87d7-ae56cbc3b0a5","block_type":"box","text":"of a convertible security increases to a point that approximates or exceeds its investment value, the","page_number":91,"box":{"x":116,"y":242,"width":743,"height":12}},{"id":"e1ea0cc9-083d-44e4-9728-26fa620fa166","block_type":"box","text":"price of the convertible security will be influenced principally by its conversion value. A convertible","page_number":91,"box":{"x":117,"y":258,"width":729,"height":12}},{"id":"d96bedfd-d302-4d56-ab5e-85c473cb3cc9","block_type":"box","text":"security will sell at a premium over the conversion value to the extent investors place value on the right","page_number":91,"box":{"x":116,"y":273,"width":768,"height":12}},{"id":"e7068ced-e712-47a3-a8d0-2d50f5f3125d","block_type":"box","text":"to acquire the underlying common stock while holding a fixed-income security. The yield and","page_number":91,"box":{"x":116,"y":289,"width":691,"height":12}},{"id":"57e617b6-e9c1-43a1-bf65-8cc5921e209f","block_type":"box","text":"conversion premium of convertible securities issued in Japan and the Euromarket are frequently","page_number":91,"box":{"x":116,"y":304,"width":718,"height":12}},{"id":"f3aced43-f6ee-4c38-ba51-88928c9922d0","block_type":"box","text":"determined at levels that cause the conversion value to affect their market value more than the","page_number":91,"box":{"x":116,"y":320,"width":708,"height":9}},{"id":"49b553dd-a931-4b63-ab05-5c3ca06c6888","block_type":"box","text":"securities’ investment value.","page_number":91,"box":{"x":116,"y":335,"width":215,"height":10}},{"id":"872b89ce-148a-41cf-8a16-320998c97516","block_type":"box","text":"Holders of convertible securities generally have a claim on the assets of the issuer prior to the common","page_number":91,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"d1a5a56b-8be9-408a-bcb9-2b31e4cf92e1","block_type":"box","text":"stockholders but may be subordinated to other debt securities of the same issuer. A convertible","page_number":91,"box":{"x":116,"y":378,"width":713,"height":12}},{"id":"6c72d395-19bc-4095-83e6-2177adf00929","block_type":"box","text":"security may be subject to redemption at the option of the issuer at a price established in a charter","page_number":91,"box":{"x":116,"y":393,"width":734,"height":12}},{"id":"1168d063-87b6-43fc-86a2-292a7f0f615c","block_type":"box","text":"provision, indenture or other governing instrument pursuant to which the convertible security was","page_number":91,"box":{"x":117,"y":409,"width":723,"height":12}},{"id":"2075031b-64bd-402f-a93e-4644ddc81e55","block_type":"box","text":"issued. If a convertible security held by a Fund is called for redemption, the Fund will be required to","page_number":91,"box":{"x":117,"y":424,"width":741,"height":12}},{"id":"2e030ed0-d220-4eaf-bbb3-a518941a09f3","block_type":"box","text":"redeem the security, convert it into the underlying common stock or sell it to a third party. Certain","page_number":91,"box":{"x":117,"y":440,"width":723,"height":12}},{"id":"ae790a8e-ac86-4a3f-8225-5174e020e8d6","block_type":"box","text":"convertible debt securities may provide a put option to the holder, which entitles the holder to cause","page_number":91,"box":{"x":116,"y":455,"width":745,"height":12}},{"id":"ea9a31f9-386e-4578-b87f-40f489b2d5d2","block_type":"box","text":"the security to be redeemed by the issuer at a premium over the stated principal amount of the debt","page_number":91,"box":{"x":116,"y":471,"width":745,"height":12}},{"id":"57308494-cf22-4eac-b11d-203ee21ce106","block_type":"box","text":"security under certain circumstances.","page_number":91,"box":{"x":116,"y":486,"width":282,"height":12}},{"id":"4a535137-1a50-4ab3-bd8b-a09a6dfc9166","block_type":"box","text":"A Fund may also invest in synthetic convertible securities. Synthetic convertible securities may include","page_number":91,"box":{"x":116,"y":513,"width":765,"height":12}},{"id":"c1177952-4c52-472e-b6a3-48d4523cba1e","block_type":"box","text":"either Cash-Settled Convertibles or Manufactured Convertibles. “Cash-Settled Convertibles” are","page_number":91,"box":{"x":116,"y":529,"width":717,"height":9}},{"id":"2d5d8610-4232-4d48-ad3a-7e2e0197ed8b","block_type":"box","text":"instruments that are created by the issuer and have the economic characteristics of traditional","page_number":91,"box":{"x":117,"y":544,"width":701,"height":12}},{"id":"763a7b9f-fb68-43fd-b706-382f6730c055","block_type":"box","text":"convertible securities but may not actually permit conversion into the underlying equity securities in all","page_number":91,"box":{"x":116,"y":560,"width":760,"height":12}},{"id":"062aa597-09f4-4c84-b591-09a808204a86","block_type":"box","text":"circumstances. As an example, a private company may issue a Cash-Settled Convertible that is","page_number":91,"box":{"x":116,"y":575,"width":715,"height":12}},{"id":"aaac18b8-3c22-4a26-85c9-16857fd00a46","block_type":"box","text":"convertible into common stock only if the company successfully completes a public offering of its","page_number":91,"box":{"x":116,"y":591,"width":721,"height":12}},{"id":"7a244715-aa30-46c9-b97f-47e5aeb237fc","block_type":"box","text":"common stock prior to maturity and otherwise pays a cash amount to reflect any equity appreciation.","page_number":91,"box":{"x":116,"y":606,"width":751,"height":12}},{"id":"bd7b6982-97e4-43a4-be3a-5d55375732dc","block_type":"box","text":"“Manufactured Convertibles” are created by the Manager or another party by combining separate","page_number":91,"box":{"x":116,"y":622,"width":726,"height":12}},{"id":"228f737d-4ba2-4519-827b-4221cd29d03c","block_type":"box","text":"securities that possess one of the two principal characteristics of a convertible security,","page_number":91,"box":{"x":116,"y":637,"width":651,"height":12}},{"id":"7da3d979-0ee5-4a72-b7d0-3cb5aa3c6905","block_type":"box","text":"i.e.","page_number":91,"box":{"x":767,"y":638,"width":21,"height":9}},{"id":"a5a315f4-20e5-4f13-8dfc-018feeb75d89","block_type":"box","text":", fixed","page_number":91,"box":{"x":791,"y":637,"width":49,"height":12}},{"id":"bd5146f6-8fce-4f25-84bd-4ef175871d89","block_type":"box","text":"income (“fixed-income component”) or a right to acquire equity securities (“convertibility component”).","page_number":91,"box":{"x":117,"y":653,"width":756,"height":12}},{"id":"dd1db9d1-d843-4aa7-8215-fcc02cf8ed77","block_type":"box","text":"The fixed-income component is achieved by investing in nonconvertible fixed-income securities, such","page_number":91,"box":{"x":116,"y":668,"width":751,"height":12}},{"id":"29a189dc-f55f-4d3f-b9b2-de26b10bf6ab","block_type":"box","text":"as nonconvertible bonds, preferred stocks and money market instruments. The convertibility","page_number":91,"box":{"x":116,"y":684,"width":684,"height":12}},{"id":"3f78659b-b16c-488f-87cc-c89f2f0bf55d","block_type":"box","text":"component is achieved by investing in call options, warrants, or other securities with equity conversion","page_number":91,"box":{"x":116,"y":700,"width":758,"height":12}},{"id":"7d76d6eb-30f8-4fa9-9920-8d8a823132b3","block_type":"box","text":"features (“equity features”) granting the holder the right to purchase a specified quantity of the","page_number":91,"box":{"x":116,"y":715,"width":697,"height":12}},{"id":"cb4eff4b-c906-486b-a99f-d49ae44ea43d","block_type":"box","text":"underlying stocks within a specified period of time at a specified price or, in the case of a stock index","page_number":91,"box":{"x":117,"y":730,"width":745,"height":13}},{"id":"97b84695-858f-4e3e-b723-d89b0d9aa60d","block_type":"box","text":"option, the right to receive a cash payment based on the value of the underlying stock index.","page_number":91,"box":{"x":116,"y":746,"width":685,"height":12}},{"id":"024e3ae0-8a9a-466d-9691-5924aac552ec","block_type":"box","text":"A Manufactured Convertible differs from traditional convertible securities in several respects. Unlike a","page_number":91,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"79585d04-9eeb-44c8-8a39-4f74a9f4f5ac","block_type":"box","text":"traditional convertible security, which is a single security that has a unitary market value, a","page_number":91,"box":{"x":116,"y":789,"width":669,"height":12}},{"id":"ead0e00b-6da0-48ad-a4ff-76762b2f7174","block_type":"box","text":"Manufactured Convertible is comprised of two or more separate securities, each with its own market","page_number":91,"box":{"x":117,"y":804,"width":742,"height":12}},{"id":"7279b872-2f83-4d18-a846-d1ac898f8bda","block_type":"box","text":"value. Therefore, the total “market value” of such a Manufactured Convertible is the sum of the values","page_number":91,"box":{"x":116,"y":820,"width":755,"height":11}},{"id":"c6b59ad1-4644-4cea-9bb7-959ea89f5c86","block_type":"box","text":"of its fixed-income component and its convertibility component.","page_number":91,"box":{"x":116,"y":835,"width":472,"height":12}},{"id":"dd77ac53-ae20-465a-a20e-8f453b559b37","block_type":"box","text":"More flexibility is possible in the creation of a Manufact","page_number":91,"box":{"x":117,"y":862,"width":382,"height":12}},{"id":"0d5733a6-0f37-4180-aeb3-4a297a436a75","block_type":"box","text":"ctured Convertible than in the purchase of a traditional","page_number":91,"box":{"x":499,"y":862,"width":382,"height":12}},{"id":"b68f300a-a574-43e7-a6de-6c21a85864ce","block_type":"box","text":"convertible security. Because many corporations hav","page_number":91,"box":{"x":116,"y":878,"width":377,"height":12}},{"id":"aa7ac839-db81-4c39-99ef-855ec5d39f78","block_type":"box","text":"e not issued convertible securities, the Manager may","page_number":91,"box":{"x":493,"y":878,"width":380,"height":12}},{"id":"4eee9a9f-e2be-4dd6-8372-ea04fd51dc19","block_type":"box","text":"II-8","page_number":91,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"b5e0d6be-b831-49f9-8671-38fd253a33b7","block_type":"box","text":"NM1026U-6039989-91/256","page_number":91,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"c590992f-501b-46cb-bf0e-ddc93303ebf6","block_type":"box","text":"combine a fixed-income instrument and an equity feature wit","page_number":92,"box":{"x":116,"y":87,"width":429,"height":12}},{"id":"4fe14f93-f58a-496c-9af7-e7af2e897e19","block_type":"box","text":"h respect to the stock of the issuer of the fixed","page_number":92,"box":{"x":546,"y":87,"width":332,"height":12}},{"id":"2abb73b8-3099-46a4-b4fb-2309402462c2","block_type":"box","text":"income instrument to create a synthetic converti","page_number":92,"box":{"x":117,"y":103,"width":338,"height":12}},{"id":"a9d72d00-0413-4312-bbcf-80d09e72abf5","block_type":"box","text":"ble security otherwise unavailable in the market. The","page_number":92,"box":{"x":457,"y":103,"width":378,"height":12}},{"id":"77e7b9f0-e883-4d67-b649-bb2e2c9b5400","block_type":"box","text":"Manager may also combine a fixed-income instrument of","page_number":92,"box":{"x":117,"y":118,"width":405,"height":12}},{"id":"5a7ed13c-7c87-4131-a416-3735d5148bc3","block_type":"box","text":"f an issuer with an equity feature with respect to the","page_number":92,"box":{"x":521,"y":118,"width":366,"height":12}},{"id":"19ad25cf-62eb-4319-b79d-8afbf8bf6b2e","block_type":"box","text":"stock of a different issuer when the Manager belie","page_number":92,"box":{"x":116,"y":134,"width":354,"height":12}},{"id":"6800a508-5225-42b8-be2b-afec94e1fa9f","block_type":"box","text":"ves such a Manufactured Convertible would better","page_number":92,"box":{"x":471,"y":134,"width":362,"height":9}},{"id":"6d3a64e8-aebd-47b0-b747-0ed1e30cec1f","block_type":"box","text":"promote a Fund’s objective than alternative investment","page_number":92,"box":{"x":117,"y":149,"width":389,"height":12}},{"id":"d3ba9fb3-7371-4704-86b1-6ce7ee9dd5e8","block_type":"box","text":"s. For example, the Manager may combine an equity","page_number":92,"box":{"x":506,"y":149,"width":381,"height":12}},{"id":"2f50aa6d-9dcf-4ead-8627-6da44bbaf3d3","block_type":"box","text":"feature with respect to an issuer’s stock with a fixed-in","page_number":92,"box":{"x":116,"y":165,"width":383,"height":11}},{"id":"b3b3c368-c567-4dee-93c5-e1bba464296c","block_type":"box","text":"come security of a different issuer in the same","page_number":92,"box":{"x":500,"y":165,"width":332,"height":12}},{"id":"66316ac8-c81e-4dbe-bf35-303a47190c89","block_type":"box","text":"industry to diversify the Fund’s credit exposure, or","page_number":92,"box":{"x":117,"y":180,"width":353,"height":12}},{"id":"2ee1ac70-5586-439e-b6c8-7dadc1ef8ec9","block_type":"box","text":"r with a U.S. Treasury instrument to create a","page_number":92,"box":{"x":470,"y":180,"width":315,"height":12}},{"id":"c05b3646-2465-43a7-bec1-8e81ce57f911","block_type":"box","text":"Manufactured Convertible with a higher credit profile t","page_number":92,"box":{"x":117,"y":196,"width":379,"height":12}},{"id":"576146d2-9e2b-47d5-8d57-da585b243d0f","block_type":"box","text":"han a traditional convertible security issued by that","page_number":92,"box":{"x":497,"y":196,"width":363,"height":12}},{"id":"12ea4dee-792d-4e96-a794-8b352a46940a","block_type":"box","text":"issuer. A Manufactured Convertible also is a more fl","page_number":92,"box":{"x":117,"y":211,"width":366,"height":10}},{"id":"fb0b92b9-29c2-4ff6-b43d-cd2ac072c9fc","block_type":"box","text":"exible investment in that its two components may be","page_number":92,"box":{"x":484,"y":211,"width":377,"height":12}},{"id":"67c4a801-ad09-4b22-ae06-b845a1f188af","block_type":"box","text":"purchased separately and, upon purchasi","page_number":92,"box":{"x":117,"y":227,"width":293,"height":12}},{"id":"7f533972-44bf-452c-bfbd-4173f7f95912","block_type":"box","text":"ng the separate securities, “combined” to create a Manufactured","page_number":92,"box":{"x":412,"y":227,"width":461,"height":12}},{"id":"ef0e34cd-0b73-4aab-8a1d-44a7836e836e","block_type":"box","text":"Convertible. For example, the Fund may purchase a w","page_number":92,"box":{"x":117,"y":242,"width":375,"height":12}},{"id":"7090c8f6-75ea-4320-983a-74932bd96fdc","block_type":"box","text":"warrant for eventual inclusion in a Manufactured","page_number":92,"box":{"x":492,"y":242,"width":347,"height":10}},{"id":"02be0d7b-3722-4184-9281-87f80f8d177e","block_type":"box","text":"Convertible while postponing the purchase of a su","page_number":92,"box":{"x":117,"y":258,"width":354,"height":12}},{"id":"dc1f6b8c-74ce-49f1-a178-a5b6beb9db7d","block_type":"box","text":"itable bond to pair with the warrant pending development","page_number":92,"box":{"x":473,"y":258,"width":407,"height":12}},{"id":"dbd1d618-1dc7-4f02-865c-0ae6efc10b36","block_type":"box","text":"of more favorable market conditions.","page_number":92,"box":{"x":116,"y":273,"width":265,"height":10}},{"id":"75e9025a-d9bb-4ae6-8470-a14a53a4c1e1","block_type":"box","text":"The value of a Manufactured Convertible may respond to certain market fluctuations differently from a","page_number":92,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"3133adff-ce26-435b-9201-a3c5b65a7c39","block_type":"box","text":"traditional convertible security with similar characteristics. For example, in the event a Fund created a","page_number":92,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"843bc83a-7132-49d2-baf7-6e18f212d859","block_type":"box","text":"Manufactured Convertible by combining a short-term U.S. Treasury instrument and a call option on a","page_number":92,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"d1fc498e-3e44-4f4b-9ad3-bed5b3807578","block_type":"box","text":"stock, the Manufactured Convertible would be expected to outperform a traditional convertible of","page_number":92,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"98f59c11-e038-4af0-8835-ec216bf792ef","block_type":"box","text":"similar maturity that is convertible into that stock during periods when Treasury instruments outperform","page_number":92,"box":{"x":116,"y":366,"width":767,"height":12}},{"id":"4b9a3e5e-320e-4ca9-af93-11034a2d7910","block_type":"box","text":"corporate fixed-income securities and underperform during periods when corporate fixed-income","page_number":92,"box":{"x":116,"y":382,"width":722,"height":12}},{"id":"9312c77d-d70b-41cd-9ad3-4a794a854693","block_type":"box","text":"securities outperform Treasury instruments.","page_number":92,"box":{"x":116,"y":397,"width":329,"height":12}},{"id":"6e9c555f-85bc-4133-abdf-a54b874b25ac","block_type":"box","text":"Corporate Loans.","page_number":92,"box":{"x":117,"y":428,"width":137,"height":12}},{"id":"d277afba-d729-4e54-96df-2539907e4c88","block_type":"box","text":"Certain Funds may invest in corporate loans. Corporate loans are generally","page_number":92,"box":{"x":255,"y":428,"width":570,"height":12}},{"id":"80660166-6738-4122-ad5e-cb3c24227211","block_type":"box","text":"non-investment grade floating rate instruments. Usually, they are freely callable at the issuer’s option.","page_number":92,"box":{"x":117,"y":444,"width":757,"height":12}},{"id":"0ce6606b-3970-4659-a0ee-df0cff20f3d1","block_type":"box","text":"Certain Funds may invest in fixed and floating rate loans (“Loans”) arranged through private","page_number":92,"box":{"x":117,"y":459,"width":685,"height":12}},{"id":"1695be35-a3e0-4525-82bf-ef0f7f0147e3","block_type":"box","text":"negotiations between a corporate borrower or a foreign sovereign entity and one or more financial","page_number":92,"box":{"x":117,"y":475,"width":730,"height":12}},{"id":"9bd020c9-002b-4ce6-b6ec-22a4c438d475","block_type":"box","text":"institutions or institutional investors (“Lenders”). A Fund may invest in such Loans in the form of","page_number":92,"box":{"x":117,"y":490,"width":712,"height":12}},{"id":"c9b60382-dcfc-4836-bf63-0a6e483e7fb6","block_type":"box","text":"participations in Loans (“Participations”) and assignments of all or a portion of Loans from third parties","page_number":92,"box":{"x":117,"y":506,"width":761,"height":12}},{"id":"016c62b4-d1e5-4891-9ff5-28a5e0724123","block_type":"box","text":"(“Assignments”). A Fund considers these investments to be investments in debt securities for purposes","page_number":92,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"e11415fb-951c-4fb5-9449-ecb9632245c1","block_type":"box","text":"of its investment policies. Participations typically will result in the Fund having a contractual relationship","page_number":92,"box":{"x":116,"y":537,"width":770,"height":12}},{"id":"0180c814-672e-43a0-84d8-10bbe834a56c","block_type":"box","text":"only with the Lender, not with the borrower. The Fund will have the right to receive payments of","page_number":92,"box":{"x":116,"y":552,"width":712,"height":12}},{"id":"c22c8588-0e83-4519-8b68-b09814ee3f7d","block_type":"box","text":"principal, interest and any fees to which it is entitled only from the Lender selling the Participation and","page_number":92,"box":{"x":117,"y":568,"width":756,"height":12}},{"id":"21353177-377f-43cd-b2b4-91ca00837d37","block_type":"box","text":"only upon receipt by the Lender of the payments from the borrower. In connection with purchasing","page_number":92,"box":{"x":116,"y":583,"width":734,"height":12}},{"id":"64893fa7-7563-4f48-9d55-5b215136bc58","block_type":"box","text":"Participations, the Fund generally will have no right to enforce compliance by the borrower with the","page_number":92,"box":{"x":117,"y":599,"width":737,"height":12}},{"id":"990b600e-8241-41d8-995e-1575742724d2","block_type":"box","text":"terms of the loan agreement relating to the Loans, nor any rights of set-off against the borrower, and","page_number":92,"box":{"x":116,"y":614,"width":750,"height":12}},{"id":"63b057de-1f74-4c73-bfaf-fc65d2e2cd13","block_type":"box","text":"the Fund may not benefit directly from any collateral supporting the Loan in which it has purchased the","page_number":92,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"f096b353-7a30-4018-af11-045c5a5178bc","block_type":"box","text":"Participation. As a result, the Fund will assume the credit risk of both the borrower and the Lender that","page_number":92,"box":{"x":117,"y":645,"width":763,"height":12}},{"id":"7d1a8729-052b-46fe-97c3-a220e5b755d8","block_type":"box","text":"is selling the Participation. In the event of the insolvency of the Lender selling the Participation, the","page_number":92,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"f8ccea06-4490-499b-ae82-bee89131c145","block_type":"box","text":"Fund may be treated as a general creditor of the Lender and may not benefit from any set-off between","page_number":92,"box":{"x":117,"y":676,"width":758,"height":12}},{"id":"cfe00f22-c778-4ebe-adfb-93222ed701d5","block_type":"box","text":"the Lender and the borrower. The Fund will acquire Participations only if the Lender interpositioned","page_number":92,"box":{"x":116,"y":692,"width":734,"height":12}},{"id":"f03a24fb-c742-4f09-b7ab-7b6dfaf8260c","block_type":"box","text":"between the Fund and the borrower is determined by the Fund’s manager to be creditworthy. When","page_number":92,"box":{"x":117,"y":707,"width":738,"height":12}},{"id":"eb883f0c-e7f5-423e-a183-ac2e039f4fb7","block_type":"box","text":"the Fund purchases Assignments from Lenders, the Fund will acquire direct rights against the borrower","page_number":92,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"ce91b147-fb37-40c0-a527-fd8296570832","block_type":"box","text":"on the Loan, and will not have exposure to a counterparty’s credit risk. The Funds may enter into","page_number":92,"box":{"x":116,"y":738,"width":718,"height":12}},{"id":"275a3471-7a71-4174-a30e-d840ac9c2e56","block_type":"box","text":"Participations and Assignments on a forward commitment or “when-issued” basis, whereby a Fund","page_number":92,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"28092657-82b1-479c-bb3d-8cfc17f039a8","block_type":"box","text":"would agree to purchase a Participation or Assignment at set terms in the future. For more information","page_number":92,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"ccee854f-159b-450a-9aa4-732f5a7f6997","block_type":"box","text":"on forward commitments and when-issued securities, see “When-Issued Securities, Delayed Delivery","page_number":92,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"c19fde22-deb6-4302-b2ff-6c98344b9c6c","block_type":"box","text":"Securities and Forward Commitments” below.","page_number":92,"box":{"x":116,"y":800,"width":339,"height":10}},{"id":"30750f41-baf5-46c3-8df9-973ee435eabc","block_type":"box","text":"A Fund may have difficulty disposing of Assignments and Participations. In certain cases, the market","page_number":92,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"475012d4-9db5-462b-b4c6-3cce3c6b57f3","block_type":"box","text":"for such instruments may lack sufficient liquidity, and therefore the Fund anticipates that in such cases","page_number":92,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"3928e214-40a2-41d1-b4c2-8558e0343bb5","block_type":"box","text":"such instruments could be sold only to a limited number of institutional investors. The lack of a","page_number":92,"box":{"x":116,"y":862,"width":704,"height":12}},{"id":"7b627f50-d822-4c24-81f6-612408c7d9ce","block_type":"box","text":"sufficiently liquid secondary market may have an adverse impact on the value of such instruments and","page_number":92,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"e76e71c4-32a6-4c1c-a46e-19d33dea50ad","block_type":"box","text":"II-9","page_number":92,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"3e9eba5a-c4a7-4f14-861d-a11125f87c29","block_type":"box","text":"NM1026U-6039989-92/256","page_number":92,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"c72d0821-246d-46cf-97bf-a6cb0849e864","block_type":"box","text":"on the Fund’s ability to dispose of particular Assignments or Participations in response to a specific","page_number":93,"box":{"x":116,"y":87,"width":740,"height":12}},{"id":"eac50a52-b428-4755-8af6-a8e9d81a8eb1","block_type":"box","text":"economic event, such as deterioration in the creditworthiness of the borrower.","page_number":93,"box":{"x":116,"y":102,"width":583,"height":12}},{"id":"df2ef92c-6857-42ad-9c09-d0dc80f322f8","block_type":"box","text":"Leading financial institutions often act as agent for a broader group of Lenders, generally referred to as","page_number":93,"box":{"x":117,"y":132,"width":768,"height":12}},{"id":"ee1086ab-f5ae-44f9-811a-97cb83f1ebfd","block_type":"box","text":"a syndicate. The syndicate’s agent arranges the loans, holds collateral and accepts payments of","page_number":93,"box":{"x":116,"y":147,"width":720,"height":12}},{"id":"f5f2db37-23d9-475d-ab2e-1917101166da","block_type":"box","text":"principal and interest. Failure by the syndicate agent to fulfill its obligations may delay or adversely","page_number":93,"box":{"x":117,"y":163,"width":734,"height":12}},{"id":"3d770fe4-1e0e-40b1-9394-07003a80f64a","block_type":"box","text":"affect receipt of payment by the Fund.","page_number":93,"box":{"x":116,"y":178,"width":287,"height":12}},{"id":"ab5a1b1a-5586-4003-aaa1-c715daf99802","block_type":"box","text":"The Loans in which the Fund may invest are subject to the risk of loss of principal and income.","page_number":93,"box":{"x":116,"y":207,"width":706,"height":12}},{"id":"9b31350c-7a79-4737-9437-96b6f36928a7","block_type":"box","text":"Although borrowers frequently provide collateral to secure repayment of these obligations they do not","page_number":93,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"ab7119c4-5e07-4a8f-9fbf-ffeee057d9f9","block_type":"box","text":"always do so. If they do provide collateral, the value of the collateral may not completely cover the","page_number":93,"box":{"x":116,"y":238,"width":732,"height":12}},{"id":"0c4e2aa5-776e-4592-9e6b-ed7a299eaf74","block_type":"box","text":"borrower’s obligations at the time of a default. If a borrower files for protection from its creditors under","page_number":93,"box":{"x":117,"y":254,"width":757,"height":12}},{"id":"2e87bdc1-69c2-448d-9926-b2e3bb2c731f","block_type":"box","text":"the U.S. bankruptcy laws, these laws may limit a Fund’s rights to its collateral. In addition, the value of","page_number":93,"box":{"x":116,"y":269,"width":761,"height":12}},{"id":"0bd1014e-60da-480a-9e32-9374906865b1","block_type":"box","text":"collateral may erode during a bankruptcy case. In the event of a bankruptcy, the holder of a Loan may","page_number":93,"box":{"x":116,"y":285,"width":762,"height":12}},{"id":"e800b08b-a641-4d59-a795-5b6a03b4c0bd","block_type":"box","text":"not recover its principal, may experience a long delay in recovering its investment and may not receive","page_number":93,"box":{"x":117,"y":300,"width":765,"height":12}},{"id":"d4f65a84-756c-40b4-b7dc-c1eabc14bddb","block_type":"box","text":"interest during the delay.","page_number":93,"box":{"x":117,"y":316,"width":188,"height":12}},{"id":"6f99c996-1b25-4323-8021-4153a457f38f","block_type":"box","text":"Transactions in corporate loans may settle on a delayed basis. As a result, the proceeds from the sale","page_number":93,"box":{"x":116,"y":345,"width":763,"height":12}},{"id":"97868443-f02b-44a4-93f6-50ecdcfa1c12","block_type":"box","text":"of corporate loans may not be readily available to make additional investments or to meet a Fund’s","page_number":93,"box":{"x":116,"y":360,"width":738,"height":12}},{"id":"4e097293-fbc0-45c2-9f70-0751d6d7caf6","block_type":"box","text":"redemption obligations. To the extent the extended settlement process gives rise to short-term liquidity","page_number":93,"box":{"x":117,"y":376,"width":765,"height":12}},{"id":"de21cb20-64c6-4e19-b90c-56856b2c07b9","block_type":"box","text":"needs, a Fund may hold additional cash, sell investments or temporarily borrow from banks and other","page_number":93,"box":{"x":117,"y":391,"width":758,"height":12}},{"id":"ac7e89b1-1877-4813-bdf3-64c008331741","block_type":"box","text":"lenders.","page_number":93,"box":{"x":117,"y":407,"width":63,"height":9}},{"id":"540a976a-61bc-41d3-9e89-ab8cddc0145f","block_type":"box","text":"In certain circumstances, Loans may not be deemed to be securities under certain federal securities","page_number":93,"box":{"x":117,"y":436,"width":746,"height":12}},{"id":"0c3ba8e7-0242-435b-8aa9-d74a49b778d6","block_type":"box","text":"laws. Therefore, in the event of fraud or misrepresentation by a borrower or an arranger, Lenders and","page_number":93,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"312e87f7-eca2-4a35-9b7d-76317dbdbf89","block_type":"box","text":"purchasers of interests in Loans, such as the Funds, may not have the protection of the anti-fraud","page_number":93,"box":{"x":117,"y":467,"width":729,"height":12}},{"id":"5ed67a16-09cf-4dfc-847d-5125095984d2","block_type":"box","text":"provisions of the federal securities laws as would otherwise be available for bonds or stocks. Instead,","page_number":93,"box":{"x":117,"y":482,"width":755,"height":12}},{"id":"09817044-4a48-4aff-9c75-3f59da613fed","block_type":"box","text":"in such cases, parties generally would rely on the contractual provisions in the Loan agreement itself","page_number":93,"box":{"x":117,"y":498,"width":750,"height":12}},{"id":"312ee7bd-bab6-4622-9cf2-293c042bd7f7","block_type":"box","text":"and common-law fraud protections under applicable state law.","page_number":93,"box":{"x":116,"y":513,"width":467,"height":12}},{"id":"57a65553-007b-48aa-a82a-edf820e25606","block_type":"box","text":"Direct Lending.","page_number":93,"box":{"x":116,"y":543,"width":109,"height":11}},{"id":"e1c2b184-f035-43c8-937b-7cf499c73924","block_type":"box","text":"The Fund may act as the originator for direct loans and engage in direct lending. Direct","page_number":93,"box":{"x":226,"y":542,"width":641,"height":13}},{"id":"0817f779-3e5d-4207-a0b4-a207710a2292","block_type":"box","text":"loans between the Fund and a borrower may not be adm","page_number":93,"box":{"x":117,"y":558,"width":412,"height":12}},{"id":"c5a21542-845e-4725-a6b8-2c581acd9f3e","block_type":"box","text":"inistered by an underwriter or agent bank. The","page_number":93,"box":{"x":531,"y":558,"width":340,"height":12}},{"id":"e08c8114-c5f8-4ed7-bd3e-25689dbbd51f","block_type":"box","text":"Fund may provide financing to commercial borrowers di","page_number":93,"box":{"x":117,"y":573,"width":402,"height":13}},{"id":"991f5e3f-55c8-44ac-b6e6-c27f2dd72f40","block_type":"box","text":"rectly or through companies acquired (or created)","page_number":93,"box":{"x":521,"y":573,"width":364,"height":13}},{"id":"09daa753-5d98-4d5b-9f30-9a9a2b8c0f20","block_type":"box","text":"and owned by or otherwise affiliat","page_number":93,"box":{"x":116,"y":589,"width":244,"height":12}},{"id":"e5b1997b-d4d0-4781-ae9b-cbdff2c8f44e","block_type":"box","text":"ed with the Fund. The terms of the","page_number":93,"box":{"x":360,"y":589,"width":255,"height":9}},{"id":"e35c7b91-f3b5-4b6d-8da7-8567543d55a9","block_type":"box","text":"direct loans are negotiated with","page_number":93,"box":{"x":616,"y":589,"width":231,"height":12}},{"id":"cf487d3c-7865-42e4-b08c-c0a25faa54b5","block_type":"box","text":"borrowers in private transactions. Furthermore, a direct loan may be secured or unsecured.","page_number":93,"box":{"x":117,"y":605,"width":667,"height":12}},{"id":"a16f2886-bac6-4b7e-921f-8172ccf339bf","block_type":"box","text":"In determining whether to make a direct loan, the Fund will rely primarily upon the creditworthiness of","page_number":93,"box":{"x":117,"y":634,"width":755,"height":12}},{"id":"4aef3f8b-09c0-48d9-9924-a9df5ea7d18d","block_type":"box","text":"the borrower and/or any collateral for payment of interest and repayment of principal. The risks","page_number":93,"box":{"x":116,"y":649,"width":708,"height":12}},{"id":"01b7d512-957c-4f9e-a324-2f139d322c33","block_type":"box","text":"associated with direct loans are substantially similar to those associated with investing in corporate","page_number":93,"box":{"x":116,"y":665,"width":733,"height":12}},{"id":"25f5693c-3daf-4df0-8609-732e83bdcea9","block_type":"box","text":"loans. In making a direct loan, the Fund is exposed to the risk that the borrower may default or become","page_number":93,"box":{"x":117,"y":680,"width":764,"height":12}},{"id":"6aa3b6c7-9f49-4c9f-afa2-e55d732d022a","block_type":"box","text":"insolvent and, consequently, that the Fund will lose money on the loan. Furthermore, direct loans may","page_number":93,"box":{"x":117,"y":696,"width":755,"height":12}},{"id":"612a765d-f93b-4769-abd3-ac3afdefb1ff","block_type":"box","text":"subject the Fund to liquidity and interest rate risk and certain direct loans may be deemed illiquid.","page_number":93,"box":{"x":116,"y":711,"width":720,"height":12}},{"id":"0328a505-494e-4d3b-b2e2-44ac6653fff9","block_type":"box","text":"Direct loans are not publicly traded and may not have a secondary market. The lack of a secondary","page_number":93,"box":{"x":117,"y":727,"width":737,"height":12}},{"id":"7df0a5d9-2b9a-4fca-859a-4e7257441a43","block_type":"box","text":"market for direct loans may have an adverse impact on the ability of the Fund to dispose of a direct","page_number":93,"box":{"x":117,"y":742,"width":734,"height":12}},{"id":"82be2be6-c07b-411c-a8f4-867363e72cbd","block_type":"box","text":"loan and/or to value the direct loan.","page_number":93,"box":{"x":117,"y":758,"width":260,"height":9}},{"id":"b43f5d2a-fb71-47fa-8c82-aadaedf0cd7f","block_type":"box","text":"When engaging in direct lending, the Fund’s performance may depend, in part, on the ability of the","page_number":93,"box":{"x":116,"y":787,"width":731,"height":12}},{"id":"6a68c53e-b83d-4b61-8188-f5cef33a7904","block_type":"box","text":"Fund to originate loans on advantageous terms. In originating loans, the Fund will compete with a","page_number":93,"box":{"x":117,"y":802,"width":722,"height":12}},{"id":"b04a69fa-0346-4e94-bbb4-bc3a8af1bf6e","block_type":"box","text":"broad spectrum of lenders. Increased competition for, or a diminishment in the available supply of,","page_number":93,"box":{"x":117,"y":818,"width":727,"height":12}},{"id":"3d03a7e0-3fd8-463f-9009-268b9f4d8199","block_type":"box","text":"qualifying loans could result in lower yields on such loans, which could reduce Fund performance.","page_number":93,"box":{"x":116,"y":833,"width":730,"height":12}},{"id":"2a8a1818-e060-4c27-b381-3eddbdd1a52f","block_type":"box","text":"As part of its lending activities, the Fund may originate loans to companies that are experiencing","page_number":93,"box":{"x":116,"y":862,"width":719,"height":12}},{"id":"315b7877-feb0-4f32-bd34-fdada39951d1","block_type":"box","text":"significant financial or business difficulties, including companies involved in bankruptcy or other","page_number":93,"box":{"x":116,"y":878,"width":710,"height":12}},{"id":"7d53d45e-dc6d-43b3-8bc3-d996d8d3d3e6","block_type":"box","text":"II-10","page_number":93,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"aa50d412-cdc5-4f2d-ba16-593c92eefc60","block_type":"box","text":"NM1026U-6039989-93/256","page_number":93,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"a5d5704f-1831-4b76-9fa1-99fc1d17ad5a","block_type":"box","text":"reorganization and liquidation proceedings. Although the terms of such financing may result in","page_number":94,"box":{"x":117,"y":87,"width":701,"height":12}},{"id":"3f4c9530-44cc-4992-87d7-eee68690a0ba","block_type":"box","text":"significant financial returns to the Fund, they involve a substantial degree of risk. The level of analytical","page_number":94,"box":{"x":116,"y":102,"width":768,"height":13}},{"id":"5fef313d-5487-4a3a-a352-10face0f5798","block_type":"box","text":"sophistication, both financial and legal, necessary for successful financing to companies experiencing","page_number":94,"box":{"x":116,"y":118,"width":758,"height":12}},{"id":"2e2eac98-f050-4fc0-9d2d-c1774aadc5e6","block_type":"box","text":"significant business and financial difficulties is unusually high.","page_number":94,"box":{"x":116,"y":134,"width":461,"height":12}},{"id":"077d8353-0012-4add-90e4-07e374d0a20f","block_type":"box","text":"Credit Linked Securities.","page_number":94,"box":{"x":117,"y":162,"width":195,"height":10}},{"id":"aaeecae6-7412-43ed-89b5-cda42bed7610","block_type":"box","text":"Among the income producing securities in which a Fund may invest are","page_number":94,"box":{"x":313,"y":162,"width":541,"height":12}},{"id":"e914de0f-ff3a-444a-8649-63ef616d712f","block_type":"box","text":"credit linked securities, which are issued by a limited purpose trust or other vehicle that, in turn, invests","page_number":94,"box":{"x":116,"y":178,"width":768,"height":12}},{"id":"d03eef64-8d5c-49f6-ac8a-6245ec99995c","block_type":"box","text":"in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate","page_number":94,"box":{"x":117,"y":193,"width":771,"height":12}},{"id":"cf3d84e4-aa50-4e64-bbe7-3c1b6126bb5b","block_type":"box","text":"swaps and other securities, in order to provide exposure to certain fixed-income markets. For instance,","page_number":94,"box":{"x":116,"y":209,"width":768,"height":12}},{"id":"e8bbbd9e-f319-4166-ac52-9470fb66a918","block_type":"box","text":"a Fund may invest in credit linked securities as a cash management tool in order to gain exposure to a","page_number":94,"box":{"x":116,"y":224,"width":765,"height":12}},{"id":"57f7f97f-c306-4a62-b368-710d7e04b69d","block_type":"box","text":"certain market and/or to remain fully invested when more traditional income producing securities are","page_number":94,"box":{"x":116,"y":240,"width":748,"height":12}},{"id":"bfc167fd-d649-440e-b97a-22cf0332ee5e","block_type":"box","text":"not available.","page_number":94,"box":{"x":117,"y":255,"width":103,"height":10}},{"id":"59338b22-db66-4236-8197-03c52a6650a1","block_type":"box","text":"Like an investment in a bond, investments in these credit linked securities represent the right to receive","page_number":94,"box":{"x":117,"y":284,"width":770,"height":12}},{"id":"e2903223-bae6-4443-b5c1-1f2367598df0","block_type":"box","text":"periodic income payments (in the form of distributions) and payment of principal at the end of the term","page_number":94,"box":{"x":117,"y":300,"width":761,"height":12}},{"id":"a285917d-9107-402a-9a27-0a53579987a4","block_type":"box","text":"of the security.","page_number":94,"box":{"x":116,"y":315,"width":114,"height":12}},{"id":"238b8064-8947-4d78-9d43-1a9cfcfe65ca","block_type":"box","text":"However, these payments are conditioned on the issuer’s receipt of payments from, and the issuer’s","page_number":94,"box":{"x":117,"y":344,"width":748,"height":12}},{"id":"5b9100ed-c8cf-45c6-b898-5c65849b37b4","block_type":"box","text":"potential obligations to, the counterparties to the derivative instruments and other securities in which","page_number":94,"box":{"x":117,"y":359,"width":747,"height":12}},{"id":"d78760b0-2284-460c-a143-196923f28fc9","block_type":"box","text":"the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the","page_number":94,"box":{"x":116,"y":375,"width":762,"height":12}},{"id":"9ee9168d-ed67-44e9-ab44-f4d9dd77af3b","block_type":"box","text":"issuer would receive a stream of payments over the term of the swap agreements provided that no","page_number":94,"box":{"x":117,"y":390,"width":736,"height":12}},{"id":"88746085-4f06-4972-ade3-266161b51c4f","block_type":"box","text":"event of default has occurred with respect to the referenced debt obligation upon which the swap is","page_number":94,"box":{"x":116,"y":406,"width":741,"height":12}},{"id":"f4d6f6c9-4c77-47e5-8fd3-c26783f6503b","block_type":"box","text":"based. If a default occurs, the stream of payments may stop and the issuer would be obligated to pay","page_number":94,"box":{"x":117,"y":421,"width":756,"height":12}},{"id":"bcbbb340-d20c-4109-8912-f137b83a21b5","block_type":"box","text":"the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn,","page_number":94,"box":{"x":116,"y":437,"width":749,"height":12}},{"id":"cfd8fd67-92ba-4f8b-bc5a-045df96a4d74","block_type":"box","text":"would reduce the amount of income and principal that","page_number":94,"box":{"x":116,"y":452,"width":404,"height":12}},{"id":"bd5ff4cd-7302-46b1-baf5-c133487947ed","block_type":"box","text":"a Fund would receive. A Fund’s investments in","page_number":94,"box":{"x":521,"y":452,"width":351,"height":10}},{"id":"f598ce6d-4fe1-4e2e-b9c2-b4b6745e6a56","block_type":"box","text":"these instruments are indirectly subject to the risks associated with derivative instruments, including,","page_number":94,"box":{"x":116,"y":468,"width":750,"height":12}},{"id":"c8d68c26-c041-45c9-ad68-906555451b0c","block_type":"box","text":"among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk","page_number":94,"box":{"x":116,"y":483,"width":766,"height":12}},{"id":"0cbb40a4-a84b-47c6-a66b-ad520273c3f8","block_type":"box","text":"and management risk. It is also expected that the securities will be exempt from registration under the","page_number":94,"box":{"x":116,"y":499,"width":761,"height":12}},{"id":"2091d1b6-ceb0-440f-a3dd-0372d2e3daff","block_type":"box","text":"Securities Act. Accordingly, there may be no established trading market for the securities and they may","page_number":94,"box":{"x":116,"y":514,"width":771,"height":12}},{"id":"b242b398-8b29-4d9c-844d-724b6b6a0c79","block_type":"box","text":"constitute illiquid investments.","page_number":94,"box":{"x":116,"y":530,"width":227,"height":12}},{"id":"d43c84f3-0baa-49a7-b65d-665093d005da","block_type":"box","text":"Debt Securities.","page_number":94,"box":{"x":116,"y":559,"width":126,"height":9}},{"id":"2a24498f-d999-48e8-b0fd-6854b2e382b6","block_type":"box","text":"Debt securities, such as bonds, involve credit risk. This is the risk that the issuer will","page_number":94,"box":{"x":243,"y":559,"width":633,"height":11}},{"id":"2457950b-e70f-4049-866a-d15d82e12974","block_type":"box","text":"not make timely payments of principal and interest. The degree of credit risk depends on the issuer’s","page_number":94,"box":{"x":117,"y":574,"width":751,"height":12}},{"id":"bcd4a848-1f39-4f19-aff9-74c958cbe8bf","block_type":"box","text":"financial condition and on the terms of the debt securities. Changes in an issuer’s credit rating or the","page_number":94,"box":{"x":116,"y":590,"width":749,"height":12}},{"id":"9feda3e2-9eb8-4660-986c-2d0d45bced3b","block_type":"box","text":"market’s perception of an issuer’s creditworthiness may also affect the value of a Fund’s investment in","page_number":94,"box":{"x":117,"y":605,"width":763,"height":12}},{"id":"d3eeb8a5-a198-4d0a-85f6-8914588ea26f","block_type":"box","text":"that issuer. Credit risk is reduced to the extent a Fund limits its debt investments to U.S. Government","page_number":94,"box":{"x":116,"y":621,"width":754,"height":9}},{"id":"ca6902b7-63df-4f5f-9b47-dc8ac0d4bcf8","block_type":"box","text":"Securities.","page_number":94,"box":{"x":116,"y":636,"width":83,"height":10}},{"id":"6c53ba14-8642-4057-af2b-049ab014c1e0","block_type":"box","text":"All debt securities, however, are subject to interest rate risk. This is the risk that the value of the","page_number":94,"box":{"x":116,"y":665,"width":709,"height":12}},{"id":"36f27018-ade4-4986-bb6d-e449a13968f1","block_type":"box","text":"security may fall when interest rates rise. If interest rates move sharply in a manner not anticipated by","page_number":94,"box":{"x":116,"y":680,"width":755,"height":12}},{"id":"89f689ae-9ad7-4508-87c9-db580d6ed5ea","block_type":"box","text":"Fund management, a Fund’s investments in debt securities could be adversely affected and the Fund","page_number":94,"box":{"x":117,"y":696,"width":752,"height":12}},{"id":"747a0dd5-3191-455c-a3c0-20189eba66b0","block_type":"box","text":"could lose money. In general, the market price of debt securities with longer maturities will go up or","page_number":94,"box":{"x":116,"y":711,"width":735,"height":12}},{"id":"bdbdc250-1d3b-4873-ac9b-c123c2d7b24c","block_type":"box","text":"down more in response to changes in interest rates than will the market price of shorter-term debt","page_number":94,"box":{"x":116,"y":727,"width":725,"height":12}},{"id":"c3c9c749-7e79-4989-b93f-cf6212806e63","block_type":"box","text":"securities.","page_number":94,"box":{"x":116,"y":743,"width":74,"height":9}},{"id":"e9875f3f-994a-4b8a-8585-c24d51c55d1d","block_type":"box","text":"During periods of rising interest rates, the average life of certain fixed-income securities is extended","page_number":94,"box":{"x":117,"y":771,"width":738,"height":12}},{"id":"52c4df8f-f85b-48fa-9d95-226422c54f35","block_type":"box","text":"because of slower than expected principal payments. This may lock in a below-market interest rate and","page_number":94,"box":{"x":117,"y":787,"width":765,"height":12}},{"id":"189f8a02-6136-4e88-bc8e-1db2b53da469","block_type":"box","text":"extend the duration of these fixed-income securities, especially mortgage-related securities, making","page_number":94,"box":{"x":116,"y":802,"width":739,"height":12}},{"id":"1347e5f5-ecb2-4320-b9f2-8705c54102a8","block_type":"box","text":"them more sensitive to changes in interest rates. As a result, in a period of rising interest rates, these","page_number":94,"box":{"x":116,"y":818,"width":750,"height":12}},{"id":"d54412af-f9ce-442d-9a5f-cf92de358025","block_type":"box","text":"securities may exhibit additional volatility and lose value. This is known as extension risk.","page_number":94,"box":{"x":116,"y":833,"width":665,"height":12}},{"id":"63fd98cb-71fb-491b-8ff9-3885efe12f98","block_type":"box","text":"The value of fixed-income securities in the Funds can be expected to vary inversely with changes in","page_number":94,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"de4e7c56-ad82-45a4-9c17-236c7278a735","block_type":"box","text":"prevailing interest rates. Fixed-income securities with longer maturities, which tend to produce higher","page_number":94,"box":{"x":117,"y":878,"width":753,"height":11}},{"id":"53fb9981-c5c2-4ad4-8ae5-126011306ffa","block_type":"box","text":"II-11","page_number":94,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"e4b46d63-f03d-45da-81b6-c664dca46e18","block_type":"box","text":"NM1026U-6039989-94/256","page_number":94,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"a8ef33e5-e841-4977-9480-1bc6a614e994","block_type":"box","text":"yields, are subject to potentially greater capital appreciation and depreciation than securities with","page_number":95,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"058db5c7-d67f-4939-802e-23eb68e4db85","block_type":"box","text":"shorter maturities. The Funds are not restricted to any maximum or minimum time to maturity in","page_number":95,"box":{"x":116,"y":103,"width":714,"height":12}},{"id":"416f1b1c-1216-4400-b1e1-2e54b4d0cfc2","block_type":"box","text":"purchasing individual portfolio securities, and the average maturity of a Fund’s assets will vary.","page_number":95,"box":{"x":117,"y":118,"width":707,"height":12}},{"id":"214f94ba-ce94-4425-884d-972253169786","block_type":"box","text":"Floating and Variable Rate Securities","page_number":95,"box":{"x":116,"y":149,"width":277,"height":12}},{"id":"50556d2c-0a26-4a36-83f0-c02341b997d1","block_type":"box","text":". Certain Funds may invest in debt instruments that pay a variable","page_number":95,"box":{"x":395,"y":149,"width":493,"height":12}},{"id":"538da1fb-d7f6-4c87-8ccc-2eb5816b22af","block_type":"box","text":"coupon rate. Securities with floating or variable interest rates can be less sensitive to interest rate","page_number":95,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"e64e1113-52c4-454d-a316-7dfc42905399","block_type":"box","text":"changes than securities with fixed interest rates, but may decline in value if their interest rates do not","page_number":95,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"94648f80-32d6-4677-b364-120a07f872fc","block_type":"box","text":"rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not","page_number":95,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"b32a2fd4-a198-43fc-bc23-e82a25c756f1","block_type":"box","text":"generally increase in value if interest rates decline. The","page_number":95,"box":{"x":116,"y":211,"width":415,"height":12}},{"id":"f5852eab-b3ee-43ef-8fd2-5af727625fd6","block_type":"box","text":"impact of interest rate changes on floating rate","page_number":95,"box":{"x":532,"y":211,"width":350,"height":12}},{"id":"4fb18830-463d-4bb1-be71-b64fe9de6ef9","block_type":"box","text":"investments is typically mitigated by the periodic interest rate reset of the investments. Benchmark","page_number":95,"box":{"x":117,"y":227,"width":733,"height":12}},{"id":"b6b16b51-9175-4403-8d94-815490dfc305","block_type":"box","text":"interest rates used for floating and variable rate securities may not accurately track market interest","page_number":95,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"0a6b3099-c16b-4659-9d59-9e28182ce73d","block_type":"box","text":"rates.","page_number":95,"box":{"x":117,"y":258,"width":45,"height":9}},{"id":"13b93ca3-cc26-4f69-a70a-89311a341163","block_type":"box","text":"Inflation-Indexed Bonds.","page_number":95,"box":{"x":117,"y":289,"width":179,"height":9}},{"id":"cb203a4e-c7dc-47f4-8d7e-7bd7709df03e","block_type":"box","text":"Certain Funds may invest in inflation-indexed bonds, which are fixed-income","page_number":95,"box":{"x":297,"y":289,"width":577,"height":12}},{"id":"9cd26a64-a694-40e9-a537-674754111e98","block_type":"box","text":"securities or other instruments whose principal value is periodically adjusted according to the rate of","page_number":95,"box":{"x":116,"y":304,"width":746,"height":12}},{"id":"4bc1c860-6970-4e5c-9ff4-a609d944a9a5","block_type":"box","text":"inflation. Two structures are common. The U.S. Treasury and some other issuers use a structure that","page_number":95,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"8a9323a7-9070-42f6-b633-a840e8c292ec","block_type":"box","text":"accrues inflation into the principal value of the bond. Most other issuers pay out the Consumer Price","page_number":95,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"3495baad-e232-4e22-a514-e77dd05bd864","block_type":"box","text":"Index (“CPI”) accruals as part of a semi-annual coupon.","page_number":95,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"db106454-800c-4dd5-b03c-f5995fc11e2b","block_type":"box","text":"Inflation-indexed securities issued by the U.S. Treasury have maturities of five, ten or thirty years,","page_number":95,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"5f3fccbf-6150-4ad3-b569-5d625744d4d7","block_type":"box","text":"although it is possible that securities with other maturities will be issued in the future. The U.S.","page_number":95,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"bb804058-0b54-49fa-a7d5-4deab30f24ad","block_type":"box","text":"Treasury securities pay interest on a semi-annual basis, equal to a fixed percentage of the inflation","page_number":95,"box":{"x":116,"y":413,"width":738,"height":12}},{"id":"d736cd5b-d1d6-4a95-9de0-d93cb5da4f11","block_type":"box","text":"adjusted principal amount. For example, if a Fund purchased an inflation-indexed bond with a par","page_number":95,"box":{"x":116,"y":428,"width":727,"height":12}},{"id":"45240f57-e0e2-4a99-a545-37539f660bd1","block_type":"box","text":"value of $1,000 and a 3% real rate of return coupon (payable 1.5% semi-annually), and inflation over","page_number":95,"box":{"x":116,"y":443,"width":753,"height":13}},{"id":"9018c0d2-2e77-4417-afba-241bfffb2d52","block_type":"box","text":"the first six months was 1%, the mid-year par value of the bond would be $1,010 and the first semi","page_number":95,"box":{"x":116,"y":458,"width":736,"height":13}},{"id":"063d8545-f666-4c3e-b0f9-a873c6960693","block_type":"box","text":"annual interest payment would be $15.15 ($1,010 times 1.5%). If inflation during the second half of the","page_number":95,"box":{"x":116,"y":474,"width":766,"height":13}},{"id":"4a0f4cc3-2ca6-4541-a663-7021afab955f","block_type":"box","text":"year resulted in the whole year’s inflation equaling 3%, the end-of-year par value of the bond would be","page_number":95,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"1780c9b3-606e-4360-81a6-5b0968438d36","block_type":"box","text":"$1,030 and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).","page_number":95,"box":{"x":116,"y":505,"width":689,"height":13}},{"id":"6613560d-b086-4ced-b08a-5637dcee166a","block_type":"box","text":"If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds","page_number":95,"box":{"x":117,"y":537,"width":747,"height":12}},{"id":"acb9fe0d-16db-4ce0-886e-ee2e3b4ce804","block_type":"box","text":"will be adjusted downward, and, consequently, the interest payable on these securities (calculated with","page_number":95,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"27488bef-b04f-43d5-afa9-153a7a5fd1e7","block_type":"box","text":"respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon","page_number":95,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"d4e0e33e-f993-4d76-bcab-4e348c33176e","block_type":"box","text":"maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds,","page_number":95,"box":{"x":117,"y":583,"width":755,"height":12}},{"id":"5c6197f2-d976-4204-927e-03f0681c72c5","block_type":"box","text":"even during a period of deflation. However, the current market value of the bonds is not guaranteed,","page_number":95,"box":{"x":116,"y":599,"width":748,"height":12}},{"id":"8897eebf-d129-4f3a-8b34-fb5d76e79e9f","block_type":"box","text":"and will fluctuate. Certain Funds may also invest in other inflation related bonds which may or may not","page_number":95,"box":{"x":116,"y":614,"width":763,"height":12}},{"id":"fb7f5ef8-0b00-4723-ab76-ff43474692c1","block_type":"box","text":"provide a similar guarantee. If a guarantee of principal is not provided, the adjusted principal value of","page_number":95,"box":{"x":117,"y":630,"width":752,"height":12}},{"id":"462d5aa9-a724-4e0a-8903-2ba90d9fd977","block_type":"box","text":"the bond repaid at maturity may be less than the original principal. In addition, if the Fund purchases","page_number":95,"box":{"x":116,"y":645,"width":749,"height":12}},{"id":"8162d88e-bcb5-45d7-9aba-bca9495a9ac8","block_type":"box","text":"inflation-indexed bonds offered by foreign issuers, the rate of inflation measured by the foreign inflation","page_number":95,"box":{"x":117,"y":661,"width":761,"height":12}},{"id":"95be1c08-9de3-41b1-aa62-82212a9ca785","block_type":"box","text":"index may not be correlated to the rate of inflation in the United States.","page_number":95,"box":{"x":117,"y":676,"width":523,"height":12}},{"id":"c23f4519-570d-4149-bfe6-5ed97764398c","block_type":"box","text":"The value of inflation-indexed bonds is expected to change in response to changes in real interest","page_number":95,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"e4eab775-db22-430a-94dc-69e1502a1e4e","block_type":"box","text":"rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates and the","page_number":95,"box":{"x":117,"y":723,"width":736,"height":12}},{"id":"4adabeec-1e20-4454-b810-abb9f46fabb4","block_type":"box","text":"rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real","page_number":95,"box":{"x":117,"y":738,"width":717,"height":11}},{"id":"13056c0c-98fd-426c-a962-f56fc3bcbdaf","block_type":"box","text":"interest rates might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if","page_number":95,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"4b3d57f9-59dd-4a1a-8d91-ec04210b2170","block_type":"box","text":"nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a","page_number":95,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"3a60c492-7c97-4088-b8bb-f016d5aeae75","block_type":"box","text":"decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of","page_number":95,"box":{"x":116,"y":785,"width":745,"height":11}},{"id":"3b3a0114-8a72-4fd5-a088-7b310d6dd2c2","block_type":"box","text":"inflation-indexed bonds will be directly correlated to changes in interest rates.","page_number":95,"box":{"x":117,"y":800,"width":570,"height":12}},{"id":"406e3a52-9ba6-445c-95e9-0f042ee8b668","block_type":"box","text":"While these securities are expected to be protected from long-term inflationary trends, short-term","page_number":95,"box":{"x":116,"y":831,"width":725,"height":12}},{"id":"b03f69e9-8700-469a-bdab-63013b993739","block_type":"box","text":"increases in inflation may lead to a decline in value. If interest rates rise due to reasons other than","page_number":95,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"f895a487-b85e-431b-a213-bd756f0d3bf6","block_type":"box","text":"inflation (for example, due to changes in currency exchange rates), investors in these securities may","page_number":95,"box":{"x":117,"y":862,"width":749,"height":12}},{"id":"c0cf0e0a-5631-4cda-a405-8d5c78a96435","block_type":"box","text":"not be protected to the extent that the increase is not reflected in the bond’s inflation measure.","page_number":95,"box":{"x":117,"y":878,"width":704,"height":12}},{"id":"7260ef53-37bf-4ea9-9d71-7b4a9cdd286c","block_type":"box","text":"II-12","page_number":95,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"7ef89030-3475-42b3-9a04-aaa48866f163","block_type":"box","text":"NM1026U-6039989-95/256","page_number":95,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"4b4d8ccb-46dc-4cfa-9496-a32dcb09e71c","block_type":"box","text":"In general, the measure used to determine the periodic adjustment of U.S. inflation-indexed bonds is","page_number":96,"box":{"x":117,"y":87,"width":750,"height":12}},{"id":"cf1bd792-73cb-4a3a-b729-12012d10fe9a","block_type":"box","text":"the Consumer Price Index for Urban Consumers (“CPI-U”), which is calculated monthly by the U.S.","page_number":96,"box":{"x":116,"y":102,"width":739,"height":13}},{"id":"8b1eb594-44cc-4401-b8b9-9ed65acaf598","block_type":"box","text":"Bureau of Labor Statistics. The CPI-U is a measurement of changes in the cost of living, made up of","page_number":96,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"f20569f7-0e3a-4ec3-bf2e-262e9941cba0","block_type":"box","text":"components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a","page_number":96,"box":{"x":116,"y":134,"width":739,"height":12}},{"id":"5be8078a-e507-4880-84d4-386b93447ec6","block_type":"box","text":"foreign government are generally adjusted to reflect a comparable inflation index, calculated by that","page_number":96,"box":{"x":116,"y":149,"width":743,"height":12}},{"id":"91041001-14b7-473f-9097-b46c145e5165","block_type":"box","text":"government. There can be no assurance that the CPI-U or any foreign inflation index will accurately","page_number":96,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"91c129ab-372f-4cdb-b6ab-081969e113ae","block_type":"box","text":"measure the real rate of inflation in the prices of goods and services. Moreover, there can be no","page_number":96,"box":{"x":117,"y":180,"width":716,"height":12}},{"id":"30ffe9a1-cdc8-450a-9ad2-ce2dc619e552","block_type":"box","text":"assurance that the rate of inflation in a foreign country will be correlated to the rate of inflation in the","page_number":96,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"3ff59bd7-e674-4e38-a9eb-75d159c4c411","block_type":"box","text":"United States.","page_number":96,"box":{"x":117,"y":211,"width":109,"height":10}},{"id":"3b879e96-9869-42a7-8a38-440811663e01","block_type":"box","text":"Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary","page_number":96,"box":{"x":116,"y":242,"width":750,"height":12}},{"id":"45e90a31-fb18-4545-a882-da659c5cb90e","block_type":"box","text":"income, even though investors do not receive their principal until maturity.","page_number":96,"box":{"x":117,"y":258,"width":552,"height":12}},{"id":"e8b5e51d-d9dc-4a5f-bb08-aa8430169df8","block_type":"box","text":"Investment Grade Debt Obligations.","page_number":96,"box":{"x":117,"y":289,"width":265,"height":12}},{"id":"aa5b1278-57bb-4a5f-b245-fbfa31f32baf","block_type":"box","text":"Certain Funds may invest in “investment grade securities,” which","page_number":96,"box":{"x":383,"y":289,"width":492,"height":12}},{"id":"9874d61f-2b8b-4cb7-af0c-1863c860d491","block_type":"box","text":"are securities rated in the four highest rating categories of an NRSRO or deemed to be of equivalent","page_number":96,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"8a216265-b0e3-4480-91a3-73609e7a5dab","block_type":"box","text":"quality by a Fund’s Manager. Certain Funds may invest in debt securities rated Aaa by Moody’s or","page_number":96,"box":{"x":116,"y":320,"width":734,"height":12}},{"id":"8f50d4c5-479c-4016-ae0b-fb971fb1651d","block_type":"box","text":"AAA by S&P. It should be noted that debt obligations rated in the lowest of the top four ratings (","page_number":96,"box":{"x":116,"y":335,"width":708,"height":12}},{"id":"e188532e-695a-4583-b812-4c78c4582608","block_type":"box","text":"i.e.","page_number":96,"box":{"x":825,"y":335,"width":20,"height":10}},{"id":"932c0c97-b56e-4d0f-bfbb-209a53156cd4","block_type":"box","text":",","page_number":96,"box":{"x":848,"y":343,"width":8,"height":3}},{"id":"d09f83df-389d-4f39-9785-c0d8946822e5","block_type":"box","text":"“Baa” by Moody’s or “BBB” by S&P) are considered to have some speculative characteristics and are","page_number":96,"box":{"x":116,"y":351,"width":756,"height":12}},{"id":"0542ea68-536b-41da-b71b-862f045ab946","block_type":"box","text":"more sensitive to economic change than higher rated securities. If an investment grade security of a","page_number":96,"box":{"x":117,"y":366,"width":747,"height":12}},{"id":"e93eacda-0542-4b37-aff0-09c12d54aaa5","block_type":"box","text":"Fund is subsequently downgraded below investment grade, the Fund’s Manager will consider such an","page_number":96,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"f2836332-1cc5-4f27-92e4-321953af3752","block_type":"box","text":"event in determining whether the Fund should continue to hold the security. Subject to its investment","page_number":96,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"7190ebc4-eb4d-4b5e-b0ae-fdb3f0aef609","block_type":"box","text":"strategies, there is no limit on the amount of such downgraded securities a Fund may hold.","page_number":96,"box":{"x":116,"y":413,"width":679,"height":12}},{"id":"0ee06de9-3dfe-4c67-8cdb-1be3088f08d5","block_type":"box","text":"See Appendix A to this SAI for a description of applicable securities ratings.","page_number":96,"box":{"x":116,"y":444,"width":566,"height":12}},{"id":"b3d14468-f671-471e-b607-4648b4b87eba","block_type":"box","text":"High Yield Investments (“Junk Bonds”).","page_number":96,"box":{"x":116,"y":475,"width":296,"height":12}},{"id":"108d71a0-7e7f-4853-b486-fbadb31110ea","block_type":"box","text":"Non-investment grade or “high yield” fixed-income or convertible securities commonly known to","page_number":96,"box":{"x":117,"y":498,"width":711,"height":12}},{"id":"d6c83bcf-11fa-44d9-909e-e167688f7b68","block_type":"box","text":"investors as “junk bonds” are debt securities that are rated below investment grade by the major rating","page_number":96,"box":{"x":117,"y":513,"width":764,"height":12}},{"id":"b49bee58-02da-4037-be4a-1d4b273e528a","block_type":"box","text":"agencies or are securities that Fund management believes are of comparable quality. While generally","page_number":96,"box":{"x":116,"y":529,"width":759,"height":12}},{"id":"720c2684-abd9-40b1-958b-0a282f75c041","block_type":"box","text":"providing greater income and opportunity for gain, non-investment grade debt securities may be","page_number":96,"box":{"x":117,"y":544,"width":715,"height":12}},{"id":"e0ae9e64-f355-4a92-93ba-9e3f6d3f6636","block_type":"box","text":"subject to greater risks than securities which have higher credit ratings, including a high risk of default,","page_number":96,"box":{"x":116,"y":560,"width":764,"height":12}},{"id":"3b31e71a-ad32-4080-8244-4af6fbfb4348","block_type":"box","text":"and their yields will fluctuate over time. High yield securities will generally be in the lower rating","page_number":96,"box":{"x":116,"y":575,"width":709,"height":12}},{"id":"27b98122-271f-471e-bc57-522ed67025fe","block_type":"box","text":"categories of recognized rating agencies (rated “Ba” or lower by Moody’s or “BB” or lower by S&P) or","page_number":96,"box":{"x":116,"y":591,"width":755,"height":12}},{"id":"f1225e04-0341-4dc7-914d-6b87d4b7d9ee","block_type":"box","text":"will be non-rated. The credit rating of a high yield security does not necessarily address its market","page_number":96,"box":{"x":116,"y":606,"width":730,"height":12}},{"id":"a95ea5e8-e7f0-4490-9cec-0d25fa4ee9bb","block_type":"box","text":"value risk, and ratings may from time to time change, positively or negatively, to reflect developments","page_number":96,"box":{"x":116,"y":622,"width":757,"height":12}},{"id":"4efb2c7b-8388-4b91-ad49-d85dcd3427aa","block_type":"box","text":"regarding the issuer’s financial condition. High yield securities are considered to be speculative with","page_number":96,"box":{"x":117,"y":637,"width":743,"height":12}},{"id":"6bd956cb-e405-489b-b987-ce5a718d1a21","block_type":"box","text":"respect to the capacity of the issuer to timely repay principal and pay interest or dividends in","page_number":96,"box":{"x":117,"y":653,"width":687,"height":12}},{"id":"d8a8b9a7-e619-4dd7-b04f-43688eae1b83","block_type":"box","text":"accordance with the terms of the obligation and may have more credit risk than higher rated securities.","page_number":96,"box":{"x":116,"y":668,"width":761,"height":12}},{"id":"4b5a7d96-0805-40b6-b557-e09feed4a6b2","block_type":"box","text":"The major risks in junk bond investments include the following:","page_number":96,"box":{"x":116,"y":699,"width":464,"height":13}},{"id":"94da53ab-0884-4632-9962-877d099b6624","block_type":"box","text":"• Junk bonds may be issued by less creditworthy companies. These securities are vulnerable to","page_number":96,"box":{"x":117,"y":731,"width":731,"height":12}},{"id":"750ffc5c-3176-4c58-8904-cad5b9138dc2","block_type":"box","text":"adverse changes in the issuer’s industry and to general economic conditions. Issuers of junk","page_number":96,"box":{"x":150,"y":746,"width":686,"height":12}},{"id":"c90136a0-d3bc-4c07-91c4-c088f3286ab2","block_type":"box","text":"bonds may be unable to meet their interest or principal payment obligations because of an","page_number":96,"box":{"x":150,"y":761,"width":669,"height":13}},{"id":"935ca8dc-ae00-4c14-9950-552293926442","block_type":"box","text":"economic downturn, specific issuer developments or the unavailability of additional financing.","page_number":96,"box":{"x":150,"y":777,"width":689,"height":12}},{"id":"e4735c57-2653-42ec-8f8a-c30b1006a10d","block_type":"box","text":"• The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets","page_number":96,"box":{"x":117,"y":800,"width":740,"height":12}},{"id":"123984cb-459f-4a99-8a80-423bc901f67a","block_type":"box","text":"than issuers of investment grade bonds. If the issuer experiences financial stress, it may be","page_number":96,"box":{"x":150,"y":816,"width":678,"height":12}},{"id":"dfebe2a5-ade2-44f0-99c7-bef0809612f9","block_type":"box","text":"unable to meet its debt obligations. The issuer’s ability to pay its debt obligations also may be","page_number":96,"box":{"x":150,"y":831,"width":697,"height":12}},{"id":"cbc78311-1ed8-4c0b-b1d9-d88a5c4f4766","block_type":"box","text":"lessened by specific issuer developments, or the unavailability of additional financing. Issuers of","page_number":96,"box":{"x":150,"y":847,"width":717,"height":12}},{"id":"526bdcc2-9380-46f7-b289-b6f13c3139f0","block_type":"box","text":"high yield securities are often in the growth stage of their development and/or involved in a","page_number":96,"box":{"x":150,"y":862,"width":677,"height":12}},{"id":"0109af4a-5ee6-4983-a417-519c11b7c557","block_type":"box","text":"reorganization or takeover.","page_number":96,"box":{"x":150,"y":878,"width":204,"height":12}},{"id":"1ac43a6e-b8b2-45ef-a4ac-9883885d2768","block_type":"box","text":"II-13","page_number":96,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"713ba2ec-c207-4392-a3f8-b31d597086fb","block_type":"box","text":"NM1026U-6039989-96/256","page_number":96,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"33ec86e6-f45b-4a5d-aaca-c6c4f6870c60","block_type":"box","text":"• Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its","page_number":97,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"572ddd84-3f90-4536-8628-80cc0473a073","block_type":"box","text":"obligations, the senior obligations are generally paid off before the junior obligations, which will","page_number":97,"box":{"x":150,"y":102,"width":706,"height":13}},{"id":"0b45c000-4546-4b7f-ac73-f9b286425092","block_type":"box","text":"potentially limit a Fund’s ability to fully recover principal or to receive interest payments when","page_number":97,"box":{"x":150,"y":118,"width":693,"height":12}},{"id":"c2fec0b1-d9d8-4c8d-bb5d-e2ee8a3375a6","block_type":"box","text":"senior securities are in default. Thus, investors in high yield securities have a lower degree of","page_number":97,"box":{"x":150,"y":134,"width":696,"height":12}},{"id":"65bb3a38-90e5-4289-8a5f-86c37220f5b2","block_type":"box","text":"protection with respect to principal and interest payments than do investors in higher rated","page_number":97,"box":{"x":150,"y":149,"width":674,"height":12}},{"id":"2a5d4cec-ee1f-44e7-9a49-6f7712e6bfde","block_type":"box","text":"securities.","page_number":97,"box":{"x":150,"y":165,"width":80,"height":9}},{"id":"d328c1d0-97d0-4380-8dcc-d1187ed4c771","block_type":"box","text":"• Junk bonds frequently have redemption features that permit an issuer to repurchase the security","page_number":97,"box":{"x":117,"y":188,"width":753,"height":12}},{"id":"b78389f6-999f-49fb-a5c7-755953f5fcc1","block_type":"box","text":"from a Fund before it matures. If an issuer redeems the junk bonds, a Fund may have to invest the","page_number":97,"box":{"x":149,"y":203,"width":738,"height":12}},{"id":"d9e30110-b8f7-489c-8ce8-42851b772933","block_type":"box","text":"proceeds in bonds with lower yields and may lose income.","page_number":97,"box":{"x":150,"y":219,"width":437,"height":12}},{"id":"08979335-fc1d-4ff6-b4e4-3c5d3745f2a1","block_type":"box","text":"• Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments","page_number":97,"box":{"x":117,"y":242,"width":753,"height":12}},{"id":"d2af6ce4-e036-4ae1-8e01-bdee68fefc94","block_type":"box","text":"may have a greater impact on the prices of junk bonds than on those of other higher rated fixed","page_number":97,"box":{"x":150,"y":258,"width":713,"height":12}},{"id":"2472dd11-fb5a-45c5-ba14-81094acab4a9","block_type":"box","text":"income securities.","page_number":97,"box":{"x":150,"y":273,"width":139,"height":10}},{"id":"b7f71cff-f8c9-4ecf-9b5b-e107e06ad022","block_type":"box","text":"• Junk bonds may be less liquid than higher rated fixed-income securities even under normal","page_number":97,"box":{"x":117,"y":296,"width":714,"height":12}},{"id":"b624b942-1882-4dca-bc55-efb1e9995284","block_type":"box","text":"economic conditions. Under certain economic and/or market conditions, a Fund may have difficulty","page_number":97,"box":{"x":150,"y":312,"width":738,"height":12}},{"id":"75bb2f44-aebc-4c26-b713-e195da262348","block_type":"box","text":"disposing of certain high yield securities due to the limited number of investors in that sector of the","page_number":97,"box":{"x":150,"y":327,"width":734,"height":12}},{"id":"43650f5e-3216-466a-84c1-00d9b4a12323","block_type":"box","text":"market. There are fewer dealers in the junk bond market, and there may be significant differences","page_number":97,"box":{"x":150,"y":343,"width":730,"height":12}},{"id":"c7c6cc9a-7ab0-406f-b532-a428c23e65a7","block_type":"box","text":"in the prices quoted for junk bonds by the dealers, and such quotations may not be the actual","page_number":97,"box":{"x":150,"y":358,"width":698,"height":12}},{"id":"9b78fa37-7bba-4ccb-9799-a529b36928ff","block_type":"box","text":"prices available for a purchase or sale. Because junk bonds are less liquid than higher rated","page_number":97,"box":{"x":150,"y":374,"width":688,"height":12}},{"id":"e70d9648-6240-4080-adb0-462be99d025e","block_type":"box","text":"bonds, judgment may play a greater role in valuing certain of a Fund’s portfolio securities than in","page_number":97,"box":{"x":150,"y":389,"width":720,"height":12}},{"id":"d7804627-ba12-4ff5-9067-d746960f324a","block_type":"box","text":"the case of securities trading in a more liquid market.","page_number":97,"box":{"x":150,"y":405,"width":398,"height":12}},{"id":"fcfc263f-1f64-436c-bb16-ca3ca167b7f0","block_type":"box","text":"• The secondary markets for high yield securities are not as liquid as the secondary markets for","page_number":97,"box":{"x":117,"y":428,"width":734,"height":12}},{"id":"4ef126bc-5b41-431a-9e14-c3169be92dc0","block_type":"box","text":"higher rated securities. The secondary markets for high yield securities are concentrated in","page_number":97,"box":{"x":150,"y":444,"width":680,"height":12}},{"id":"8f4f1b12-b0bd-4fc8-9891-b4975f61e896","block_type":"box","text":"relatively few market makers and participants in the markets are mostly institutional investors,","page_number":97,"box":{"x":150,"y":459,"width":699,"height":12}},{"id":"f8cf67e3-63d0-4f11-b5f3-41ce222fdf95","block_type":"box","text":"including insurance companies, banks, other financial institutions and mutual funds. In addition,","page_number":97,"box":{"x":150,"y":475,"width":712,"height":12}},{"id":"466eca16-9b01-4556-a31a-328f0af117ca","block_type":"box","text":"the trading volume for high yield securities is generally lower than that for higher rated securities","page_number":97,"box":{"x":150,"y":490,"width":718,"height":12}},{"id":"a7666d83-47d4-48d3-a233-882b82bcda2b","block_type":"box","text":"and the secondary markets could contract under adverse market or economic conditions","page_number":97,"box":{"x":150,"y":506,"width":662,"height":12}},{"id":"df8442b1-1b7a-4992-b9e0-5d864918096c","block_type":"box","text":"independent of any specific adverse changes in the condition of a particular issuer. Under certain","page_number":97,"box":{"x":150,"y":521,"width":725,"height":12}},{"id":"f9860945-776e-4dc4-9f3c-5fc21cb368d7","block_type":"box","text":"economic and/or market conditions, a Fund may have difficulty disposing of certain high yield","page_number":97,"box":{"x":150,"y":537,"width":695,"height":12}},{"id":"c5c9ff48-e2c0-4717-9076-fa7dcdf3f490","block_type":"box","text":"securities due to the limited number of investors in that sector of the market. An illiquid secondary","page_number":97,"box":{"x":150,"y":552,"width":728,"height":12}},{"id":"eba209c9-3bd8-4031-94d5-947b568c7b06","block_type":"box","text":"market may adversely affect the market price of the high yield security, which may result in","page_number":97,"box":{"x":150,"y":568,"width":678,"height":12}},{"id":"d8795b66-a46f-4bea-a279-5a388476822f","block_type":"box","text":"increased difficulty selling the particular issue and obtaining accurate market quotations on the","page_number":97,"box":{"x":150,"y":583,"width":706,"height":12}},{"id":"a79cc552-6d23-4788-add0-c981386555ea","block_type":"box","text":"issue when valuing a Fund’s assets. Market quotations on high yield securities are available only","page_number":97,"box":{"x":150,"y":599,"width":722,"height":12}},{"id":"098e1848-fb8c-4abe-8274-b875104c59ec","block_type":"box","text":"from a limited number of dealers, and such quotations may not be the actual prices available for a","page_number":97,"box":{"x":149,"y":614,"width":731,"height":12}},{"id":"59b9f5e2-8bd6-4f4d-9b0f-739d04da14c8","block_type":"box","text":"purchase or sale. When the secondary market for high yield securities becomes more illiquid, or in","page_number":97,"box":{"x":150,"y":630,"width":734,"height":12}},{"id":"dfad19e6-dd21-4aa2-94a4-6586f7836fa1","block_type":"box","text":"the absence of readily available market quotations for such securities, the relative lack of reliable","page_number":97,"box":{"x":150,"y":645,"width":723,"height":12}},{"id":"778a8273-8ad2-4c4a-a179-25b9bae84a0c","block_type":"box","text":"objective data makes it more difficult to value a Fund’s securities, and judgment plays a more","page_number":97,"box":{"x":150,"y":661,"width":691,"height":12}},{"id":"dd149f04-3f3b-4e0b-b92b-2010f6994e5c","block_type":"box","text":"important role in determining such valuations.","page_number":97,"box":{"x":150,"y":676,"width":337,"height":12}},{"id":"b7218a0f-6093-4377-b4e5-847438b446e5","block_type":"box","text":"• A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate","page_number":97,"box":{"x":117,"y":699,"width":757,"height":13}},{"id":"4b6aa683-4a35-4383-8748-ebb1e2d0c465","block_type":"box","text":"new terms with a defaulting issuer.","page_number":97,"box":{"x":150,"y":715,"width":256,"height":12}},{"id":"903553b4-e8ad-40c5-95a3-04f3b294c342","block_type":"box","text":"• The junk bond markets may react strongly to adverse news about an issuer or the economy, or to","page_number":97,"box":{"x":117,"y":738,"width":756,"height":12}},{"id":"8d2ff3de-79f7-4f78-b7fb-b641136d40e4","block_type":"box","text":"the perception or expectation of adverse news, whether or not it is based on fundamental analysis.","page_number":97,"box":{"x":150,"y":754,"width":731,"height":12}},{"id":"bc6c9493-3666-4f2c-ac62-36754f8aca01","block_type":"box","text":"Additionally, prices for high yield securities may be affected by legislative and regulatory","page_number":97,"box":{"x":149,"y":769,"width":654,"height":12}},{"id":"ab091a97-5d20-41c1-ab80-f5bc12b10db7","block_type":"box","text":"developments. These developments could adversely affect a Fund’s NAV and investment","page_number":97,"box":{"x":150,"y":785,"width":664,"height":12}},{"id":"bfac74b9-797c-4498-bdc9-8a2e93191a1c","block_type":"box","text":"practices, the secondary market for high yield securities, the financial condition of issuers of these","page_number":97,"box":{"x":150,"y":800,"width":726,"height":12}},{"id":"6fc5b5ee-e551-4673-bb1e-a3658f3b42b1","block_type":"box","text":"securities and the value and liquidity of outstanding high yield securities, especially in a thinly","page_number":97,"box":{"x":150,"y":816,"width":690,"height":12}},{"id":"c37aba9f-0c2d-4950-aa7d-c1de18f27d10","block_type":"box","text":"traded market. For example, federal legislation requiring the divestiture by federally insured","page_number":97,"box":{"x":150,"y":831,"width":681,"height":12}},{"id":"ac604336-e2b5-44a2-907a-9a47beca34c5","block_type":"box","text":"savings and loan associations of their investments in high yield bonds and limiting the deductibility","page_number":97,"box":{"x":150,"y":847,"width":733,"height":12}},{"id":"752ba6e3-3499-4b00-836b-3c5f1d7c2adb","block_type":"box","text":"of interest by certain corporate issuers of high yield bonds adversely affected the market in the","page_number":97,"box":{"x":150,"y":862,"width":706,"height":12}},{"id":"5861a2cc-2e02-447d-9ae2-27614e06eb98","block_type":"box","text":"past.","page_number":97,"box":{"x":150,"y":878,"width":41,"height":12}},{"id":"a8206b2d-03f8-4e12-a9bc-20dca48cb094","block_type":"box","text":"II-14","page_number":97,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1553bb96-df2a-415f-af3c-8ba8008a37b2","block_type":"box","text":"NM1026U-6039989-97/256","page_number":97,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"f4b23c84-dcc1-439f-9e30-0d4234a6069c","block_type":"box","text":"• The rating assigned by a rating agency evaluates the issuing agency’s assessment of the safety of","page_number":98,"box":{"x":117,"y":87,"width":770,"height":12}},{"id":"b2f38736-9957-4d81-b30b-3e5b11bbaabc","block_type":"box","text":"a non-investment grade security’s principal and interest payments, but does not address market","page_number":98,"box":{"x":150,"y":103,"width":716,"height":12}},{"id":"88aefecf-27ee-485e-bf7a-6680cd060626","block_type":"box","text":"value risk. Because such ratings of the ratings agencies may not always reflect current conditions","page_number":98,"box":{"x":150,"y":118,"width":728,"height":12}},{"id":"a3fafc80-1b2c-44a8-afe5-6535e784ea0f","block_type":"box","text":"and events, in addition to using recognized rating agencies and other sources, the Manager or","page_number":98,"box":{"x":150,"y":134,"width":705,"height":12}},{"id":"32140a81-3e1d-4737-b4ef-9c5f829858c8","block_type":"box","text":"sub-adviser performs its own analysis of the issuers whose non-investment grade securities a","page_number":98,"box":{"x":150,"y":149,"width":700,"height":12}},{"id":"b2e6a895-9104-4255-8d97-9896a938deba","block_type":"box","text":"Fund holds. Because of this, the Fund’s performance may depend more on the Manager’s or","page_number":98,"box":{"x":151,"y":165,"width":693,"height":12}},{"id":"92e81987-6dad-4736-ae17-b85ede0ca7a2","block_type":"box","text":"sub-adviser’s own credit analysis than in the case of mutual funds investing in higher-rated","page_number":98,"box":{"x":150,"y":180,"width":678,"height":12}},{"id":"b5647883-606c-4187-b945-3243883feb44","block_type":"box","text":"securities.","page_number":98,"box":{"x":150,"y":196,"width":80,"height":9}},{"id":"255e94bf-075c-4607-ad35-95762955b87a","block_type":"box","text":"In selecting non-investment grade securities, the Manager or sub-adviser considers factors such as","page_number":98,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"813ed5e6-8526-4678-8a37-c6288a0e5bc1","block_type":"box","text":"those relating to the creditworthiness of issuers, the ratings and performance of the securities, the","page_number":98,"box":{"x":116,"y":242,"width":731,"height":12}},{"id":"256522ff-6a1a-41a4-aafe-56731275154f","block_type":"box","text":"protections afforded the securities and the diversity of the Fund. The Manager or sub-adviser","page_number":98,"box":{"x":117,"y":258,"width":694,"height":12}},{"id":"b28d929c-dcc7-43ff-b8e6-ae238cf84395","block_type":"box","text":"continuously monitors the issuers of non-investment grade securities held by the Fund for their ability","page_number":98,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"a8066933-964a-46cf-8c7a-2d36c7921779","block_type":"box","text":"to make required principal and interest payments, as well as in an effort to control the liquidity of the","page_number":98,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"d19a9968-bdee-449b-815d-abfb13b8cb34","block_type":"box","text":"Fund so that it can meet redemption requests. If a security’s rating is reduced below the minimum","page_number":98,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"12a905c4-11e1-4f99-9d3d-9543de5c072f","block_type":"box","text":"credit rating that is permitted for a Fund, the Fund’s adviser or sub-adviser will consider whether the","page_number":98,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"c7d6f442-5541-47b2-b9f4-de6fd33ce79e","block_type":"box","text":"Fund should continue to hold the security.","page_number":98,"box":{"x":117,"y":335,"width":315,"height":12}},{"id":"0aec8a60-2f70-4141-b0ed-9ac16fcfe70c","block_type":"box","text":"In the event that a Fund investing in high yield securities experiences an unexpected level of net","page_number":98,"box":{"x":117,"y":366,"width":718,"height":12}},{"id":"673677f9-27e0-4a48-b962-5d3104a701b8","block_type":"box","text":"redemptions, the Fund could be forced to sell its holdings without regard to the investment merits,","page_number":98,"box":{"x":117,"y":382,"width":729,"height":12}},{"id":"625ff13a-b3b9-458b-a451-1b0196b9747b","block_type":"box","text":"thereby decreasing the assets upon which the Fund’s rate of return is based.","page_number":98,"box":{"x":116,"y":397,"width":575,"height":12}},{"id":"b718f471-bc02-414f-9e75-01730ecbd7e4","block_type":"box","text":"The costs attributable to investing in the junk bond markets are usually higher for several reasons,","page_number":98,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"0ee665ed-7bd9-491f-bb30-523cafca2cdf","block_type":"box","text":"such as higher investment research costs and higher commission costs.","page_number":98,"box":{"x":116,"y":444,"width":540,"height":12}},{"id":"a66d994b-eb17-463c-8d9a-d4829eb015f9","block_type":"box","text":"Mezzanine Investments.","page_number":98,"box":{"x":116,"y":475,"width":179,"height":9}},{"id":"c3931d77-8358-4f2d-8062-3d66c6423537","block_type":"box","text":"Certain Funds, consistent with their restrictions on investing in securities of a","page_number":98,"box":{"x":297,"y":475,"width":579,"height":12}},{"id":"491c29e2-7584-4798-bf8d-08596086363c","block_type":"box","text":"specific credit quality, may invest in certain high yield securities known as mezzanine investments,","page_number":98,"box":{"x":116,"y":490,"width":735,"height":12}},{"id":"b2b25ac1-a45c-4819-b446-a54e62eec0d7","block_type":"box","text":"which are subordinated debt securities which are generally issued in private placements in connection","page_number":98,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"501ea869-4778-4d5e-8da6-33ddf2f9a419","block_type":"box","text":"with an equity security (","page_number":98,"box":{"x":116,"y":521,"width":175,"height":12}},{"id":"8005f069-d41b-416a-9abd-4809e9dc34c2","block_type":"box","text":"e.g.","page_number":98,"box":{"x":292,"y":524,"width":26,"height":9}},{"id":"b0d5d8e1-04d4-41fe-b2ba-eb66bc500503","block_type":"box","text":", with attached warrants). Such mezzanine investments may be issued with","page_number":98,"box":{"x":321,"y":521,"width":563,"height":12}},{"id":"8e48333b-1288-4f2b-8f21-08ec1d30cb07","block_type":"box","text":"or without registration rights. Similar to other high yield securities, maturities of mezzanine investments","page_number":98,"box":{"x":116,"y":537,"width":767,"height":12}},{"id":"78f53994-2d08-4880-88af-ea118b12fb38","block_type":"box","text":"are typically seven to ten years, but the expected average life is significantly shorter at three to five","page_number":98,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"f33a186d-867f-4780-ab22-c35527859980","block_type":"box","text":"years. Mezzanine investments are usually unsecured and subordinate to other obligations of the","page_number":98,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"9e4d6b02-2652-4697-89c0-787cd26fa742","block_type":"box","text":"issuer.","page_number":98,"box":{"x":117,"y":583,"width":53,"height":10}},{"id":"4ff9ab18-4b79-425c-b1f8-37e2c6056bd2","block_type":"box","text":"Pay-in-kind Bonds.","page_number":98,"box":{"x":116,"y":614,"width":139,"height":12}},{"id":"fd177373-73e1-4eb7-a39e-0737b1012255","block_type":"box","text":"Certain Funds may invest in pay-in-kind, or PIK, bonds. PIK bonds are bonds which","page_number":98,"box":{"x":257,"y":614,"width":631,"height":12}},{"id":"70c62ac9-9faf-4c65-b41c-00c011b0c11a","block_type":"box","text":"pay interest through the issuance of additional debt or equity securities. Similar to zero coupon","page_number":98,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"d9e10f28-1c58-4283-b934-d442f489273a","block_type":"box","text":"obligations, pay-in-kind bonds also carry additional risk as holders of these types of securities realize","page_number":98,"box":{"x":116,"y":645,"width":753,"height":12}},{"id":"b5a71f7c-8124-452b-ae3c-86aa8bcbcaef","block_type":"box","text":"no cash until the cash payment date unless a portion of such securities is sold and, if the issuer","page_number":98,"box":{"x":117,"y":661,"width":707,"height":12}},{"id":"95c4413b-f143-4f08-a7a6-eee143120e15","block_type":"box","text":"defaults, a Fund may obtain no return at all on its investment. The market price of pay-in-kind bonds is","page_number":98,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"6d123d4b-99c2-4d81-bfe2-7cc70edec515","block_type":"box","text":"affected by interest rate changes to a greater extent, and therefore tends to be more volatile, than that","page_number":98,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"1503fa71-f272-409d-88f0-4919ac85c47a","block_type":"box","text":"of securities which pay interest in cash. Additionally, current U.S. federal income tax law requires the","page_number":98,"box":{"x":116,"y":707,"width":747,"height":12}},{"id":"335ad32c-cfb7-47b7-9292-b9416c08c34a","block_type":"box","text":"holder of pay-in-kind bonds to accrue current income with respect to these securities regardless of the","page_number":98,"box":{"x":117,"y":723,"width":756,"height":12}},{"id":"5a443a8a-b928-4835-9acf-8b45bcd8dc26","block_type":"box","text":"receipt of cash payments. To maintain its qualification as a regulated investment company and avoid","page_number":98,"box":{"x":117,"y":738,"width":745,"height":12}},{"id":"49e3bc6f-8a96-4c93-b958-9538edc24f93","block_type":"box","text":"liability for U.S. federal income and excise taxes, each Fund may be required to distribute income","page_number":98,"box":{"x":117,"y":754,"width":721,"height":12}},{"id":"5a0e73cd-41a9-40cb-83d1-b35ad6cf66fb","block_type":"box","text":"accrued with respect to these securities and may have to dispose of portfolio securities under","page_number":98,"box":{"x":116,"y":769,"width":693,"height":12}},{"id":"89bf06c6-783f-4179-81be-6774bb45ac80","block_type":"box","text":"disadvantageous circumstances in order to generate cash to satisfy these distribution requirements.","page_number":98,"box":{"x":116,"y":785,"width":740,"height":12}},{"id":"d822b029-672a-41d2-b853-a97146582b4e","block_type":"box","text":"Supranational Entities.","page_number":98,"box":{"x":117,"y":816,"width":165,"height":12}},{"id":"57527b58-5047-4ce9-b0cb-dcaa4fec1a0f","block_type":"box","text":"A Fund may invest in debt securities of supranational entities. Examples of","page_number":98,"box":{"x":289,"y":816,"width":555,"height":12}},{"id":"70d0bd26-5c86-4eaa-a033-028db4b5a0d9","block_type":"box","text":"such entities include the International Bank for Reconstruction and Development (the World Bank), the","page_number":98,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"b8a406ed-0a31-4238-a8e8-5a4452569ce9","block_type":"box","text":"European Steel and Coal Community, the Asian Development Bank and the Inter-American","page_number":98,"box":{"x":117,"y":847,"width":683,"height":12}},{"id":"40c73817-204d-4a8f-a8cd-9880ccb95153","block_type":"box","text":"Development Bank. The government members, or “stockholders,” usually make initial capital","page_number":98,"box":{"x":117,"y":862,"width":691,"height":12}},{"id":"e13c8507-c3c0-4493-b132-e7cefd6e4d8e","block_type":"box","text":"contributions to the supranational entity and in many cases are committed to make additional capital","page_number":98,"box":{"x":116,"y":878,"width":748,"height":12}},{"id":"b85303de-b480-41d5-b8dc-03677ba218ac","block_type":"box","text":"II-15","page_number":98,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"4a7ffaf7-6aa3-490d-9bdd-22009bd26049","block_type":"box","text":"NM1026U-6039989-98/256","page_number":98,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1155f78c-328a-457e-b4cf-dc44f90d43c1","block_type":"box","text":"contributions if the supranational entity is unable to repay its borrowings. There is no guarantee that","page_number":99,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"ffdbaee6-fad1-4d6c-bb67-9cb2f7d1ad74","block_type":"box","text":"one or more stockholders of a supranational entity will continue to make any necessary additional","page_number":99,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"aed12b92-a773-4709-a2f5-b3a7dfc35c7b","block_type":"box","text":"capital contributions. If such contributions are not made, the entity may be unable to pay interest or","page_number":99,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"cf6296e5-1068-4a06-a26a-e13aa9994e87","block_type":"box","text":"repay principal on its debt securities, and a Fund may lose money on such investments.","page_number":99,"box":{"x":117,"y":134,"width":655,"height":12}},{"id":"16d69694-9558-46f3-bb39-cf3034bc1dd1","block_type":"box","text":"Depositary Receipts (ADRs, EDRs and GDRs).","page_number":99,"box":{"x":116,"y":167,"width":367,"height":12}},{"id":"43f520e6-11a6-498f-bdab-55d7c0e85a7d","block_type":"box","text":"Certain Funds may invest in the securities of foreign","page_number":99,"box":{"x":484,"y":167,"width":397,"height":12}},{"id":"6fede22d-b656-40af-bbd3-b2dc2f914adb","block_type":"box","text":"issuers in the form of Depositary Receipts or other securities convertible into securities of foreign","page_number":99,"box":{"x":117,"y":182,"width":722,"height":12}},{"id":"7c63abdf-d894-4b8a-b7c8-ea3c2d248aa1","block_type":"box","text":"issuers. Depositary Receipts may not necessarily be denominated in the same currency as the","page_number":99,"box":{"x":117,"y":198,"width":707,"height":12}},{"id":"ae828a97-ea0b-4edb-a8f0-465f611942fa","block_type":"box","text":"underlying securities into which they may be converted. The Fund may invest in both sponsored and","page_number":99,"box":{"x":117,"y":213,"width":749,"height":12}},{"id":"da4544fc-e5c8-4de3-9a41-97e33b67940f","block_type":"box","text":"unsponsored American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global","page_number":99,"box":{"x":117,"y":229,"width":769,"height":12}},{"id":"0f5724a8-dae7-4809-9b8c-786635924b5a","block_type":"box","text":"Depositary Receipts (“GDRs”) and other similar global instruments. ADRs typically are issued by an","page_number":99,"box":{"x":117,"y":244,"width":743,"height":12}},{"id":"350c52a5-8e23-48fd-8e54-ecfee6f19307","block_type":"box","text":"American bank or trust company and evidence ownership of underlying securities issued by a foreign","page_number":99,"box":{"x":116,"y":260,"width":756,"height":12}},{"id":"a8a024ec-3900-4228-be05-9a4ee7eb3a5a","block_type":"box","text":"corporation. EDRs, which are sometimes referred to as Continental Depositary Receipts, are receipts","page_number":99,"box":{"x":116,"y":275,"width":757,"height":12}},{"id":"1a320e12-1cbd-4feb-8c95-56036060742c","block_type":"box","text":"issued in Europe, typically by foreign banks and trust companies, that evidence ownership of either","page_number":99,"box":{"x":117,"y":291,"width":739,"height":12}},{"id":"d69cac20-af6d-4245-b1c7-654af162958b","block_type":"box","text":"foreign or domestic underlying securities. GDRs are depositary receipts structured like global debt","page_number":99,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"eeecfa54-b37b-4b14-944f-c86cff7bf324","block_type":"box","text":"issues to facilitate trading on an international basis. In addition to investment risks associated with the","page_number":99,"box":{"x":117,"y":322,"width":758,"height":12}},{"id":"7a32b340-072c-463d-ac32-e3e768ccbf05","block_type":"box","text":"underlying issuer, Depositary Receipts expose a Fund to additional risks associated with the","page_number":99,"box":{"x":117,"y":337,"width":689,"height":12}},{"id":"220cdd63-2439-4a00-a09e-86041ed1eb65","block_type":"box","text":"non-uniform terms that apply to Depositary Receipt programs, credit exposure to the depository bank","page_number":99,"box":{"x":117,"y":353,"width":754,"height":12}},{"id":"debfc769-a2ec-4e11-a017-6b197f1fb9be","block_type":"box","text":"and to the sponsors and other parties with whom the depository bank establishes the programs,","page_number":99,"box":{"x":116,"y":368,"width":716,"height":12}},{"id":"cd3aabe5-3193-40c8-9b1f-2c56cfaea9be","block_type":"box","text":"currency risk and the risk of an illiquid market for Depositary Receipts. Unsponsored ADR, EDR and","page_number":99,"box":{"x":116,"y":384,"width":748,"height":12}},{"id":"0dcbe1a2-8b93-4f82-8cd6-13a3e69db5d0","block_type":"box","text":"GDR programs are organized independently and without the cooperation of the issuer of the underlying","page_number":99,"box":{"x":117,"y":399,"width":771,"height":12}},{"id":"0cd757ef-6ae0-4d5f-b656-9b5e366f55b5","block_type":"box","text":"securities. Unsponsored programs generally expose investors to greater risks than sponsored","page_number":99,"box":{"x":116,"y":415,"width":701,"height":12}},{"id":"2d45b21e-7e5e-44fb-b5ea-6128cdc2e0f3","block_type":"box","text":"programs and do not provide holders with many of the shareholder benefits that come from investing in","page_number":99,"box":{"x":117,"y":430,"width":769,"height":12}},{"id":"a07575d5-dc58-4752-8d05-a7e34666a453","block_type":"box","text":"a sponsored Depositary Receipt. Available information concerning the issuer may not be as current as","page_number":99,"box":{"x":116,"y":446,"width":764,"height":12}},{"id":"7ccbd038-c7b1-405e-be22-6665e4a06e2c","block_type":"box","text":"for sponsored ADRs, EDRs and GDRs, and the prices of unsponsored ADRs, EDRs and GDRs may","page_number":99,"box":{"x":116,"y":461,"width":750,"height":12}},{"id":"ee8e042d-79e8-418a-b7a9-3f136a5fe039","block_type":"box","text":"be more volatile than if such instruments were sponsored by the issuer. Depositary Receipts are","page_number":99,"box":{"x":117,"y":477,"width":718,"height":12}},{"id":"b4e16c6d-8722-4e63-95a8-a4518ed1c4a4","block_type":"box","text":"generally subject to the same risks as the foreign securities that they evidence or into which they may","page_number":99,"box":{"x":116,"y":492,"width":759,"height":12}},{"id":"64677dd5-ddf4-404c-a060-534c2024b5be","block_type":"box","text":"be converted. Investments in ADRs, EDRs and GDRs present additional investment considerations as","page_number":99,"box":{"x":117,"y":508,"width":763,"height":12}},{"id":"7acfccef-6dae-492a-9182-b02f89904609","block_type":"box","text":"described under “Foreign Investment Risks.”","page_number":99,"box":{"x":116,"y":523,"width":336,"height":12}},{"id":"460f4b75-fa47-4933-90d5-96e73ed29cea","block_type":"box","text":"Derivatives.","page_number":99,"box":{"x":116,"y":557,"width":99,"height":9}},{"id":"5c59047b-5b19-497c-a12e-ac9181ca201e","block_type":"box","text":"General.","page_number":99,"box":{"x":117,"y":581,"width":68,"height":9}},{"id":"f2d86057-c566-42d5-8fc9-15b725c7a6ef","block_type":"box","text":"Each Fund may use instruments referred to as derivatives, which are financial instruments","page_number":99,"box":{"x":186,"y":581,"width":675,"height":12}},{"id":"a2b2e66b-4ef3-4977-aafa-1555ce386f46","block_type":"box","text":"that derive their value from one or more securities, commodities (such as gold or oil), currencies,","page_number":99,"box":{"x":116,"y":596,"width":722,"height":12}},{"id":"db5c0b11-f924-4ab0-98d9-d7e70eb21cea","block_type":"box","text":"interest rates, credit events or indices (a measure of value or rates, such as the S&P 500 Index or the","page_number":99,"box":{"x":117,"y":612,"width":758,"height":12}},{"id":"c2db4ca4-d4d7-4129-95ea-76ef33cd38fc","block_type":"box","text":"prime lending rate) or other reference asset. Derivatives may allow a Fund to increase or decrease the","page_number":99,"box":{"x":117,"y":627,"width":765,"height":12}},{"id":"a9993ead-1074-4420-9898-e27e3e10f46c","block_type":"box","text":"level of risk to which the Fund is exposed more quickly and efficiently than with other transactions.","page_number":99,"box":{"x":117,"y":643,"width":732,"height":12}},{"id":"b60eb38a-8b53-4825-9519-23ea09ebff41","block_type":"box","text":"Certain Funds may use derivatives to maintain a portion of their long and short positions. Unless","page_number":99,"box":{"x":117,"y":658,"width":719,"height":12}},{"id":"dc0d2e18-8f27-4aab-91e0-670903ab4217","block_type":"box","text":"otherwise permitted, no Fund may use derivatives to gain exposure to an asset or asset class it is","page_number":99,"box":{"x":116,"y":674,"width":724,"height":12}},{"id":"f784100a-19f5-46b8-9367-3b8916e6f7f6","block_type":"box","text":"prohibited by its investment restrictions from purchasing directly. As described below, derivatives can","page_number":99,"box":{"x":117,"y":689,"width":748,"height":12}},{"id":"cd78e1c0-416c-414f-94bd-b45c79e2dbe6","block_type":"box","text":"be used for hedging or speculative purposes. Funds will engage in transaction-level payment netting,","page_number":99,"box":{"x":117,"y":705,"width":747,"height":12}},{"id":"824e34a2-8a4b-4d40-92c6-6c3e3a54e6c3","block_type":"box","text":"i.e.","page_number":99,"box":{"x":116,"y":721,"width":20,"height":9}},{"id":"bfd92869-afbe-45b5-a9aa-f1ac914e2717","block_type":"box","text":", the payment obligations of derivatives contracts are netted against one another with the Fund","page_number":99,"box":{"x":140,"y":720,"width":701,"height":12}},{"id":"197e949a-e4f9-4b21-9475-810c54d4514f","block_type":"box","text":"receiving or paying, as the case may be, only the net amount of the two payment streams.","page_number":99,"box":{"x":117,"y":736,"width":667,"height":12}},{"id":"798a8595-3b15-4868-ab1e-a9b74d9a6cc8","block_type":"box","text":"Hedging.","page_number":99,"box":{"x":116,"y":769,"width":65,"height":12}},{"id":"2cef5af4-137a-4876-abbb-a3aa9bbde97a","block_type":"box","text":"Each Fund may use derivatives for hedging purposes, in which a derivative is used to offset","page_number":99,"box":{"x":189,"y":769,"width":680,"height":12}},{"id":"420b8c29-cec3-4185-a78c-fff1e4cbe202","block_type":"box","text":"the risks associated with other Fund holdings. Losses on other investments may be substantially","page_number":99,"box":{"x":116,"y":785,"width":716,"height":12}},{"id":"3a55a7b3-7e42-435e-97d1-2ced59f78b28","block_type":"box","text":"reduced by gains on a derivative that reacts in an opposite manner to market movements. Although","page_number":99,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"fe36f87e-f3bf-4a24-9234-5011a5e64546","block_type":"box","text":"hedging may reduce losses, it may also reduce or eliminate gains. In addition, hedging may cause","page_number":99,"box":{"x":117,"y":816,"width":728,"height":12}},{"id":"a6fb7797-98b0-4a9a-bd33-3b80f8ea0edd","block_type":"box","text":"losses if the market moves in an unanticipated manner, or if the cost of the derivative outweighs the","page_number":99,"box":{"x":117,"y":831,"width":744,"height":12}},{"id":"8cc5b6ef-cacc-42bf-a82d-6314c1093dba","block_type":"box","text":"benefit of the hedge. The effectiveness of hedging may be reduced by correlation risk,","page_number":99,"box":{"x":117,"y":847,"width":643,"height":12}},{"id":"b23ad874-823c-4e9d-97d8-28eb7c58580f","block_type":"box","text":"i.e.","page_number":99,"box":{"x":761,"y":847,"width":20,"height":9}},{"id":"4ba17a2c-5773-413e-9b12-5d05e5cb5d24","block_type":"box","text":",","page_number":99,"box":{"x":784,"y":855,"width":2,"height":3}},{"id":"0cecf44e-6c70-44f1-bc23-05b75e2a66ae","block_type":"box","text":"the risk that","page_number":99,"box":{"x":793,"y":847,"width":91,"height":9}},{"id":"98781c20-1a08-4522-b096-63874e871513","block_type":"box","text":"changes in the value of the derivative will not match those of the holdings being hedged as expected","page_number":99,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"c3de29bd-7807-49d6-a6d7-37c4e10ec2b3","block_type":"box","text":"by a Fund, which may result in additional losses to the Fund. The inability to close or offset derivatives","page_number":99,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"27c988b9-8c8b-46de-a355-c2b09a77af7e","block_type":"box","text":"II-16","page_number":99,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"43dd5ac8-8b6c-45f4-aeb8-7915699e59ca","block_type":"box","text":"NM1026U-6039989-99/256","page_number":99,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"2213a048-259d-48c5-8bbe-3779d3f6d97c","block_type":"box","text":"could also reduce the effectiveness of a Fund’s hedging. There is no assurance that a Fund’s hedging","page_number":100,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"17c4de5e-7ab5-47ee-979f-d8cb98e74eac","block_type":"box","text":"will be effective. No Fund is required to use derivatives to hedge.","page_number":100,"box":{"x":116,"y":102,"width":486,"height":13}},{"id":"a2d67596-2c84-4e15-87ee-fdcfb05e7bd7","block_type":"box","text":"Speculation.","page_number":100,"box":{"x":117,"y":132,"width":90,"height":12}},{"id":"eed5702c-2b22-43e5-8024-111dd3902615","block_type":"box","text":"Certain Funds may also use derivatives for speculative purposes to seek to enhance","page_number":100,"box":{"x":208,"y":132,"width":638,"height":13}},{"id":"d383c920-c913-4b88-87a5-2e3a7de832b6","block_type":"box","text":"returns. The use of a derivative is speculative if the Fund is primarily seeking to achieve gains, rather","page_number":100,"box":{"x":117,"y":148,"width":753,"height":12}},{"id":"a2e1ba0a-ff2b-49b8-93c4-a9fe2966f882","block_type":"box","text":"than offset the risk of other positions. To the extent a Fund invests in a derivative for speculative","page_number":100,"box":{"x":116,"y":163,"width":719,"height":12}},{"id":"7ad8f2e5-e5a7-40d5-b90d-0ee68860a7bc","block_type":"box","text":"purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be","page_number":100,"box":{"x":117,"y":179,"width":769,"height":12}},{"id":"e76cd0ba-5843-463b-8e49-3fb924fe587d","block_type":"box","text":"greater than the derivative’s cost, and the potential for loss in certain cases may be unlimited.","page_number":100,"box":{"x":116,"y":194,"width":699,"height":13}},{"id":"ccc6ef49-55c6-4271-be9f-a2630e5f87b6","block_type":"box","text":"Regulation of Derivatives.","page_number":100,"box":{"x":116,"y":224,"width":196,"height":12}},{"id":"c86c4786-436a-48ce-8160-25e098661d3b","block_type":"box","text":"Rule 18f-4 Under the Investment Company Act.","page_number":100,"box":{"x":116,"y":247,"width":352,"height":12}},{"id":"ab938db3-e740-4412-9eba-b563ec36ddd8","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits","page_number":100,"box":{"x":469,"y":247,"width":416,"height":12}},{"id":"d06dd90e-22e4-4b17-ab24-e4ef614a0017","block_type":"box","text":"a Fund to enter into Derivatives Transactions (as defined below) and certain other transactions","page_number":100,"box":{"x":116,"y":263,"width":708,"height":12}},{"id":"44e67fd5-dc36-4573-a814-237b460a2f2e","block_type":"box","text":"notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the","page_number":100,"box":{"x":117,"y":278,"width":692,"height":12}},{"id":"ab84ca01-56d6-432f-a64f-667ee158fe55","block_type":"box","text":"Investment Company Act. Section 18 of the Investment Company Act, among other things, prohibits","page_number":100,"box":{"x":117,"y":294,"width":747,"height":12}},{"id":"392e3b09-0ac6-4b7a-9b74-2fab58d83ce4","block_type":"box","text":"open-end funds, including the Funds, from issuing or selling any “senior security,” other than borrowing","page_number":100,"box":{"x":116,"y":309,"width":769,"height":12}},{"id":"fba2eb6e-08c7-4b1b-bd6c-3185ce340ccc","block_type":"box","text":"from a bank (subject to a requirement to maintain 300% “asset coverage”).","page_number":100,"box":{"x":116,"y":325,"width":560,"height":12}},{"id":"1eddad8b-b993-421a-a2ea-e854ecc9d50f","block_type":"box","text":"Under Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap","page_number":100,"box":{"x":117,"y":354,"width":761,"height":13}},{"id":"1d4df9a1-40e9-4c4b-836e-23e88911db01","block_type":"box","text":"(including a contract for differences), futures contract, forward contract, option (excluding purchased","page_number":100,"box":{"x":117,"y":370,"width":747,"height":12}},{"id":"4106b0a5-336e-424a-bfbf-f166f5373c0d","block_type":"box","text":"options), any combination of the foregoing, or any similar instrument, under which a Fund is or may be","page_number":100,"box":{"x":116,"y":385,"width":764,"height":13}},{"id":"083859b6-0172-46ac-9b1d-df326a4c82a5","block_type":"box","text":"required to make any payment or delivery of cash or other assets during the life of the instrument or at","page_number":100,"box":{"x":117,"y":401,"width":763,"height":12}},{"id":"b6236271-21da-4d49-b4c1-1acb15d61cad","block_type":"box","text":"maturity or early termination, whether as margin or settlement payment or otherwise; (2) any short sale","page_number":100,"box":{"x":117,"y":416,"width":767,"height":13}},{"id":"74bcff38-bec5-4d1b-859f-2e55c060f048","block_type":"box","text":"borrowing; (3) reverse repurchase agreements and similar financing transactions (e.g., recourse and","page_number":100,"box":{"x":117,"y":432,"width":750,"height":12}},{"id":"9347373f-ebfb-496d-96c8-602e5a1486a2","block_type":"box","text":"non-recourse tender option bonds, and borrowed bonds), if a Fund elects to treat all of these","page_number":100,"box":{"x":117,"y":447,"width":691,"height":13}},{"id":"dcb94093-3e8e-409a-982b-2285c799aaf9","block_type":"box","text":"transactions as Derivatives Transactions under Rule 18f-4; and (4) when-issued or forward-settling","page_number":100,"box":{"x":116,"y":463,"width":738,"height":12}},{"id":"479aba0c-bdcc-400b-a7d5-c8742caf2a41","block_type":"box","text":"securities (e.g., firm and standby commitments, including to-be-announced (“TBA”) commitments, and","page_number":100,"box":{"x":116,"y":478,"width":763,"height":13}},{"id":"3cb2e213-77fb-461a-a644-b1284ea4e718","block_type":"box","text":"dollar rolls) and non-standard settlement cycle securities, unless such transactions meet the Delayed","page_number":100,"box":{"x":116,"y":494,"width":755,"height":12}},{"id":"ab30ab09-8254-4560-9a51-bba1cb0b1db2","block_type":"box","text":"Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed Delivery","page_number":100,"box":{"x":116,"y":509,"width":768,"height":13}},{"id":"88cadfd8-8556-419a-8c41-3a9ec9dd6983","block_type":"box","text":"Securities and Forward Commitments”).","page_number":100,"box":{"x":116,"y":525,"width":302,"height":12}},{"id":"d9db17fa-712c-46ce-ad44-b2a2b3a87e32","block_type":"box","text":"Unless a Fund is relying on the Limited Derivatives User Exception (as defined below), the Fund must","page_number":100,"box":{"x":117,"y":555,"width":759,"height":12}},{"id":"1b6e0691-301b-4c91-825b-2f94a28fee3f","block_type":"box","text":"comply with Rule 18f-4 with respect to its Derivatives Transactions. Rule 18f-4, among other things,","page_number":100,"box":{"x":116,"y":570,"width":744,"height":12}},{"id":"83334e8c-6b5a-4174-af3a-cf902e3079f5","block_type":"box","text":"requires a Fund to adopt and implement a comprehensive written derivatives risk management","page_number":100,"box":{"x":117,"y":586,"width":708,"height":12}},{"id":"21c71431-6536-49aa-b636-43550de39b47","block_type":"box","text":"program (“DRMP”) and comply with a relative or absolute limit on Fund leverage risk calculated based","page_number":100,"box":{"x":117,"y":601,"width":761,"height":13}},{"id":"74ddde33-5821-4474-aa98-007f128f8d06","block_type":"box","text":"on value-at-risk (“VaR”). The DRMP is administered by a “derivatives risk manager,” who is appointed","page_number":100,"box":{"x":116,"y":617,"width":760,"height":12}},{"id":"8194ee02-f516-4e69-98dc-5036228fd3b6","block_type":"box","text":"by the Fund’s Board, including a majority of the independent Directors, and periodically reviews the","page_number":100,"box":{"x":117,"y":632,"width":739,"height":13}},{"id":"c7c93e18-4c78-46a1-a182-713b13ed7cf2","block_type":"box","text":"DRMP and reports to the Fund’s Board.","page_number":100,"box":{"x":117,"y":648,"width":299,"height":12}},{"id":"8f80e0a2-11a6-4bca-a26b-201f7ef0b25e","block_type":"box","text":"Rule 18f-4 provides an exception from the DRMP, VaR limit and certain other requirements if a Fund’s","page_number":100,"box":{"x":117,"y":678,"width":758,"height":12}},{"id":"6f5fae0d-e955-44fb-9834-7fd78ca3b3f5","block_type":"box","text":"“derivatives exposure” is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)","page_number":100,"box":{"x":116,"y":693,"width":754,"height":12}},{"id":"d80b58da-bdea-48a0-8373-64380dbbb9fb","block_type":"box","text":"and the Fund adopts and implements written policies and procedures reasonably designed to manage","page_number":100,"box":{"x":116,"y":709,"width":758,"height":12}},{"id":"91bffd97-e6ab-4982-be98-014a0dc3535d","block_type":"box","text":"its derivatives risks (the “Limited Derivatives User Exception”).","page_number":100,"box":{"x":117,"y":724,"width":459,"height":12}},{"id":"379cd7e6-ed2b-4894-9179-bf144c4d5540","block_type":"box","text":"Dodd-Frank Regulations.","page_number":100,"box":{"x":116,"y":754,"width":185,"height":12}},{"id":"cc955923-eed4-4c25-90ab-2776bcc7bda3","block_type":"box","text":"The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd","page_number":100,"box":{"x":308,"y":754,"width":555,"height":12}},{"id":"66e5922e-81bc-4aa1-af05-e6c99bf5065f","block_type":"box","text":"Frank”), enacted in July 2010, includes provisions that comprehensively regulate the over-the-counter","page_number":100,"box":{"x":117,"y":770,"width":754,"height":12}},{"id":"4d4676b4-dfd6-45bb-a345-902a3dd0973e","block_type":"box","text":"(“OTC”) derivatives markets for the first time. While the Commodity Futures Trading Commission","page_number":100,"box":{"x":117,"y":785,"width":716,"height":12}},{"id":"f99a420a-2ef8-4f8a-99dc-0c2127db354b","block_type":"box","text":"(“CFTC”) and other U.S. regulators have adopted many of the required Dodd-Frank regulations, certain","page_number":100,"box":{"x":117,"y":801,"width":764,"height":12}},{"id":"42af546a-d3f5-49a7-acaf-90ceed01ba28","block_type":"box","text":"regulations have only recently become effective and other regulations remain to be adopted. The full","page_number":100,"box":{"x":117,"y":816,"width":743,"height":12}},{"id":"f52569ba-eb1f-4e99-9dc8-7f7f468d6651","block_type":"box","text":"impact of Dodd-Frank on the Funds remains uncertain.","page_number":100,"box":{"x":117,"y":832,"width":411,"height":12}},{"id":"0b4a630a-55c6-4b16-a602-f41c11be3057","block_type":"box","text":"Many OTC derivatives dealers are required to register with the CFTC as “swap dealers” and/or with the","page_number":100,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"41b5c8d0-7862-4961-bc10-273978f02bd4","block_type":"box","text":"SEC as “security-based swap dealers”. Registered swap dealers and security-based swap dealers are","page_number":100,"box":{"x":116,"y":877,"width":765,"height":12}},{"id":"39848056-4cb7-4bfb-84b4-3025fb26576c","block_type":"box","text":"II-17","page_number":100,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7cde7338-1833-4725-9b21-21435edc414f","block_type":"box","text":"NM1026U-6039989-100/256","page_number":100,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6f47668c-d5ef-4798-9272-b25c52990655","block_type":"box","text":"subject to various regulatory requirements, including, but not limited to, margin, recordkeeping,","page_number":101,"box":{"x":116,"y":87,"width":708,"height":12}},{"id":"773bd10b-3bb5-4ee2-a4c5-504df3f8fb4c","block_type":"box","text":"reporting, transparency, position limits, limitations on conflicts of interest, business conduct standards,","page_number":101,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"bb36265e-efc5-415f-b427-af27554ffe14","block_type":"box","text":"minimum capital requirements and other regulatory requirements, which indirectly impact the Funds","page_number":101,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"e2cf9e2e-1866-4617-a300-99eec8d4c528","block_type":"box","text":"that enter into transactions with them.","page_number":101,"box":{"x":116,"y":134,"width":284,"height":9}},{"id":"efcee015-86b6-4550-b688-062b6832c53b","block_type":"box","text":"The CFTC requires that certain interest rate swaps and certain credit default swaps must be executed","page_number":101,"box":{"x":116,"y":165,"width":761,"height":11}},{"id":"c0428e61-7275-46d6-bc8b-f1c9d5fbbd9f","block_type":"box","text":"in regulated markets and be submitted for clearing to regulated clearinghouses. The SEC is also","page_number":101,"box":{"x":117,"y":180,"width":719,"height":12}},{"id":"ef2d73dc-fadc-4034-8484-5ab2ecc55e05","block_type":"box","text":"expected to impose similar requirements on certain security-based derivatives in the future. OTC","page_number":101,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"9ba05a65-06f5-40d4-baef-98b5727c87e8","block_type":"box","text":"derivatives trades submitted for clearing are subject to minimum initial and variation margin","page_number":101,"box":{"x":116,"y":211,"width":681,"height":12}},{"id":"f9776a1e-f707-4988-90f7-f94759d27147","block_type":"box","text":"requirements set by the relevant clearinghouse, as well as margin requirements mandated by the","page_number":101,"box":{"x":117,"y":227,"width":726,"height":12}},{"id":"c23fab39-fe2f-4a17-9cb4-c6a9d7a13ec4","block_type":"box","text":"CFTC, SEC and/or federal prudential regulators. In addition, futures commission merchants (“FCMs”),","page_number":101,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"d3f5fdab-5308-4839-b17b-f34dc57baeae","block_type":"box","text":"who act as clearing members on behalf of customers for cleared OTC derivatives and futures","page_number":101,"box":{"x":116,"y":258,"width":697,"height":12}},{"id":"8a8efeb0-bb23-4bae-9ddc-527ff49beef4","block_type":"box","text":"contracts, also have discretion to increase a Fund’s margin requirements for these transactions beyond","page_number":101,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"4615b6fd-1544-4b76-ae8e-4dd4db7a2636","block_type":"box","text":"any regulatory and clearinghouse minimums subject to any restrictions on such discretion in the","page_number":101,"box":{"x":116,"y":289,"width":715,"height":12}},{"id":"d0669f5f-58db-4dcf-9e1a-16ca26c0759f","block_type":"box","text":"documentation between the FCM and the customer. These regulatory requirements may make it more","page_number":101,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"3c7f519b-7f8e-4fcd-8dc4-1f8d4555688f","block_type":"box","text":"difficult and costly for the Funds to enter into highly tailored or customized transactions, potentially","page_number":101,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"89db973f-50af-4906-8d92-e6477edea91d","block_type":"box","text":"rendering certain investment strategies impossible or not economically feasible. If a Fund decides to","page_number":101,"box":{"x":117,"y":335,"width":747,"height":12}},{"id":"f599fe39-b2d2-47a5-9304-0fa13e5cec2b","block_type":"box","text":"execute and clear cleared OTC derivatives and/or futures contracts through execution facilities,","page_number":101,"box":{"x":116,"y":351,"width":712,"height":12}},{"id":"c1f324a8-c609-426e-8996-3ccf87890e7f","block_type":"box","text":"exchanges or clearinghouses, either indirectly through an executing broker, clearing member FCM or","page_number":101,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"a3e7319b-10c5-4423-83c7-762b5bb1e5e6","block_type":"box","text":"as a direct member, a Fund would be required to comply with the rules of the execution facility,","page_number":101,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"78364051-f981-4f93-9caa-e7831e95cd87","block_type":"box","text":"exchange or clearinghouse and other applicable law.","page_number":101,"box":{"x":116,"y":397,"width":397,"height":12}},{"id":"a5000243-f43d-4cac-8e33-df56dd3b2740","block_type":"box","text":"With respect to cleared OTC derivatives and futures contracts and options on futures, a Fund will not","page_number":101,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"e8375c22-4018-409e-8d4c-bb6eecd306ad","block_type":"box","text":"face a clearinghouse directly but rather will do so through a FCM that is registered with the CFTC and/","page_number":101,"box":{"x":116,"y":444,"width":759,"height":12}},{"id":"77925e18-0514-4882-9fbf-a1f1777c8e54","block_type":"box","text":"or SEC and that acts as a clearing member. A Fund may face the indirect risk of the failure of another","page_number":101,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"1cc8a117-d417-4b5f-b62d-b86311359011","block_type":"box","text":"clearing member customer to meet its obligations to its clearing member. Such scenario could arise","page_number":101,"box":{"x":116,"y":475,"width":744,"height":12}},{"id":"3b72ac3c-170d-4d9a-995e-01dc216f78d0","block_type":"box","text":"due to a default by the clearing member on its obligations to the clearinghouse simultaneously with a","page_number":101,"box":{"x":116,"y":490,"width":752,"height":12}},{"id":"8128eb57-93c9-46b3-9c0b-c9cac7c6490f","block_type":"box","text":"customer’s failure to meet its obligations to the clearing member.","page_number":101,"box":{"x":116,"y":506,"width":485,"height":12}},{"id":"98112203-26e7-4c4b-b589-25c84a83f30b","block_type":"box","text":"Clearing member FCMs are required to post initial margin to the clearinghouses through which they","page_number":101,"box":{"x":117,"y":537,"width":742,"height":12}},{"id":"69d5223f-29cc-40dc-9e8c-611576242820","block_type":"box","text":"clear their customers’ cleared OTC derivatives and futures contracts, instead of using such initial","page_number":101,"box":{"x":116,"y":552,"width":722,"height":12}},{"id":"432c8fe0-e07b-4d33-8773-a06e078a9307","block_type":"box","text":"margin in their businesses, as was widely permitted for OTC derivatives before Dodd-Frank. While an","page_number":101,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"52a5d55c-e8d8-4716-a2ef-10b8527c888a","block_type":"box","text":"FCM may require its customer to post initial margin in excess of clearinghouse requirements, and","page_number":101,"box":{"x":117,"y":583,"width":727,"height":12}},{"id":"4d28ccc4-9c1c-4085-b506-63dfa0ed9ec8","block_type":"box","text":"certain clearinghouses may share a portion of their earnings on initial margin with their clearing","page_number":101,"box":{"x":116,"y":599,"width":710,"height":12}},{"id":"463e96ea-7579-4dc7-884c-97179d3936eb","block_type":"box","text":"members, some portion of the initial margin that is passed through to the clearinghouse does not","page_number":101,"box":{"x":117,"y":614,"width":722,"height":12}},{"id":"b6ea7ee3-e882-4ef3-a4fc-ff6b2c9af5bc","block_type":"box","text":"generate earnings for the FCM. The inability of FCMs to earn the same levels of returns on initial","page_number":101,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"2f47cfa4-ada6-41a7-8acc-e75f698e5225","block_type":"box","text":"margin for cleared OTC derivatives as they could earn with respect to non-cleared OTC derivatives","page_number":101,"box":{"x":117,"y":645,"width":739,"height":12}},{"id":"ab895bc6-1ac8-44ed-96ac-4acc454f2fdc","block_type":"box","text":"may cause FCMs to charge higher fees, or provide less favorable pricing on cleared OTC derivatives","page_number":101,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"2e263b90-173c-499e-a982-775ef27ba814","block_type":"box","text":"than swap dealers will provide for non-cleared OTC derivatives. Furthermore, customers, including the","page_number":101,"box":{"x":116,"y":676,"width":760,"height":12}},{"id":"9fabf8f5-8e3a-47a9-a906-ae0244657c90","block_type":"box","text":"Funds, are subject to additional fees payable to FCMs with respect to cleared OTC derivatives, which","page_number":101,"box":{"x":117,"y":692,"width":751,"height":12}},{"id":"af5c6fe0-4ef1-473a-b28c-691e9c3f5754","block_type":"box","text":"may raise the cost to Funds of clearing as compared to trading non-cleared OTC derivatives bilaterally.","page_number":101,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"f74f415e-cea0-4995-9e28-654cb62b3a6d","block_type":"box","text":"With respect to uncleared swaps, registered swap dealers and security-based swap dealers are","page_number":101,"box":{"x":116,"y":738,"width":710,"height":12}},{"id":"69648e6e-b511-4a6f-bd3f-3d2b0c63587b","block_type":"box","text":"required to exchange variation margin with a Fund and may be required by applicable regulations to","page_number":101,"box":{"x":117,"y":754,"width":740,"height":12}},{"id":"6b444953-2759-4176-92e7-8fac01aa9894","block_type":"box","text":"collect (and in some cases exchange) initial margin with a Fund. Both initial and variation margin may","page_number":101,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"f1367a79-92e3-4805-8e7b-62ebd02ffa3b","block_type":"box","text":"be comprised of cash and/or securities, subject to applicable regulatory haircuts and other restrictions.","page_number":101,"box":{"x":117,"y":785,"width":757,"height":12}},{"id":"cb5c494c-7c26-4106-812f-6d457efd4850","block_type":"box","text":"Shares of investment companies (other than certain money market funds) may not be posted as","page_number":101,"box":{"x":116,"y":800,"width":713,"height":12}},{"id":"17d46fa4-0d5f-4057-af48-8b6fc9927786","block_type":"box","text":"collateral under applicable regulations.","page_number":101,"box":{"x":116,"y":816,"width":285,"height":12}},{"id":"8819dec5-92df-4523-83ca-cd296a8d733b","block_type":"box","text":"The CFTC, certain foreign regulators, and many futures exchanges have established (and continue to","page_number":101,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"25ba214e-d8a1-481c-8c0f-11a072815d27","block_type":"box","text":"evaluate and monitor) speculative position limits (“position limits”) on the maximum speculative position","page_number":101,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"6c3548ef-e098-4f70-a764-5a8bcca0bc69","block_type":"box","text":"which any person, or group of persons acting in concert, may hold or control in particular contracts. In","page_number":101,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"beea2ae5-cfa8-4a74-9fdb-1b374b45712e","block_type":"box","text":"II-18","page_number":101,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"266914d6-2c8a-42f9-9ee8-d7a42ed1fe7f","block_type":"box","text":"NM1026U-6039989-101/256","page_number":101,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b9d40bc7-1f76-4d7a-8c2c-38c730f1fc52","block_type":"box","text":"addition, U.S. federal position limits apply to swaps that are economically equivalent to futures","page_number":102,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"8a469946-9139-45a7-8f31-6c18d93f32ea","block_type":"box","text":"contracts on certain agricultural, metals and energy commodities. All positions owned or controlled by","page_number":102,"box":{"x":116,"y":103,"width":758,"height":12}},{"id":"4f9b63ae-b8b0-4bd1-82d9-ddbe19e0eece","block_type":"box","text":"the same person or entity, even if in different accounts, must be aggregated for purposes of complying","page_number":102,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"40b9faa7-03e5-4bb9-ad76-bb5dddf547df","block_type":"box","text":"with the speculative limits. Thus, even if a Fund does not intend to exceed applicable position limits, it","page_number":102,"box":{"x":116,"y":134,"width":758,"height":11}},{"id":"0e712e27-8dd5-48be-a92d-8727bc5be136","block_type":"box","text":"is possible that different clients managed by the Manager and its affiliates may be aggregated for this","page_number":102,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"8f179ff4-b7fd-4a4f-a927-8b5292ab9afe","block_type":"box","text":"purpose. Therefore, the trading decisions of the Manager may have to be modified and positions held","page_number":102,"box":{"x":117,"y":165,"width":757,"height":12}},{"id":"25d61622-46ba-4f01-836c-f1967ad08ca2","block_type":"box","text":"by a Fund liquidated in order to avoid exceeding such limits. The modification of investment decisions","page_number":102,"box":{"x":117,"y":180,"width":757,"height":12}},{"id":"2e9878fb-73b0-4378-852f-128c230a62a9","block_type":"box","text":"or the elimination of open positions, if it occurs, may adversely affect the profitability of a Fund. A","page_number":102,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"b46238c9-0444-4d78-bde2-b8f97e37575a","block_type":"box","text":"violation of position limits could also lead to regulatory action materially adverse to a Fund’s investment","page_number":102,"box":{"x":116,"y":211,"width":770,"height":12}},{"id":"b1677708-2c50-4142-a463-09978580a644","block_type":"box","text":"strategy. A Fund may also be affected by other regimes, including those of the European Union and","page_number":102,"box":{"x":116,"y":227,"width":746,"height":12}},{"id":"5026483c-81d2-4913-950b-884af0ada57c","block_type":"box","text":"United Kingdom, and trading venues that impose position limits on commodity derivative contracts.","page_number":102,"box":{"x":117,"y":242,"width":737,"height":12}},{"id":"cc675df6-6a7b-4e69-84df-533f629fad9f","block_type":"box","text":"Additional Regulation of Derivatives.","page_number":102,"box":{"x":115,"y":275,"width":269,"height":12}},{"id":"9095aca3-dabc-4ae7-8b26-704126152b53","block_type":"box","text":"Regulatory bodies outside the U.S. have also passed, proposed,","page_number":102,"box":{"x":386,"y":275,"width":489,"height":12}},{"id":"b6dc48ee-b287-4114-b42d-43c588128a50","block_type":"box","text":"or may propose in the future, legislation similar to Dodd-Frank or other legislation that could increase","page_number":102,"box":{"x":116,"y":290,"width":753,"height":12}},{"id":"5582957b-efe5-4686-8e17-416b94cf6b5e","block_type":"box","text":"the costs of participating in, or otherwise adversely impact the liquidity of, participating in the","page_number":102,"box":{"x":116,"y":306,"width":689,"height":12}},{"id":"fc340360-1d38-41de-8152-a83294ec3984","block_type":"box","text":"commodities markets. For example, the European Market Infrastructure Regulation (Regulation (EU)","page_number":102,"box":{"x":116,"y":321,"width":752,"height":12}},{"id":"83bec54c-e011-4e2b-a39d-d14e3afed270","block_type":"box","text":"No 648/2012) (“EMIR”) introduced certain requirements in respect of OTC derivatives including: (i) the","page_number":102,"box":{"x":117,"y":337,"width":761,"height":12}},{"id":"6ef8be2b-20ef-4fd0-9bdf-e6b9fd54b271","block_type":"box","text":"mandatory clearing of OTC derivative contracts declared subject to the clearing obligation; (ii) risk","page_number":102,"box":{"x":117,"y":352,"width":728,"height":12}},{"id":"cef795f5-3a8a-4db9-a9a4-cbdb8e2fa86d","block_type":"box","text":"mitigation techniques in respect of uncleared OTC derivative contracts, including the mandatory","page_number":102,"box":{"x":117,"y":368,"width":714,"height":12}},{"id":"d5ed8f95-ecc8-4aa2-8936-2fd85d72fd44","block_type":"box","text":"margining of uncleared OTC derivative contracts; and (iii) reporting and recordkeeping requirements in","page_number":102,"box":{"x":117,"y":383,"width":765,"height":12}},{"id":"86dac1b2-e327-4088-8f90-455dac572808","block_type":"box","text":"respect of all derivatives contracts. By way of further example, the European Union Markets in","page_number":102,"box":{"x":117,"y":399,"width":703,"height":12}},{"id":"6e44d823-1db3-46af-8bfc-db26b4dfc704","block_type":"box","text":"Financial Instruments Directive (Directive 2014/65/EU) and Markets in Financial Instruments","page_number":102,"box":{"x":117,"y":414,"width":688,"height":12}},{"id":"02febd15-37c8-48a8-ae49-fa434602130c","block_type":"box","text":"Regulation (Regulation (EU) No 600/2014) (together “MiFID II”), which have applied since January 3,","page_number":102,"box":{"x":117,"y":430,"width":753,"height":12}},{"id":"6f38348f-d66d-4de3-898d-c010febce7da","block_type":"box","text":"2018, govern the provision of investment services and activities in relation to, as well as the organized","page_number":102,"box":{"x":116,"y":445,"width":762,"height":12}},{"id":"3ffa1f8b-78d7-4c8b-891a-e0d9687706fc","block_type":"box","text":"trading of, financial instruments such as shares, bonds, units in collective investment schemes and","page_number":102,"box":{"x":116,"y":461,"width":738,"height":12}},{"id":"bf4100f3-e637-49d1-98b6-a3c04583ed37","block_type":"box","text":"derivatives. In particular, MiFID II requires European Union Member States to apply position limits to","page_number":102,"box":{"x":116,"y":476,"width":749,"height":12}},{"id":"f9b047d6-1485-4d38-949f-ac4ab3811d72","block_type":"box","text":"the size of a net position a person can hold at any time in commodity derivatives traded on European","page_number":102,"box":{"x":116,"y":492,"width":754,"height":12}},{"id":"520f9f01-4290-4b48-bb93-c97090595153","block_type":"box","text":"Union trading venues and in “economically equivalent” OTC contracts. If the requirements of EMIR and","page_number":102,"box":{"x":117,"y":507,"width":769,"height":12}},{"id":"d0a977b1-9573-45a3-866b-dbcff1e69840","block_type":"box","text":"MiFID II apply, the cost of derivatives transactions is expected to increase.","page_number":102,"box":{"x":117,"y":523,"width":550,"height":12}},{"id":"69421b42-8f33-40a3-b55b-2570f14fd4c5","block_type":"box","text":"In addition, regulations adopted by global prudential regulators that are now in effect require certain","page_number":102,"box":{"x":117,"y":555,"width":742,"height":13}},{"id":"1c46c90b-79b8-40c4-83de-176cd5e025f3","block_type":"box","text":"prudentially regulated entities and certain of their affiliates and subsidiaries (including swap dealers) to","page_number":102,"box":{"x":117,"y":571,"width":764,"height":12}},{"id":"d6d0ce70-62dd-469f-996d-3d65db7087ee","block_type":"box","text":"include in their derivatives contracts and certain other financial contracts, terms that delay or restrict","page_number":102,"box":{"x":117,"y":586,"width":745,"height":13}},{"id":"56949c73-8267-419b-b180-92acf44649f4","block_type":"box","text":"the rights of counterparties (such as the Funds) to terminate such contracts, foreclose upon collateral,","page_number":102,"box":{"x":116,"y":602,"width":761,"height":12}},{"id":"5b60c078-62b0-4799-ba77-584f1f7e2904","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the prudentially","page_number":102,"box":{"x":116,"y":617,"width":725,"height":13}},{"id":"36707568-7019-454c-b2bc-f7edfae6f2ad","block_type":"box","text":"regulated entity and/or its affiliates are subject to certain types of resolution or insolvency proceedings.","page_number":102,"box":{"x":117,"y":633,"width":765,"height":12}},{"id":"99fe75fb-1834-4be0-b186-cbcac303593f","block_type":"box","text":"Similar regulations and laws have been adopted in non-U.S. jurisdictions that may apply to a Fund’s","page_number":102,"box":{"x":116,"y":648,"width":746,"height":13}},{"id":"53386214-a0c3-484f-ad51-e9c17ee048f2","block_type":"box","text":"counterparties located in those jurisdictions. In particular, in the United Kingdom and the European","page_number":102,"box":{"x":116,"y":664,"width":731,"height":12}},{"id":"20e29d14-1747-4ef4-99b1-164ae71e39d2","block_type":"box","text":"Union, governmental authorities could reduce, eliminate or convert to equity the liabilities to a Fund of","page_number":102,"box":{"x":117,"y":680,"width":753,"height":12}},{"id":"509e4ead-3157-402d-892a-54484c479fc3","block_type":"box","text":"a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”). It is possible that","page_number":102,"box":{"x":116,"y":695,"width":763,"height":12}},{"id":"85f72267-8310-4ed9-aa62-90d63bc4ee31","block_type":"box","text":"these requirements, as well as potential additional related government regulation, could adversely","page_number":102,"box":{"x":116,"y":711,"width":726,"height":12}},{"id":"8c8a523e-801f-4475-a74e-f9247cf4543a","block_type":"box","text":"affect a Fund’s ability to terminate existing derivatives contracts, exercise default rights or satisfy","page_number":102,"box":{"x":116,"y":726,"width":716,"height":12}},{"id":"919dc0cc-39a3-4237-b316-fc490cd0f18e","block_type":"box","text":"obligations owed to it with collateral received under such contracts.","page_number":102,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"dd146efb-4ea3-4276-aff5-a7b5f06f816e","block_type":"box","text":"Risk Factors in Derivatives.","page_number":102,"box":{"x":116,"y":774,"width":202,"height":10}},{"id":"2efb4126-d085-4d72-98a0-fbe0dc251ff8","block_type":"box","text":"There are significant risks that apply generally to derivatives transactions, including:","page_number":102,"box":{"x":116,"y":798,"width":620,"height":12}},{"id":"1fd652c9-357d-4b0b-8377-6bd33ec23270","block_type":"box","text":"Correlation Risk —","page_number":102,"box":{"x":117,"y":831,"width":123,"height":10}},{"id":"4c080b06-015f-4d2b-804d-a2c83367aa9e","block_type":"box","text":"— the risk that changes in the value of a derivative will not match the changes in the","page_number":102,"box":{"x":240,"y":831,"width":631,"height":12}},{"id":"910dce1a-fa98-4339-b59c-43802a14f0a0","block_type":"box","text":"value of the portfolio holdings that are being hedged or of the particular market or security to which the","page_number":102,"box":{"x":116,"y":846,"width":765,"height":13}},{"id":"0a5e7255-61bd-4d67-8591-f7514bf1b54b","block_type":"box","text":"Fund seeks exposure. There are a number of factors which may prevent a derivative instrument from","page_number":102,"box":{"x":117,"y":862,"width":754,"height":12}},{"id":"d823bcdc-11fc-4059-b170-362b9dd65606","block_type":"box","text":"achieving the desired correlation (or inverse correlation) with an underlying asset, rate or index, such","page_number":102,"box":{"x":116,"y":877,"width":753,"height":13}},{"id":"83570a2b-38dd-4e39-bc7a-ecdcada811bd","block_type":"box","text":"II-19","page_number":102,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"4ec67848-f237-4ef6-a11d-935e8c354a40","block_type":"box","text":"NM1026U-6039989-102/256","page_number":102,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"36d13b55-9774-43c3-b26e-f88196ba9092","block_type":"box","text":"as the impact of fees, expenses and transaction costs, the timing of pricing, and disruptions or illiquidity","page_number":103,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"a251b383-8ad0-48da-9a6c-4222379f3f99","block_type":"box","text":"in the markets for such derivative instrument.","page_number":103,"box":{"x":117,"y":102,"width":338,"height":10}},{"id":"a697de09-90e4-442e-89e7-55db47717445","block_type":"box","text":"Counterparty Risk —","page_number":103,"box":{"x":117,"y":134,"width":138,"height":12}},{"id":"cea519f7-714f-4c62-b2d9-d513f456ea4d","block_type":"box","text":"—","page_number":103,"box":{"x":255,"y":139,"width":22,"height":4}},{"id":"c8595a7f-17f0-4e6a-ac92-7a362c0eb0fb","block_type":"box","text":"the risk that a derivatives transaction counterparty will be unable or unwilling to","page_number":103,"box":{"x":277,"y":134,"width":590,"height":12}},{"id":"cfffcab1-6a82-4395-916a-79a622282685","block_type":"box","text":"make payments or otherwise honor its obligations to a Fund and the related risks of having","page_number":103,"box":{"x":117,"y":149,"width":678,"height":12}},{"id":"dd7b06da-4ef0-4f8f-985a-7d9705b606c8","block_type":"box","text":"concentrated exposure to such a counterparty. In particular, derivatives traded in OTC markets often","page_number":103,"box":{"x":116,"y":165,"width":751,"height":12}},{"id":"bceb38eb-0f12-430b-a679-46bf8b027817","block_type":"box","text":"are not guaranteed by an exchange or clearing corporation and often do not require payment of","page_number":103,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"683b8df5-4dd4-43e1-ac11-63f77956e2c0","block_type":"box","text":"margin, and to the extent that the Fund has unrealized gains in such instruments or has deposited","page_number":103,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"eebba065-0b6b-4bf3-b0d6-200ecf4e1007","block_type":"box","text":"collateral with its counterparties the Fund is at risk that its counterparties will become bankrupt or","page_number":103,"box":{"x":116,"y":211,"width":725,"height":12}},{"id":"12a8b0f4-b735-4532-8caa-d5d156fe1291","block_type":"box","text":"otherwise fail to honor their obligations. A Fund will typically attempt to minimize counterparty risk by","page_number":103,"box":{"x":116,"y":227,"width":750,"height":12}},{"id":"ce51846c-80e7-46c0-a06e-7bcb9e1ae343","block_type":"box","text":"engaging in OTC derivatives transactions only with creditworthy entities that have substantial capital or","page_number":103,"box":{"x":116,"y":242,"width":768,"height":12}},{"id":"35ad09a8-b0e0-4fc7-83ec-437ed6858dac","block_type":"box","text":"that have provided the Fund with a third-party guaranty or other credit support. When a Fund enters","page_number":103,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"42f4410d-c56b-40bb-9b56-445da1b562fc","block_type":"box","text":"into a derivatives transaction that is centrally cleared (whether mandatorily or voluntarily), the Fund is","page_number":103,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"89b91982-e97c-4363-b05d-649025ed0e0a","block_type":"box","text":"subject to the credit risk of the clearing house and the clearing member through which it holds its","page_number":103,"box":{"x":116,"y":289,"width":722,"height":12}},{"id":"aaca2670-a7ee-427b-82aa-2762f50e6ecd","block_type":"box","text":"cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared","page_number":103,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"121d23d4-2873-4136-92a5-ea3f8c9d58c2","block_type":"box","text":"is concentrated in a few clearing houses and increasingly fewer clearing members. It is not clear how","page_number":103,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"43be292b-5d29-4fe9-9807-b234d1eecc1c","block_type":"box","text":"an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a","page_number":103,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"bede939d-2528-4438-89c8-9f8c9a0ea006","block_type":"box","text":"clearing house would have on the financial system. Also, a Fund will not be fully protected in the event","page_number":103,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"df1d2018-73b3-495a-9835-8e95997d2735","block_type":"box","text":"of the bankruptcy of a Fund’s clearing member because the Fund would be limited to recovering only a","page_number":103,"box":{"x":116,"y":366,"width":768,"height":12}},{"id":"a10b70fb-d69f-454d-b027-3ec2845b5111","block_type":"box","text":"pro rata share of the funds held by the clearing member on behalf of customers by account class for","page_number":103,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"191b0878-530d-4329-a0ff-ad0f16762ca7","block_type":"box","text":"cleared derivatives. Although a clearing member is required to segregate assets from customers with","page_number":103,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"21631577-1292-47f6-a2dd-d79c00339cd2","block_type":"box","text":"respect to cleared derivatives positions from the clearing member’s proprietary assets, if a clearing","page_number":103,"box":{"x":117,"y":413,"width":736,"height":12}},{"id":"e7ae85a7-79fe-4cf5-82c8-3836e5c73ff2","block_type":"box","text":"member does not comply with the applicable regulations, or in the event of fraud or misappropriation of","page_number":103,"box":{"x":117,"y":428,"width":768,"height":12}},{"id":"7fdab1fc-3b77-47a3-af57-83c39edb30a4","block_type":"box","text":"customer assets by a clearing member, a Fund could have only an unsecured creditor claim in an","page_number":103,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"78336eb8-e771-48c9-9c4d-a029d630ad20","block_type":"box","text":"insolvency of the clearing member with respect to the assets held by the clearing member.","page_number":103,"box":{"x":117,"y":459,"width":675,"height":12}},{"id":"988e294d-2b4e-4898-b1a3-84b67a3b6b2d","block_type":"box","text":"Credit Risk —","page_number":103,"box":{"x":117,"y":490,"width":86,"height":10}},{"id":"bf7d74cb-4704-43ea-b8c0-a28ea32f039a","block_type":"box","text":"— the risk that the reference entity in a credit default swap or similar derivative will not be","page_number":103,"box":{"x":203,"y":490,"width":668,"height":12}},{"id":"85a44a03-edf8-4d84-a040-dd531e740754","block_type":"box","text":"able to honor its financial obligations.","page_number":103,"box":{"x":116,"y":506,"width":280,"height":12}},{"id":"93895a20-da3f-48d6-9885-7d634af962e5","block_type":"box","text":"Currency Risk —","page_number":103,"box":{"x":117,"y":537,"width":109,"height":12}},{"id":"9359a9bc-a598-4216-b0f1-07decc82eb22","block_type":"box","text":"— the risk that changes in the exchange rate between two currencies will adversely","page_number":103,"box":{"x":226,"y":537,"width":625,"height":12}},{"id":"c58dbdf7-45f9-4407-b66f-90a724684a16","block_type":"box","text":"affect the value (in U.S. dollar terms) of a derivative.","page_number":103,"box":{"x":116,"y":552,"width":392,"height":12}},{"id":"a87289af-d846-49a4-9b0c-10e5d7d40033","block_type":"box","text":"Illiquidity Risk —","page_number":103,"box":{"x":117,"y":583,"width":105,"height":12}},{"id":"69e260e9-f5bb-4a41-b70b-1d3aea0fed62","block_type":"box","text":"— the risk that certain securities or instruments may be difficult or impossible to sell at","page_number":103,"box":{"x":222,"y":583,"width":644,"height":12}},{"id":"abca84ac-3e30-4ae1-b00b-6b17587a21d4","block_type":"box","text":"the time or at the price desired by a Fund in connection with payments of margin, collateral, or","page_number":103,"box":{"x":116,"y":599,"width":704,"height":12}},{"id":"00579378-7412-4320-9cee-a43221ec611d","block_type":"box","text":"settlement payments. There can be no assurance that a Fund will be able to unwind or offset a","page_number":103,"box":{"x":116,"y":614,"width":708,"height":12}},{"id":"4610fae0-d916-4c28-88d1-566567d63d63","block_type":"box","text":"derivative at its desired price, in a secondary market or otherwise. It may, therefore, not be possible for","page_number":103,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"ea0545fe-0f1e-49e8-b098-232eb61b8d1f","block_type":"box","text":"the Fund to unwind its position in a derivative without incurring substantial losses (if at all). Certain","page_number":103,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"9c909811-cf1e-4a13-a574-d8c93c50d22d","block_type":"box","text":"OTC derivatives, including swaps and OTC options, involve substantial illiquidity risk. Illiquidity may","page_number":103,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"00a7b66f-b5be-4884-852c-0c9a9d953817","block_type":"box","text":"also make it more difficult for a Fund to ascertain a market value for such derivatives. A Fund will,","page_number":103,"box":{"x":116,"y":676,"width":723,"height":11}},{"id":"281db326-2197-4622-bebc-fd3bfa6abf76","block_type":"box","text":"therefore, acquire illiquid OTC derivatives (i) if the agreement pursuant to which the instrument is","page_number":103,"box":{"x":116,"y":692,"width":719,"height":12}},{"id":"b91051cf-c637-4d3f-992e-37714ea485c7","block_type":"box","text":"purchased contains a formula price at which the instrument may be terminated or sold, or (ii) for which","page_number":103,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"24d40f4b-ce23-4885-826a-a6b9ed2bbdcf","block_type":"box","text":"the Manager anticipates the Fund can receive on each business day at least two independent bids or","page_number":103,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"a3fd581a-9f17-4d29-9caf-f25269b64de5","block_type":"box","text":"offers, unless a quotation from only one dealer is available, in which case that dealer’s quotation may","page_number":103,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"4314cdce-cd75-4a55-97a8-935e1155c969","block_type":"box","text":"be used. The illiquidity of the derivatives markets may be due to various factors, including congestion,","page_number":103,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"4521e734-6eee-49d6-a118-4c26bbeb1b32","block_type":"box","text":"disorderly markets, limitations on deliverable supplies, the participation of speculators, government","page_number":103,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"8a811491-e3b3-4b6e-a5b7-6815de29cef6","block_type":"box","text":"regulation and intervention, and technical and operational or system failures. In addition, the liquidity of","page_number":103,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"7368bcf7-8750-4aef-8e86-13e543921ff6","block_type":"box","text":"a market in an exchange-traded derivative contract may be adversely affected by “daily price","page_number":103,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"3274b3ae-6d71-4120-a714-cd9cad84dae2","block_type":"box","text":"fluctuation limits” established by the exchanges which limit the amount of fluctuation in an exchange","page_number":103,"box":{"x":116,"y":816,"width":747,"height":12}},{"id":"aa4e9483-c5f3-4def-b7d2-ab53420d20c2","block_type":"box","text":"traded contract price during a single trading day. Once the daily limit has been reached in the contract,","page_number":103,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"b9e173ef-fd9f-4ff6-ab08-5520f2f5aa72","block_type":"box","text":"no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open","page_number":103,"box":{"x":117,"y":847,"width":717,"height":12}},{"id":"085c2306-5117-4ba3-ab2a-6d50537a869c","block_type":"box","text":"positions. Prices have in the past moved to the daily limit on a number of consecutive trading days with","page_number":103,"box":{"x":117,"y":862,"width":768,"height":12}},{"id":"13669fe3-e481-4ab2-8af4-8ecb2737a83c","block_type":"box","text":"little to no trading. If it is not possible to close an open derivative position entered into by the Fund, the","page_number":103,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"1e546aa6-de9a-4922-9eae-55565120e4bc","block_type":"box","text":"II-20","page_number":103,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7b4a78b5-6948-4881-81e9-32bdeaf2ca8a","block_type":"box","text":"NM1026U-6039989-103/256","page_number":103,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cfa297d3-f4cd-455b-a582-34dea7fd5373","block_type":"box","text":"Fund would continue to be required to make daily cash payments of variation margin in the event of","page_number":104,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"1b348777-8230-41b8-b9c5-ca891135265f","block_type":"box","text":"adverse price movements. In such a situation, if the Fund has insufficient cash, it may have to sell","page_number":104,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"d17862a5-589a-4aa6-98e4-9eaa92d91bf8","block_type":"box","text":"portfolio securities to meet daily variation margin requirements at a time when it may be","page_number":104,"box":{"x":117,"y":118,"width":654,"height":12}},{"id":"f4470e92-95f5-4bd1-ba88-8ef8b4a2f628","block_type":"box","text":"disadvantageous to do so.","page_number":104,"box":{"x":116,"y":134,"width":201,"height":12}},{"id":"9bf87617-d154-4e62-a727-9cb710e837a4","block_type":"box","text":"Index Risk","page_number":104,"box":{"x":117,"y":166,"width":78,"height":9}},{"id":"d17e0a0b-113d-4188-b8e9-3763cd50dc94","block_type":"box","text":"k — if the derivative is linked to the performance of an index, it will be subject to the risks","page_number":104,"box":{"x":194,"y":166,"width":656,"height":12}},{"id":"a2919735-d841-42f4-ab32-f6945b36d6e0","block_type":"box","text":"associated with changes in that index. If the index changes, the Fund could receive lower interest","page_number":104,"box":{"x":116,"y":181,"width":728,"height":12}},{"id":"a0bf8dec-3c65-4e02-a2e4-5a273872589b","block_type":"box","text":"payments or experience a reduction in the value of the derivative to below the price that the Fund paid","page_number":104,"box":{"x":117,"y":197,"width":762,"height":12}},{"id":"85a55c34-f1a1-4c65-98d3-f2e4b52f30bd","block_type":"box","text":"for such derivative.","page_number":104,"box":{"x":116,"y":212,"width":146,"height":10}},{"id":"1204600f-699b-447f-83a2-225d9ce77bec","block_type":"box","text":"Legal Risk","page_number":104,"box":{"x":116,"y":245,"width":79,"height":12}},{"id":"27dc955d-f29b-4cf7-9ad9-bac4ed8aca93","block_type":"box","text":"k — the risk of insufficient documentation, insufficient capacity or authority of counterparty, or","page_number":104,"box":{"x":194,"y":245,"width":689,"height":12}},{"id":"3b244d89-e7fa-45a1-ad51-972e4fb1cd2b","block_type":"box","text":"legality or enforceability of a contract.","page_number":104,"box":{"x":117,"y":260,"width":281,"height":12}},{"id":"46fc2c7a-4799-4aca-b948-3fa128bb779e","block_type":"box","text":"Leverage Risk —","page_number":104,"box":{"x":116,"y":293,"width":112,"height":12}},{"id":"b67c7da6-08fd-4f94-b688-8738f219d925","block_type":"box","text":"— the risk that a Fund’s derivatives transactions can magnify the Fund’s gains and","page_number":104,"box":{"x":228,"y":293,"width":619,"height":12}},{"id":"7c2f9044-b9d3-4f0c-a039-ff949f02033d","block_type":"box","text":"losses. Relatively small market movements may result in large changes in the value of a derivatives","page_number":104,"box":{"x":117,"y":308,"width":744,"height":12}},{"id":"c231b785-0bfa-4db0-92b6-a027141243cf","block_type":"box","text":"position and can result in losses that greatly exceed the amount originally invested.","page_number":104,"box":{"x":117,"y":324,"width":621,"height":12}},{"id":"a0599c76-7edf-4848-a54c-ee6dcf6989e5","block_type":"box","text":"Market Risk —","page_number":104,"box":{"x":116,"y":356,"width":93,"height":10}},{"id":"3d95f6a2-9c8a-4579-90e5-a4e6faaa3a64","block_type":"box","text":"— the risk that changes in the value of one or more markets or changes with respect to","page_number":104,"box":{"x":209,"y":356,"width":653,"height":12}},{"id":"97286f46-2d33-4c36-b713-441d09919bb0","block_type":"box","text":"the value of the underlying asset will adversely affect the value of a derivative. In the event of an","page_number":104,"box":{"x":116,"y":371,"width":719,"height":13}},{"id":"dd572389-c7a8-49cf-aa53-318de5a4b50f","block_type":"box","text":"adverse movement, a Fund may be required to pay substantial additional margin to maintain its","page_number":104,"box":{"x":116,"y":387,"width":713,"height":12}},{"id":"6145b9e2-f0a5-4b1d-9d58-a9954e7ff8af","block_type":"box","text":"position or the Fund’s returns may be adversely affected.","page_number":104,"box":{"x":117,"y":402,"width":427,"height":13}},{"id":"29fb8fa6-fa51-400b-813b-1e4fb5dda4cf","block_type":"box","text":"Operational Risk","page_number":104,"box":{"x":117,"y":435,"width":124,"height":12}},{"id":"83b85eee-caa2-4f83-bf4f-17e430320459","block_type":"box","text":"k — the risk related to potential operational issues, including documentation issues,","page_number":104,"box":{"x":240,"y":435,"width":616,"height":12}},{"id":"b4d6fac7-b2ed-4fba-a88a-af2d03d3b714","block_type":"box","text":"settlement issues, systems failures, inadequate controls and human error.","page_number":104,"box":{"x":116,"y":450,"width":555,"height":12}},{"id":"08be884b-83d7-438b-af34-24ca162ee34b","block_type":"box","text":"Valuation Risk —","page_number":104,"box":{"x":118,"y":483,"width":110,"height":9}},{"id":"83a0bf44-00d0-48f5-9719-55bb35107eba","block_type":"box","text":"— the risk that valuation sources for a derivative will not be readily available in the","page_number":104,"box":{"x":228,"y":483,"width":614,"height":12}},{"id":"d9b9dd1a-f6e3-4d94-bac7-90a7be79df26","block_type":"box","text":"market. This is possible especially in times of market distress, since many market participants may be","page_number":104,"box":{"x":117,"y":498,"width":760,"height":12}},{"id":"edb9589f-900c-4c7f-94e7-0a56685d5844","block_type":"box","text":"reluctant to purchase complex instruments or quote prices for them.","page_number":104,"box":{"x":117,"y":514,"width":507,"height":12}},{"id":"9ec15aa0-d771-4d5b-bb7a-4e6d4823edb9","block_type":"box","text":"Volatility Risk —","page_number":104,"box":{"x":118,"y":546,"width":102,"height":12}},{"id":"d0429abb-c46c-456c-9c66-37c802a56bfe","block_type":"box","text":"— the risk that the value of derivatives will fluctuate significantly within a short time","page_number":104,"box":{"x":220,"y":546,"width":619,"height":12}},{"id":"9d65f557-5eaa-4d6f-b1f5-ebf3606d8976","block_type":"box","text":"period.","page_number":104,"box":{"x":117,"y":562,"width":55,"height":12}},{"id":"7cd175f5-b2eb-4492-a7ff-5efeeb900a46","block_type":"box","text":"Types of Derivatives Transactions.","page_number":104,"box":{"x":118,"y":594,"width":261,"height":12}},{"id":"a5ebd8e5-a6f6-4460-b8ed-a02a56604b93","block_type":"box","text":"A Fund may enter into derivatives transactions in accordance with its investment guidelines and","page_number":104,"box":{"x":116,"y":618,"width":715,"height":12}},{"id":"537bebd9-86d4-4c72-a5a9-c2524e00a53b","block_type":"box","text":"restrictions, including the following:","page_number":104,"box":{"x":117,"y":633,"width":263,"height":12}},{"id":"67a0da77-8922-4874-84ed-3d9b6bd31885","block_type":"box","text":"Futures.","page_number":104,"box":{"x":116,"y":666,"width":60,"height":9}},{"id":"db942290-43cc-4d1e-a8f5-b9388c0fc08d","block_type":"box","text":"A Fund may enter into futures contracts (“futures”) and options on futures contracts. Futures are","page_number":104,"box":{"x":116,"y":690,"width":713,"height":12}},{"id":"afbc2c1b-8ef3-49d2-92fd-6e6fb6c01afd","block_type":"box","text":"standardized, exchange-traded contracts that require a purchaser to take delivery, and a seller to make","page_number":104,"box":{"x":116,"y":705,"width":767,"height":12}},{"id":"cee12e8d-f6da-4c99-a85f-c1fdab72cbde","block_type":"box","text":"delivery, of a specified amount of an asset at a specified future date and price. Upon purchasing or","page_number":104,"box":{"x":116,"y":721,"width":734,"height":12}},{"id":"84729498-5030-4332-86d8-f042dbe7815a","block_type":"box","text":"selling a futures contract, a Fund is required to deposit initial margin equal to a percentage of the","page_number":104,"box":{"x":116,"y":736,"width":718,"height":12}},{"id":"28a8c53e-2253-4451-a7d7-0ef2cff09adc","block_type":"box","text":"contract value. Futures contracts are marked to market daily for the duration of the contract, and the","page_number":104,"box":{"x":116,"y":752,"width":743,"height":12}},{"id":"1f38cd63-1de7-4fac-9683-b22cf55da568","block_type":"box","text":"Fund will either post additional margin or be entitled to a payment, as applicable, based on the","page_number":104,"box":{"x":117,"y":767,"width":699,"height":12}},{"id":"cb1f4da1-7b14-42d5-9533-79a4bb8dcac2","block_type":"box","text":"mark-to-market movement of the contract.","page_number":104,"box":{"x":117,"y":783,"width":311,"height":9}},{"id":"42af5b04-6510-45d5-be91-28685c430176","block_type":"box","text":"A Fund may sell a futures contract prior to the completion","page_number":104,"box":{"x":116,"y":815,"width":425,"height":12}},{"id":"fdcdcb9a-bf70-4d6e-b6b4-6918c2c69b5c","block_type":"box","text":"of its term to limit its risk of loss from a","page_number":104,"box":{"x":548,"y":815,"width":284,"height":10}},{"id":"226fc650-5906-4b58-a57d-b7015fa3944e","block_type":"box","text":"decline in the market value of portfolio holdings correlated with the futures contract. However, in the","page_number":104,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"409d6173-a5ea-492a-842f-885b0076e758","block_type":"box","text":"event the market value of the portfolio holdings correlated with the futures contract increases rather","page_number":104,"box":{"x":116,"y":846,"width":742,"height":12}},{"id":"f207e438-57ce-4604-a94d-34995a406481","block_type":"box","text":"than decreases, a Fund will realize a loss on the futures position and a lower return on the portfolio","page_number":104,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"f9a75672-9c67-4ff4-8fdf-9af74b5ed4f0","block_type":"box","text":"holdings than would have been realized without the purchase of the futures contract.","page_number":104,"box":{"x":117,"y":877,"width":631,"height":12}},{"id":"0810e681-7c84-4dd7-aba0-09f9934a85ac","block_type":"box","text":"II-21","page_number":104,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"32a9a297-2e7c-455f-861b-d10c7fb55ade","block_type":"box","text":"NM1026U-6039989-104/256","page_number":104,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"dbb3805b-5b17-4683-bdb9-56f47b5c1a32","block_type":"box","text":"The purchase of a futures contract may provide a Fund a lower cost alternative to purchasing","page_number":105,"box":{"x":116,"y":87,"width":697,"height":12}},{"id":"f4ffd491-2236-4934-8775-e69ae816252d","block_type":"box","text":"securities or commodities directly. In the event that such securities or commodities decline in value or a","page_number":105,"box":{"x":116,"y":103,"width":772,"height":12}},{"id":"d192ddb9-5a89-43bf-a72b-1133655c9fd5","block_type":"box","text":"Fund determines not to complete an anticipatory hedge transaction relating to a futures contract,","page_number":105,"box":{"x":117,"y":118,"width":720,"height":12}},{"id":"da6bcbe2-dfb9-40c4-86bf-a0d8592f0ac2","block_type":"box","text":"however, the Fund may realize a loss relating to the futures position.","page_number":105,"box":{"x":117,"y":134,"width":512,"height":12}},{"id":"6a8cc964-b0a4-4143-b999-4fbb5243b446","block_type":"box","text":"Futures contracts are also subject to position limits. In order to comply with position limits, a Fund may","page_number":105,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"052a8605-9f1d-4196-9e98-f9f0cf99f801","block_type":"box","text":"be required to liquidate positions or may not be able to fully implement trading instructions. Any such","page_number":105,"box":{"x":117,"y":181,"width":750,"height":12}},{"id":"234eaa2d-87a0-405d-8db5-5e24d09722a0","block_type":"box","text":"liquidation or limited implementation could result in substantial costs to a Fund. See “— Regulation of","page_number":105,"box":{"x":117,"y":196,"width":754,"height":13}},{"id":"b45074e0-cd74-4659-8133-95e006e00b7a","block_type":"box","text":"Derivatives — Dodd-Frank Regulations” above.","page_number":105,"box":{"x":117,"y":212,"width":356,"height":12}},{"id":"f11dfc93-da44-4cc5-a7b7-5e8a022a64c7","block_type":"box","text":"A Fund is also permitted to purchase or sell call and put options on futures contracts, including","page_number":105,"box":{"x":116,"y":244,"width":706,"height":12}},{"id":"982f117f-4f9e-4ab1-80c0-ca57bd894ffa","block_type":"box","text":"financial futures and stock indices. Generally, these strategies would be used under the same market","page_number":105,"box":{"x":116,"y":259,"width":757,"height":13}},{"id":"ca7309a9-8339-4945-9bce-ae8c0b98bb57","block_type":"box","text":"and market sector conditions (","page_number":105,"box":{"x":116,"y":275,"width":225,"height":12}},{"id":"7c40abd8-d0be-4bd5-bc46-8a01701fd017","block_type":"box","text":"i.e.","page_number":105,"box":{"x":342,"y":275,"width":20,"height":10}},{"id":"a515d282-7ea1-4d3d-a838-1416c7658a56","block_type":"box","text":", conditions relating to specific types of investments) in which the","page_number":105,"box":{"x":365,"y":275,"width":485,"height":12}},{"id":"87e90bc8-7631-443c-b8fb-db89ef2900f0","block_type":"box","text":"Fund entered into futures transactions. A Fund may purchase put options or write call options on","page_number":105,"box":{"x":117,"y":290,"width":720,"height":13}},{"id":"fcc8c82a-a76a-483c-9341-b10292b8ab47","block_type":"box","text":"futures contracts and stock indices in lieu of selling the underlying futures contract in anticipation of a","page_number":105,"box":{"x":116,"y":306,"width":754,"height":12}},{"id":"a798c0d2-4086-4c16-92e5-bac3734f14c7","block_type":"box","text":"decrease in the market value of its securities. Similarly, a Fund can purchase call options, or write put","page_number":105,"box":{"x":116,"y":321,"width":759,"height":13}},{"id":"3f656823-f944-41cf-892b-2b500df5c37d","block_type":"box","text":"options on futures contracts and stock indices, as a substitute for the purchase of such futures","page_number":105,"box":{"x":116,"y":337,"width":705,"height":12}},{"id":"c2e3e072-a562-494a-9857-953792bb139e","block_type":"box","text":"contracts to hedge against the increased cost resulting from an increase in the market value of","page_number":105,"box":{"x":116,"y":352,"width":707,"height":13}},{"id":"c1bab1fb-b10f-42f3-9873-0fd8e98ca3c3","block_type":"box","text":"securities which the Fund intends to purchase.","page_number":105,"box":{"x":116,"y":368,"width":350,"height":12}},{"id":"8765ac24-ccc3-41a9-8a6e-5f1fd43f4699","block_type":"box","text":"To maintain greater flexibility, a Fund may invest in instruments which have characteristics similar to","page_number":105,"box":{"x":116,"y":400,"width":748,"height":12}},{"id":"ce7663eb-493a-4882-a339-d68bb63d6f25","block_type":"box","text":"futures contracts. These instruments may take a variety of forms, such as debt securities with interest","page_number":105,"box":{"x":116,"y":415,"width":759,"height":13}},{"id":"6df72bad-2f1d-4e08-9da0-503a82ff51bd","block_type":"box","text":"or principal payments determined by reference to the value of a security, an index of securities or a","page_number":105,"box":{"x":116,"y":431,"width":740,"height":12}},{"id":"f2510397-fe28-4f37-a50c-8ad897b2870e","block_type":"box","text":"commodity at a future point in time. The risks of such investments could reflect the risks of investing in","page_number":105,"box":{"x":116,"y":446,"width":764,"height":13}},{"id":"2ae26457-9659-4967-bc00-47b33c4d0b73","block_type":"box","text":"futures and securities, including volatility and illiquidity.","page_number":105,"box":{"x":116,"y":462,"width":410,"height":12}},{"id":"6a5bd527-1ad7-489d-b88d-9dde011d7782","block_type":"box","text":"Futures contracts and options on futures contracts are subject to significant correlation risk, leverage","page_number":105,"box":{"x":117,"y":494,"width":751,"height":12}},{"id":"3db86aa9-c021-4ce6-a1c4-ca1effc9be36","block_type":"box","text":"risk, illiquidity risk, market risk and counterparty risk with respect to a Fund’s futures broker or the","page_number":105,"box":{"x":117,"y":509,"width":726,"height":13}},{"id":"2cdec894-a145-431f-b244-27d82fa14032","block_type":"box","text":"clearinghouse. See “— Risk Factors in Derivatives” above.","page_number":105,"box":{"x":116,"y":525,"width":440,"height":12}},{"id":"6dd6dd26-6643-4df1-ad0d-1923043f9b62","block_type":"box","text":"Certain Funds may invest in futures based on carbon “allowances.” Under certain regulatory regimes, a","page_number":105,"box":{"x":117,"y":557,"width":771,"height":12}},{"id":"aa933bcd-389c-4887-aa5f-fe46fb04fe92","block_type":"box","text":"limit is set by a regulator, such as a government entity, on the total amount of specific greenhouse","page_number":105,"box":{"x":117,"y":572,"width":732,"height":13}},{"id":"d0d583f8-c93c-4200-82f0-4035510caed3","block_type":"box","text":"gases, such as CO2, that can be emitted by regulated entities, such as manufacturers or energy","page_number":105,"box":{"x":116,"y":588,"width":720,"height":12}},{"id":"7d165b12-3e52-4a09-a41e-5e3bcf4155fb","block_type":"box","text":"producers. The regulator then may issue or sell individual “emission allowances” to regulated entities,","page_number":105,"box":{"x":117,"y":603,"width":756,"height":13}},{"id":"920ac754-fd70-4089-9c33-0509c69d4352","block_type":"box","text":"which can then be traded on the open market. Commodity futures contracts linked to the value of","page_number":105,"box":{"x":116,"y":619,"width":725,"height":12}},{"id":"a97b48e7-991f-4a8e-a841-a194be112a2b","block_type":"box","text":"emission allowances are known as “carbon futures.”","page_number":105,"box":{"x":116,"y":634,"width":392,"height":10}},{"id":"6576629e-8aa6-432c-bd8d-8addfef74516","block_type":"box","text":"The price for carbon futures contracts is based on a number of factors, including the supply of and the","page_number":105,"box":{"x":116,"y":666,"width":756,"height":13}},{"id":"58b8857b-1aa8-496d-96fa-21b9e1981bdb","block_type":"box","text":"demand for carbon futures contracts. Changes in law, market conditions and expectations, position","page_number":105,"box":{"x":116,"y":682,"width":734,"height":12}},{"id":"a86274bf-83b4-47ab-baf2-e396cba100c2","block_type":"box","text":"limits, collateral requirements, and other factors each can impact the supply of and demand for carbon","page_number":105,"box":{"x":117,"y":697,"width":758,"height":13}},{"id":"d4bbee1c-1555-4d64-854e-a1e4d43e0ff4","block_type":"box","text":"futures contracts. The market for carbon futures contracts is still developing and may be subject to","page_number":105,"box":{"x":116,"y":713,"width":729,"height":12}},{"id":"b81a5cbd-9949-40c3-8e3e-1a199f963316","block_type":"box","text":"periods of illiquidity. During such times it may be difficult or impossible to buy or sell a position at the","page_number":105,"box":{"x":117,"y":728,"width":742,"height":13}},{"id":"96a15104-44da-4aa1-bc59-8fcce8c0e062","block_type":"box","text":"desired price. Market disruptions or volatility can also make it difficult to find a counterparty willing to","page_number":105,"box":{"x":116,"y":744,"width":742,"height":12}},{"id":"95031bc3-3e4f-46f7-bb0e-ca6fd7b86a6f","block_type":"box","text":"transact at a reasonable price and sufficient size.","page_number":105,"box":{"x":116,"y":759,"width":363,"height":12}},{"id":"f54833dd-e045-4e38-8c1c-f3dcf26bf24d","block_type":"box","text":"Swap Agreements.","page_number":105,"box":{"x":117,"y":791,"width":139,"height":13}},{"id":"ee298738-cf04-4f82-80f4-2181067525c8","block_type":"box","text":"A Fund may enter into swap agreements for hedging purposes or speculative purposes. Swap","page_number":105,"box":{"x":116,"y":815,"width":699,"height":12}},{"id":"de0c079e-3900-41d3-982a-2f56c07b168a","block_type":"box","text":"agreements are OTC contracts entered into primarily by financial institutions and institutional investors","page_number":105,"box":{"x":116,"y":831,"width":764,"height":12}},{"id":"ebbb1f11-333b-4a6c-8c36-fcc9df571b74","block_type":"box","text":"which may or may not be cleared by a central clearinghouse. In a standard “swap” transaction, two","page_number":105,"box":{"x":116,"y":846,"width":738,"height":12}},{"id":"4879ef3d-9aee-4fd2-bc6c-1e6d6e23f292","block_type":"box","text":"parties agree to exchange the returns earned or realized from one or more underlying assets or rates","page_number":105,"box":{"x":117,"y":862,"width":755,"height":12}},{"id":"7e5786f3-dbe9-476c-9f44-46c9bd2fd780","block_type":"box","text":"of return, which may be adjusted for an interest factor. The gross returns to be exchanged or","page_number":105,"box":{"x":116,"y":877,"width":693,"height":12}},{"id":"e04992f2-5be9-4f09-8af7-0c8f49d4cc2e","block_type":"box","text":"II-22","page_number":105,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"18131d33-c763-49d4-9363-56a4514d4e67","block_type":"box","text":"NM1026U-6039989-105/256","page_number":105,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"854a275c-9c39-418b-be95-4caf6eb45a46","block_type":"box","text":"“swapped” between the parties are generally calculated with respect to a “notional amount,”","page_number":106,"box":{"x":116,"y":87,"width":684,"height":12}},{"id":"704ae5ad-4054-4015-899d-5c8bf461d79e","block_type":"box","text":"e.g.","page_number":106,"box":{"x":801,"y":90,"width":26,"height":9}},{"id":"a4b4b8c8-b4ca-4c03-bc0b-48506469dc2e","block_type":"box","text":", the","page_number":106,"box":{"x":830,"y":87,"width":36,"height":11}},{"id":"6734b98b-7011-4c7d-94bc-88b05fbaffac","block_type":"box","text":"return or increase in value of a particular dollar amount invested at a particular interest rate, in a","page_number":106,"box":{"x":117,"y":102,"width":716,"height":12}},{"id":"642fef60-27d6-4786-bae7-27f3b499b55f","block_type":"box","text":"particular foreign currency, or in a “basket” of securities representing a particular index. The notional","page_number":106,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"d7eedfec-9cc0-4f59-9a0d-8341f9a814c5","block_type":"box","text":"amount of the swap agreement is only used to calculate the obligations that the parties to a swap","page_number":106,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"d3b4e954-0b44-4abf-85f4-c1306dec9456","block_type":"box","text":"agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will","page_number":106,"box":{"x":116,"y":149,"width":736,"height":12}},{"id":"eca6da2a-c557-4b54-b8e8-428e0a1e8999","block_type":"box","text":"generally be equal only to the net amount to be paid or received under the agreement based on the","page_number":106,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"0ae25ab7-4e42-4715-ada6-3709fe20571b","block_type":"box","text":"relative values of the positions held by each party to the agreement. Swaps that are not cleared involve","page_number":106,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"294e7cc5-cfdd-478a-b002-c62bc74e94d5","block_type":"box","text":"substantial counterparty risk. A Fund will typically attempt to mitigate this counterparty risk by entering","page_number":106,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"d9a62d8f-4e10-4837-a6ca-840071f49af9","block_type":"box","text":"into swap agreements only with creditworthy entities that have substantial capital or that have provided","page_number":106,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"90b85dc7-eace-438a-94a7-d757cb408d0a","block_type":"box","text":"the Fund with a third-party guaranty or other credit support. A Fund’s ability to use swap agreements","page_number":106,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"68c3aa9b-18de-42b4-8ad3-50819ac19f04","block_type":"box","text":"may be restricted by the tax rules applicable to registered investment companies.","page_number":106,"box":{"x":117,"y":242,"width":607,"height":12}},{"id":"36479606-aa03-4717-9ec6-9d7d6e7a16fb","block_type":"box","text":"Credit Default Swaps and Similar Instruments.","page_number":106,"box":{"x":117,"y":273,"width":333,"height":12}},{"id":"e746c0d7-c88c-45af-bd3b-fa29882de448","block_type":"box","text":"Certain Funds may enter into credit default swaps and","page_number":106,"box":{"x":450,"y":273,"width":389,"height":12}},{"id":"759ee644-15eb-4eb3-9e91-b1694e9106b3","block_type":"box","text":"similar instruments. Credit default swaps are standardi","page_number":106,"box":{"x":116,"y":289,"width":386,"height":12}},{"id":"5ed762bf-3e24-4dcb-bb4a-759f50631a2c","block_type":"box","text":"zed agreements in which the protection “buyer” pays","page_number":106,"box":{"x":503,"y":289,"width":378,"height":12}},{"id":"f5437b7e-aca6-4c56-8845-be990711c3b6","block_type":"box","text":"the protection “seller” an up-front payment, or a periodic","page_number":106,"box":{"x":116,"y":304,"width":400,"height":12}},{"id":"6652e9fd-3092-42f2-836d-84cfd9eebe1f","block_type":"box","text":"stream of payments, over the term of the contract,","page_number":106,"box":{"x":517,"y":304,"width":360,"height":12}},{"id":"6fac3957-1300-4de2-a999-03cbe7cb43ba","block_type":"box","text":"provided generally that no credit event on a reference ob","page_number":106,"box":{"x":117,"y":320,"width":401,"height":12}},{"id":"a2eba9fb-bc33-4b70-9a47-d6be158406d5","block_type":"box","text":"ligation has occurred. If a credit event occurs, the","page_number":106,"box":{"x":520,"y":320,"width":353,"height":12}},{"id":"c4fa9df7-7bdf-4cb2-8578-bd817c9f320e","block_type":"box","text":"seller generally must pay the buyer the difference","page_number":106,"box":{"x":116,"y":335,"width":355,"height":12}},{"id":"2a21a3a1-5f6a-4643-a978-ff8be049b049","block_type":"box","text":"between the notional amount of the contract and the","page_number":106,"box":{"x":472,"y":335,"width":375,"height":10}},{"id":"d87067df-e7e1-499f-a117-ecc68195d388","block_type":"box","text":"value of a portfolio of securities issued by the refere","page_number":106,"box":{"x":116,"y":351,"width":357,"height":12}},{"id":"4fd27255-ec66-4865-9f3f-e87e9523f8bd","block_type":"box","text":"rence entity. A Fund may be either the buyer or seller in","page_number":106,"box":{"x":473,"y":351,"width":395,"height":12}},{"id":"80fb571b-7658-403c-85ca-28b68c04149c","block_type":"box","text":"the transaction. The Funds may enter into credit default","page_number":106,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"1b0e19c1-3375-4c0d-8e65-b802194af2be","block_type":"box","text":"swaps that reference the obligations of a single","page_number":106,"box":{"x":515,"y":366,"width":338,"height":12}},{"id":"cef4048a-d0e0-4537-912c-db88576f5291","block_type":"box","text":"entity (“single-name CDS”) or the obli","page_number":106,"box":{"x":116,"y":382,"width":264,"height":12}},{"id":"a2876b43-b95e-40e6-be16-83b9b0042e1f","block_type":"box","text":"gations of entities that make up an index (“index CDS”). References to","page_number":106,"box":{"x":381,"y":382,"width":504,"height":12}},{"id":"b94c458b-c44c-4161-baa9-a149809fcf24","block_type":"box","text":"“credit default swaps” shall collectively refer to single-name CDS and index CDS.","page_number":106,"box":{"x":116,"y":397,"width":579,"height":12}},{"id":"bb83e98b-7107-4efb-a9f9-202aeede328a","block_type":"box","text":"Credit default swaps have as reference obligations one or more securities or loans that are not","page_number":106,"box":{"x":117,"y":428,"width":706,"height":12}},{"id":"f8d79a74-90d6-4760-ae7f-65d7b25f6689","block_type":"box","text":"currently held by a Fund. In circumstances in which a Fund does not own the securities or loans that","page_number":106,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"18449461-85a5-465e-b824-f02f2a0e54a1","block_type":"box","text":"are deliverable under a credit default swap, the Fund is exposed to the risk that deliverable securities","page_number":106,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"4fb33e09-2d9f-4cf0-a93b-f2328f6d87d2","block_type":"box","text":"will not be available in the market, or will be available only at unfavorable prices, as would be the case","page_number":106,"box":{"x":116,"y":475,"width":763,"height":12}},{"id":"9a350d26-ff6f-4f26-9449-ecf3c6f312ee","block_type":"box","text":"in a so-called “short squeeze.” In certain instances of issuer defaults or restructurings, it has been","page_number":106,"box":{"x":117,"y":490,"width":729,"height":12}},{"id":"a2abb4d7-cbb6-4238-ad4b-2860c6cf9def","block_type":"box","text":"unclear under the standard industry documentation for credit default swaps whether or not a “credit","page_number":106,"box":{"x":117,"y":506,"width":739,"height":12}},{"id":"ac060590-c679-4f7f-bfda-52c60cafcaae","block_type":"box","text":"event” triggering the seller’s payment obligation had occurred. Certain initiatives adopted by derivatives","page_number":106,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"02b9dcdd-00fd-4a8d-aab2-bb1612189b6d","block_type":"box","text":"market participants, including the International Swaps and Derivatives Association (“ISDA”), are","page_number":106,"box":{"x":117,"y":537,"width":713,"height":12}},{"id":"0491e933-78cd-43e7-9c56-b26ce759e517","block_type":"box","text":"designed to implement uniform settlement terms into standard credit default swap documentation, as","page_number":106,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"69cba756-b154-45c0-88f6-a10b96c65c14","block_type":"box","text":"well as refine the practices for the transparent conduct of the credit default swap market generally.","page_number":106,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"77cd2dc4-9b33-48c7-8f88-8f427450726c","block_type":"box","text":"Among these initiatives are the ISDA Credit Derivatives Determination Committee and the","page_number":106,"box":{"x":116,"y":583,"width":672,"height":12}},{"id":"91c88e65-261f-4504-ab67-8738c852bf4a","block_type":"box","text":"implementation of market-wide cash settlement protocols applicable to all market-standard credit","page_number":106,"box":{"x":117,"y":599,"width":722,"height":12}},{"id":"14172d55-ac1a-42c8-9249-777a3b79b0b8","block_type":"box","text":"default swaps. These initiatives are intended to reduce both the uncertainty as to the occurrence of","page_number":106,"box":{"x":116,"y":614,"width":739,"height":12}},{"id":"2db9b86f-e4e5-4c28-a00c-6114103c31c8","block_type":"box","text":"credit events and the risk of a “short squeeze” by providing that the ISDA Credit Derivatives","page_number":106,"box":{"x":116,"y":630,"width":684,"height":12}},{"id":"0daad9f9-d107-48df-88fb-74628948460b","block_type":"box","text":"Determinations Committee will make determinations as to whether a credit event has occurred,","page_number":106,"box":{"x":117,"y":645,"width":710,"height":11}},{"id":"551cc9b4-6ada-48c2-9ce1-2b6194ece3ab","block_type":"box","text":"establish an auction to determine a settlement price and identify the deliverable securities for purposes","page_number":106,"box":{"x":116,"y":661,"width":763,"height":12}},{"id":"2f822810-1507-4cf6-9274-b433cfb2b19c","block_type":"box","text":"of the auction, although the ISDA Credit Derivatives Determinations Committee may in certain limited","page_number":106,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"6c1dc163-3e2c-4579-b129-9524c28bf5e1","block_type":"box","text":"circumstances refrain from doing so. In the event the ISDA Credit Derivatives Determinations","page_number":106,"box":{"x":116,"y":692,"width":691,"height":12}},{"id":"fceae66f-37ed-4dc2-b972-eef49c268260","block_type":"box","text":"Committee cannot reach a timely resolution with respect to a “credit event” or otherwise does not","page_number":106,"box":{"x":117,"y":707,"width":718,"height":12}},{"id":"e3450ccd-896a-4b74-8ed9-4f5e3861ba1f","block_type":"box","text":"establish a cash settlement auction, a Fund may not be able to realize the full value of the credit","page_number":106,"box":{"x":116,"y":723,"width":713,"height":12}},{"id":"8ee17415-66ae-4c98-ad52-39d4af07655f","block_type":"box","text":"default swap upon a default by the reference entity. Furthermore, a Fund may enter into certain credit","page_number":106,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"d5cf2b75-8aaf-462e-9153-cc061d44f665","block_type":"box","text":"default swaps or similar instruments that may not be covered by these initiatives.","page_number":106,"box":{"x":116,"y":754,"width":598,"height":12}},{"id":"aba9914f-3fc3-42c1-94d3-a08663181c1b","block_type":"box","text":"If a Fund is a buyer, it will lose the payments made under the terms of the credit default swap and","page_number":106,"box":{"x":117,"y":785,"width":723,"height":12}},{"id":"c86e6aeb-1654-44cf-9d2b-00f7626fbd1e","block_type":"box","text":"recover nothing should no credit event occur. If a Fund is a seller and a credit event occurs, the value","page_number":106,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"a84a5152-ecf8-4241-a1cb-648c1b5a1018","block_type":"box","text":"of any deliverable obligation received by the Fund or the amount of cash settlement received by the","page_number":106,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"bbef24dc-d634-41c1-86f1-f7607862bdc4","block_type":"box","text":"Fund pursuant to the relevant cash settlement auction, together with the up-front or periodic payments","page_number":106,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"56ac2373-1d9b-419f-a215-7a04bddc72fc","block_type":"box","text":"previously received, may be less than the amount it pays to the buyer, resulting in a loss of value to the","page_number":106,"box":{"x":117,"y":847,"width":770,"height":12}},{"id":"fe583dc1-84a3-4fcb-a197-e89b22cb51c7","block_type":"box","text":"Fund. A Fund that sells credit default swaps incurs leveraged exposure to the credit of one or more","page_number":106,"box":{"x":117,"y":862,"width":739,"height":12}},{"id":"9c6ff3a4-84c1-41bf-a696-40a4153c09db","block_type":"box","text":"reference entities and is subject to many of the same risks it would incur if it were holding debt","page_number":106,"box":{"x":117,"y":878,"width":703,"height":12}},{"id":"de0578f4-8b8a-4103-a9d8-e469f738f5b7","block_type":"box","text":"II-23","page_number":106,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5d61353a-e906-405d-b454-b18dbb9ceb17","block_type":"box","text":"NM1026U-6039989-106/256","page_number":106,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b9f6abd7-010e-48c9-be62-9f2b12296aee","block_type":"box","text":"securities issued by the relevant reference entity. However, a Fund will not have any legal recourse","page_number":107,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"7e179f1c-9a22-42cb-a260-eaba35248392","block_type":"box","text":"against any reference entity and will not benefit from any collateral securing the reference entity’s debt","page_number":107,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"f895097f-598f-49b6-b6c5-495037a2f1df","block_type":"box","text":"obligations. In the event the ISDA Credit Derivatives Determinations Committee does not establish a","page_number":107,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"522590f3-b956-4f46-81c2-b268d4a95dea","block_type":"box","text":"cash settlement auction and identify the relevant deliverable securities or loans, the credit default swap","page_number":107,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"3d66f6c3-a080-45ea-bc34-e1c7a75df17d","block_type":"box","text":"buyer will have broad discretion to select which of the reference entity’s debt obligations to deliver to","page_number":107,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"e6e36333-a782-4047-bd6e-f93afed94c8b","block_type":"box","text":"the Fund following a credit event and will likely choose the obligations with the lowest market value in","page_number":107,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"847b082c-cfa2-4209-9154-6f8840c1d61c","block_type":"box","text":"order to maximize the payment obligations of the Fund. In addition, credit default swaps generally trade","page_number":107,"box":{"x":116,"y":180,"width":772,"height":12}},{"id":"ca819dc6-9a51-4f22-840f-3e3037a8a9ee","block_type":"box","text":"on the basis of theoretical pricing and valuation models, which may not accurately value such swap","page_number":107,"box":{"x":116,"y":196,"width":742,"height":12}},{"id":"07606838-97de-43e9-8524-1343e2672d75","block_type":"box","text":"positions when established or when subsequently traded or unwound under actual market conditions.","page_number":107,"box":{"x":117,"y":211,"width":756,"height":12}},{"id":"70d71dc5-c37d-46ff-a581-5c482be4c3cb","block_type":"box","text":"Dodd-Frank requires that certain index CDS be executed in regulated markets and submitted for","page_number":107,"box":{"x":117,"y":242,"width":719,"height":12}},{"id":"f7754419-d036-438e-8263-581cf6b8c2b2","block_type":"box","text":"clearing to regulated clearinghouses. See “— Derivatives — Regulation of Derivatives — Dodd-Frank","page_number":107,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"210c9192-b8e3-47d0-87a1-52bb07a8c64c","block_type":"box","text":"Regulations” above. Other single-name CDS and index CDS are permitted, although not required, to","page_number":107,"box":{"x":117,"y":273,"width":750,"height":12}},{"id":"f925cb7c-005d-4f2d-8e06-1c401b9d66fb","block_type":"box","text":"be cleared through regulated clearinghouses. The Funds clear all credit default swaps that are subject","page_number":107,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"25bec081-1eed-4485-9c4a-c05c1a121e6a","block_type":"box","text":"to mandatory clearing and may voluntarily clear some, but not all, of the other credit default swaps not","page_number":107,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"3842ca24-a69c-4c00-9e44-d5492f296589","block_type":"box","text":"subject to mandatory clearing. The Funds face counterparty risk with respect to the clearinghouse","page_number":107,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"7f62042e-a3b1-4d81-b6c7-6de868e8c846","block_type":"box","text":"when entering into cleared single-name CDS and cleared index CDS. The Funds face significant","page_number":107,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"5e0d5be8-2382-4002-8d41-66ea15e46fd4","block_type":"box","text":"counterparty risk with respect to their counterparties to non-cleared credit default swaps and similar","page_number":107,"box":{"x":116,"y":351,"width":743,"height":12}},{"id":"28c64b32-f33e-43e4-a1ae-d9512fb64aa8","block_type":"box","text":"instruments. A Fund typically will enter into non-cleared credit default swaps and similar instruments","page_number":107,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"51d64319-76f0-4c27-bfe7-b70ab4562acb","block_type":"box","text":"with swap dealers and creditworthy entities that have substantial capital or that have provided the Fund","page_number":107,"box":{"x":116,"y":382,"width":771,"height":12}},{"id":"de670f1f-d532-46de-be25-2b72073fbff9","block_type":"box","text":"with a third-party guaranty or other credit support.","page_number":107,"box":{"x":116,"y":397,"width":373,"height":12}},{"id":"9bca79aa-0dc3-4ad0-8975-890f586179f3","block_type":"box","text":"In certain instances, a Fund may enter into bespoke credit default swaps or similar instruments either","page_number":107,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"9e8eddab-47d6-4f97-9a1c-98e969246535","block_type":"box","text":"as protection buyer or protection seller. While these contracts are similar in their operation to the","page_number":107,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"af7e58e5-a8ee-4953-adbb-35f707c93832","block_type":"box","text":"market-standard credit default swaps described above, they are less standardized and instead have","page_number":107,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"9283375c-2a21-4c77-b5c8-127c21f10cd2","block_type":"box","text":"bespoke or tailored features. For example, as compared to market-standard credit defaults, the range","page_number":107,"box":{"x":117,"y":475,"width":758,"height":12}},{"id":"ca8d3f5f-cbd2-4c67-8621-e6b858d079b6","block_type":"box","text":"of “credit events” triggering settlement of such bespoke contracts may be narrower or broader, any","page_number":107,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"447d92b9-6caa-47ce-92a8-a735c033f6af","block_type":"box","text":"such triggered contracts are settled by physical delivery of the underlying security or loan to or by the","page_number":107,"box":{"x":116,"y":506,"width":755,"height":12}},{"id":"dcee3b17-4e44-4c55-a1c2-2d69c084635f","block_type":"box","text":"Fund rather than by way of cash settlement, and there may be a wider range of securities as the","page_number":107,"box":{"x":117,"y":521,"width":719,"height":12}},{"id":"70990665-347f-4ce2-a3c4-dc6b2891d80c","block_type":"box","text":"reference obligations and/or deliverable obligations.","page_number":107,"box":{"x":117,"y":537,"width":388,"height":12}},{"id":"14515ef3-36a7-484a-b589-102a2bc5bf15","block_type":"box","text":"In addition, credit default swaps and similar instruments generally involve greater risks than if a Fund","page_number":107,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"0482b429-48e0-47bf-806b-c6ae3bbe6ec3","block_type":"box","text":"had invested in the reference obligation directly and are subject to significant credit risk, correlation","page_number":107,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"d59ae4eb-a73d-4ffc-9f07-712baed9179e","block_type":"box","text":"risk, leverage risk, illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":107,"box":{"x":117,"y":599,"width":689,"height":12}},{"id":"0192d38b-2f28-439b-bbee-da7a807ddd56","block_type":"box","text":"Interest Rate Swaps, Floors and Caps.","page_number":107,"box":{"x":117,"y":630,"width":292,"height":12}},{"id":"a3757cf5-164e-41e0-a315-b6e2ab008857","block_type":"box","text":"Certain Funds may enter into OTC derivatives in the form of","page_number":107,"box":{"x":410,"y":630,"width":450,"height":12}},{"id":"6bc3be99-e2b8-4b1c-b1bc-d106ec606603","block_type":"box","text":"interest rate swaps and interest rate caps and floors. As described in further detail below, a Fund may","page_number":107,"box":{"x":117,"y":645,"width":760,"height":12}},{"id":"2928d29a-9848-4b09-9801-82642b656ef2","block_type":"box","text":"enter into these transactions primarily to preserve a return or spread on a particular investment or","page_number":107,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"859ba866-0344-41e4-8246-d6f5fff02ced","block_type":"box","text":"portion of its holdings, as a duration management technique, to protect against an increase in the price","page_number":107,"box":{"x":117,"y":676,"width":762,"height":12}},{"id":"f261d195-d170-48ac-b715-2183de0b2751","block_type":"box","text":"of securities a Fund anticipates purchasing at a later date, or for speculation to increase returns.","page_number":107,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"6b8cfdda-34ae-437b-9b51-0f12826fc2ba","block_type":"box","text":"Dodd-Frank requires that certain interest rate swaps be executed in regulated markets and submitted","page_number":107,"box":{"x":117,"y":723,"width":750,"height":12}},{"id":"ea082612-f0dc-49ee-b330-681e04d915aa","block_type":"box","text":"for clearing to regulated clearinghouses. See “— Regulation of Derivatives — Dodd-Frank Regulations”","page_number":107,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"39dff46d-ae66-4f99-88cd-11191be575de","block_type":"box","text":"above. Other interest rate swaps are permitted, although not required, to be cleared. Most of the","page_number":107,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"202097dd-2e85-4469-82f5-4a6ab162daf0","block_type":"box","text":"interest rate swaps entered into by the Funds are cleared. The Funds face counterparty risk with","page_number":107,"box":{"x":117,"y":769,"width":714,"height":12}},{"id":"05571286-ad69-4361-8aba-55abd63dc5ca","block_type":"box","text":"respect to the clearinghouse when entering into cleared interest rate swaps.","page_number":107,"box":{"x":117,"y":785,"width":561,"height":12}},{"id":"f8e9dca0-17b8-437a-815d-6a53213dcd03","block_type":"box","text":"The Funds face significant counterparty risk with respect to their counterparties to non-cleared interest","page_number":107,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"01160fab-0483-468e-bad4-1348c108b72c","block_type":"box","text":"rate swaps and interest rate caps and floors. The typical counterparties for a Fund’s non-cleared","page_number":107,"box":{"x":117,"y":831,"width":719,"height":12}},{"id":"d09f9c3e-b186-4dd9-8f94-8c5399543f72","block_type":"box","text":"interest rate derivatives transactions are swap dealers and other creditworthy entities that have","page_number":107,"box":{"x":117,"y":847,"width":709,"height":12}},{"id":"fc0e599b-1036-49d9-80c1-d4c0195aeead","block_type":"box","text":"substantial capital or that have provided the Fund with a third-party guaranty or other credit support. If","page_number":107,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"dfc371de-4a1f-473d-8783-0024a10e10c2","block_type":"box","text":"the Fund’s counterparty defaults on such a transaction, a Fund will have contractual remedies with","page_number":107,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"6d2ce50c-96ea-4c75-9d23-a5be9d4c4dc6","block_type":"box","text":"II-24","page_number":107,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"43d5ac13-d13d-4fca-86c1-d330e6a50104","block_type":"box","text":"NM1026U-6039989-107/256","page_number":107,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3e8b4cc3-b620-4a77-8d70-1b668ec9fe61","block_type":"box","text":"respect to the transaction, but there can be no guarantee that the Fund will be successful in enforcing","page_number":108,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"b442c52a-2262-4c10-ab47-2876af583279","block_type":"box","text":"such remedies. The market for interest rate swaps is relatively liquid in comparison with other similar","page_number":108,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"8a360db4-1435-4869-be81-c6e02d2e2e7a","block_type":"box","text":"instruments traded in the interbank market. A Fund may be limited in its ability to enter into certain","page_number":108,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"f3318f7d-9b1e-40a1-a6c2-693e0f2821ed","block_type":"box","text":"interest rate derivatives due to applicable U.S. federal income tax requirements.","page_number":108,"box":{"x":117,"y":134,"width":597,"height":11}},{"id":"d49e4a06-fee1-4db0-8ca3-3da3f2038a0c","block_type":"box","text":"Interest rate swaps are transactions in which each party makes periodic interest payments based on a","page_number":108,"box":{"x":117,"y":161,"width":762,"height":12}},{"id":"53c85437-b91c-47e0-b7d9-59da150537be","block_type":"box","text":"fixed or variable interest rate, index or asset in return for periodic payments from its counterparty based","page_number":108,"box":{"x":116,"y":177,"width":772,"height":12}},{"id":"30b89f74-ea97-43d2-a56c-b5fc0753cfed","block_type":"box","text":"on a different fixed or variable interest rate, index or asset.","page_number":108,"box":{"x":116,"y":192,"width":439,"height":11}},{"id":"4435aae9-54be-4eab-a922-5ea1f7698549","block_type":"box","text":"The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls","page_number":108,"box":{"x":116,"y":220,"width":746,"height":12}},{"id":"84377a40-c89c-48fa-96f4-aed05d191021","block_type":"box","text":"below a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":108,"box":{"x":117,"y":235,"width":736,"height":12}},{"id":"3ce39f28-57ae-453f-a3c2-762610124bfe","block_type":"box","text":"from the party selling such interest rate floor.","page_number":108,"box":{"x":116,"y":251,"width":337,"height":12}},{"id":"ca89b729-30bd-4668-b633-197c8e6ee43d","block_type":"box","text":"The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises","page_number":108,"box":{"x":116,"y":278,"width":746,"height":12}},{"id":"7285c803-4d95-4ae3-ad1e-14bc27dc2476","block_type":"box","text":"above a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":108,"box":{"x":116,"y":294,"width":739,"height":12}},{"id":"3b8d5303-ccea-4cfd-9646-f3f647aff9b3","block_type":"box","text":"from the party selling such interest rate cap.","page_number":108,"box":{"x":116,"y":309,"width":331,"height":12}},{"id":"4d00bb58-ee57-4280-8963-eabd4c863131","block_type":"box","text":"A Fund may enter into an interest rate swap to effectively exchange with another party their respective","page_number":108,"box":{"x":116,"y":337,"width":764,"height":12}},{"id":"ade19ec4-6a1d-4199-9e9f-7a3f4970c593","block_type":"box","text":"commitments to pay or receive interest,","page_number":108,"box":{"x":116,"y":352,"width":298,"height":12}},{"id":"00bd38a0-db65-4231-b7fa-1005c6bcedcb","block_type":"box","text":"e.g.","page_number":108,"box":{"x":415,"y":355,"width":26,"height":9}},{"id":"e0e7a19a-bdbe-4623-873b-4ed5e5b1b7bb","block_type":"box","text":", an exchange of fixed rate payments for floating rate","page_number":108,"box":{"x":444,"y":352,"width":396,"height":12}},{"id":"9c6cad16-3ced-4c0d-a6ef-5310f939b533","block_type":"box","text":"payments. For example, if a Fund holds a mortgage-backed security with an interest rate that is reset","page_number":108,"box":{"x":117,"y":368,"width":755,"height":12}},{"id":"423c3f59-4cb1-4131-9184-b018519b8693","block_type":"box","text":"only once each year, it may swap the right to receive interest at this fixed rate for the right to receive","page_number":108,"box":{"x":116,"y":383,"width":748,"height":12}},{"id":"7dce9450-685c-4233-861e-5e58e917576b","block_type":"box","text":"interest at a rate that is reset every week. This would enable a Fund to offset a decline in the value of","page_number":108,"box":{"x":117,"y":399,"width":755,"height":12}},{"id":"c97ccb16-2323-45b0-82ea-a8bb6c96773b","block_type":"box","text":"the mortgage-backed security due to rising interest rates but would also limit its ability to benefit from","page_number":108,"box":{"x":116,"y":414,"width":753,"height":12}},{"id":"201907ba-6060-4e9b-9804-aa7aee085cc0","block_type":"box","text":"falling interest rates. Conversely, if a Fund holds a mortgage-backed security with an interest rate that","page_number":108,"box":{"x":116,"y":430,"width":761,"height":12}},{"id":"1f153330-defd-4310-974a-a7aba5dd59f3","block_type":"box","text":"is reset every week and it would like to lock in what","page_number":108,"box":{"x":117,"y":445,"width":383,"height":12}},{"id":"4974d594-258b-407d-bf1e-8138079b3bec","block_type":"box","text":"it believes to be a high interest rate for one year, it","page_number":108,"box":{"x":501,"y":445,"width":377,"height":12}},{"id":"7a5bf3d5-aafc-4f28-abfc-92b404488196","block_type":"box","text":"may swap the right to receive interest at this variable weekly rate for the right to receive interest at a","page_number":108,"box":{"x":117,"y":461,"width":746,"height":12}},{"id":"02eb81bd-f6d4-45e1-a48f-889460ba8b8b","block_type":"box","text":"rate that is fixed for one year. Such a swap would protect the Fund from a reduction in yield due to","page_number":108,"box":{"x":117,"y":476,"width":733,"height":12}},{"id":"e2274a21-3d48-4fe4-b02b-655779612d8b","block_type":"box","text":"falling interest rates and may permit the Fund to enhance its income through the positive differential","page_number":108,"box":{"x":116,"y":492,"width":745,"height":12}},{"id":"9f2e840f-8887-405a-9687-6e46b8cfdbf4","block_type":"box","text":"between one week and one year interest rates, but would preclude it from taking full advantage of","page_number":108,"box":{"x":117,"y":507,"width":729,"height":12}},{"id":"85d01c26-73e4-4e55-8cce-0ee7755ed692","block_type":"box","text":"rising interest rates.","page_number":108,"box":{"x":117,"y":523,"width":150,"height":12}},{"id":"76a8db50-3726-492d-8dbd-1c4571401376","block_type":"box","text":"For U.S federal income tax purposes, gains from transactions in interest rate swaps distributed to","page_number":108,"box":{"x":117,"y":550,"width":726,"height":12}},{"id":"9b005d95-700a-40ce-8a2b-083f64e4b99d","block_type":"box","text":"shareholders will be taxable as ordinary income or, in certain circumstances, as long term capital gains","page_number":108,"box":{"x":116,"y":566,"width":769,"height":12}},{"id":"b02db356-47a7-4fbb-b996-dcd5611b7358","block_type":"box","text":"to shareholders.","page_number":108,"box":{"x":116,"y":581,"width":125,"height":10}},{"id":"d9c06e1e-0852-4087-b6d1-10e5b1671b32","block_type":"box","text":"Interest rate swaps and interest rate caps and floors may be subject to correlation risk, leverage risk,","page_number":108,"box":{"x":117,"y":609,"width":751,"height":12}},{"id":"b69e9371-a720-4211-86d6-eead80d01b80","block_type":"box","text":"illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":108,"box":{"x":117,"y":624,"width":549,"height":12}},{"id":"c8848113-f61f-44b4-8c27-eb7cfa26ad7c","block_type":"box","text":"Total Return Swaps.","page_number":108,"box":{"x":118,"y":652,"width":155,"height":12}},{"id":"8d63bbaa-ed4e-4a64-9310-c2e251307e28","block_type":"box","text":"Total return swaps are contracts in which one party agrees to make periodic","page_number":108,"box":{"x":273,"y":652,"width":570,"height":12}},{"id":"48e22111-ea46-4ffd-986c-d928c9d1ff7b","block_type":"box","text":"payments to the other party based on the return of the assets underlying the contract in exchange for","page_number":108,"box":{"x":117,"y":667,"width":750,"height":12}},{"id":"4f8ad1b0-4e34-47a3-83f6-4aff287f6367","block_type":"box","text":"periodic payments based on a fixed or variable interest rate or the total return from different underlying","page_number":108,"box":{"x":117,"y":683,"width":759,"height":12}},{"id":"4821d7dd-df32-4333-a6e0-454ebdef7cfd","block_type":"box","text":"assets. The return of the assets underlying the contract includes both the income generated by the","page_number":108,"box":{"x":116,"y":698,"width":732,"height":12}},{"id":"58b9d28e-e09e-41f3-85fe-43e745ed057b","block_type":"box","text":"asset and the change in market value of the asset. The asset underlying the contract may include a","page_number":108,"box":{"x":116,"y":714,"width":737,"height":12}},{"id":"af16e8db-f5c4-4e05-abd1-c9942c91a4d2","block_type":"box","text":"specified security, basket of securities or securities indices. Total return swaps on a specified security,","page_number":108,"box":{"x":116,"y":729,"width":757,"height":12}},{"id":"387551ff-3c98-4181-a822-c5fef5334371","block_type":"box","text":"basket of securities or securities indices may sometimes be referred to as “contracts for difference.”","page_number":108,"box":{"x":117,"y":745,"width":738,"height":12}},{"id":"cac62925-fb71-4a71-825a-4c672e717bb9","block_type":"box","text":"Total return swaps may be used to obtain exposure to a security or market without owning or taking","page_number":108,"box":{"x":116,"y":772,"width":738,"height":12}},{"id":"25809853-8f5d-40fa-8f7b-c25722f9806e","block_type":"box","text":"physical custody of such security or investing directly in such market. Upon entering into a total return","page_number":108,"box":{"x":117,"y":788,"width":752,"height":12}},{"id":"76a8e217-924f-4aa9-80c4-dfaa8a3ef31e","block_type":"box","text":"swap, a Fund is required to deposit initial margin but the parties do not exchange the notional amount.","page_number":108,"box":{"x":116,"y":803,"width":757,"height":12}},{"id":"7b444025-78be-4f75-8d36-956dbb2dc093","block_type":"box","text":"As a result, total return swaps may effectively add leverage to the Fund’s portfolio because the Fund","page_number":108,"box":{"x":116,"y":819,"width":744,"height":12}},{"id":"649dca0e-dc36-4100-b7af-91b5fdcacdc2","block_type":"box","text":"would be subject to investment exposure on the notional amount of the swap.","page_number":108,"box":{"x":116,"y":834,"width":580,"height":12}},{"id":"0f84a7a8-9ee6-4c68-9654-588ab99c87fe","block_type":"box","text":"Total return swaps are subject to significant correlation risk, leverage risk, illiquidity risk, market risk","page_number":108,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"1a3babe3-09a0-4d07-b11f-dddbf52d3385","block_type":"box","text":"and counterparty risk. See “— Risk Factors in Derivatives” above.","page_number":108,"box":{"x":116,"y":877,"width":493,"height":12}},{"id":"904987f6-a485-4ba0-b0d2-a72227e24231","block_type":"box","text":"II-25","page_number":108,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"40af0796-14e5-4f9b-94ab-55578ea384de","block_type":"box","text":"NM1026U-6039989-108/256","page_number":108,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"eaf7af73-e399-49ce-89dd-57978fe552c7","block_type":"box","text":"Options.","page_number":109,"box":{"x":117,"y":87,"width":66,"height":12}},{"id":"f6a7c8d7-dff6-4770-be6d-bec4546acb10","block_type":"box","text":"Options on Securities and Securities Indices.","page_number":109,"box":{"x":117,"y":110,"width":337,"height":12}},{"id":"3fc9c1f1-9adb-42dc-83e6-3b33574241a5","block_type":"box","text":"A Fund may engage in transactions in options on","page_number":109,"box":{"x":454,"y":110,"width":370,"height":12}},{"id":"b22716d6-6a84-4efa-a2e5-4e471869fd89","block_type":"box","text":"individual securities, baskets of securities or securities indices, or particular measurements of value or","page_number":109,"box":{"x":117,"y":126,"width":761,"height":12}},{"id":"681623ac-f82a-438f-ab8b-ff9b6f316146","block_type":"box","text":"rates, such as an index of the price of treasury securities or an index representative of short-term","page_number":109,"box":{"x":117,"y":141,"width":724,"height":12}},{"id":"e6c496d8-597e-4622-a49c-cdb03fcda6ce","block_type":"box","text":"interest rates. Such investments may be made on exchanges and in the OTC markets. In general,","page_number":109,"box":{"x":117,"y":157,"width":732,"height":12}},{"id":"1330536e-029e-401a-9074-e4d1e6caba07","block_type":"box","text":"exchange-traded options have standardized exercise prices and expiration dates and require the","page_number":109,"box":{"x":116,"y":172,"width":723,"height":12}},{"id":"546dde47-e2b1-42f0-9c8a-e8206e65d4f2","block_type":"box","text":"parties to post margin against their obligations, and the performance of the parties’ obligations in","page_number":109,"box":{"x":117,"y":188,"width":720,"height":12}},{"id":"9be7747d-f718-45e9-a1ca-7903c832b3c5","block_type":"box","text":"connection with such options is guaranteed by the exchange or a related clearing corporation. OTC","page_number":109,"box":{"x":116,"y":203,"width":742,"height":12}},{"id":"957a32d4-af15-4e48-9782-4add8ec939f6","block_type":"box","text":"options have more flexible terms negotiated between the buyer and the seller, but are subject to","page_number":109,"box":{"x":116,"y":219,"width":717,"height":12}},{"id":"f88c0c85-4522-46bc-b690-a5333188793c","block_type":"box","text":"greater credit risk. OTC options also involve greater illiquidity risk.","page_number":109,"box":{"x":116,"y":234,"width":493,"height":12}},{"id":"566f61c1-4c88-431e-b3b5-c1a27d9b07b0","block_type":"box","text":"A Fund may also engage in transactions in options which have additional features that result in","page_number":109,"box":{"x":116,"y":265,"width":709,"height":12}},{"id":"8db277da-f11e-490f-a397-b013c20c298b","block_type":"box","text":"different payment structures and/or expirations (commonly referred to as exotic options). For example,","page_number":109,"box":{"x":116,"y":281,"width":765,"height":12}},{"id":"3d62db26-56a3-4aee-a970-c44f0663945f","block_type":"box","text":"barrier options are exotic options that can only be exercised (or automatically expire) if the price of the","page_number":109,"box":{"x":117,"y":296,"width":761,"height":12}},{"id":"6ced2ed9-a30d-40c0-93bf-ebbc0268ed3c","block_type":"box","text":"underlying asset reaches one or more predetermined levels on or before expiration. Binary options are","page_number":109,"box":{"x":117,"y":312,"width":765,"height":12}},{"id":"f592ca03-e490-4412-8ee0-5f89eaef29f9","block_type":"box","text":"another example of exotic options which have a fixed all-or-nothing payout if one or more","page_number":109,"box":{"x":116,"y":327,"width":666,"height":12}},{"id":"7a967ce2-1ca9-4aaa-9aa2-5064206046e5","block_type":"box","text":"predetermined conditions are met. Exotic options are typically traded in OTC markets.","page_number":109,"box":{"x":117,"y":343,"width":641,"height":12}},{"id":"b6483105-aa56-4d15-9b3f-6c5d7dee9a8a","block_type":"box","text":"There are several risks associated with transactions in options on securities and indexes. For example,","page_number":109,"box":{"x":116,"y":374,"width":770,"height":12}},{"id":"5561a241-d68b-4f87-8484-08f46cbbfb27","block_type":"box","text":"there are significant differences between the securities and options markets that could result in an","page_number":109,"box":{"x":116,"y":389,"width":731,"height":12}},{"id":"6c3c4c63-b7da-4b15-9051-400dea623785","block_type":"box","text":"imperfect correlation between these markets, causing a given transaction not to achieve its objectives.","page_number":109,"box":{"x":117,"y":405,"width":763,"height":12}},{"id":"bf949001-71d9-4d18-83ea-b57a85280417","block_type":"box","text":"In addition, a liquid market for particular options, whether traded OTC or on a national securities","page_number":109,"box":{"x":117,"y":420,"width":716,"height":12}},{"id":"d5910f6e-af9c-4e4b-8e5e-3682e9050aaf","block_type":"box","text":"exchange (“Exchange”) may be absent for reasons which include the following: there may be","page_number":109,"box":{"x":116,"y":436,"width":695,"height":12}},{"id":"0adce3aa-4d2c-438c-90e3-f69b5b38fd54","block_type":"box","text":"insufficient trading interest in certain options; restrictions may be imposed by an Exchange on opening","page_number":109,"box":{"x":117,"y":451,"width":763,"height":12}},{"id":"b5b1c7de-58e3-4d99-a824-12e919bd8609","block_type":"box","text":"transactions or closing transactions or both; trading halts, suspensions or other restrictions may be","page_number":109,"box":{"x":116,"y":467,"width":737,"height":12}},{"id":"686088f6-e18e-46ad-a98c-43e1e8b671ec","block_type":"box","text":"imposed with respect to particular classes or series of options or underlying securities; unusual or","page_number":109,"box":{"x":117,"y":482,"width":727,"height":12}},{"id":"eb261b01-4b9d-4583-b0fd-fbbafe7b5e97","block_type":"box","text":"unforeseen circumstances may interrupt normal operations on an Exchange; the facilities of an","page_number":109,"box":{"x":117,"y":498,"width":708,"height":12}},{"id":"be2f166b-a5f4-4e91-b0ba-9aec35b29f76","block_type":"box","text":"Exchange or the Options Clearing Corporation may not at all times be adequate to handle current","page_number":109,"box":{"x":117,"y":513,"width":728,"height":12}},{"id":"864f0335-30a4-4ce6-a471-884b577d2a63","block_type":"box","text":"trading volume; or one or more Exchanges could, for economic or other reasons, decide or be","page_number":109,"box":{"x":116,"y":529,"width":703,"height":12}},{"id":"7f03abe8-4158-4373-8eb0-77f9134388ce","block_type":"box","text":"compelled at some future date to discontinue the trading of options (or a particular class or series of","page_number":109,"box":{"x":116,"y":544,"width":746,"height":12}},{"id":"f5692fb2-f2ad-4809-8c46-da45a580d2a9","block_type":"box","text":"options), in which event the market on that Exchange (or in that class or series of options) would cease","page_number":109,"box":{"x":116,"y":560,"width":770,"height":12}},{"id":"b9b0196e-9f8e-4eb2-ba1d-0c9bfc6ff186","block_type":"box","text":"to exist, although outstanding options that had been issued by the Options Clearing Corporation as a","page_number":109,"box":{"x":116,"y":575,"width":753,"height":12}},{"id":"3979c9bf-f142-42ca-bf71-caf5619bd366","block_type":"box","text":"result of trades on that Exchange would continue to be exercisable in accordance with their terms.","page_number":109,"box":{"x":117,"y":591,"width":732,"height":12}},{"id":"64ffce3b-b907-445e-a591-aa472ad39f49","block_type":"box","text":"Each of the options exchanges has established limitations governing the maximum number of call or","page_number":109,"box":{"x":117,"y":622,"width":749,"height":12}},{"id":"0a062def-0c4e-41ff-8824-cdbb773e9df4","block_type":"box","text":"put options on the same asset that may be bought or written by a single investor, whether acting alone","page_number":109,"box":{"x":117,"y":638,"width":764,"height":11}},{"id":"6ef6da4e-0914-42e4-a6c6-70da01d877c2","block_type":"box","text":"or in concert with others (regardless of whether such options are written on the same or different","page_number":109,"box":{"x":116,"y":653,"width":720,"height":12}},{"id":"2085a099-1dea-4272-a6d7-a720e3ae3492","block_type":"box","text":"exchanges or are held or written on one or more accounts or through one or more brokers). Under","page_number":109,"box":{"x":116,"y":668,"width":730,"height":12}},{"id":"efb4868c-c266-45b7-a6ae-083c2fd1d1d2","block_type":"box","text":"these limitations, option positions of all investment companies advised by the Manager are combined","page_number":109,"box":{"x":116,"y":684,"width":749,"height":12}},{"id":"f9762f45-9361-45fc-8f53-ad8790c18363","block_type":"box","text":"for purposes of these limits. Pursuant to these limitations, an exchange may order the liquidation of","page_number":109,"box":{"x":116,"y":699,"width":736,"height":13}},{"id":"8abae1e4-011b-4f27-9ab9-74f019496daa","block_type":"box","text":"positions and may impose other sanctions or restrictions. These position limits may restrict the number","page_number":109,"box":{"x":117,"y":715,"width":762,"height":12}},{"id":"a8e30250-30ae-4f5e-8de5-50ea6804806e","block_type":"box","text":"of listed options that a Fund may buy or sell.","page_number":109,"box":{"x":116,"y":730,"width":328,"height":13}},{"id":"367dca9d-f38b-4a49-89e9-79273fc4daa8","block_type":"box","text":"Call Options.","page_number":109,"box":{"x":117,"y":761,"width":93,"height":12}},{"id":"f1153f37-ef7b-4002-908a-cf939b3348f3","block_type":"box","text":"A Fund may purchase call options on any of the types of securities or instruments in","page_number":109,"box":{"x":217,"y":761,"width":623,"height":13}},{"id":"37eedca7-0375-4cc1-9ca9-9843306c7962","block_type":"box","text":"which it may invest. A purchased call option gives a Fund the right to buy, and obligates the seller to","page_number":109,"box":{"x":116,"y":777,"width":743,"height":12}},{"id":"8489aa34-d745-436b-8fc0-a7d4aff208e5","block_type":"box","text":"sell, the underlying security at the exercise price at any time during the option period. A Fund also may","page_number":109,"box":{"x":116,"y":793,"width":762,"height":12}},{"id":"bed10c96-4a73-4738-9b0b-060e5a334bc6","block_type":"box","text":"purchase and sell call options on indices. Index options are similar to options on securities except that,","page_number":109,"box":{"x":117,"y":808,"width":759,"height":12}},{"id":"1f7a02d4-850e-4ee9-9558-b801721ba444","block_type":"box","text":"rather than taking or making delivery of securities underlying the option at a specified price upon","page_number":109,"box":{"x":117,"y":823,"width":712,"height":13}},{"id":"cc7d41d2-dbde-47f2-883d-de3bfef240a8","block_type":"box","text":"exercise, an index option gives the holder the right to receive cash upon exercise of the option if the","page_number":109,"box":{"x":116,"y":839,"width":745,"height":12}},{"id":"cb1d474e-7301-414e-9a98-70e16860cf31","block_type":"box","text":"level of the index upon which the option is based is greater than the exercise price of the option.","page_number":109,"box":{"x":117,"y":854,"width":716,"height":13}},{"id":"db790d7d-b2e0-493a-bb9e-69dd84afe3b3","block_type":"box","text":"II-26","page_number":109,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"674e5b6d-f3e6-4227-9176-dcb3110fcf66","block_type":"box","text":"NM1026U-6039989-109/256","page_number":109,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9a8a5750-c57f-4dc5-9888-2676f335eaf6","block_type":"box","text":"A written call option is covered if a Fund holds a call on the same security or index as the call written","page_number":110,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"10870f2e-9eba-4e4d-b996-d39faa1ccf69","block_type":"box","text":"where the exercise price of the call held is (i) equal to or less than the exercise price of the call written,","page_number":110,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"2ad80e5f-986f-4a55-bf7d-12aa80f94c7e","block_type":"box","text":"or (ii) greater than the exercise price of the call written provided the difference is maintained by the","page_number":110,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"6fc6fda0-a10e-4fb6-ab1b-99b27cdee710","block_type":"box","text":"Fund in assets which are not considered illiquid investments under the Funds’ Liquidity Program (as","page_number":110,"box":{"x":117,"y":134,"width":745,"height":12}},{"id":"bfea367d-00f4-4aef-990d-25d82127aad0","block_type":"box","text":"defined below) (“liquid assets”) designated on the Manager’s or the sub-adviser’s books and records to","page_number":110,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"411d1d45-e9aa-43d6-87a0-625ea0629235","block_type":"box","text":"the extent required by Commission guidelines.","page_number":110,"box":{"x":116,"y":165,"width":350,"height":12}},{"id":"63fb6dbd-3ab7-4da8-a36b-afeac3032689","block_type":"box","text":"A Fund may write (","page_number":110,"box":{"x":116,"y":196,"width":140,"height":12}},{"id":"b1609f1c-1777-46dd-9036-ed2115314778","block_type":"box","text":"i.e.","page_number":110,"box":{"x":257,"y":196,"width":21,"height":9}},{"id":"c8377801-dfc0-43a7-8732-c5915a0961fc","block_type":"box","text":", sell) covered call options on the securities or instruments in which it may invest","page_number":110,"box":{"x":281,"y":196,"width":599,"height":12}},{"id":"06a4c682-6885-40e1-a96e-71d082d90071","block_type":"box","text":"and to enter into closing purchase transactions with respect to certain of such options. A covered call","page_number":110,"box":{"x":116,"y":211,"width":754,"height":12}},{"id":"7be33f74-0297-4c66-86f8-f0712e3aae80","block_type":"box","text":"option is an option in which a Fund, in return for a premium, gives another party a right to buy specified","page_number":110,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"fd83e978-f521-416c-ab21-87eb911d651d","block_type":"box","text":"securities owned by the Fund at a specified future date and price set at the time of the contract. The","page_number":110,"box":{"x":116,"y":242,"width":747,"height":12}},{"id":"01f3ba2a-c02c-41ea-bc89-15b4298a5f4b","block_type":"box","text":"principal reason for writing call options is the attempt to realize, through the receipt of premiums, a","page_number":110,"box":{"x":117,"y":258,"width":733,"height":12}},{"id":"de2b5f3d-20a3-4fe4-a7e6-13ba2b81bc7d","block_type":"box","text":"greater return than would be realized on the securities alone. By writing covered call options, a Fund","page_number":110,"box":{"x":116,"y":273,"width":750,"height":12}},{"id":"98bf2771-d6d2-47dd-97ed-8b1e1d25be15","block_type":"box","text":"gives up the opportunity, while the option is in effect, to profit from any price increase in the underlying","page_number":110,"box":{"x":116,"y":289,"width":763,"height":12}},{"id":"ac0f32f0-dff3-44e7-a456-fdca31c06f7b","block_type":"box","text":"security above the option exercise price. In addition, a Fund’s ability to sell the underlying security will","page_number":110,"box":{"x":116,"y":304,"width":758,"height":12}},{"id":"e527eed6-5de1-447c-9bbf-4da92804378a","block_type":"box","text":"be limited while the option is in effect unless the Fund enters into a closing purchase transaction. A","page_number":110,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"ad0d23dd-2e62-40c7-a16d-738f9e2187a1","block_type":"box","text":"closing purchase transaction cancels out a Fund’s position as the writer of an option by means of an","page_number":110,"box":{"x":116,"y":335,"width":748,"height":12}},{"id":"90f13522-0b63-4a0c-bf0a-75fa9da01cd3","block_type":"box","text":"offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call","page_number":110,"box":{"x":116,"y":351,"width":768,"height":12}},{"id":"3891fe54-614e-495d-b2d9-a97dfecba1b1","block_type":"box","text":"options also serve as a partial hedge to the extent of the premium received against the price of the","page_number":110,"box":{"x":116,"y":366,"width":736,"height":12}},{"id":"7712bf04-f9fb-4b72-a51c-95d94a159a32","block_type":"box","text":"underlying security declining.","page_number":110,"box":{"x":117,"y":382,"width":219,"height":12}},{"id":"0dcfd899-1c6e-48dd-aed2-1e5b7c156be7","block_type":"box","text":"A Fund may write (","page_number":110,"box":{"x":116,"y":413,"width":140,"height":12}},{"id":"4ced38fb-24eb-40c6-be4e-b63dca59da9a","block_type":"box","text":"i.e.","page_number":110,"box":{"x":257,"y":413,"width":21,"height":9}},{"id":"b8db7f5d-7533-4bd3-85bf-4182c2b24487","block_type":"box","text":", sell) uncovered call options on securities or instruments in which it may invest","page_number":110,"box":{"x":281,"y":413,"width":590,"height":12}},{"id":"e8e67c07-cca7-466e-80d4-4cbe0928f3bc","block_type":"box","text":"but that are not currently held by the Fund. The principal reason for writing uncovered call options is to","page_number":110,"box":{"x":117,"y":428,"width":763,"height":12}},{"id":"23d49428-c0dc-43bc-a800-723209b4f779","block_type":"box","text":"realize income without committing capital to the ownership of the underlying securities or instruments.","page_number":110,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"ba32505b-dcfe-456c-8548-3cec3aa8fac5","block_type":"box","text":"When writing uncovered call options, a Fund must deposit and maintain sufficient margin with the","page_number":110,"box":{"x":116,"y":459,"width":727,"height":12}},{"id":"41d417cd-3175-4929-b873-c31c2973f0d4","block_type":"box","text":"broker-dealer through which it made the uncovered call option as collateral to ensure that the securities","page_number":110,"box":{"x":117,"y":475,"width":771,"height":12}},{"id":"12a0cca3-7350-46e3-b35f-791343a9724e","block_type":"box","text":"can be purchased for delivery if and when the option is exercised. During periods of declining","page_number":110,"box":{"x":116,"y":490,"width":697,"height":12}},{"id":"d91b319e-a760-4841-9f70-16b254c5eb62","block_type":"box","text":"securities prices or when prices are stable, writing uncovered calls can be a profitable strategy to","page_number":110,"box":{"x":116,"y":506,"width":724,"height":12}},{"id":"0a9446e3-2926-49f9-a333-3f6797c5bff4","block_type":"box","text":"increase a Fund’s income with minimal capital risk. Uncovered calls are riskier than covered calls","page_number":110,"box":{"x":117,"y":521,"width":724,"height":12}},{"id":"deafdfac-b4ed-4a36-9c4d-f5fa36d727dc","block_type":"box","text":"because there is no underlying security held by a Fund that can act as a partial hedge. Uncovered calls","page_number":110,"box":{"x":117,"y":537,"width":771,"height":12}},{"id":"0d5cac47-9e47-41a6-bcce-e79bb1117fc6","block_type":"box","text":"have speculative characteristics and the potential for loss is unlimited. When an uncovered call is","page_number":110,"box":{"x":117,"y":552,"width":725,"height":12}},{"id":"446c5238-2988-429c-85f0-5b5f351381c2","block_type":"box","text":"exercised, a Fund must purchase the underlying security to meet its call obligation. There is also a risk,","page_number":110,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"de939afb-536a-4daa-9b75-7f50039e2b08","block_type":"box","text":"especially with preferred and debt securities that lack sufficient liquidity, that the securities may not be","page_number":110,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"0b0d905b-7eb1-4cb6-82b4-ace75fac855e","block_type":"box","text":"available for purchase. If the purchase price exceeds the exercise price, a Fund will lose the difference.","page_number":110,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"a5fcc9b9-8fe5-4b63-afc2-67789948082c","block_type":"box","text":"Put Options.","page_number":110,"box":{"x":116,"y":630,"width":97,"height":12}},{"id":"3908e637-f724-47c9-a6d0-fca4fad054d6","block_type":"box","text":"A Fund may purchase put options to seek to hedge against a decline in the value of its","page_number":110,"box":{"x":213,"y":630,"width":648,"height":12}},{"id":"c63578d3-c112-4f7a-b193-9c3d604bcb7f","block_type":"box","text":"securities or to enhance its return. By buying a put option, a Fund acquires a right to sell the underlying","page_number":110,"box":{"x":116,"y":645,"width":770,"height":12}},{"id":"e0a219de-3526-4d4d-9757-14b31ac9fc02","block_type":"box","text":"securities or instruments at the exercise price, thus limiting the Fund’s risk of loss through a decline in","page_number":110,"box":{"x":116,"y":661,"width":754,"height":12}},{"id":"165e8dc3-1e91-44be-8fa4-fe6dd7f68f92","block_type":"box","text":"the market value of the securities or instruments until the put option expires. The amount of any","page_number":110,"box":{"x":116,"y":676,"width":709,"height":12}},{"id":"5c5b869d-8615-41f8-a1a4-4168cf31480e","block_type":"box","text":"appreciation in the value of the underlying securities or instruments will be partially offset by the","page_number":110,"box":{"x":116,"y":692,"width":708,"height":12}},{"id":"5a8fb408-978a-4c9b-b731-db14a23103a6","block_type":"box","text":"amount of the premium paid for the put option and any related transaction costs. Prior to its expiration,","page_number":110,"box":{"x":116,"y":707,"width":758,"height":12}},{"id":"015e532d-6b75-45c2-ba9d-d4203384ea95","block_type":"box","text":"a put option may be sold in a closing sale transaction and profit or loss from the sale will depend on","page_number":110,"box":{"x":116,"y":723,"width":737,"height":12}},{"id":"ab0f6a0f-2bfe-4bd3-8f26-6e16e5406ec7","block_type":"box","text":"whether the amount received is more or less than the premium paid for the put option plus the related","page_number":110,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"8edbad96-7999-49cf-b845-a612c7843714","block_type":"box","text":"transaction costs. A closing sale transaction cancels out a Fund’s position as the purchaser of an","page_number":110,"box":{"x":116,"y":754,"width":719,"height":12}},{"id":"8bc5c9bd-0b9b-4fb7-9310-75b62c14cdf8","block_type":"box","text":"option by means of an offsetting sale of an identical option prior to the expiration of the option it has","page_number":110,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"9818d467-639f-493b-9e91-5efa8750a38c","block_type":"box","text":"purchased. A Fund also may purchase uncovered put options.","page_number":110,"box":{"x":117,"y":785,"width":460,"height":12}},{"id":"45770d48-77e7-490e-9e76-81d080baea71","block_type":"box","text":"A Fund also may write (","page_number":110,"box":{"x":116,"y":816,"width":176,"height":12}},{"id":"1528ca49-eaf8-43f4-bf3a-753a964c9e60","block_type":"box","text":"i.e.","page_number":110,"box":{"x":293,"y":816,"width":20,"height":9}},{"id":"227c73a1-b27a-49cc-8891-1a69a38b67b5","block_type":"box","text":", sell) put options on the types of securities or instruments that may be held","page_number":110,"box":{"x":316,"y":816,"width":557,"height":12}},{"id":"22840fec-3d21-4e76-92cf-83b0282b7d40","block_type":"box","text":"by the Fund. A Fund will receive a premium for writing a put option, which increases the Fund’s return.","page_number":110,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"a5ea5059-b9e9-4edc-9270-d4abeab5eea5","block_type":"box","text":"A Fund also may write (","page_number":110,"box":{"x":116,"y":862,"width":172,"height":12}},{"id":"7d8f1f57-d50c-4109-8521-33fad85e63ca","block_type":"box","text":"i.e.","page_number":110,"box":{"x":289,"y":862,"width":20,"height":10}},{"id":"de7d8148-bea4-4056-9426-120c4f37d933","block_type":"box","text":", sell) uncovered put options on securities or instruments in which it may invest","page_number":110,"box":{"x":312,"y":862,"width":575,"height":12}},{"id":"bb74299c-ff71-48a1-995a-72e5cdac5934","block_type":"box","text":"but with respect to which the Fund does not current","page_number":110,"box":{"x":117,"y":878,"width":372,"height":12}},{"id":"58b8ff16-e2aa-4be4-8f10-0ad014da7053","block_type":"box","text":"ly have a corresponding short position or has not","page_number":110,"box":{"x":490,"y":878,"width":359,"height":12}},{"id":"e2f833b2-f9c4-457d-9dc6-2fbe93fe3deb","block_type":"box","text":"II-27","page_number":110,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"33584616-692d-416d-a769-615bc5156cd3","block_type":"box","text":"NM1026U-6039989-110/256","page_number":110,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a7be031a-e980-4f40-b293-0c17d58a49a0","block_type":"box","text":"deposited as collateral cash equal to the exercise va","page_number":111,"box":{"x":116,"y":87,"width":380,"height":12}},{"id":"f5f1e1da-0b3e-476c-9c0f-2f47b17ca94e","block_type":"box","text":"lue of the put option with","page_number":111,"box":{"x":498,"y":87,"width":182,"height":12}},{"id":"fae46cc9-af1b-4135-9062-176bbe6cc7ea","block_type":"box","text":"the broker-dealer through","page_number":111,"box":{"x":680,"y":87,"width":190,"height":12}},{"id":"a6917efb-8160-4a6b-901d-a02d7864e17d","block_type":"box","text":"which it made the uncovered put opt","page_number":111,"box":{"x":116,"y":103,"width":264,"height":11}},{"id":"5814441e-4236-4205-9541-09758de293da","block_type":"box","text":"ion. The principal reason for writing uncovered put options is to","page_number":111,"box":{"x":381,"y":102,"width":461,"height":13}},{"id":"482a68d3-874a-4e48-a94f-d065f062f5ff","block_type":"box","text":"receive premium income and to acquire such securities","page_number":111,"box":{"x":117,"y":118,"width":400,"height":12}},{"id":"d8119b14-0c2e-4ace-b85f-8fbe94704370","block_type":"box","text":"or instruments at a net cost below the current","page_number":111,"box":{"x":517,"y":118,"width":339,"height":10}},{"id":"b22e814d-91dd-4dae-8ba5-94af76e07e8d","block_type":"box","text":"market value. A Fund has the obligation to buy the","page_number":111,"box":{"x":117,"y":134,"width":370,"height":12}},{"id":"c50fe28b-f13c-4960-a845-ba994dde4aae","block_type":"box","text":"securities or instruments at an agreed upon price if","page_number":111,"box":{"x":488,"y":134,"width":373,"height":12}},{"id":"c5d30c66-bc52-4605-b48e-b3f97ff212f0","block_type":"box","text":"the price of the securities or instruments decreases bel","page_number":111,"box":{"x":116,"y":149,"width":397,"height":12}},{"id":"5409f159-c374-4c9d-bcb9-6ccf0772c838","block_type":"box","text":"ow the exercise price. If the price of the securities","page_number":111,"box":{"x":515,"y":149,"width":364,"height":12}},{"id":"acd6423c-7fa0-4cd9-b74d-f16c6668c083","block_type":"box","text":"or instruments increases during the option period,","page_number":111,"box":{"x":116,"y":165,"width":360,"height":12}},{"id":"f2d6035f-f9ba-49e1-b1f2-54d520a27a55","block_type":"box","text":"the option will expire worthless and a Fund will retain","page_number":111,"box":{"x":477,"y":165,"width":393,"height":11}},{"id":"8a84c2ac-882a-4da3-982b-ade2e9ddc187","block_type":"box","text":"the premium and will not have to purchase the securiti","page_number":111,"box":{"x":116,"y":180,"width":392,"height":12}},{"id":"0f6d4a72-ed57-4d7b-ac7c-c094704ae9fa","block_type":"box","text":"es or instruments at the exercise price.","page_number":111,"box":{"x":510,"y":180,"width":286,"height":12}},{"id":"f9261d3e-dba7-48f8-946a-5a72832eff45","block_type":"box","text":"Options on Government National Mortgage Association (“GNMA”) Certificates.","page_number":111,"box":{"x":117,"y":211,"width":586,"height":12}},{"id":"cbbfe6b9-de20-4b78-b72b-08af86858144","block_type":"box","text":"The following","page_number":111,"box":{"x":704,"y":211,"width":103,"height":12}},{"id":"88fd577a-4206-4237-a0c6-15450108750f","block_type":"box","text":"information relates to the unique characteristics of options on GNMA Certificates. Since the remaining","page_number":111,"box":{"x":117,"y":227,"width":759,"height":12}},{"id":"6c94a611-4e66-4d96-81b4-36ce0ef6c455","block_type":"box","text":"principal balance of GNMA Certificates declines each month as a result of mortgage payments, a","page_number":111,"box":{"x":117,"y":242,"width":725,"height":12}},{"id":"83ff1397-c682-4700-9a0c-421f2358088c","block_type":"box","text":"Fund, as a writer of a GNMA call holding GNMA Certificates as “cover” to satisfy its delivery obligation","page_number":111,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"459e3bdc-b5ef-4f77-889c-898afdb6097c","block_type":"box","text":"in the event of exercise, may find that the GNMA Certificates it holds no longer have a sufficient","page_number":111,"box":{"x":117,"y":273,"width":714,"height":12}},{"id":"f42d66f9-8f0a-4a82-9eb4-cef6e3af106a","block_type":"box","text":"remaining principal balance for this purpose. Should this occur, a Fund will purchase additional GNMA","page_number":111,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"e56a0a03-c760-44ff-b8e9-03fba1837cad","block_type":"box","text":"Certificates from the same pool (if obtainable) or other GNMA Certificates in the cash market in order","page_number":111,"box":{"x":117,"y":304,"width":754,"height":12}},{"id":"76417d79-e1ee-45cf-8f1a-34fcf92d6375","block_type":"box","text":"to maintain its “cover.”","page_number":111,"box":{"x":116,"y":320,"width":170,"height":9}},{"id":"c4ab465c-65cf-4395-bf3e-f18935829faa","block_type":"box","text":"A GNMA Certificate held by a Fund to cover an option position in any but the nearest expiration month","page_number":111,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"68d7647d-c803-4867-a252-211935b6d9ac","block_type":"box","text":"may cease to represent cover for the option in the event of a decline in the GNMA coupon rate at","page_number":111,"box":{"x":117,"y":366,"width":724,"height":12}},{"id":"ee5e98b9-5030-409f-a56b-f4a3316e129b","block_type":"box","text":"which new pools are originated under the FHA/VA loan ceiling in effect at any given time. If this should","page_number":111,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"9f1c6365-d335-416a-93b3-f312e942587d","block_type":"box","text":"occur, a Fund will no longer be covered, and the Fund will either enter into a closing purchase","page_number":111,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"5ecbd73d-d55e-4a91-99ba-a8a6efc0c274","block_type":"box","text":"transaction or replace such Certificate with a certificate that represents cover. When a Fund closes its","page_number":111,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"d1213be5-b266-4d88-9139-74285adda4af","block_type":"box","text":"position or replaces such Certificate, it may realize an unanticipated loss and incur transaction costs.","page_number":111,"box":{"x":117,"y":428,"width":751,"height":12}},{"id":"f5daba10-c28d-426d-93b7-7776744985a5","block_type":"box","text":"Options on Swaps (“Swaptions”).","page_number":111,"box":{"x":117,"y":459,"width":243,"height":12}},{"id":"e87cfe9d-ba3d-43c9-ab74-c835b5e8282a","block_type":"box","text":"A swaption gives a counterparty the option (but not the obligation) to","page_number":111,"box":{"x":362,"y":459,"width":517,"height":12}},{"id":"00763263-b642-47e6-af80-6d76c98cedc8","block_type":"box","text":"enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap","page_number":111,"box":{"x":116,"y":475,"width":750,"height":12}},{"id":"c22aee07-91c4-4513-89f8-748b9ed3192a","block_type":"box","text":"agreement, at a designated future time on specified terms. A Fund may write (","page_number":111,"box":{"x":116,"y":490,"width":580,"height":12}},{"id":"084063ee-f344-45b9-bf93-aa9aca268257","block_type":"box","text":"i.e.","page_number":111,"box":{"x":698,"y":490,"width":20,"height":10}},{"id":"05d22257-97dd-4d63-b138-10bb0072dc43","block_type":"box","text":", sell) and purchase","page_number":111,"box":{"x":721,"y":490,"width":150,"height":12}},{"id":"490dd478-6eae-4429-8764-c97854f28918","block_type":"box","text":"put and call swaptions. Depending on the terms of the particular option agreement, a Fund will","page_number":111,"box":{"x":117,"y":506,"width":704,"height":12}},{"id":"d94a3766-67ae-4457-9723-7913fb98a478","block_type":"box","text":"generally incur a greater degree of risk when it writes a swaption than it will incur when it purchases a","page_number":111,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"f3d8b33d-9161-4e9b-a5bc-58fed13a4445","block_type":"box","text":"swaption. When a Fund purchases a swaption, it risks losing only the amount of the premium it has","page_number":111,"box":{"x":116,"y":537,"width":741,"height":12}},{"id":"260b0d8e-8a7e-4059-a84f-7c351b7039f6","block_type":"box","text":"paid should it decide to let the option expire unexercised. However, when a Fund writes a swaption,","page_number":111,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"45fcb224-3c60-4b8f-a107-8ac952f192e5","block_type":"box","text":"upon exercise of the option the Fund will become obligated according to the terms of the underlying","page_number":111,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"0757c6ea-e53b-4db0-88a6-f54b3d367c84","block_type":"box","text":"agreement and the potential for loss may be unlimited. Certain swaptions are permitted, although not","page_number":111,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"50668347-addf-44df-b50b-09d3679ca2b1","block_type":"box","text":"required, to be cleared.","page_number":111,"box":{"x":117,"y":599,"width":177,"height":12}},{"id":"7f6b6b5b-5010-4476-8082-1ed790f46519","block_type":"box","text":"A Fund will likely enter into these transactions to preserve a return or spread on a particular investment","page_number":111,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"8c71afad-8cba-4b09-b0ad-72649a9e5c23","block_type":"box","text":"or portion of its portfolio or to protect against any increase in the price of securities the Fund anticipates","page_number":111,"box":{"x":116,"y":645,"width":772,"height":12}},{"id":"d8517fd4-6777-41f0-b6e7-802ad2e5be9e","block_type":"box","text":"purchasing at a later date. A Fund generally will use these transactions for hedging purposes, not for","page_number":111,"box":{"x":117,"y":661,"width":746,"height":12}},{"id":"87928771-25c6-4d32-95f6-2ed172e33dcf","block_type":"box","text":"speculation.","page_number":111,"box":{"x":116,"y":676,"width":88,"height":12}},{"id":"f4cd3285-6b4c-49fc-9450-35b796e02275","block_type":"box","text":"Swaptions may be subject to correlation risk, leverage risk, illiquidity risk and market risk. See “— Risk","page_number":111,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"0e585b5e-48e1-482d-9e44-0cf072e132fc","block_type":"box","text":"Factors in Derivatives” above.","page_number":111,"box":{"x":117,"y":723,"width":220,"height":9}},{"id":"7e42db95-a266-453d-b047-7bb73b0a1af2","block_type":"box","text":"FLEX Options.","page_number":111,"box":{"x":116,"y":754,"width":107,"height":12}},{"id":"3d46b08b-4f33-4ba8-b16b-549e39e6c087","block_type":"box","text":"FLEX Options are customized option contracts available through national securities","page_number":111,"box":{"x":231,"y":754,"width":617,"height":12}},{"id":"c202de69-f181-4b3c-ab49-3b65613ae325","block_type":"box","text":"exchanges that are guaranteed for settlement by the Options Clearing Corporation (“OCC”). FLEX","page_number":111,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"c72dc5d2-5725-4ad8-b6cc-4727060dbdec","block_type":"box","text":"Options are listed on a U.S. national securities exchange. FLEX Options provide investors with the","page_number":111,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"cafdf13d-927a-4ff9-bbb6-3fc8b96d6bfb","block_type":"box","text":"ability to customize assets referenced by the options, exercise prices, exercise styles (","page_number":111,"box":{"x":116,"y":800,"width":641,"height":12}},{"id":"228b694a-adc3-43a7-b57a-b494eb91a56c","block_type":"box","text":"i.e.","page_number":111,"box":{"x":758,"y":800,"width":20,"height":10}},{"id":"c7bc3564-75a6-42ac-a1b2-b983e8c6cbd8","block_type":"box","text":", American","page_number":111,"box":{"x":782,"y":800,"width":84,"height":11}},{"id":"6e0c8288-eb8a-4e2b-b741-ec44cb60f8e4","block_type":"box","text":"style, exercisable any time prior to the expiration date, or European-style, exercisable only on the","page_number":111,"box":{"x":116,"y":816,"width":721,"height":12}},{"id":"9dc5b54d-5d20-4deb-a88e-a1edcbdb1585","block_type":"box","text":"option expiration date) and expiration dates, while achieving price discovery in competitive, transparent","page_number":111,"box":{"x":116,"y":831,"width":769,"height":12}},{"id":"c8dae9f1-e440-428e-b307-d13503a26cf7","block_type":"box","text":"auctions markets and avoiding the counterparty exposure of OTC options positions. Each option","page_number":111,"box":{"x":116,"y":847,"width":719,"height":12}},{"id":"4a816d16-572d-4e77-8c7c-dc1a3a9e4e81","block_type":"box","text":"contract entitles the holder thereof to purchase (for the","page_number":111,"box":{"x":116,"y":862,"width":410,"height":12}},{"id":"7e2c4c7e-c08e-49b6-bd3f-dec04117ac90","block_type":"box","text":"call options) or sell (for the put options) shares","page_number":111,"box":{"x":527,"y":862,"width":349,"height":12}},{"id":"7bd7a45b-7ec8-4aaf-977f-8ed0c5a7ed27","block_type":"box","text":"of the reference asset at the strike price. A Fund’s portfolio may include several types of FLEX Options,","page_number":111,"box":{"x":116,"y":878,"width":772,"height":12}},{"id":"ee11f3a5-b465-40e7-a7d4-c5231ecb1dad","block_type":"box","text":"II-28","page_number":111,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f5b6b49f-7f7a-42f8-be8f-f73a81e28ec1","block_type":"box","text":"NM1026U-6039989-111/256","page_number":111,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"55208a34-45ef-4dd2-a1b7-9c97138a71d8","block_type":"box","text":"including both purchased and written put and call options (as further described below). The FLEX","page_number":112,"box":{"x":117,"y":87,"width":726,"height":12}},{"id":"1ff70eb6-0b8d-4f8d-80e6-1f8dee86e4be","block_type":"box","text":"Options are all European style options, which means that they are exercisable at a predetermined","page_number":112,"box":{"x":116,"y":102,"width":730,"height":13}},{"id":"44687e50-d481-45e3-b2fa-39e6c6bbdd25","block_type":"box","text":"specified price (the “strike price”) only on the FLEX Option’s expiration date.","page_number":112,"box":{"x":116,"y":118,"width":569,"height":12}},{"id":"6db1a4fe-1d89-4059-886d-81876ad8f03f","block_type":"box","text":"The OCC guarantees performance by each of the counterparties to the FLEX Options, becoming the","page_number":112,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"1de9df29-cd82-4711-afc4-2d751e16f030","block_type":"box","text":"“buyer for every seller and the seller for every buyer”, reducing counterparty risk for clearing members","page_number":112,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"a0044e00-9fff-492f-9894-fa2a38fe3f6a","block_type":"box","text":"and options traders. Although guaranteed for settlement by the OCC, FLEX Options are still subject to","page_number":112,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"b77fbda2-9268-4284-9161-065b00ec5f26","block_type":"box","text":"counterparty risk with the OCC and subject to the risk that the OCC may fail to perform the settlement","page_number":112,"box":{"x":116,"y":196,"width":760,"height":12}},{"id":"ced9ff99-f81e-4012-880e-796c01c4c4bb","block_type":"box","text":"of the FLEX Options due to bankruptcy or other adverse reasons. A Fund bears the risk that the OCC","page_number":112,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"10f81310-81aa-46b1-9924-ea2a104cea38","block_type":"box","text":"will be unable or unwilling to perform its obligations under the FLEX Options contracts.","page_number":112,"box":{"x":116,"y":227,"width":646,"height":12}},{"id":"65f1699c-4f92-45ac-9cc9-a973d8ea6eed","block_type":"box","text":"Subject to determination by the Securities Committee of the OCC, adjustments may be made to the","page_number":112,"box":{"x":116,"y":258,"width":744,"height":12}},{"id":"344a823e-e9db-4579-b335-4789248cede8","block_type":"box","text":"FLEX Options for certain events (collectively, “Corporate Actions”) specified in the OCC’s by-laws and","page_number":112,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"b98d788a-a112-4e5f-95d6-dc5e2c5a8ce4","block_type":"box","text":"rules: certain stock dividends or distributions, stock splits, reverse stock splits, rights offerings,","page_number":112,"box":{"x":117,"y":289,"width":702,"height":12}},{"id":"bf871319-ea9e-431c-aa79-5a53e1cb565c","block_type":"box","text":"distributions, reorganizations, recapitalizations, or reclassifications with respect to an underlying","page_number":112,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"0f646b75-31b6-40d6-8254-98193df770f3","block_type":"box","text":"security, or a merger, consolidation, dissolution or liquidation of the issuer of the underlying security.","page_number":112,"box":{"x":116,"y":320,"width":748,"height":12}},{"id":"e4e13d81-c41a-44bc-a3c8-0adfb6e68e90","block_type":"box","text":"According to the OCC’s by-laws, the nature and extent of any such adjustment is to be determined by","page_number":112,"box":{"x":116,"y":335,"width":759,"height":12}},{"id":"52ff6e33-3f04-4b8a-9836-1c476ef35565","block_type":"box","text":"the OCC’s Securities Committee, in light of the circumstances known to it at the time such","page_number":112,"box":{"x":116,"y":351,"width":673,"height":12}},{"id":"61d97320-55db-48f9-9ab7-a018bb3d222b","block_type":"box","text":"determination is made, based on its judgment as to what is appropriate for the protection of investors","page_number":112,"box":{"x":116,"y":366,"width":754,"height":12}},{"id":"1484139a-3cc2-42e7-81e8-2dbef17c6ad9","block_type":"box","text":"and the public interest, taking into account such factors as fairness to holders and writers (or","page_number":112,"box":{"x":116,"y":382,"width":691,"height":12}},{"id":"967d0d62-c60b-435d-b87f-480507954e4e","block_type":"box","text":"purchasers and sellers) of the affected options, the maintenance of a fair and orderly market in the","page_number":112,"box":{"x":117,"y":397,"width":734,"height":12}},{"id":"dcdf910f-0402-4910-a27d-33e182224cd9","block_type":"box","text":"affected options, consistency of interpretation and practice, efficiency of exercise settlement","page_number":112,"box":{"x":116,"y":413,"width":687,"height":12}},{"id":"b929722f-21ff-4b9c-bb18-c1d92423fae2","block_type":"box","text":"procedures, and the coordination with other clearing agencies of the clearance and settlement of","page_number":112,"box":{"x":117,"y":428,"width":721,"height":12}},{"id":"39703380-7ca5-486c-8713-ade4431a5f78","block_type":"box","text":"transactions in the underlying interest.","page_number":112,"box":{"x":116,"y":444,"width":288,"height":12}},{"id":"f8b47539-2a17-4e4a-baa2-b57bf7296d19","block_type":"box","text":"Certain Considerations Regarding Options","page_number":112,"box":{"x":117,"y":475,"width":315,"height":12}},{"id":"7d831242-cd85-44c3-aae9-755077fc504b","block_type":"box","text":". The FLEX Options in which each Fund may invest will be","page_number":112,"box":{"x":433,"y":475,"width":437,"height":12}},{"id":"e9f0cb42-bf81-4263-99ea-b1e1b3b2e5a7","block_type":"box","text":"options on an exchange-traded fund (“ETF”) or the S&P 500 Index (together with such ETF, a","page_number":112,"box":{"x":116,"y":490,"width":700,"height":12}},{"id":"0373f093-5f9d-4d2f-96da-4042f8922d2d","block_type":"box","text":"“Reference Asset”). As such, the value of a Fund’s FLEX Options will fluctuate with changes in the","page_number":112,"box":{"x":116,"y":506,"width":735,"height":12}},{"id":"dbf04c47-6cc5-49e8-9ad6-d30ecb63a3e6","block_type":"box","text":"value of the securities held by the ETF, and thus the ETF’s share price. In addition to the value of the","page_number":112,"box":{"x":116,"y":521,"width":755,"height":12}},{"id":"60cc2f1a-d1b0-49f5-9914-cdaeec3eeb90","block_type":"box","text":"ETF, the value of an option, in general, will reflect, among other things, the time remaining until","page_number":112,"box":{"x":117,"y":537,"width":709,"height":12}},{"id":"111e7bc2-3d62-4fd7-a81d-195f52ceaa78","block_type":"box","text":"expiration (the end of the Outcome Period), the relationship of the exercise price to the market price of","page_number":112,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"a642b206-a75e-4f04-9a3d-ee6474d89a01","block_type":"box","text":"the Reference Asset, and general market conditions. Options that expire unexercised have no value.","page_number":112,"box":{"x":116,"y":568,"width":752,"height":12}},{"id":"dcbfe456-6df4-44d2-a026-3547be15ac62","block_type":"box","text":"The puts and calls on the Reference Asset entitle the purchaser of the option the right to purchase (for","page_number":112,"box":{"x":116,"y":591,"width":764,"height":12}},{"id":"434705c3-b0ff-410c-b39e-213b9ea846b3","block_type":"box","text":"a call option) or sell (for a put option) the Reference Asset at a predetermined specified price (the","page_number":112,"box":{"x":116,"y":606,"width":727,"height":12}},{"id":"1f1217f2-27ae-4303-ac2c-66d6d083a031","block_type":"box","text":"“strike price”). When a Fund writes a call on the Reference Asset, it receives a premium and agrees","page_number":112,"box":{"x":116,"y":622,"width":745,"height":12}},{"id":"d585d8c1-1988-4f0b-9e80-928de62d624d","block_type":"box","text":"that the purchaser of the call, upon exercise of the call, will receive from the Fund the delivery of a","page_number":112,"box":{"x":116,"y":637,"width":733,"height":12}},{"id":"045901fa-22c2-4d1a-86e8-5ccfc6468b01","block_type":"box","text":"specified number of shares of the ETF in exchange for the strike price. When a Fund buys a call on the","page_number":112,"box":{"x":116,"y":653,"width":770,"height":12}},{"id":"bdf03b6d-aadc-4710-b9fb-24c40bfc4ef9","block_type":"box","text":"Reference Asset, it pays a premium and has the same rights to such call as indicated above. When a","page_number":112,"box":{"x":117,"y":668,"width":750,"height":12}},{"id":"820ee4d0-8942-46c3-baff-d910d53729f6","block_type":"box","text":"Fund buys a put on the Reference Asset, it pays a premium and has the right to require the seller of","page_number":112,"box":{"x":117,"y":684,"width":741,"height":12}},{"id":"b89ad135-a6c7-4fdb-89b3-24fec8295516","block_type":"box","text":"the put, upon the Fund’s exercise of the put, to deliver the specified number of shares of the ETF in","page_number":112,"box":{"x":116,"y":699,"width":736,"height":12}},{"id":"3594ff8d-04b0-41b7-9b9b-7b1078e52696","block_type":"box","text":"exchange for the strike price. When a Fund writes a put on the Reference Asset, it receives a premium","page_number":112,"box":{"x":116,"y":715,"width":761,"height":12}},{"id":"eabe087d-71ef-49a4-8033-548a832f9cce","block_type":"box","text":"and the purchaser of the put has the right to require the Fund to deliver the specified number of shares","page_number":112,"box":{"x":116,"y":730,"width":762,"height":13}},{"id":"ea0c8d19-b762-4a6d-a4ff-def0abb79de3","block_type":"box","text":"of the ETF in exchange for the strike price.","page_number":112,"box":{"x":116,"y":746,"width":316,"height":12}},{"id":"15e3db09-a95e-4c0e-bca5-ecce8decc5e0","block_type":"box","text":"Although each Fund will generally utilize FLEX Options that are physically settled, a Fund may also","page_number":112,"box":{"x":116,"y":769,"width":735,"height":12}},{"id":"63bd3754-1f52-40a8-bdd2-a313d7aa0303","block_type":"box","text":"utilize FLEX Options that are cash-settled. Cash-settled options give the holder the right to receive an","page_number":112,"box":{"x":117,"y":785,"width":752,"height":12}},{"id":"fa18f853-28f4-4613-a360-e54244d1230c","block_type":"box","text":"amount (or owe an amount) of cash upon the exercise of the option. Gain or loss depends on changes","page_number":112,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"2c048f32-e262-4622-83a7-47ccb46f8d57","block_type":"box","text":"in the value of the ETF’s share price relative to the strike price for a given option contract. The amount","page_number":112,"box":{"x":117,"y":816,"width":758,"height":12}},{"id":"624c5168-171d-4cdb-971c-2fe6e7cbb75f","block_type":"box","text":"of cash is equal to the difference between the closing price of the ETF’s share price and the exercise","page_number":112,"box":{"x":116,"y":831,"width":753,"height":12}},{"id":"a51cd592-4e58-4b99-b04c-9f129271ec59","block_type":"box","text":"price of the option contract times a specified multiple (“multiplier”), which determines the total value for","page_number":112,"box":{"x":117,"y":847,"width":763,"height":12}},{"id":"4f4328f0-1353-4d38-a24c-a2cdd60e5ac3","block_type":"box","text":"each point of such difference.","page_number":112,"box":{"x":116,"y":862,"width":224,"height":12}},{"id":"ac9a940b-34b2-48ee-b41d-8178dbd694ae","block_type":"box","text":"II-29","page_number":112,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"28d937fe-e3aa-480e-a9e2-39d0a4f07315","block_type":"box","text":"NM1026U-6039989-112/256","page_number":112,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"29f4536c-a3de-40d5-a199-3bf323fe1709","block_type":"box","text":"Risks of Options on the Reference Assets","page_number":113,"box":{"x":116,"y":87,"width":311,"height":12}},{"id":"42ce32d1-7ec6-4d02-bc45-a47723e1ad92","block_type":"box","text":". If a Fund has purchased an option and exercises it before","page_number":113,"box":{"x":429,"y":87,"width":442,"height":12}},{"id":"66fae5dc-55e1-4288-8179-0ca34db8cf20","block_type":"box","text":"the closing value for that day is available, it runs the risk that the level of the Reference Asset may","page_number":113,"box":{"x":116,"y":102,"width":733,"height":13}},{"id":"6605a0b5-f623-4fd3-9b18-bca8a48ca3fd","block_type":"box","text":"subsequently change. If such a change causes the exercised option to fall out of the money, the","page_number":113,"box":{"x":116,"y":118,"width":718,"height":12}},{"id":"44fdafe5-404b-4121-9adc-c7384b49f36a","block_type":"box","text":"applicable Fund will be required to pay the difference between the closing Reference Asset value and","page_number":113,"box":{"x":116,"y":134,"width":758,"height":12}},{"id":"fcefdecd-692f-476b-ac28-d451fb24c7d5","block_type":"box","text":"the exercise price of the option (times the applicable multiplier) to the assigned writer.","page_number":113,"box":{"x":116,"y":149,"width":640,"height":12}},{"id":"6d18b41c-6161-4a95-9d11-501b3a55f4df","block_type":"box","text":"Foreign Exchange Transactions.","page_number":113,"box":{"x":116,"y":180,"width":247,"height":12}},{"id":"83a98664-31dc-4a91-973b-ed594e40d1d4","block_type":"box","text":"A Fund may enter into spot foreign exchange transactions, forward foreign exchange transactions (“FX","page_number":113,"box":{"x":116,"y":203,"width":768,"height":12}},{"id":"e638b0a6-8d20-45e2-a612-7c0c5d151376","block_type":"box","text":"forwards”) and currency swaps, purchase and sell currency options, currency futures and related","page_number":113,"box":{"x":116,"y":219,"width":723,"height":12}},{"id":"f54234d9-a2c5-4da2-9394-d2a77c22df5a","block_type":"box","text":"options thereon (collectively, “Currency Instruments”) for purposes of hedging against the decline in the","page_number":113,"box":{"x":116,"y":234,"width":772,"height":12}},{"id":"02a0f871-b9de-4f15-98e0-df271a01ebc9","block_type":"box","text":"value of currencies in which its portfolio holdings are denominated against the U.S. dollar or, with","page_number":113,"box":{"x":116,"y":250,"width":725,"height":12}},{"id":"98699a53-4121-4ab8-988f-fad2710b543b","block_type":"box","text":"respect to certain Funds, to seek to enhance returns.","page_number":113,"box":{"x":117,"y":265,"width":397,"height":12}},{"id":"27db875d-e7e7-4e1d-9cdb-375f6c18bba0","block_type":"box","text":"Such transactions could be effected to hedge with respect to foreign dollar denominated securities","page_number":113,"box":{"x":116,"y":296,"width":734,"height":12}},{"id":"9faef4b5-30a9-4048-bfd0-26245ce68cb1","block_type":"box","text":"owned by a Fund, sold by a Fund but not","page_number":113,"box":{"x":116,"y":312,"width":309,"height":12}},{"id":"0c9a5536-8b33-4110-87e6-38439a71b527","block_type":"box","text":"yet delivered, or committed or anticipated to be purchased by","page_number":113,"box":{"x":426,"y":312,"width":460,"height":12}},{"id":"4e069db9-4dd4-4501-a544-02ace67782d5","block_type":"box","text":"a Fund. As an illustration, a Fund may use such techniques to hedge the stated value in U.S. dollars of","page_number":113,"box":{"x":116,"y":327,"width":768,"height":12}},{"id":"c5af7b9d-8f3b-4f18-b8ac-71a0f1fdc68b","block_type":"box","text":"an investment in a yen-denominated security. For example, the Fund may purchase a foreign currency","page_number":113,"box":{"x":116,"y":343,"width":767,"height":12}},{"id":"07198181-045e-448e-95be-364b59b7fa6b","block_type":"box","text":"put option enabling it to sell a specified amount of yen","page_number":113,"box":{"x":117,"y":358,"width":404,"height":12}},{"id":"8455eaeb-537d-4cf6-ac60-9375b7e63204","block_type":"box","text":"for dollars at a specified price by a future date.","page_number":113,"box":{"x":521,"y":358,"width":350,"height":12}},{"id":"24ed3c89-9ae6-4a8a-8abb-686f2b537186","block_type":"box","text":"To the extent the hedge is successful, a loss in the value of the yen relative to the dollar will tend to be","page_number":113,"box":{"x":116,"y":374,"width":764,"height":12}},{"id":"7ed99c1a-ded5-4b5a-88fd-206602699462","block_type":"box","text":"offset by an increase in the value of the put option. To offset, in whole or in part, the cost of acquiring","page_number":113,"box":{"x":116,"y":389,"width":753,"height":12}},{"id":"ce83d417-365d-4fd1-aa09-50f846d3c8fb","block_type":"box","text":"such a put option, the Fund may also sell a call option which, if exercised, requires it to sell a specified","page_number":113,"box":{"x":116,"y":405,"width":764,"height":12}},{"id":"3cf7b3ba-993c-44c2-9061-528c67cd25ea","block_type":"box","text":"amount of yen for dollars at a specified price by a future date (a technique called a “straddle”). By","page_number":113,"box":{"x":116,"y":420,"width":727,"height":12}},{"id":"6b4b6d12-de40-4aa7-a510-5eed2a9a8a6a","block_type":"box","text":"selling such a call option in this illustration, the Fund gives up the opportunity to profit without limit from","page_number":113,"box":{"x":116,"y":436,"width":767,"height":12}},{"id":"635ea60a-8e8a-422f-ab7d-867cf1e61647","block_type":"box","text":"increases in the relative value of the yen to the dollar. “Straddles” of the type that may be used by a","page_number":113,"box":{"x":117,"y":451,"width":742,"height":12}},{"id":"74aec123-874c-4cdd-8484-68379089ee6f","block_type":"box","text":"Fund are considered hedging transactions. Certain Funds have a fundamental investment restriction","page_number":113,"box":{"x":117,"y":467,"width":749,"height":12}},{"id":"8fcfb4fd-3559-4835-8aea-fd3ab751b588","block_type":"box","text":"that restricts currency option strategies.","page_number":113,"box":{"x":116,"y":482,"width":298,"height":12}},{"id":"2c8b7cf2-a18c-4695-869f-187ce308f762","block_type":"box","text":"Hedging transactions involving Currency Instruments involve substantial risks, including correlation","page_number":113,"box":{"x":117,"y":513,"width":737,"height":12}},{"id":"c5d67663-9327-40cd-8970-5d6c3f18b6a5","block_type":"box","text":"risk. A Fund’s use of Currency Instruments to effect hedging strategies is intended to reduce the","page_number":113,"box":{"x":117,"y":529,"width":718,"height":12}},{"id":"8ef91566-af2f-48ee-9e1d-9c55b70e517e","block_type":"box","text":"volatility of the NAV of the Fund’s shares; however, the use of such hedging strategies will not prevent","page_number":113,"box":{"x":116,"y":544,"width":763,"height":12}},{"id":"c7f7ee86-f48d-4acb-bcbf-3f7b6148fb0b","block_type":"box","text":"the NAV of the Fund’s shares from fluctuating. Moreover, although Currency Instruments will be used","page_number":113,"box":{"x":116,"y":560,"width":757,"height":12}},{"id":"1e6de363-cbc4-46b1-b902-57f26cf6d6e7","block_type":"box","text":"with the intention of hedging against adverse currency movements, transactions in Currency","page_number":113,"box":{"x":116,"y":575,"width":689,"height":12}},{"id":"73b2a999-5180-4b07-af79-d80589acf07e","block_type":"box","text":"Instruments involve the risk that anticipated currency movements will not be accurately predicted and","page_number":113,"box":{"x":117,"y":591,"width":755,"height":12}},{"id":"adeac5b3-9ff8-4041-9752-fa9543ce2083","block_type":"box","text":"that the Fund’s hedging strategies will be ineffective. To the extent that a Fund hedges against","page_number":113,"box":{"x":116,"y":606,"width":706,"height":12}},{"id":"5e8024b3-0490-4579-b2b1-87f01b41943d","block_type":"box","text":"anticipated currency movements that do not occur, the Fund may realize losses and decrease its total","page_number":113,"box":{"x":116,"y":622,"width":761,"height":12}},{"id":"0adb416d-8a4f-48f2-be6e-4f42039b698b","block_type":"box","text":"return. Furthermore, a Fund will only engage in hedging activities from time to time and may not be","page_number":113,"box":{"x":117,"y":637,"width":738,"height":12}},{"id":"dc9e023d-77b8-42b3-a702-b88d99abcdfa","block_type":"box","text":"engaging in hedging activities when movements in currency exchange rates actually occur.","page_number":113,"box":{"x":116,"y":653,"width":681,"height":12}},{"id":"e0e0aa98-4376-4041-be45-9785d7e9be49","block_type":"box","text":"In connection with its trading in forward foreign currency contracts, a Fund will contract with a foreign","page_number":113,"box":{"x":117,"y":684,"width":746,"height":12}},{"id":"f965451b-f568-49e5-ba72-f6eaa7487fda","block_type":"box","text":"or domestic bank, or foreign or domestic securities dealer, to make or take future delivery of a specified","page_number":113,"box":{"x":116,"y":699,"width":766,"height":13}},{"id":"cf64c2c1-1df7-46ea-98af-c52dac261ae3","block_type":"box","text":"amount of a particular currency. There are no limitations on daily price moves in such forward","page_number":113,"box":{"x":116,"y":715,"width":693,"height":12}},{"id":"2aa6eca3-a847-497a-8ad2-3ad27bece128","block_type":"box","text":"contracts, and banks and dealers are not required to continue to make markets in such contracts.","page_number":113,"box":{"x":116,"y":731,"width":722,"height":11}},{"id":"39ce746f-860b-431e-8a98-6944959af14f","block_type":"box","text":"There have been periods during which certain banks or dealers have refused to quote prices for such","page_number":113,"box":{"x":116,"y":746,"width":751,"height":12}},{"id":"6b752042-ec81-465a-a924-773482f094dc","block_type":"box","text":"forward contracts or have quoted prices with an unusually wide spread between the price at which the","page_number":113,"box":{"x":116,"y":761,"width":756,"height":13}},{"id":"85d57f12-fb71-4a33-ab41-84cddd561d10","block_type":"box","text":"bank or dealer is prepared to buy and that at which it is prepared to sell. Governmental imposition of","page_number":113,"box":{"x":117,"y":777,"width":743,"height":12}},{"id":"338d4c1c-d244-4d91-a92c-e0ba72e07fc8","block_type":"box","text":"currency controls might limit any such forward contract trading. With respect to its trading of forward","page_number":113,"box":{"x":116,"y":792,"width":740,"height":13}},{"id":"fd86598b-41eb-4820-8059-38812cefec75","block_type":"box","text":"contracts, if any, a Fund will be subject to counterparty risk. Any such failure to perform by a","page_number":113,"box":{"x":116,"y":808,"width":683,"height":12}},{"id":"ffdc0bd8-fdfd-4455-87d0-33b5c83e92bc","block_type":"box","text":"counterparty would deprive the Fund of any profit potential or force the Fund to cover its commitments","page_number":113,"box":{"x":116,"y":823,"width":757,"height":13}},{"id":"b1fb836f-be1c-4c98-92f0-05eed3cbe559","block_type":"box","text":"for resale, if any, at the then market price and could result in a loss to the Fund.","page_number":113,"box":{"x":116,"y":839,"width":595,"height":12}},{"id":"bf00a56c-db7f-4c90-afd8-277ef188ab5a","block_type":"box","text":"II-30","page_number":113,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"35358647-24e6-4834-a403-cb309183823c","block_type":"box","text":"NM1026U-6039989-113/256","page_number":113,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"19d746ac-f2d6-4c8f-ac1d-3eb6fa7e9b71","block_type":"box","text":"It may not be possible for a Fund to hedge against currency exchange rate movements, even if","page_number":114,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"270da2b8-ed71-4d38-b48e-33983556b206","block_type":"box","text":"correctly anticipated, in the event that (i) the currency exchange rate movement is so generally","page_number":114,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"5efdd3fe-bea4-4110-a0f4-cb767d776438","block_type":"box","text":"anticipated that the Fund is not able to enter into a hedging transaction at an effective price, or (ii) the","page_number":114,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"2cb4439c-9ef3-400e-9e86-69b85ad6662e","block_type":"box","text":"currency exchange rate movement relates to a market with respect to which Currency Instruments are","page_number":114,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"2b013be1-2f31-4707-aea4-5ac7c9790e09","block_type":"box","text":"not available and it is not possible to engage in effective foreign currency hedging. The cost to a Fund","page_number":114,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"75c095f1-cb12-4fe0-928c-483605b88878","block_type":"box","text":"of engaging in foreign currency transactions varies with such factors as the currencies involved, the","page_number":114,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"c26fcff1-8409-4e69-bb3c-1f487a2aaecd","block_type":"box","text":"length of the contract period and the market conditions then prevailing. Since transactions in foreign","page_number":114,"box":{"x":117,"y":180,"width":744,"height":12}},{"id":"1cae970d-d567-43a9-baf8-faf466a7a222","block_type":"box","text":"currency exchange usually are conducted on a principal basis, no fees or commissions are involved.","page_number":114,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"2b40b1ea-3e6a-4c99-a159-68f71843f047","block_type":"box","text":"A Fund will not hedge a currency in excess of the aggregate market value of the securities that it owns","page_number":114,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"6a480d95-e4bc-4463-b71d-a83829235add","block_type":"box","text":"(including receivables for unsettled securities sales), or has committed to purchase or anticipates","page_number":114,"box":{"x":117,"y":242,"width":724,"height":12}},{"id":"808ce820-daf6-413d-9941-92561050ccd7","block_type":"box","text":"purchasing, which are denominated in such currency.","page_number":114,"box":{"x":117,"y":258,"width":401,"height":12}},{"id":"22607660-857d-43ab-bc16-ab78ff3ab0b2","block_type":"box","text":"Spot Transactions and FX Forwards.","page_number":114,"box":{"x":117,"y":289,"width":271,"height":12}},{"id":"33a8d029-8a4d-4c2e-b48f-46d077f66d84","block_type":"box","text":"FX forwards are OTC contracts to purchase or sell a specified","page_number":114,"box":{"x":390,"y":289,"width":470,"height":12}},{"id":"456ca2b9-531f-46e2-a488-2097e25dff2f","block_type":"box","text":"amount of a specified currency or multinational currency unit at a specified price and specified future","page_number":114,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"2939f8a3-96f8-4527-b333-c3b8e5e564ac","block_type":"box","text":"date. Spot foreign exchange transactions are similar but are settled in the current, or “spot”, market. A","page_number":114,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"dc67399b-4f73-4d8a-99da-def35e652065","block_type":"box","text":"Fund will enter into foreign exchange transactions for purposes of hedging either a specific transaction","page_number":114,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"de52aaf5-7ef1-4bfa-8e01-9364193c7844","block_type":"box","text":"or a portfolio position, or, with respect to certain Funds, to seek to enhance returns. FX forwards","page_number":114,"box":{"x":116,"y":351,"width":719,"height":12}},{"id":"9719482d-5bb3-453d-9d55-5c49bfc97932","block_type":"box","text":"involve substantial currency risk, credit risk and liquidity risk. A Fund may enter into a foreign exchange","page_number":114,"box":{"x":117,"y":366,"width":770,"height":12}},{"id":"e42a9e2b-abf8-49b2-8e37-69e6bf8c6978","block_type":"box","text":"transaction for purposes of hedging a specific transaction by, for example, purchasing a currency","page_number":114,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"001a4ef5-1bbf-460a-807b-195d7bfac325","block_type":"box","text":"needed to settle a security transaction or selling a currency in which the Fund has received or","page_number":114,"box":{"x":117,"y":397,"width":699,"height":12}},{"id":"54a4c7d6-3a1d-49a6-b0b8-4356da522e8c","block_type":"box","text":"anticipates receiving a dividend or distribution. A Fund may enter into a foreign exchange transaction","page_number":114,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"6a5b0535-016e-4510-a86b-cd8a3d671caa","block_type":"box","text":"for purposes of hedging a portfolio position by selling forward a currency in which a portfolio position of","page_number":114,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"5aa21b91-6a13-4fc4-b546-92db3d497f22","block_type":"box","text":"the Fund is denominated or by purchasing a currency in which the Fund anticipates acquiring a","page_number":114,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"c3d53521-3dc3-4142-b5a0-2883ff86520a","block_type":"box","text":"portfolio position in the near future. A Fund may also hedge a currency by entering into a transaction in","page_number":114,"box":{"x":117,"y":459,"width":767,"height":12}},{"id":"0dc68a2d-dacf-43fd-9dd4-cd8205790162","block_type":"box","text":"a Currency Instrument denominated in a currency other than the currency being hedged (a “cross","page_number":114,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"09ffcaca-e4d8-4859-9ce9-bbe1b76de54b","block_type":"box","text":"hedge”). A Fund will only enter into a cross-hedge if the Manager believes that (i) there is a","page_number":114,"box":{"x":117,"y":490,"width":680,"height":12}},{"id":"40097a46-88f3-4d66-a111-84688945036b","block_type":"box","text":"demonstrably high correlation between the currency in which the cross-hedge is denominated and the","page_number":114,"box":{"x":116,"y":506,"width":761,"height":12}},{"id":"3e6e7bbf-2b77-485b-ba33-695fcd828db3","block_type":"box","text":"currency being hedged, and (ii) executing a cross-hedge through the currency in which the cross","page_number":114,"box":{"x":116,"y":521,"width":722,"height":12}},{"id":"360c002b-92e2-4215-b622-4f4445984296","block_type":"box","text":"hedge is denominated will be significantly more cost-effective or provide substantially greater liquidity","page_number":114,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"97e9825e-619f-45e4-a765-c64df8b11a1b","block_type":"box","text":"than executing a similar hedging transaction by means of the currency being hedged.","page_number":114,"box":{"x":116,"y":552,"width":638,"height":12}},{"id":"0f6c5a5a-f4eb-4529-ad4a-c8531e7d0bbe","block_type":"box","text":"A Fund may also engage in proxy hedging transactions to reduce the effect of currency fluctuations on","page_number":114,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"a939b90f-ab87-4be2-b0d1-b57431803a9f","block_type":"box","text":"the value of existing or anticipated holdings of portfolio securities. Proxy hedging is often used when","page_number":114,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"add6967c-abe7-4180-be28-ed9949629646","block_type":"box","text":"the currency to which the Fund is exposed is difficult to hedge, or to hedge against the U.S. dollar.","page_number":114,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"484ffa26-a9e8-48bf-a900-0b05684d7ea3","block_type":"box","text":"Proxy hedging entails entering into a forward contract to sell a currency whose changes in value are","page_number":114,"box":{"x":117,"y":630,"width":746,"height":12}},{"id":"385aae12-c17d-4120-96a9-a985df04bafb","block_type":"box","text":"generally considered to be linked to a currency or currencies in which some or all of the Fund’s","page_number":114,"box":{"x":116,"y":645,"width":709,"height":12}},{"id":"3d8f0052-b7e6-483d-a232-02ab42cdfd06","block_type":"box","text":"securities are, or are expected to be, denominated, and to buy U.S. dollars. Proxy hedging involves","page_number":114,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"b73723ac-6d58-4021-b3ff-510ef717272f","block_type":"box","text":"some of the same risks and considerations as other transactions with similar instruments. Currency","page_number":114,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"1df57826-40d1-4a00-bf61-ba9fe1606f80","block_type":"box","text":"transactions can result in losses to the Fund if the currency being hedged fluctuates in value to a","page_number":114,"box":{"x":116,"y":692,"width":717,"height":12}},{"id":"dba1ab97-8556-4766-a373-8daacc0ca56c","block_type":"box","text":"degree or in a direction that is not anticipated. In addition, there is the risk that the perceived linkage","page_number":114,"box":{"x":116,"y":707,"width":742,"height":12}},{"id":"92d0f86a-8332-4ecd-b2ed-222b78a05cf2","block_type":"box","text":"between various currencies may not be present, including during the particular time that a Fund is","page_number":114,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"6ebcc76f-3045-484b-9323-1226e3e1774c","block_type":"box","text":"engaging in proxy hedging.","page_number":114,"box":{"x":116,"y":738,"width":200,"height":12}},{"id":"8bfaa5bf-21af-42ca-b7c2-723f492e8ad6","block_type":"box","text":"A Fund may also cross-hedge currencies by entering into forward contracts to sell one or more","page_number":114,"box":{"x":116,"y":769,"width":703,"height":12}},{"id":"8d932686-e86e-479a-aa88-7939f28bc66a","block_type":"box","text":"currencies that are expected to decline in value relative to other currencies to which the Fund has or in","page_number":114,"box":{"x":116,"y":785,"width":760,"height":12}},{"id":"7c6b34fb-7006-40c0-a106-919be5c8fafa","block_type":"box","text":"which the Fund expects to have portfolio exposure. For example, a Fund may hold both Canadian","page_number":114,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"6aa87963-111d-45b4-b966-232ef72d5d81","block_type":"box","text":"government bonds and Japanese government bonds, and the Manager or sub-adviser may believe","page_number":114,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"145c6629-caf0-4d83-a107-7594c7de7253","block_type":"box","text":"that Canadian dollars will deteriorate against Japanese yen. The Fund would sell Canadian dollars to","page_number":114,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"a94b812f-b07c-43b2-8203-d7f0e289d1be","block_type":"box","text":"reduce its exposure to that currency and buy Japanese yen. This strategy would be a hedge against a","page_number":114,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"e0e21c70-95a4-479d-9ec1-37b4ffc64bbe","block_type":"box","text":"decline in the value of Canadian dollars, although it would expose the Fund to declines in the value of","page_number":114,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"9bfa6587-38ff-4f83-837c-cbe3fbb20e66","block_type":"box","text":"the Japanese yen relative to the U.S. dollar.","page_number":114,"box":{"x":116,"y":878,"width":331,"height":12}},{"id":"32119356-52e9-409b-94e7-b85ddc991597","block_type":"box","text":"II-31","page_number":114,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"251f6fe4-1fa3-4ae9-9fcf-4dc2ab73ab67","block_type":"box","text":"NM1026U-6039989-114/256","page_number":114,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"47eeef4b-87a6-4995-8bac-fa7758e7bed1","block_type":"box","text":"Some of the forward non-U.S. currency contracts entered into by the Funds are classified as","page_number":115,"box":{"x":116,"y":87,"width":690,"height":12}},{"id":"0d219c24-89e7-4644-b4ec-deabfe2e32e3","block_type":"box","text":"non-deliverable forwards (“NDFs”). NDFs are cash-settled, short-term forward contracts that may be","page_number":115,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"598f8704-5486-4753-8ace-b4b0cfb9d80d","block_type":"box","text":"thinly traded or are denominated in non-convertible foreign currency, where the profit or loss at the","page_number":115,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"45625927-099b-4f1d-a3fc-621b136839c3","block_type":"box","text":"time at the settlement date is calculated by taking the difference between the agreed upon exchange","page_number":115,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"61901f19-c6c6-4832-9345-4a17dcb63356","block_type":"box","text":"rate and the spot rate at the time of settlement, for an agreed upon notional amount of funds. All NDFs","page_number":115,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"d4723070-f02f-4b18-bd1d-d3ea0877e61d","block_type":"box","text":"have a fixing date and a settlement date. The fixing date is the date at which the difference between","page_number":115,"box":{"x":117,"y":165,"width":746,"height":12}},{"id":"6d2e9fbf-8c91-446a-b503-b486344a6910","block_type":"box","text":"the prevailing market exchange rate and the agreed upon exchange rate is calculated. The settlement","page_number":115,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"17d6871b-a4b4-491f-a887-40362a813b21","block_type":"box","text":"date is the date by which the payment of the difference is due to the party receiving payment. NDFs","page_number":115,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"b891af03-5563-43fe-b320-65377772d108","block_type":"box","text":"are commonly quoted for time periods of one month up to two years, and are normally quoted and","page_number":115,"box":{"x":116,"y":211,"width":733,"height":12}},{"id":"c1f07592-55e6-4c69-b69e-1ac36c95ff02","block_type":"box","text":"settled in U.S. dollars. They are often used to gain exposure to and/or hedge exposure to foreign","page_number":115,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"612f9042-129d-4909-aaf3-5389ef5daf6c","block_type":"box","text":"currencies that are not internationally traded.","page_number":115,"box":{"x":116,"y":242,"width":337,"height":12}},{"id":"26d52bcc-f8a7-4928-870d-e88de9542b93","block_type":"box","text":"Currency Futures.","page_number":115,"box":{"x":117,"y":273,"width":132,"height":12}},{"id":"bc33d861-15fb-4557-9921-1d0e361112a6","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":115,"box":{"x":250,"y":273,"width":626,"height":12}},{"id":"4cbe456c-55d2-48e7-b325-ba9709d8ff81","block_type":"box","text":"currency through use of currency futures or options on currency futures. Currency futures are similar to","page_number":115,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"37c5d1c1-068c-4953-8ce3-1cdf273c7fcc","block_type":"box","text":"forward foreign exchange transactions except that futures are standardized, exchange-traded contracts","page_number":115,"box":{"x":116,"y":304,"width":772,"height":12}},{"id":"58cb52a2-8839-4e60-abd0-3a6431d8da0b","block_type":"box","text":"while forward foreign exchange transactions are traded in the OTC market. Currency futures involve","page_number":115,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"1ff07cc7-3b4e-4789-9c01-c6d7daf0d3b2","block_type":"box","text":"substantial currency risk as well as the risks discussed above in “— Futures.”","page_number":115,"box":{"x":116,"y":335,"width":578,"height":12}},{"id":"8798e91f-a1c8-4756-953a-51969cd03456","block_type":"box","text":"Currency Options.","page_number":115,"box":{"x":117,"y":366,"width":133,"height":12}},{"id":"14e17e46-c0be-420c-8732-af371a2ba59f","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":115,"box":{"x":251,"y":366,"width":626,"height":12}},{"id":"54799977-7cc0-4f3c-949d-3902e03cae27","block_type":"box","text":"currency through the use of currency options. Certain Funds have fundamental investment restrictions","page_number":115,"box":{"x":116,"y":382,"width":763,"height":12}},{"id":"3fa444dd-6431-4558-bec7-908a228c7ae8","block_type":"box","text":"that permit the purchase of currency options, but prohibit the writing of currency options. Currency","page_number":115,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"97a20747-e87e-420f-b030-6457877bbb39","block_type":"box","text":"options are similar to options on securities. For example, in consideration for an option premium the","page_number":115,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"aac22515-1391-4a69-b1ad-5aa93d5d7e1c","block_type":"box","text":"writer of a currency option is obligated to sell (in the case of a call option) or purchase (in the case of a","page_number":115,"box":{"x":116,"y":428,"width":765,"height":12}},{"id":"4f40e312-9b13-441c-a9e9-cfc9c8abf61c","block_type":"box","text":"put option) a specified amount of a specified currency on or before the expiration date for a specified","page_number":115,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"4cf36542-62f5-4b8d-8e8a-e913cea2cc1a","block_type":"box","text":"amount of another currency. A Fund may engage in transactions in options on currencies either on","page_number":115,"box":{"x":116,"y":459,"width":737,"height":12}},{"id":"22b44b24-82d1-4312-a238-2c5bc42d2dea","block_type":"box","text":"exchanges or OTC markets. Such transactions in options may include exotic options on currencies,","page_number":115,"box":{"x":116,"y":475,"width":743,"height":12}},{"id":"e4e04106-3742-442f-a7fb-2e016e830706","block_type":"box","text":"which are typically traded in OTC markets and have additional features that result in different payment","page_number":115,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"2659fd99-8a3a-4614-8f0e-2744202798c5","block_type":"box","text":"structures and/or expirations. Where a Fund is permitted to write currency options, it may write covered","page_number":115,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"0416cec3-98b6-48e3-b8d3-c90c2dbe0673","block_type":"box","text":"call options on up to 100% of the currencies in its portfolio. See “— Options” above. Currency options","page_number":115,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"d1d43142-582c-494b-a8fe-b0b1145d1bb2","block_type":"box","text":"involve substantial currency risk, and may also involve credit, leverage or illiquidity risk.","page_number":115,"box":{"x":117,"y":537,"width":651,"height":12}},{"id":"535161ec-da89-49fa-b468-f8f98e594e62","block_type":"box","text":"Currency Swaps.","page_number":115,"box":{"x":117,"y":568,"width":131,"height":12}},{"id":"736b9f98-69ea-424a-a86b-2db792b199d7","block_type":"box","text":"A Fund may enter into currency swaps in order to protect against currency","page_number":115,"box":{"x":248,"y":568,"width":557,"height":12}},{"id":"592b42f3-0aba-4b89-9309-acfa2d380b8c","block_type":"box","text":"fluctuations or to hedge portfolio positions. Currency swaps are transactions in which one currency is","page_number":115,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"e736e3d0-1e97-458c-a409-017d40ffb92d","block_type":"box","text":"simultaneously bought for a second currency on a spot basis and sold for the second currency on a","page_number":115,"box":{"x":116,"y":599,"width":743,"height":12}},{"id":"56ef9659-a5b9-4d17-af90-efa76e2ec00d","block_type":"box","text":"forward basis. Currency swaps involve the exchange of the rights of a Fund and another party to make","page_number":115,"box":{"x":116,"y":614,"width":767,"height":12}},{"id":"b756bc97-1895-42b2-ae94-512e220399ec","block_type":"box","text":"or receive payments in specified currencies, and typically require the delivery of the entire principal","page_number":115,"box":{"x":116,"y":630,"width":738,"height":12}},{"id":"b0a688ab-3062-4f39-ba15-4e4f56954b97","block_type":"box","text":"value of one designated currency in exchange for the other designated currency. As a result, the entire","page_number":115,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"b85388ff-ed64-46c3-805a-1ff1029a7303","block_type":"box","text":"principal value of a currency swap is subject to the risk that the other party to the swap will default on","page_number":115,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"6df752c0-297b-47c8-bd1e-e9240052dc26","block_type":"box","text":"its contractual delivery obligations.","page_number":115,"box":{"x":117,"y":676,"width":254,"height":12}},{"id":"64171b95-9551-4ceb-986b-42d02b039245","block_type":"box","text":"Distressed Securities.","page_number":115,"box":{"x":116,"y":707,"width":174,"height":10}},{"id":"41a12873-b9d8-4890-b0f4-b08eeb4fde1c","block_type":"box","text":"A Fund may invest in securities, including loans purchased in the secondary","page_number":115,"box":{"x":296,"y":707,"width":565,"height":12}},{"id":"0595c09f-9126-4c61-9bb3-b57698f940e0","block_type":"box","text":"market, that are the subject of bankruptcy proceedings or otherwise in default or in risk of being in","page_number":115,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"a1b4f929-e18e-4d71-88f9-8750564b5438","block_type":"box","text":"default as to the repayment of principal and/or interest at the time of acquisition by the Fund or that are","page_number":115,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"2ea3b052-cae3-45f7-9b34-9b2ad3e96a20","block_type":"box","text":"rated in the lower rating categories by one or more nationally recognized statistical rating organizations","page_number":115,"box":{"x":117,"y":754,"width":762,"height":12}},{"id":"ed142f1e-fd65-4548-be02-2054525e7805","block_type":"box","text":"(for example, Ca or lower by Moody’s and CC or lower by S&P or Fitch) or, if unrated, are in the","page_number":115,"box":{"x":117,"y":769,"width":709,"height":12}},{"id":"776bf374-6abe-4c6b-a0ba-eb8a0057aaa6","block_type":"box","text":"judgment of the Manager of equivalent quality (“Distressed Securities”). Investment in Distressed","page_number":115,"box":{"x":115,"y":785,"width":719,"height":12}},{"id":"bf530657-1d90-46e3-aacc-1181d7808e01","block_type":"box","text":"Securities is speculative and involves significant risks.","page_number":115,"box":{"x":116,"y":800,"width":399,"height":12}},{"id":"326cfe97-2980-4a73-b3e5-9c43d2efe001","block_type":"box","text":"A Fund will generally make such investments only when the Manager believes it is reasonably likely","page_number":115,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"61e83c04-1680-44cf-bce9-d633d1b9daeb","block_type":"box","text":"that the issuer of the Distressed Securities will make an exchange offer or will be the subject of a plan","page_number":115,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"b88408c9-e59b-4364-8fa6-f3ea63d65005","block_type":"box","text":"of reorganization pursuant to which the Fund will receive new securities in return for the Distressed","page_number":115,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"ddf811f1-b0a7-4b7e-aed2-c8600075dbe9","block_type":"box","text":"Securities. However, there can be no assurance that such an exchange offer will be made or that such","page_number":115,"box":{"x":116,"y":878,"width":766,"height":12}},{"id":"a8dbe3c0-9ba1-43a7-8197-ab6cb0b22996","block_type":"box","text":"II-32","page_number":115,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"4656ab17-cd9b-4e0e-acaa-a99d18642569","block_type":"box","text":"NM1026U-6039989-115/256","page_number":115,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"119ddab8-ab44-493b-8a73-87d034c4a078","block_type":"box","text":"a plan of reorganization will be adopted. In addition, a significant period of time may pass between the","page_number":116,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"1113bfc2-bb03-43c5-a62d-100178eb4d22","block_type":"box","text":"time at which a Fund makes its investment in Distressed Securities and the time that any such","page_number":116,"box":{"x":116,"y":102,"width":704,"height":13}},{"id":"4cc9e150-a919-477d-a347-8160a5bae7e1","block_type":"box","text":"exchange offer or plan of reorganization is completed. During this period, it is unlikely that a Fund will","page_number":116,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"79cdf5e0-280e-4e45-87e0-2ab0580f1254","block_type":"box","text":"receive any interest payments on the Distressed Securities, the Fund will be subject to significant","page_number":116,"box":{"x":117,"y":134,"width":725,"height":12}},{"id":"500442e7-327b-4dd2-8494-bc13445b2ec1","block_type":"box","text":"uncertainty as to whether or not the exchange offer or plan of reorganization will be completed and the","page_number":116,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"4ca2c7bc-6a9c-412c-b817-c3f275188430","block_type":"box","text":"Fund may be required to bear certain extraordinary expenses to protect and recover its investment.","page_number":116,"box":{"x":117,"y":165,"width":741,"height":12}},{"id":"2661ea13-08ba-497e-9575-92524c8b4e7d","block_type":"box","text":"Therefore, to the extent the Fund seeks capital appreciation through investment in distressed","page_number":116,"box":{"x":116,"y":180,"width":696,"height":12}},{"id":"e13dc533-136b-4043-81ed-8ad8a6b3d2f8","block_type":"box","text":"securities, the Fund’s ability to achieve current income for its shareholders may be diminished. The","page_number":116,"box":{"x":116,"y":196,"width":740,"height":12}},{"id":"67a3d257-8487-4aa3-a34f-8bdbf92c31e9","block_type":"box","text":"Fund also will be subject to significant uncertainty as to when and in what manner and for what value","page_number":116,"box":{"x":117,"y":211,"width":753,"height":12}},{"id":"8d178d8c-6303-46de-a3ad-13ed7e0eb70d","block_type":"box","text":"the obligations evidenced by the distressed securities will eventually be satisfied (","page_number":116,"box":{"x":116,"y":227,"width":605,"height":12}},{"id":"56d4c53d-11bd-40e9-8297-46667042d62c","block_type":"box","text":"e.g.","page_number":116,"box":{"x":723,"y":229,"width":25,"height":10}},{"id":"d8b5ef23-3bfc-413c-81d3-968474221818","block_type":"box","text":", through a","page_number":116,"box":{"x":751,"y":227,"width":84,"height":12}},{"id":"935e220e-76f6-44b5-b001-8f961f9f0770","block_type":"box","text":"liquidation of the obligor’s assets, an exchange offer or plan of reorganization involving the distressed","page_number":116,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"f6eb0ea0-13af-42bd-813c-0e081b5285e1","block_type":"box","text":"securities or a payment of some amount in satisfaction of the obligation). Even if an exchange offer is","page_number":116,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"9ca76437-7630-48d8-9027-54364eef9b43","block_type":"box","text":"made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there","page_number":116,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"83846f7e-f79f-4827-8b75-c0e61a063235","block_type":"box","text":"can be no assurance that the securities or other assets received by a Fund in connection with such","page_number":116,"box":{"x":116,"y":289,"width":740,"height":12}},{"id":"8ae101a6-1627-4485-8572-582860ede1e3","block_type":"box","text":"exchange offer or plan of reorganization will not have a lower value or income potential than may have","page_number":116,"box":{"x":116,"y":304,"width":765,"height":12}},{"id":"c04a5db6-6667-4ea9-b28c-7aaec4b35719","block_type":"box","text":"been anticipated when the investment was made or no value. Moreover, any securities received by a","page_number":116,"box":{"x":117,"y":320,"width":753,"height":12}},{"id":"98120936-facd-4708-a12d-36f6cad8c711","block_type":"box","text":"Fund upon completion of an exchange offer or plan of reorganization may be restricted as to resale.","page_number":116,"box":{"x":117,"y":335,"width":745,"height":12}},{"id":"44f05fb9-a8be-478f-9b98-c07177d52e88","block_type":"box","text":"Similarly, if a Fund participates in negotiations with respect to any exchange offer or plan of","page_number":116,"box":{"x":116,"y":351,"width":683,"height":12}},{"id":"3077a6bb-bf4a-43e8-8709-5f0a56d14941","block_type":"box","text":"reorganization with respect to an issuer of Distressed Securities, the Fund may be restricted from","page_number":116,"box":{"x":117,"y":366,"width":726,"height":12}},{"id":"086f921a-1022-4692-9539-c8464f3ffa5f","block_type":"box","text":"disposing of such securities. To the extent that a Fund becomes involved in such proceedings, the","page_number":116,"box":{"x":116,"y":382,"width":734,"height":12}},{"id":"4e014957-cf0a-4aab-a7a7-927c3fd82138","block_type":"box","text":"Fund may have a more active participation in the affairs of the issuer than that assumed generally by","page_number":116,"box":{"x":117,"y":397,"width":752,"height":12}},{"id":"f96216ce-3e94-4476-b597-0d19ecefc03b","block_type":"box","text":"an investor. The Fund, however, will not make investments for the purpose of exercising day-to-day","page_number":116,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"c655d89c-b52e-4bca-bf30-8cf1a03154e7","block_type":"box","text":"management of any issuer’s affairs.","page_number":116,"box":{"x":117,"y":428,"width":269,"height":12}},{"id":"4fb9cc84-0edb-49ba-89ff-bf1e7d45b013","block_type":"box","text":"Environmental, Social and Governance (“ESG”) Integration.","page_number":116,"box":{"x":116,"y":459,"width":476,"height":12}},{"id":"5a4bf65f-37e3-4e2d-b617-c866f93b6d5f","block_type":"box","text":"Although a Fund does not seek to","page_number":116,"box":{"x":593,"y":459,"width":261,"height":12}},{"id":"015f1110-1388-4f8a-b787-2db9c24465eb","block_type":"box","text":"implement a specific sustainability objective, strategy or process unless disclosed in its Prospectus,","page_number":116,"box":{"x":117,"y":475,"width":741,"height":12}},{"id":"3456d283-895c-4602-bd11-8f3faa70c009","block_type":"box","text":"Fund management will consider ESG factors as part of the investment process for the Fund. Fund","page_number":116,"box":{"x":117,"y":490,"width":733,"height":12}},{"id":"3eec4747-333f-4d49-a368-e97a044b80b2","block_type":"box","text":"management views ESG integration as the practice of incorporating financially material ESG data or","page_number":116,"box":{"x":117,"y":506,"width":747,"height":12}},{"id":"b2fd5568-7148-4ef1-b5eb-f7b68b1a5169","block_type":"box","text":"information into investment processes with the objective of enhancing risk-adjusted returns. These","page_number":116,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"0eaedbbf-f34a-49a8-a4f3-ad922e14b767","block_type":"box","text":"ESG considerations will vary depending on a Fund’s particular investment strategies and may include","page_number":116,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"f7117463-76d9-4e20-a28b-c5afa75d79eb","block_type":"box","text":"consideration of third-party research as well as consideration of proprietary BlackRock research across","page_number":116,"box":{"x":116,"y":552,"width":770,"height":12}},{"id":"5885dd35-8082-4786-b942-63424205cd13","block_type":"box","text":"the ESG risks and opportunities regarding an issuer. The ESG characteristics utilized in a Fund’s","page_number":116,"box":{"x":116,"y":568,"width":725,"height":12}},{"id":"2dbccb28-5b03-49cd-ae88-4a7a4df297e9","block_type":"box","text":"investment process are anticipated to evolve over time and one or more characteristics may not be","page_number":116,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"bbc8eda1-45c4-4158-9251-36545d7daeca","block_type":"box","text":"relevant with respect to all issuers that are eligible for investment.","page_number":116,"box":{"x":117,"y":599,"width":490,"height":12}},{"id":"d3dbcdf3-7657-476f-a8da-c97698686eaf","block_type":"box","text":"Certain of these considerations may affect a Fund’s exposure to certain companies or industries. While","page_number":116,"box":{"x":117,"y":630,"width":769,"height":12}},{"id":"85c1f289-b048-42e6-ae66-5df3276c7009","block_type":"box","text":"Fund management views ESG considerations as having the potential to contribute to a Fund’s long","page_number":116,"box":{"x":117,"y":645,"width":740,"height":12}},{"id":"0c6b2978-66fd-4a00-bb5c-995850db3dcc","block_type":"box","text":"term performance, there is no guarantee that such results will be achieved.","page_number":116,"box":{"x":116,"y":661,"width":555,"height":12}},{"id":"a77f270b-0d11-42d0-bece-c5ed880b72cd","block_type":"box","text":"Equity Securities.","page_number":116,"box":{"x":116,"y":692,"width":140,"height":12}},{"id":"e1565301-d342-44f1-ac9d-e6d00258856d","block_type":"box","text":"Certain Funds may invest in equity securities, which include common stock and, for","page_number":116,"box":{"x":263,"y":692,"width":618,"height":12}},{"id":"42498167-ee9e-46ef-bc74-688b2a5f4411","block_type":"box","text":"certain Funds, preferred stock (including convertible preferred stock); bonds; stock purchase warrants","page_number":116,"box":{"x":116,"y":707,"width":755,"height":12}},{"id":"7d48f19e-752a-4fdf-b45c-0f844109d826","block_type":"box","text":"and rights; equity interests in trusts; general and limited partnerships and limited liability companies;","page_number":116,"box":{"x":116,"y":723,"width":739,"height":12}},{"id":"09ff0eae-ec0f-4f5b-b770-722f1c2ad9f2","block_type":"box","text":"and depositary receipts. Stock markets are volatile. The price of equity securities will fluctuate and can","page_number":116,"box":{"x":116,"y":738,"width":759,"height":12}},{"id":"79f83068-78e9-4e33-a982-0575d7dc4f58","block_type":"box","text":"decline and reduce the value of a portfolio investing in equities. The price of equity securities fluctuates","page_number":116,"box":{"x":116,"y":754,"width":763,"height":12}},{"id":"e65e40ae-865b-4575-979a-3efa3db45ab1","block_type":"box","text":"based on changes in a company’s financial condition and overall market and economic conditions. The","page_number":116,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"89053110-efe7-4905-9d43-fbb8aa3ee20b","block_type":"box","text":"value of equity securities purchased by the Fund could decline if the financial condition of the","page_number":116,"box":{"x":116,"y":785,"width":689,"height":12}},{"id":"a93cd853-1818-4ac9-b6c1-2c719f9b1800","block_type":"box","text":"companies the Fund invests in decline or if overall market and economic conditions deteriorate. They","page_number":116,"box":{"x":116,"y":800,"width":750,"height":12}},{"id":"f3971932-b111-4a74-a67f-5bd228598665","block_type":"box","text":"may also decline due to factors that affect a particular industry or industries, such as labor shortages or","page_number":116,"box":{"x":117,"y":816,"width":766,"height":12}},{"id":"1fe9990b-149d-4881-b11f-b1e12669ed87","block_type":"box","text":"increase in production costs and competitive conditions within an industry. In addition, they may","page_number":116,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"95dbb92a-f29c-438a-8180-a98edc9a53ed","block_type":"box","text":"decline due to general market conditions that are not specifically related to a company or industry,","page_number":116,"box":{"x":116,"y":847,"width":732,"height":12}},{"id":"4cee8c24-e40a-4850-8001-0250810f66fe","block_type":"box","text":"such as real or perceived adverse economic conditions, changes in the general outlook for corporate","page_number":116,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"7cf0a9a7-cbdb-463e-9946-f819711c3cc0","block_type":"box","text":"earnings, changes in interest or currency rates or generally adverse investor sentiment.","page_number":116,"box":{"x":116,"y":878,"width":654,"height":12}},{"id":"67cb6393-7fb3-4991-aa18-ee2dc568b68c","block_type":"box","text":"II-33","page_number":116,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cec29ec9-cfa0-4cc1-b677-d13bef11ea52","block_type":"box","text":"NM1026U-6039989-116/256","page_number":116,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e541cbf3-0410-4e7b-8c20-19d2a4819ea4","block_type":"box","text":"From time to time certain of the Funds may invest in","page_number":117,"box":{"x":117,"y":87,"width":368,"height":12}},{"id":"f1cbccf8-cac1-4071-be3c-5c85a36f23d9","block_type":"box","text":"shares of companies through initial public offerings","page_number":117,"box":{"x":486,"y":87,"width":369,"height":12}},{"id":"3e0f9759-8323-4664-a1d8-7186fba2ef7a","block_type":"box","text":"(“IPOs”). IPOs have the potential to produce, and have in fact produced, substantial gains for certain Funds.","page_number":117,"box":{"x":117,"y":102,"width":769,"height":13}},{"id":"39d78727-670c-4a64-bd5e-ba5a0a9d44ac","block_type":"box","text":"There is no assurance that any Fund will have continued a","page_number":117,"box":{"x":116,"y":118,"width":415,"height":12}},{"id":"e2b01b65-62b3-42ef-a11c-f8715f665efb","block_type":"box","text":"ccess to profitable IPOs and therefore investors","page_number":117,"box":{"x":532,"y":118,"width":343,"height":12}},{"id":"db0be8ef-2405-4144-8787-220717bdbc7d","block_type":"box","text":"should not rely on these past gains as an indication of future performance. The investment performance of","page_number":117,"box":{"x":116,"y":134,"width":759,"height":12}},{"id":"65cbac97-9ace-406a-8b5e-a70dd6eb93da","block_type":"box","text":"a Fund during periods when it is unable to invest signifi","page_number":117,"box":{"x":116,"y":149,"width":389,"height":12}},{"id":"4af7d682-d2fe-442a-9fa9-6f948b32d4e8","block_type":"box","text":"cantly or at all in IPOs may be lower than during","page_number":117,"box":{"x":506,"y":149,"width":345,"height":12}},{"id":"6c7a47f6-f22e-4312-93f5-f10add64277e","block_type":"box","text":"periods when it is able to do so. In addition, as a Fund increases in size, the impact of IPOs on its","page_number":117,"box":{"x":117,"y":165,"width":694,"height":11}},{"id":"9a34f86e-49dc-44e6-8036-6d6e269a81a2","block_type":"box","text":"performance will generally decrease. Securities issued in IPOs are subject to many of the same risks as","page_number":117,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"eae9c268-8934-4625-9e3e-020f9d7c399d","block_type":"box","text":"investing in companies with smaller market capita","page_number":117,"box":{"x":117,"y":196,"width":351,"height":12}},{"id":"f43c6353-c802-4f85-ac9a-4d67acd87007","block_type":"box","text":"lizations. Securities issued in IPOs have no trading","page_number":117,"box":{"x":470,"y":196,"width":364,"height":12}},{"id":"5a9137a1-ab40-4a9c-b467-ffb4f44a525b","block_type":"box","text":"history, and information about the companies may be av","page_number":117,"box":{"x":117,"y":211,"width":399,"height":12}},{"id":"c1af974f-f822-4b07-8b9d-62262f7e7825","block_type":"box","text":"ailable for very limited periods. In addition, the","page_number":117,"box":{"x":516,"y":211,"width":330,"height":12}},{"id":"c904e9a2-b4d8-42f9-b9a6-bc3e76fdc63c","block_type":"box","text":"prices of securities sold in IPOs may be highly volatile","page_number":117,"box":{"x":117,"y":227,"width":380,"height":12}},{"id":"c301b99c-0691-46f3-941b-43f12417437f","block_type":"box","text":"or may decline shortly after the initial public offering.","page_number":117,"box":{"x":497,"y":227,"width":377,"height":12}},{"id":"9a49a7c4-5b52-4cef-b322-10ab43ba7e3a","block_type":"box","text":"The Funds may invest in companies that have relatively small market capitalizations. These","page_number":117,"box":{"x":116,"y":258,"width":685,"height":12}},{"id":"058c5b4a-d630-417c-9ce3-a17daf0a82b8","block_type":"box","text":"organizations will normally have more limited product lines, markets and financial resources and will be","page_number":117,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"ecedb3c8-5946-44d7-93cb-625338e3661c","block_type":"box","text":"dependent upon a more limited management group than larger capitalized companies. In addition, it is","page_number":117,"box":{"x":116,"y":289,"width":764,"height":12}},{"id":"10e522dd-06b6-4528-8ece-4dde1bb9955d","block_type":"box","text":"more difficult to get information on smaller companies, which tend to be less well known, have shorter","page_number":117,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"4bb833cc-d0a8-4157-bcae-5b4e22bfb91b","block_type":"box","text":"operating histories, do not have significant ownership by large investors and are followed by relatively","page_number":117,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"c1d15b82-29f2-47ae-8749-623b9ba5c1a7","block_type":"box","text":"few securities analysts. The securities of smaller capitalized companies are often traded in the OTC","page_number":117,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"88e969ce-5f16-48da-ae30-8230fc8a27a6","block_type":"box","text":"markets and may have fewer market makers and wider price spreads. This may result in greater price","page_number":117,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"d481307d-ce9f-4640-a5cf-cb207fa143ef","block_type":"box","text":"movements and less ability to sell a Fund’s investment than if the Fund held the securities of larger,","page_number":117,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"a423e62b-a734-42e9-b911-83ce576460a3","block_type":"box","text":"more established companies.","page_number":117,"box":{"x":117,"y":382,"width":222,"height":12}},{"id":"5714d28c-c603-4adf-9f0d-65f1d4e6ff16","block_type":"box","text":"For a discussion of the types of equity securities in which your Fund may invest and the risks","page_number":117,"box":{"x":117,"y":413,"width":693,"height":12}},{"id":"b9f8b46b-77c5-43f7-8ceb-9034206a83a1","block_type":"box","text":"associated with investing in such equity securities, see your Fund’s Prospectus. Certain of the Funds","page_number":117,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"c52b851d-aa9c-4cc0-9b91-faf17fa190a1","block_type":"box","text":"may also invest in shares of private companies, which are subject to the risks of “Illiquid Investments”","page_number":117,"box":{"x":117,"y":444,"width":756,"height":12}},{"id":"007f53ea-09c2-4cd3-ad9b-b39f9d04982b","block_type":"box","text":"and “Restricted Securities” described below.","page_number":117,"box":{"x":116,"y":459,"width":334,"height":10}},{"id":"56ed5d6e-a1c6-48b5-9416-5e4f39b69c21","block_type":"box","text":"Real Estate-Related Securities.","page_number":117,"box":{"x":116,"y":490,"width":232,"height":10}},{"id":"8a8b8f1a-bdaa-44aa-a9f6-17ff7e5ca2d2","block_type":"box","text":"Although no Fund may invest directly in real estate, certain Funds may","page_number":117,"box":{"x":349,"y":490,"width":535,"height":12}},{"id":"c608748e-1bf0-459d-8b6e-647e614740e0","block_type":"box","text":"invest in equity securities of issuers that are principally engaged in the real estate industry. Such","page_number":117,"box":{"x":117,"y":506,"width":719,"height":12}},{"id":"515e6b19-03b3-4f80-8ec7-195db7fa0830","block_type":"box","text":"investments are subject to certain risks associated with the ownership of real estate and with the real","page_number":117,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"77dcb6d3-f243-48a0-8220-de9a616c1035","block_type":"box","text":"estate industry in general. These risks include, among others: possible declines in the value of real","page_number":117,"box":{"x":116,"y":537,"width":738,"height":12}},{"id":"e2f89f7c-1c4b-4997-bbf2-9f8f71da15a4","block_type":"box","text":"estate; risks related to general and local economic conditions; possible lack of availability of mortgage","page_number":117,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"9b421d1c-7ec3-4718-9c95-d6b2f30e004d","block_type":"box","text":"funds or other limitations on access to capital; overbuilding; risks associated with leverage; market","page_number":117,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"9715426f-3294-440b-b14c-f008ce23e739","block_type":"box","text":"illiquidity; extended vacancies of properties; increase in competition, property taxes, capital","page_number":117,"box":{"x":117,"y":583,"width":679,"height":12}},{"id":"e9fc8a25-74f3-479a-886c-3087228f2055","block_type":"box","text":"expenditures and operating expenses; changes in zoning laws or other governmental regulation; costs","page_number":117,"box":{"x":116,"y":599,"width":765,"height":12}},{"id":"8d530c30-a755-4feb-b0b4-7e714a1f41aa","block_type":"box","text":"resulting from the clean-up of, and liability to third parties for damages resulting from, environmental","page_number":117,"box":{"x":117,"y":614,"width":746,"height":12}},{"id":"ca9d9385-6757-4c88-baca-5a5e5aa87733","block_type":"box","text":"problems; tenant bankruptcies or other credit problems; casualty or condemnation losses; uninsured","page_number":117,"box":{"x":117,"y":630,"width":748,"height":12}},{"id":"71ef9da0-aada-4df7-b00a-f9ea562ac3bd","block_type":"box","text":"damages from floods, earthquakes or other natural disasters; limitations on and variations in rents,","page_number":117,"box":{"x":116,"y":645,"width":736,"height":12}},{"id":"e96a3077-5bab-4651-9bf3-d2f98c8e5d8f","block_type":"box","text":"including decreases in market rates for rents; investment in developments that are not completed or","page_number":117,"box":{"x":117,"y":661,"width":740,"height":12}},{"id":"da79ea2c-ece0-4c55-a178-c87c21bdedbb","block_type":"box","text":"that are subject to delays in completion; and changes in interest rates. To the extent that assets","page_number":117,"box":{"x":116,"y":676,"width":710,"height":12}},{"id":"63d8e754-bf48-43ac-bc19-cd79e6af6666","block_type":"box","text":"underlying a Fund’s investments are concentrated geographically, by property type or in certain other","page_number":117,"box":{"x":117,"y":692,"width":750,"height":12}},{"id":"12da430d-f5bb-445a-a455-aa8a352a4f2b","block_type":"box","text":"respects, the Fund may be subject to certain of the foregoing risks to a greater extent. Investments by","page_number":117,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"93f5f5bb-e6d2-4cc4-8b49-05c71bfb0fb4","block_type":"box","text":"a Fund in securities of companies providing mortgage servicing will be subject to the risks associated","page_number":117,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"00a0dcd3-7198-47f1-a0af-3f4505c06e2e","block_type":"box","text":"with refinancings and their impact on servicing rights.","page_number":117,"box":{"x":116,"y":738,"width":393,"height":12}},{"id":"6ed34100-7cd1-4986-aabe-bbdd17f3984b","block_type":"box","text":"In addition, if a Fund receives rental income or income from the disposition of real property acquired as","page_number":117,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"f12cdc56-22ab-45ef-a69d-9e2e3502ab7c","block_type":"box","text":"a result of a default on securities the Fund owns, the receipt of such income may adversely affect the","page_number":117,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"8d7690c2-300f-47a3-9ceb-3080bf28749c","block_type":"box","text":"Fund’s ability to retain its status as a regulated investment company for U.S. federal income tax","page_number":117,"box":{"x":117,"y":800,"width":708,"height":12}},{"id":"c73ce3b4-8676-484d-b351-08ce6bf0a416","block_type":"box","text":"purposes because of certain income source requirements applicable to regulated investment","page_number":117,"box":{"x":117,"y":816,"width":687,"height":12}},{"id":"a81829f6-e18e-460e-801f-c06497fdfa4e","block_type":"box","text":"companies under the Internal Revenue Code of 1986, as amended (the “Code”).","page_number":117,"box":{"x":116,"y":831,"width":602,"height":12}},{"id":"32fd0c57-f7b3-41a2-85d5-8bd480166338","block_type":"box","text":"Securities of Smaller or Emerging Growth Companies.","page_number":117,"box":{"x":117,"y":862,"width":401,"height":12}},{"id":"9f6cd1ff-8c1f-4cab-be5f-570463f2f9eb","block_type":"box","text":"Investment in smaller or emerging growth","page_number":117,"box":{"x":520,"y":862,"width":318,"height":12}},{"id":"6795841d-cef0-4f1b-870a-6a3a3f78aa59","block_type":"box","text":"companies involves greater risk than is customarily associated with investments in more established","page_number":117,"box":{"x":116,"y":878,"width":749,"height":12}},{"id":"2d15cf1d-98f8-44d9-ab05-853f3abb33ac","block_type":"box","text":"II-34","page_number":117,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"230de5d1-690f-4e12-85fe-315c6e0bfa5a","block_type":"box","text":"NM1026U-6039989-117/256","page_number":117,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"399f6688-e60a-4f29-8a6b-8d3dfc51ec4c","block_type":"box","text":"companies. The securities of smaller or emerging growth companies may be subject to more abrupt or","page_number":118,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"8a87ffb9-0061-48b4-a0af-a909d15285e4","block_type":"box","text":"erratic market movements than larger, more established companies or the market average in general.","page_number":118,"box":{"x":116,"y":103,"width":761,"height":12}},{"id":"42d6764d-ae39-4b87-9444-e6d07ad1b2a1","block_type":"box","text":"These companies may have limited product lines, markets or financial resources, or they may be","page_number":118,"box":{"x":116,"y":118,"width":723,"height":12}},{"id":"30511519-8e4d-4c2d-bbe0-d506f5c50d04","block_type":"box","text":"dependent on a limited management group.","page_number":118,"box":{"x":116,"y":134,"width":330,"height":12}},{"id":"87abe635-b454-451e-b200-67b78385375c","block_type":"box","text":"Investments in smaller or emerging growth companies may involve greater risks and thus may be","page_number":118,"box":{"x":117,"y":163,"width":771,"height":12}},{"id":"c246f63f-62dc-490d-9091-98361b869a96","block_type":"box","text":"considered speculative. Full development of these companies and trends frequently takes time.","page_number":118,"box":{"x":116,"y":178,"width":713,"height":12}},{"id":"7bf97f99-cd09-4f14-bcf8-e4078cc02fa8","block_type":"box","text":"Small cap and emerging growth securities will often be traded only in the OTC market or on a regional","page_number":118,"box":{"x":116,"y":207,"width":762,"height":12}},{"id":"f05bd06a-c448-427b-9e16-c3edc552c7df","block_type":"box","text":"securities exchange and may not be traded every day or in the volume typical of trading on a national","page_number":118,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"861ac094-da36-4b34-9d41-e978563bc2ee","block_type":"box","text":"securities exchange. As a result, the disposition by a Fund of portfolio securities to meet redemptions","page_number":118,"box":{"x":116,"y":238,"width":756,"height":12}},{"id":"ab4306a9-66ff-4bdf-84a0-944ab4b06ce1","block_type":"box","text":"or otherwise may require the Fund to make many small sales over a lengthy period of time, or to sell","page_number":118,"box":{"x":116,"y":254,"width":749,"height":12}},{"id":"b76f5a93-284d-4319-b2ac-336828234d49","block_type":"box","text":"these securities at a discount from market prices or during periods when, in Fund management’s","page_number":118,"box":{"x":116,"y":269,"width":722,"height":12}},{"id":"6a2d5d6e-769a-46a6-b038-9bcf9cf80475","block_type":"box","text":"judgment, such disposition is not desirable.","page_number":118,"box":{"x":115,"y":285,"width":326,"height":12}},{"id":"b2496649-1a8f-4dde-bf23-8cad051b2318","block_type":"box","text":"The process of selection and continuous supervision by Fund management does not guarantee","page_number":118,"box":{"x":116,"y":314,"width":714,"height":12}},{"id":"6b6a9853-3c5e-4578-9393-57521ddb8af5","block_type":"box","text":"successful investment results. Careful initial selection is particularly important in this area as many new","page_number":118,"box":{"x":116,"y":329,"width":770,"height":12}},{"id":"32ed4ccf-e6ef-4c82-acb7-9fe5bbf8c794","block_type":"box","text":"enterprises have promise but lack certain of the fundamental factors necessary to prosper. Investing in","page_number":118,"box":{"x":116,"y":345,"width":767,"height":12}},{"id":"7a5d2a76-518b-460f-80d3-491ef1735650","block_type":"box","text":"small cap and emerging growth companies requires specialized research and analysis.","page_number":118,"box":{"x":116,"y":360,"width":651,"height":12}},{"id":"9d308752-9fe4-4a76-bf93-df26ad97effb","block_type":"box","text":"Fund management believes that relatively small companies may have the opportunity to develop into","page_number":118,"box":{"x":117,"y":389,"width":753,"height":12}},{"id":"aeac6f9d-9eed-427d-a3bf-129546e7f949","block_type":"box","text":"significant business enterprises. A Fund may invest in securities of small issuers in the relatively early","page_number":118,"box":{"x":116,"y":405,"width":759,"height":12}},{"id":"597c3790-ed44-4291-8467-4948166aceac","block_type":"box","text":"stages of business development that have a new technology, a unique or proprietary product or","page_number":118,"box":{"x":116,"y":420,"width":714,"height":12}},{"id":"8ce31e9b-128b-49b5-9ebd-0b6431781d8b","block_type":"box","text":"service, or a favorable market position.","page_number":118,"box":{"x":116,"y":436,"width":294,"height":12}},{"id":"824d4682-d978-4024-be49-f7a54e955840","block_type":"box","text":"Equity securities of specific small cap issuers may present different opportunities for long-term capital","page_number":118,"box":{"x":117,"y":465,"width":757,"height":12}},{"id":"c1d7d4d1-c814-40bf-865e-6c9513440211","block_type":"box","text":"appreciation during varying portions of economic or securities market cycles, as well as during varying","page_number":118,"box":{"x":116,"y":480,"width":763,"height":13}},{"id":"0b40f8cb-3d54-4864-b706-2c872ade24e0","block_type":"box","text":"stages of their business development. The market valuation of small cap issuers tends to fluctuate","page_number":118,"box":{"x":116,"y":496,"width":734,"height":12}},{"id":"951d24fe-811d-42ae-b44e-ab1e89e50254","block_type":"box","text":"during economic or market cycles.","page_number":118,"box":{"x":116,"y":512,"width":260,"height":12}},{"id":"70061900-eda7-4a51-a6d2-d93b280143be","block_type":"box","text":"Tracking Stocks","page_number":118,"box":{"x":118,"y":540,"width":117,"height":13}},{"id":"29d9e81a-863a-4c26-a11b-c15c9c633b6c","block_type":"box","text":". A tracking stock is a separate class of common stock whose value is linked to a","page_number":118,"box":{"x":237,"y":540,"width":604,"height":13}},{"id":"24bf4014-32fc-4aef-878d-661b219c2341","block_type":"box","text":"specific business unit or operating division within a larger company and is designed to “track” the","page_number":118,"box":{"x":116,"y":556,"width":723,"height":12}},{"id":"d54766f1-f062-4a67-8d48-2ded57d0541e","block_type":"box","text":"performance of such business unit or division. The tracking stock may pay dividends to shareholders","page_number":118,"box":{"x":117,"y":571,"width":751,"height":13}},{"id":"0621adbb-95cb-4f4f-8e6a-9d4c4fd492c1","block_type":"box","text":"independent of the parent company. The parent company, rather than the business unit or division,","page_number":118,"box":{"x":117,"y":587,"width":739,"height":12}},{"id":"2e01aab8-9d7e-444a-b856-834fbcedb979","block_type":"box","text":"generally is the issuer of tracking stock. However, holders of the tracking stock may not have the same","page_number":118,"box":{"x":116,"y":602,"width":768,"height":13}},{"id":"221f95d0-f0e0-486b-b924-7856e6b009e4","block_type":"box","text":"rights as holders of the company’s common stock.","page_number":118,"box":{"x":117,"y":618,"width":377,"height":12}},{"id":"3c00d420-2a69-46de-b987-a1bf8ed0c679","block_type":"box","text":"Exchange-Traded Notes (“ETNs”).","page_number":118,"box":{"x":116,"y":647,"width":271,"height":12}},{"id":"1aabf559-88ec-4f0d-8235-418358c8f541","block_type":"box","text":"Certain Funds may invest in ETNs. ETNs are generally notes","page_number":118,"box":{"x":389,"y":647,"width":464,"height":12}},{"id":"00ee2790-7d0f-4575-9fcd-7a408de1c3b3","block_type":"box","text":"representing debt of the issuer, usually a financial institution. ETNs combine aspects of both bonds and","page_number":118,"box":{"x":117,"y":663,"width":765,"height":12}},{"id":"5e538f13-7011-4c22-a38c-2c5f4fa53c5a","block_type":"box","text":"ETFs. An ETN’s returns are based on the performance of one or more underlying assets, reference","page_number":118,"box":{"x":117,"y":678,"width":737,"height":12}},{"id":"7bf54a74-41b0-4249-8ca7-2f9c6b96943d","block_type":"box","text":"rates or indexes, minus fees and expenses. Similar to ETFs, ETNs are listed on an exchange and","page_number":118,"box":{"x":117,"y":694,"width":724,"height":12}},{"id":"aff8bf16-a3b5-4eac-92e8-bf71d729d6d2","block_type":"box","text":"traded in the secondary market. However, unlike an ETF, an ETN can be held until the ETN’s maturity,","page_number":118,"box":{"x":116,"y":709,"width":761,"height":12}},{"id":"4050fb1c-0de2-4381-8681-650b502ff506","block_type":"box","text":"at which time the issuer will pay a return linked to the performance of the specific asset, index or rate","page_number":118,"box":{"x":116,"y":725,"width":748,"height":12}},{"id":"ac40d24b-f372-435e-b081-ad6a9d7bec08","block_type":"box","text":"(“reference instrument”) to which the ETN is linked minus certain fees. Unlike regular bonds, ETNs do","page_number":118,"box":{"x":117,"y":740,"width":753,"height":12}},{"id":"47282d7f-5937-48c3-8d5e-d618618adf31","block_type":"box","text":"not make periodic interest payments, and principal is not protected.","page_number":118,"box":{"x":117,"y":756,"width":497,"height":12}},{"id":"dccce35d-34b6-4128-954f-1ea2d5108d1a","block_type":"box","text":"The value of an ETN may be influenced by, among other things, time to maturity, level of supply and","page_number":118,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"be537cde-16d3-4795-b65f-b726c5a727f6","block_type":"box","text":"demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable","page_number":118,"box":{"x":116,"y":800,"width":731,"height":12}},{"id":"17890260-f0ef-49bf-922b-a6347378288b","block_type":"box","text":"interest rates, the performance of the reference instrument, changes in the issuer’s credit rating and","page_number":118,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"71f09848-c503-44b3-ab1c-73ab01851cd3","block_type":"box","text":"economic, legal, political or geographic events that affect the reference instrument. ETNs are subject to","page_number":118,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"751a85d9-772b-4a1b-887b-8e1f108b7791","block_type":"box","text":"credit risk and the value of the ETN may drop due to a downgrade in an issuer’s credit rating, despite","page_number":118,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"b07f9b68-051f-4efc-99e2-4fa4105a93a4","block_type":"box","text":"the underlying reference instrument remaining unchanged. When a Fund invests in ETNs, it will bear","page_number":118,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"278a7fc4-a36e-4b27-b81e-d132e54a1e47","block_type":"box","text":"its proportionate share of any fees and expenses borne by the ETN.","page_number":118,"box":{"x":117,"y":878,"width":509,"height":12}},{"id":"aafb67b3-c556-4c72-8381-4575ee38f63f","block_type":"box","text":"II-35","page_number":118,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5aef4844-8807-4f31-906b-d7a027013c0e","block_type":"box","text":"NM1026U-6039989-118/256","page_number":118,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2ccc8ba8-7c1e-4e81-925b-d057a5e8abcf","block_type":"box","text":"An ETN that is tied to a reference instrument may not replicate the performance of the reference","page_number":119,"box":{"x":116,"y":87,"width":720,"height":12}},{"id":"2f08ce50-9b3c-40ac-9451-11b7d49b371e","block_type":"box","text":"instrument. ETNs also incur certain expenses not incurred by their applicable reference instrument.","page_number":119,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"c2e4d73f-2d36-4e2a-a549-d5422ea5513f","block_type":"box","text":"Some ETNs that use leverage may, at times, be illiquid and","page_number":119,"box":{"x":116,"y":118,"width":446,"height":12}},{"id":"0dfefbfc-0f26-4492-96de-a5ebf016a900","block_type":"box","text":"may be difficult to purchase or sell at a fair","page_number":119,"box":{"x":563,"y":118,"width":319,"height":12}},{"id":"61eed0c6-48d7-4c40-9345-c7ab9fd6a25e","block_type":"box","text":"price. Levered ETNs are subject to the same risk as other instruments that use leverage in any form.","page_number":119,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"01887384-51ab-4c2f-91cb-bd4664d57abc","block_type":"box","text":"While leverage allows for greater potential return, the potential for loss is also greater. Finally,","page_number":119,"box":{"x":116,"y":149,"width":700,"height":12}},{"id":"dc567c6d-aae2-43b0-9fe9-df6bb7ca4587","block_type":"box","text":"additional losses may be incurred if the investment loses value because, in addition to the money lost","page_number":119,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"5f130b64-ddbf-463a-a5a4-3c168a581e1a","block_type":"box","text":"on the investment, the loan still needs to be repaid.","page_number":119,"box":{"x":116,"y":180,"width":384,"height":12}},{"id":"26822e7e-5e0c-4712-b235-c8a24078fc2f","block_type":"box","text":"Because the return on the ETN is dependent on the issuer’s ability or willingness to meet its","page_number":119,"box":{"x":117,"y":210,"width":685,"height":12}},{"id":"85413be8-2dbb-4724-9c8e-73a782f32afb","block_type":"box","text":"obligations, the value of the ETN may change due to a change in the issuer’s credit rating, despite no","page_number":119,"box":{"x":116,"y":226,"width":757,"height":12}},{"id":"fa7d144a-bbb1-4fcf-90d6-f1a4f1f648c0","block_type":"box","text":"change in the underlying reference instrument. The market value of ETN shares may differ from the","page_number":119,"box":{"x":116,"y":241,"width":744,"height":12}},{"id":"55f2ca69-c91d-4732-9fc2-3948c7b01cca","block_type":"box","text":"value of the reference instrument. This difference in price may be due to the fact that the supply and","page_number":119,"box":{"x":116,"y":257,"width":748,"height":12}},{"id":"16a20069-7da3-4dc4-adea-ec1124d1e385","block_type":"box","text":"demand in the market for ETN shares at any point in time is not always identical to the supply and","page_number":119,"box":{"x":116,"y":272,"width":732,"height":12}},{"id":"d9491b39-56e6-463b-bf88-48ca7bcaa825","block_type":"box","text":"demand in the market for the assets underlying the reference instrument that the ETN seeks to track.","page_number":119,"box":{"x":116,"y":288,"width":755,"height":12}},{"id":"2355ba4e-e4c2-4f0b-89ad-7814725f4318","block_type":"box","text":"There may be restrictions on the Fund’s right to redeem its investment in an ETN, which are generally","page_number":119,"box":{"x":116,"y":318,"width":761,"height":12}},{"id":"ee59a283-3961-41c3-86d5-cb2b1b16bae4","block_type":"box","text":"meant to be held until maturity. The Fund’s decision to sell its ETN holdings may be limited by the","page_number":119,"box":{"x":117,"y":333,"width":728,"height":12}},{"id":"07ec0284-1bb5-4bab-9d89-f360bbe60a55","block_type":"box","text":"availability of a secondary market. An investor in an ETN could lose some or all of the amount","page_number":119,"box":{"x":116,"y":349,"width":701,"height":12}},{"id":"bdfb4588-c1c6-4637-8552-17c275109dcd","block_type":"box","text":"invested.","page_number":119,"box":{"x":117,"y":364,"width":71,"height":10}},{"id":"3457cfd2-1b4d-49f2-91a6-65d7c805e222","block_type":"box","text":"ETNs are also subject to tax risks. The Internal Revenue Service (the “IRS”) may not accept, and a","page_number":119,"box":{"x":117,"y":394,"width":739,"height":12}},{"id":"c225fc35-1772-454a-b30f-63f6cf2e4db0","block_type":"box","text":"court may not uphold, how the Funds characterize and treat ETNs for tax purposes. The timing and","page_number":119,"box":{"x":116,"y":410,"width":742,"height":12}},{"id":"538f0958-3995-4b01-8d14-0d97c7918890","block_type":"box","text":"character of income and gains derived by a Fund from investments in ETNs may be affected by future","page_number":119,"box":{"x":116,"y":425,"width":762,"height":12}},{"id":"4383bfdc-4974-408d-9cbf-51f842321751","block_type":"box","text":"legislation, possibly on a retroactive basis.","page_number":119,"box":{"x":117,"y":441,"width":318,"height":12}},{"id":"27f91077-6231-4979-b5f8-69b196698472","block_type":"box","text":"Foreign Investments.","page_number":119,"box":{"x":116,"y":471,"width":174,"height":12}},{"id":"fc056c5a-832e-471e-8af9-e7e52ee5930f","block_type":"box","text":"Foreign Investment Risks.","page_number":119,"box":{"x":116,"y":494,"width":193,"height":12}},{"id":"eaaffe4e-6818-465f-beb0-bb2e3c631276","block_type":"box","text":"Certain Funds may invest in foreign securities, including securities from","page_number":119,"box":{"x":310,"y":493,"width":540,"height":13}},{"id":"62fd6ef1-ab5e-4905-882e-13c86c2bbdde","block_type":"box","text":"issuers located in emerging market countries. These securities may be denominated in U.S. dollars or","page_number":119,"box":{"x":117,"y":509,"width":760,"height":12}},{"id":"d7b0cb81-d9a9-4ff9-83ac-af3b5e6fb216","block_type":"box","text":"in a foreign currency. Investing in foreign securities involves risks not typically associated with investing","page_number":119,"box":{"x":117,"y":524,"width":770,"height":13}},{"id":"789b02af-7618-492a-892e-f4f9aa55b5d1","block_type":"box","text":"in securities of companies organized and operated in the United States that can increase the chances","page_number":119,"box":{"x":117,"y":540,"width":759,"height":12}},{"id":"3b7fd760-2f74-4839-9d25-053037152c48","block_type":"box","text":"that a Fund will lose money.","page_number":119,"box":{"x":116,"y":556,"width":213,"height":12}},{"id":"ffcd5356-8c54-47b5-9b03-95a11dcf6fcc","block_type":"box","text":"Securities issued by certain companies organized outside the United States may not be deemed to be","page_number":119,"box":{"x":116,"y":586,"width":762,"height":12}},{"id":"098ad2e1-b36b-4c5b-83e5-5cd6533cb5d3","block_type":"box","text":"foreign securities (but rather deemed to be U.S. securities) if (i) the company’s principal operations are","page_number":119,"box":{"x":116,"y":601,"width":766,"height":12}},{"id":"637eb6e9-e709-4f09-99c0-3fc5bbf56c66","block_type":"box","text":"conducted from the U.S., (ii) the company’s equity securities trade principally on a U.S. stock","page_number":119,"box":{"x":116,"y":617,"width":694,"height":12}},{"id":"3fcb50db-12e1-4b59-9a9a-bbfa81e0d555","block_type":"box","text":"exchange, (iii) the company does a substantial amount of business in the U.S. or (iv) the issuer of","page_number":119,"box":{"x":116,"y":632,"width":729,"height":12}},{"id":"b4df3b7c-6e9a-405e-9b8b-677973d5c818","block_type":"box","text":"securities is included in the Fund’s primary U.S. benchmark index.","page_number":119,"box":{"x":116,"y":648,"width":496,"height":12}},{"id":"fcd8e478-4fb0-4a59-bc57-6728e4d734df","block_type":"box","text":"In addition to equity securities, foreign investments of the Funds may include: (a) debt obligations","page_number":119,"box":{"x":117,"y":678,"width":721,"height":12}},{"id":"6208ae55-5c56-49dc-889d-cc0cd629dbd8","block_type":"box","text":"issued or guaranteed by foreign sovereign governments or their agencies, authorities, instrumentalities","page_number":119,"box":{"x":117,"y":693,"width":762,"height":12}},{"id":"bfd79847-1082-4045-a29e-fa3d53fbbe03","block_type":"box","text":"or political subdivisions, including a foreign state, province or municipality; (b) debt obligations of","page_number":119,"box":{"x":116,"y":709,"width":716,"height":12}},{"id":"ab971868-9e83-49ac-939d-38950dfdad4f","block_type":"box","text":"supranational organizations; (c) debt obligations of foreign banks and bank holding companies;","page_number":119,"box":{"x":116,"y":724,"width":703,"height":12}},{"id":"e6de306d-d493-45c5-8762-23dfbbc06b83","block_type":"box","text":"(d) debt obligations of domestic banks and corporations issued in foreign currencies; (e) debt","page_number":119,"box":{"x":117,"y":740,"width":689,"height":12}},{"id":"c72ead2c-bd99-4bc3-9a1b-f97e4ed72fe9","block_type":"box","text":"obligations denominated in the Euro; and (f) foreign corporate debt securities and commercial paper.","page_number":119,"box":{"x":116,"y":755,"width":746,"height":12}},{"id":"4efc5935-17e9-40f5-992a-adac987c7099","block_type":"box","text":"Such securities may include loan participations and assignments, convertible securities and","page_number":119,"box":{"x":116,"y":771,"width":678,"height":12}},{"id":"101e2301-5df9-4e0f-920b-c0bc2a339f8d","block_type":"box","text":"zero-coupon securities.","page_number":119,"box":{"x":116,"y":786,"width":172,"height":12}},{"id":"fcc0398a-2421-4032-adce-4959a065b83c","block_type":"box","text":"Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign","page_number":119,"box":{"x":117,"y":816,"width":723,"height":12}},{"id":"2937dad2-74da-42ba-88f6-ce0d59e8ebe3","block_type":"box","text":"withholding taxes.","page_number":119,"box":{"x":116,"y":832,"width":138,"height":12}},{"id":"4ab138a8-33d6-4d4d-a649-a080b9ba7537","block_type":"box","text":"To the extent that the underlying securities or other instruments held by a Fund trade on foreign","page_number":119,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"0382c642-3a0f-468d-85f7-8be5cd1aab4c","block_type":"box","text":"exchanges or in foreign markets that are closed when the securities exchange on which the Fund’s","page_number":119,"box":{"x":116,"y":877,"width":740,"height":12}},{"id":"d49d6b94-5c73-4a9f-869d-4cac8cdeaaf0","block_type":"box","text":"II-36","page_number":119,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"aa1a1bfd-60e5-487a-83ef-38813b59f857","block_type":"box","text":"NM1026U-6039989-119/256","page_number":119,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0796cb27-59f5-411f-baca-0cc1808c33d2","block_type":"box","text":"shares trade is open, there are likely to be deviations between the current price of such an underlying","page_number":120,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"08834752-9946-4dfd-8852-f8fda3d67615","block_type":"box","text":"security and the last quoted price for the underlying security (","page_number":120,"box":{"x":116,"y":102,"width":454,"height":13}},{"id":"1ad4e49d-6c5c-4a5c-a5bb-49e281d285b9","block_type":"box","text":"i.e.","page_number":120,"box":{"x":571,"y":103,"width":20,"height":9}},{"id":"edadf1c7-bcf7-4699-a11c-9fbca0835f6b","block_type":"box","text":", the Fund’s quote from the closed","page_number":120,"box":{"x":594,"y":102,"width":258,"height":12}},{"id":"2bcf9bbd-6dfb-4b11-ad84-b5ac9b1752f8","block_type":"box","text":"foreign market). The impact of a closed foreign market on a Fund is likely to be greater where a large","page_number":120,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"c7ebd407-9ae4-4aa6-8f85-5dc734eaf214","block_type":"box","text":"portion of the Fund’s underlying securities or other instruments trade on that closed foreign market or","page_number":120,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"781df3cb-8a35-482f-afae-be6072aa0c2f","block_type":"box","text":"when the foreign market is closed for unscheduled reasons. These deviations may result in premiums","page_number":120,"box":{"x":116,"y":149,"width":759,"height":12}},{"id":"e27c3df8-fcf6-48a7-b375-cc1476981d25","block_type":"box","text":"or discounts to certain Funds’ NAVs that may be greater than those experienced by other ETFs.","page_number":120,"box":{"x":116,"y":165,"width":718,"height":12}},{"id":"775b0d1a-417e-4ecd-b032-c83036b83f5d","block_type":"box","text":"Foreign Market Risk.","page_number":120,"box":{"x":116,"y":196,"width":152,"height":12}},{"id":"d7847d3b-c6af-44ad-a2b1-3b3a919068d6","block_type":"box","text":"Funds that may invest in foreign securities offer the potential for more","page_number":120,"box":{"x":269,"y":196,"width":521,"height":12}},{"id":"69608798-7ee5-440a-ba43-0aa616747443","block_type":"box","text":"diversification than a Fund that invests only in the United States because securities traded on foreign","page_number":120,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"7d8fe043-5b91-40a9-8af7-3bec2b7bbde7","block_type":"box","text":"markets have often (though not always) performed differently from securities traded in the United","page_number":120,"box":{"x":117,"y":227,"width":715,"height":12}},{"id":"4e8442c2-f75b-4577-9d28-14eba43555cb","block_type":"box","text":"States. However, such investments often involve risks not present in U.S. investments that can increase","page_number":120,"box":{"x":116,"y":242,"width":769,"height":12}},{"id":"bf914cf3-04f3-4070-9331-38b7fef9b7cd","block_type":"box","text":"the chances that a Fund will lose money. In particular, a Fund is subject to the risk that, because there","page_number":120,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"e8b2fcd7-9a32-400a-8871-33623f72b616","block_type":"box","text":"are generally fewer investors on foreign exchanges and a smaller number of shares traded each day, it","page_number":120,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"74cdbde1-35ac-4021-adf4-d15c6292c591","block_type":"box","text":"may be difficult for the Fund to buy and sell securities on those exchanges. In addition, prices of foreign","page_number":120,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"4278a9de-2d03-42fc-b8e9-747d5b4bf9ad","block_type":"box","text":"securities may fluctuate more than prices of securities traded in the United States. Investments in","page_number":120,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"584476ab-4b35-440c-836a-57c8657c3714","block_type":"box","text":"foreign markets may also be adversely affected by governmental actions such as the imposition of","page_number":120,"box":{"x":116,"y":320,"width":727,"height":12}},{"id":"e20413a4-122f-4f9f-957e-025868189f17","block_type":"box","text":"punitive taxes or tariffs. In addition, economic conditions, such as volatile currency exchange rates and","page_number":120,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"e267cf6b-e910-4850-925f-64c3a98a997f","block_type":"box","text":"interest rates, political events, military action and other conditions may, without prior warning, lead to the","page_number":120,"box":{"x":117,"y":351,"width":770,"height":12}},{"id":"a0ede4c5-f31d-49e1-b425-bc6dc596a6eb","block_type":"box","text":"governments of certain countries, or the U.S. Government with respect to certain countries, prohibiting","page_number":120,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"baff4c57-bcd7-4cc1-9bb0-45b0f3002d63","block_type":"box","text":"or imposing substantial restrictions through capital controls and/or sanctions on foreign investing in the","page_number":120,"box":{"x":116,"y":382,"width":758,"height":12}},{"id":"0858efd0-e960-482b-822f-86e9b483a314","block_type":"box","text":"capital markets or certain industries in those countries. Capital controls and/or sanctions may include","page_number":120,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"93dcd0c6-ae9c-4d7c-9bbf-94f778eb7e60","block_type":"box","text":"the prohibition of, or restrictions on, the ability to own or transfer currency, securities, derivatives or","page_number":120,"box":{"x":116,"y":413,"width":730,"height":12}},{"id":"05a8e2db-7ea7-4812-92d1-d229647c4788","block_type":"box","text":"other assets and may also include retaliatory actions of one government against another government,","page_number":120,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"45ad9c19-cbd0-428b-8676-2537e1554f48","block_type":"box","text":"such as seizure of assets. Any of these actions could severely impair a Fund’s ability to purchase, sell,","page_number":120,"box":{"x":116,"y":444,"width":758,"height":12}},{"id":"59a685c2-fb09-478f-b384-d56f33071474","block_type":"box","text":"transfer, receive, deliver or otherwise obtain exposure to foreign securities and assets, including the","page_number":120,"box":{"x":116,"y":459,"width":738,"height":12}},{"id":"3c151926-865e-4bd7-8d74-c57ed04b74d7","block_type":"box","text":"ability to transfer the Fund’s assets or income back into the United States, and could negatively impact","page_number":120,"box":{"x":116,"y":475,"width":758,"height":12}},{"id":"c4aa1df7-84d0-463e-b55a-f72449dd8b50","block_type":"box","text":"the value and/or liquidity of such assets or otherwise adversely affect a Fund’s operations, causing the","page_number":120,"box":{"x":116,"y":490,"width":757,"height":12}},{"id":"5c7d41b6-9c6c-4f13-9857-b91fcb01943b","block_type":"box","text":"Fund to decline in value. Other potential foreign market risks include exchange controls, difficulties in","page_number":120,"box":{"x":117,"y":506,"width":745,"height":12}},{"id":"b36ce93e-36fa-469d-9b10-190ebc41c65d","block_type":"box","text":"pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal","page_number":120,"box":{"x":117,"y":521,"width":727,"height":12}},{"id":"10d7fd2f-3445-464d-a60e-7928b8b54330","block_type":"box","text":"judgments in foreign courts, and political and social conditions, such as diplomatic relations,","page_number":120,"box":{"x":115,"y":537,"width":680,"height":12}},{"id":"966141bd-1732-4976-b602-ce4a9d6cf741","block_type":"box","text":"confiscatory taxation, expropriation, limitation on the removal of funds or assets, or imposition of (or","page_number":120,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"b37d77c9-96b1-4ff2-a902-fffe17bad094","block_type":"box","text":"change in) exchange control regulations. Legal remedies available to investors in certain foreign","page_number":120,"box":{"x":116,"y":568,"width":711,"height":12}},{"id":"48808213-53ef-4386-b3d5-8aa55595ff40","block_type":"box","text":"countries may be less extensive than those available to investors in the United States or other foreign","page_number":120,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"342f413e-5178-4b13-8dba-5c0e9d2fc011","block_type":"box","text":"countries. In addition, changes in government administrations or economic or monetary policies in the","page_number":120,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"e336ecd5-2e63-4edb-9f23-e33b2edf4949","block_type":"box","text":"United States or abroad could result in appreciation or depreciation of portfolio securities and could","page_number":120,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"fa2da139-f112-4d3f-8b18-a6efcefed18b","block_type":"box","text":"favorably or adversely affect a Fund’s operations.","page_number":120,"box":{"x":116,"y":630,"width":368,"height":12}},{"id":"05e06da7-b766-4a74-861f-55838dc62783","block_type":"box","text":"Foreign Economy Risk.","page_number":120,"box":{"x":116,"y":661,"width":172,"height":12}},{"id":"0ee76bb4-f6c2-4e5b-834d-d91286af4d15","block_type":"box","text":"The economies of certain foreign markets often do not compare favorably with","page_number":120,"box":{"x":295,"y":661,"width":579,"height":12}},{"id":"122c8fb5-e246-4c74-af72-a13cf0e7a5ec","block_type":"box","text":"that of the United States with respect to such issues as growth of gross national product, reinvestment","page_number":120,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"c3c2caea-a2eb-469f-8577-3f5eebb04891","block_type":"box","text":"of capital, resources, and balance of payments position. Certain such economies may rely heavily on","page_number":120,"box":{"x":116,"y":692,"width":748,"height":12}},{"id":"8c2117ff-b77f-4e2a-8dff-996a33270dfe","block_type":"box","text":"particular industries or foreign capital and are more vulnerable to diplomatic developments, the","page_number":120,"box":{"x":117,"y":707,"width":702,"height":12}},{"id":"e34e7610-f1f4-4302-90de-b9c28cd4acb0","block_type":"box","text":"imposition of economic sanctions against a particular country or countries, changes in international","page_number":120,"box":{"x":117,"y":723,"width":731,"height":12}},{"id":"1789d082-f610-451b-9472-c04037924950","block_type":"box","text":"trading patterns, trade barriers, and other protectionist or retaliatory measures.","page_number":120,"box":{"x":116,"y":738,"width":582,"height":12}},{"id":"f0b0de4f-980b-4d9a-a5eb-eac81c6a8a01","block_type":"box","text":"Currency Risk and Exchange Risk.","page_number":120,"box":{"x":117,"y":769,"width":257,"height":12}},{"id":"8a4e687e-269d-47fa-93e0-e6b09898b0fa","block_type":"box","text":"Because foreign securities generally are denominated and pay","page_number":120,"box":{"x":382,"y":769,"width":464,"height":12}},{"id":"8f9b8ad7-c5eb-4fdf-9c47-9411f0470a29","block_type":"box","text":"dividends or interest in foreign currencies, the value of a Fund that invests in foreign securities as","page_number":120,"box":{"x":116,"y":785,"width":721,"height":12}},{"id":"f9868324-e748-488c-b82a-16dadcaa4755","block_type":"box","text":"measured in U.S. dollars will be affected favorably or unfavorably by changes in exchange rates.","page_number":120,"box":{"x":117,"y":800,"width":715,"height":12}},{"id":"acfb2545-cf38-44be-90df-4e68658d4a3e","block_type":"box","text":"Generally, when the U.S. dollar rises in value against a foreign currency, a security denominated in","page_number":120,"box":{"x":117,"y":816,"width":733,"height":12}},{"id":"b0a67cd7-8cfa-42c3-8914-1e697a7825d7","block_type":"box","text":"that currency loses value because the currency is worth fewer U.S. dollars. Conversely, when the U.S.","page_number":120,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"ee71be0a-2728-42b7-acb0-26f5e3c5497a","block_type":"box","text":"dollar decreases in value against a foreign currency, a security denominated in that currency gains","page_number":120,"box":{"x":116,"y":847,"width":737,"height":12}},{"id":"f3928055-6d60-4149-9203-ac924191cfba","block_type":"box","text":"value because the currency is worth more U.S. dollars. This risk, generally known as “currency risk,”","page_number":120,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"e9e82345-aa2e-46fd-b721-a8043a11bd98","block_type":"box","text":"means that a stronger U.S. dollar will reduce returns for U.S. investors while a weak U.S. dollar will","page_number":120,"box":{"x":117,"y":878,"width":738,"height":12}},{"id":"eae056f6-c62d-4d5b-a6ff-59dbae4b4b04","block_type":"box","text":"II-37","page_number":120,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"636b6e05-14ed-48a0-953b-c7d08a29f569","block_type":"box","text":"NM1026U-6039989-120/256","page_number":120,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6724eadf-f481-4e00-add9-8c50cd1941b8","block_type":"box","text":"increase those returns. Currency exchange rates can also be affected unpredictably by intervention by","page_number":121,"box":{"x":117,"y":87,"width":764,"height":12}},{"id":"22da49a8-ed6d-4260-9c77-7d55b6ecde68","block_type":"box","text":"U.S. or foreign governments or central banks, or the failure to intervene, or buy currency controls or","page_number":121,"box":{"x":117,"y":102,"width":743,"height":13}},{"id":"4bded75a-d27a-40ea-ac46-2b4962e5257e","block_type":"box","text":"political developments in the United States or abroad.","page_number":121,"box":{"x":117,"y":118,"width":402,"height":12}},{"id":"11061ef1-6596-45f4-a1c6-c1a75a40f786","block_type":"box","text":"Governmental Supervision and Regulation/Accounting Standards. Many foreign governments","page_number":121,"box":{"x":117,"y":149,"width":697,"height":12}},{"id":"3fbd7c34-bfbe-4358-a1f0-b628a917fac0","block_type":"box","text":"supervise and regulate stock exchanges, brokers and the sale of securities less than does the United","page_number":121,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"95f173c8-0f49-4b3d-ad68-68c204da52dd","block_type":"box","text":"States. Some countries may not have laws to protect investors comparable to the U.S. securities laws.","page_number":121,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"5bee6b6a-17e7-4bd7-af97-8bd1312388ab","block_type":"box","text":"For example, some foreign countries may have no laws or rules against insider trading. Insider trading","page_number":121,"box":{"x":117,"y":196,"width":762,"height":12}},{"id":"a6c05da0-bd1f-4a36-9861-e9bb6c49c52d","block_type":"box","text":"occurs when a person buys or sells a company’s securities based on nonpublic information about that","page_number":121,"box":{"x":116,"y":211,"width":760,"height":12}},{"id":"7202313b-5f90-4eda-95bb-91dc18727de5","block_type":"box","text":"company. Accounting standards in other countries are not necessarily the same as in the United","page_number":121,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"cf860b29-68a7-4462-b350-e1801134c273","block_type":"box","text":"States. If the accounting standards in another country do not require as much detail as U.S. accounting","page_number":121,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"f7f8136f-6f62-4778-9250-06b1d8328d6f","block_type":"box","text":"standards, it may be harder for Fund management to completely and accurately determine a","page_number":121,"box":{"x":116,"y":258,"width":691,"height":12}},{"id":"94920ec6-f1fd-4e94-a404-b3d3384b0231","block_type":"box","text":"company’s financial condition. In addition, the U.S. Government has from time to time in the past","page_number":121,"box":{"x":116,"y":273,"width":722,"height":12}},{"id":"7b85b936-fc70-4483-90c4-fa3241529288","block_type":"box","text":"imposed restrictions, through penalties and otherwise, on foreign investments by U.S. investors such","page_number":121,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"5ad0d441-18a0-47b7-9a00-d0086f190a5a","block_type":"box","text":"as the Fund. If such restrictions should be reinstituted, it might become necessary for the Fund to","page_number":121,"box":{"x":116,"y":304,"width":727,"height":12}},{"id":"ddf2bec7-f27b-4095-80ff-086c51f5b32c","block_type":"box","text":"invest all or substantially all of its assets in U.S. securities. Also, brokerage commissions and other","page_number":121,"box":{"x":117,"y":320,"width":737,"height":12}},{"id":"c1836b00-fe62-420a-9662-c8c71afd206f","block_type":"box","text":"costs of buying or selling securities often are higher in foreign countries than they are in the United","page_number":121,"box":{"x":116,"y":335,"width":736,"height":12}},{"id":"36874123-f98b-4e6e-a2dd-878493452df6","block_type":"box","text":"States. This reduces the amount the Fund can earn on its investments.","page_number":121,"box":{"x":116,"y":351,"width":532,"height":9}},{"id":"9417ae86-3d20-474c-a6b5-713653243880","block_type":"box","text":"Certain Risks of Holding Fund Assets Outside the United States.","page_number":121,"box":{"x":117,"y":382,"width":477,"height":12}},{"id":"997a7e34-fbe6-4bfc-96ab-e4845e5c49a6","block_type":"box","text":"A Fund generally holds its foreign","page_number":121,"box":{"x":596,"y":382,"width":259,"height":12}},{"id":"5297bd69-0c70-409e-bce3-db04394b16ae","block_type":"box","text":"securities and cash in foreign banks and securities depositories. Some foreign banks and securities","page_number":121,"box":{"x":116,"y":397,"width":743,"height":12}},{"id":"d2c42212-3cd5-439f-97f3-90a68abad72b","block_type":"box","text":"depositories may be recently organized or new to the foreign custody business. In addition, there may","page_number":121,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"6de680f2-cbc3-48a2-b8ac-91d4a3c1bcb2","block_type":"box","text":"be limited or no regulatory oversight over their operations. Also, the laws of certain countries may put","page_number":121,"box":{"x":117,"y":428,"width":754,"height":12}},{"id":"651d624a-4297-4a23-b54d-08899f2d8c06","block_type":"box","text":"limits on a Fund’s ability to recover its assets if a foreign bank or depository or issuer of a security or","page_number":121,"box":{"x":117,"y":444,"width":747,"height":12}},{"id":"af733440-ed3f-4487-9bb6-1e2fee7c2996","block_type":"box","text":"any of their agents goes bankrupt. In addition, it is often more expensive for a Fund to buy, sell and","page_number":121,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"344e29f1-b30f-4401-92b4-49b5ca6249f3","block_type":"box","text":"hold securities in certain foreign markets than in the United States. The increased expense of investing","page_number":121,"box":{"x":117,"y":475,"width":768,"height":12}},{"id":"89ad008e-140c-4fc8-806d-e29b97c9e768","block_type":"box","text":"in foreign markets reduces the amount a Fund can earn on its investments and typically results in a","page_number":121,"box":{"x":117,"y":490,"width":741,"height":12}},{"id":"843b410d-f108-4030-bac6-1d93dc686529","block_type":"box","text":"higher operating expense ratio for the Fund as compared to investment companies that invest only in","page_number":121,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"a778a1ab-a2ae-4149-8051-0d4c48aec1c6","block_type":"box","text":"the United States.","page_number":121,"box":{"x":116,"y":521,"width":138,"height":10}},{"id":"ff82e3da-773b-426b-9b6f-a1800055dffc","block_type":"box","text":"Publicly Available Information.","page_number":121,"box":{"x":116,"y":552,"width":222,"height":12}},{"id":"d1146765-bc3a-4d7b-9b81-e0329a661f07","block_type":"box","text":"In general, less information is publicly available with respect to foreign","page_number":121,"box":{"x":340,"y":552,"width":529,"height":12}},{"id":"049dd10b-d01f-495a-aaed-36ae42447804","block_type":"box","text":"issuers than is available with respect to U.S. companies. Most foreign companies are also not subject","page_number":121,"box":{"x":117,"y":568,"width":758,"height":12}},{"id":"b6e9a4db-ca0a-4ad1-a764-14077e41782d","block_type":"box","text":"to the uniform accounting and financial reporting requirements applicable to issuers in the United","page_number":121,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"a65f85df-823f-453b-bba9-90a2fc9ab47d","block_type":"box","text":"States. While the volume of transactions effected on foreign stock exchanges has increased in recent","page_number":121,"box":{"x":116,"y":599,"width":758,"height":12}},{"id":"b3c20ce6-2887-4b5e-9d3b-8c5d1d0fa6d5","block_type":"box","text":"years, it remains appreciably below that of the New York Stock Exchange. Accordingly, a Fund’s","page_number":121,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"bb5591fe-6109-438c-9211-dc7fe55e00ea","block_type":"box","text":"foreign investments may be less liquid than, and their prices may be more volatile than, comparable","page_number":121,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"2ac5ed3b-38f5-41ad-aa8e-d85fe1ec0e66","block_type":"box","text":"investments in securities in U.S. companies. In addition, there is generally less government supervision","page_number":121,"box":{"x":117,"y":645,"width":771,"height":12}},{"id":"e99bdf99-df98-42be-a4b9-431a931e0e68","block_type":"box","text":"and regulation of securities exchanges, brokers and issuers in foreign countries than in the United","page_number":121,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"22625760-02d3-4c33-97ba-87d6696f7eae","block_type":"box","text":"States.","page_number":121,"box":{"x":116,"y":676,"width":51,"height":10}},{"id":"5fa3d474-9d20-43e0-a216-6df91bc6c6ef","block_type":"box","text":"Settlement Risk.","page_number":121,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"df3300d0-7420-4d44-8a1b-2518fae7d608","block_type":"box","text":"Settlement and clearance procedures in certain foreign markets differ significantly","page_number":121,"box":{"x":244,"y":707,"width":606,"height":12}},{"id":"61749a0f-0e70-471d-8783-2292fb8361af","block_type":"box","text":"from those in the United States. Supervisory authorities may also be unable to apply standards which","page_number":121,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"c9b6e973-1bda-4af9-8c2e-c3fc2320866f","block_type":"box","text":"are comparable with those in the United States. Foreign settlement procedures and trade regulations","page_number":121,"box":{"x":116,"y":738,"width":749,"height":12}},{"id":"a39eba60-aa83-48f0-a703-a374318a2d80","block_type":"box","text":"also may involve certain risks (such as delays in payment for or delivery of securities) not typically","page_number":121,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"9bd2cb41-acdb-4375-96f0-5ecb43d8d27c","block_type":"box","text":"generated by the settlement of U.S. investments.","page_number":121,"box":{"x":116,"y":769,"width":362,"height":12}},{"id":"781ef89b-67e9-485f-8934-7b0b9b867215","block_type":"box","text":"Communications between the United States and emerging market countries may be unreliable,","page_number":121,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"38e51e26-1c0d-4ecd-91ff-e33f0e6538a9","block_type":"box","text":"increasing the risk of delayed settlements or losses of security certificates in markets that still rely on","page_number":121,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"c608ea73-d2ee-4f30-86fa-4ebd0bdc971c","block_type":"box","text":"physical settlement. Settlements in certain foreign countries at times have not kept pace with the","page_number":121,"box":{"x":117,"y":831,"width":720,"height":12}},{"id":"0e0e8558-4197-465a-b783-fb3e7972988d","block_type":"box","text":"number of securities transactions; these problems may make it difficult for a Fund to carry out","page_number":121,"box":{"x":117,"y":847,"width":698,"height":12}},{"id":"aeab69bc-9be4-4d84-8272-1c2dcf919b1c","block_type":"box","text":"transactions. If a Fund cannot settle or is delayed in settling a purchase of securities, it may miss","page_number":121,"box":{"x":116,"y":862,"width":723,"height":12}},{"id":"05c46c8f-1c8d-4237-af6a-04ca5382e9bb","block_type":"box","text":"attractive investment opportunities and certain of its assets may be uninvested with no return earned","page_number":121,"box":{"x":116,"y":878,"width":751,"height":12}},{"id":"64e0b72b-7e17-49da-ae2e-989f007e88dc","block_type":"box","text":"II-38","page_number":121,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a08005b2-727b-4691-9f23-2852ebb7439e","block_type":"box","text":"NM1026U-6039989-121/256","page_number":121,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1036d207-da83-4032-ba20-fcd7f9f3fe4c","block_type":"box","text":"thereon for some period. If a Fund cannot settle or is delayed in settling a sale of securities, it may lose","page_number":122,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"dcd46133-32a1-457b-a6a2-f75fecdc99b6","block_type":"box","text":"money if the value of the security then declines or, if it has contracted to sell the security to another","page_number":122,"box":{"x":117,"y":102,"width":739,"height":13}},{"id":"f4f0ddf7-6f80-46a6-a5cd-3b4ff82a6dd3","block_type":"box","text":"party, the Fund could be liable to that party for any losses incurred.","page_number":122,"box":{"x":117,"y":118,"width":501,"height":12}},{"id":"874ca72c-cbdc-4690-a4d8-47e9a961dc9d","block_type":"box","text":"Because of uncertainties in the operation of settlement systems in individual markets, competing","page_number":122,"box":{"x":117,"y":149,"width":720,"height":12}},{"id":"c8db5bda-9b78-4080-a502-549622a18d21","block_type":"box","text":"claims may arise in respect of securities held by or to be transferred to a Fund. Compensation","page_number":122,"box":{"x":116,"y":165,"width":703,"height":12}},{"id":"fee1d42a-8aeb-42be-a4ef-3d5713d33716","block_type":"box","text":"schemes may not exist or may otherwise be limited or inadequate to meet the Fund’s claims in case of","page_number":122,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"f4e876f5-44cd-4f8c-971e-810a345f0eba","block_type":"box","text":"such event.","page_number":122,"box":{"x":116,"y":196,"width":90,"height":9}},{"id":"a105b666-ba7c-4de0-a7b0-31c56555d0bf","block_type":"box","text":"Sovereign Debt.","page_number":122,"box":{"x":117,"y":227,"width":115,"height":12}},{"id":"029641b9-b7c4-40ba-8dc7-0256a5a3bfa7","block_type":"box","text":"Investment in sovereign debt can involv","page_number":122,"box":{"x":234,"y":227,"width":293,"height":12}},{"id":"00629871-ca75-4030-bca0-bc4f2a779d88","block_type":"box","text":"e a high degree of risk. The governmental entity","page_number":122,"box":{"x":527,"y":227,"width":353,"height":12}},{"id":"d9eaf9df-917b-40c8-8a28-cb47fda0a2fb","block_type":"box","text":"that controls the repayment of sovereign debt ma","page_number":122,"box":{"x":116,"y":242,"width":357,"height":12}},{"id":"2819e4b9-561f-4d23-82e6-1e07a44f9768","block_type":"box","text":"y not be able or willing to repay the principal and/or","page_number":122,"box":{"x":474,"y":242,"width":375,"height":12}},{"id":"e48b1733-a909-442d-a8d8-6d8ba6329c6c","block_type":"box","text":"interest when due in accordance with the terms of","page_number":122,"box":{"x":117,"y":258,"width":362,"height":9}},{"id":"c7583d99-47c0-47d7-ad3f-b6eb412bc298","block_type":"box","text":"f such debt. A governmental entity’s willingness or","page_number":122,"box":{"x":478,"y":258,"width":364,"height":12}},{"id":"f905541e-8d01-4766-bf08-7e86e17bafca","block_type":"box","text":"ability to repay principal and interest due in a timely","page_number":122,"box":{"x":116,"y":273,"width":372,"height":12}},{"id":"23f43dd4-e454-4d0b-abe7-82e26807f44d","block_type":"box","text":"y manner may be affected by, among other factors, its","page_number":122,"box":{"x":488,"y":273,"width":390,"height":12}},{"id":"8caeae26-0ead-473e-a41a-9657d2425d19","block_type":"box","text":"cash flow situation, the extent of its foreign rese","page_number":122,"box":{"x":116,"y":289,"width":346,"height":12}},{"id":"3f589cea-4847-4630-8ded-f397bb2a75f7","block_type":"box","text":"rves, the availability of sufficient foreign exchange on the","page_number":122,"box":{"x":463,"y":289,"width":415,"height":12}},{"id":"3363cd76-79a9-45bc-a8a5-39cde72f3387","block_type":"box","text":"date a payment is due, the relative size of the","page_number":122,"box":{"x":116,"y":304,"width":335,"height":12}},{"id":"fa3fde5c-50b3-4c45-932e-40d61a652739","block_type":"box","text":"debt service burden to the economy as a whole, the","page_number":122,"box":{"x":452,"y":304,"width":381,"height":12}},{"id":"67799be3-1051-4a96-b4bc-89d829c82583","block_type":"box","text":"governmental entity’s policy towards the Internati","page_number":122,"box":{"x":116,"y":320,"width":354,"height":12}},{"id":"80eab60b-1ffc-4666-b077-d71508de57f3","block_type":"box","text":"onal Monetary Fund and the political constraints to","page_number":122,"box":{"x":472,"y":320,"width":372,"height":12}},{"id":"2291b669-2944-4cc0-a30c-bae5f66d1579","block_type":"box","text":"which a governmental entity may be subject. Gove","page_number":122,"box":{"x":116,"y":335,"width":367,"height":12}},{"id":"6dd021e9-7aef-438d-a6e8-b23656810391","block_type":"box","text":"rnmental entities may also be dependent on expected","page_number":122,"box":{"x":485,"y":335,"width":395,"height":12}},{"id":"ca6d5e7d-09d1-4227-996c-4ea16509cca4","block_type":"box","text":"disbursements from foreign governments, multila","page_number":122,"box":{"x":116,"y":351,"width":355,"height":12}},{"id":"eb69ca21-bad3-44c7-9a97-69e5e2aae833","block_type":"box","text":"teral agencies and others abroad to reduce principal","page_number":122,"box":{"x":472,"y":351,"width":384,"height":12}},{"id":"787af7a1-472c-4ae3-b676-f7ace64fd365","block_type":"box","text":"and interest arrearages on their debt. The commitment","page_number":122,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"f9fbb0f3-3976-4261-aa19-1ac2f57e42d2","block_type":"box","text":"t on the part of these governments, agencies and","page_number":122,"box":{"x":514,"y":366,"width":358,"height":12}},{"id":"8c976e17-74ac-4aac-a794-1eb594636d4e","block_type":"box","text":"others to make such disbursements may be condi","page_number":122,"box":{"x":116,"y":382,"width":362,"height":12}},{"id":"43c0b546-9009-4d2d-9dae-289e537d2673","block_type":"box","text":"tioned on the implementation of economic reforms and/","page_number":122,"box":{"x":479,"y":382,"width":402,"height":12}},{"id":"cff5dc36-67f2-4375-9a3a-6380a9307dd7","block_type":"box","text":"or economic performance and the timely service of such","page_number":122,"box":{"x":116,"y":397,"width":407,"height":12}},{"id":"c0023f29-bb7d-4e65-81e5-034436115f00","block_type":"box","text":"debtor’s obligations. Failure to implement such","page_number":122,"box":{"x":524,"y":397,"width":349,"height":12}},{"id":"c8a292db-9b3b-496c-8314-d622c77d006a","block_type":"box","text":"reforms, achieve such levels of economic performance","page_number":122,"box":{"x":117,"y":413,"width":402,"height":12}},{"id":"de88e9cb-daae-483f-aecf-e095f4827425","block_type":"box","text":"or repay principal or interest when due may result","page_number":122,"box":{"x":519,"y":413,"width":365,"height":12}},{"id":"1e1e29c4-646e-48f8-bcb7-56f39ff1bafa","block_type":"box","text":"in the cancellation of such third parties’ commitments","page_number":122,"box":{"x":117,"y":428,"width":389,"height":12}},{"id":"1a105657-1aad-4ba0-87a4-1adbb86d18d2","block_type":"box","text":"to lend funds to the governmental entity, which may","page_number":122,"box":{"x":506,"y":428,"width":380,"height":12}},{"id":"13589762-3f8d-492e-b158-b8d312781e42","block_type":"box","text":"further impair such debtor’s ability or willingness to t","page_number":122,"box":{"x":116,"y":444,"width":372,"height":12}},{"id":"05b3dcfe-51d1-404d-955f-00f8229930aa","block_type":"box","text":"timely service its debts. Consequently, governmental","page_number":122,"box":{"x":487,"y":444,"width":389,"height":12}},{"id":"acc212f5-8dbc-4e06-8ed6-24a3a215b546","block_type":"box","text":"entities may default on their sovereign debt.","page_number":122,"box":{"x":116,"y":459,"width":323,"height":12}},{"id":"26d5e702-7d82-4af1-b785-a09d2317e5d3","block_type":"box","text":"Holders of sovereign debt may be requested to participate in the rescheduling of such debt and to","page_number":122,"box":{"x":117,"y":490,"width":730,"height":12}},{"id":"095af468-80ef-49d1-965b-9ce83ef19d83","block_type":"box","text":"extend further loans to governmental entities. In the event of a default by a governmental entity, there","page_number":122,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"a535bda8-bdcd-4103-a5fd-d7eefc396c10","block_type":"box","text":"may be few or no effective legal remedies for collecting on such debt.","page_number":122,"box":{"x":117,"y":521,"width":519,"height":12}},{"id":"63eb5a6e-e1d7-4d8d-b750-513f91a52b0a","block_type":"box","text":"Withholding Tax Reclaims Risk","page_number":122,"box":{"x":118,"y":552,"width":226,"height":12}},{"id":"808808ca-5b0d-40d2-9335-868f5baaeafd","block_type":"box","text":". A Fund may file claims to recover foreign withholding taxes on dividend","page_number":122,"box":{"x":344,"y":552,"width":530,"height":12}},{"id":"cf37a525-beeb-464d-8c3d-ac735346d6b0","block_type":"box","text":"and interest income (if any) received from issuers in","page_number":122,"box":{"x":116,"y":568,"width":381,"height":12}},{"id":"4729ff75-a27c-4276-924e-0c655e85eebf","block_type":"box","text":"certain countries and capital gains on the disposition","page_number":122,"box":{"x":498,"y":568,"width":385,"height":12}},{"id":"0f5428b1-f075-495a-b0e6-45577622a8ca","block_type":"box","text":"of stocks or securities where such withholding ta","page_number":122,"box":{"x":116,"y":583,"width":351,"height":12}},{"id":"4043b45e-ce26-46ec-bf8f-14f7ce12bd23","block_type":"box","text":"x reclaim is possible. Whether or when a Fund will","page_number":122,"box":{"x":468,"y":583,"width":369,"height":12}},{"id":"1b10080d-a2ee-445c-9cae-94632b3563cc","block_type":"box","text":"receive a withholding tax refund is within the control","page_number":122,"box":{"x":117,"y":599,"width":379,"height":12}},{"id":"c1eebf2a-b557-4a54-af5e-a4969e168a9a","block_type":"box","text":"of the tax authorities in such countries. Where a","page_number":122,"box":{"x":496,"y":599,"width":352,"height":9}},{"id":"f2f76afd-7a90-47f5-8297-55c52273a0c1","block_type":"box","text":"Fund expects to recover withholding taxes, the net asset value of the Fund generally includes accruals","page_number":122,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"6a621af0-20f8-44cd-82ce-bc62a99fc8b2","block_type":"box","text":"for such tax refunds. Each Fund regularly evaluates","page_number":122,"box":{"x":116,"y":630,"width":375,"height":12}},{"id":"cff98c33-bc40-480b-bffd-128d6b9ee0f5","block_type":"box","text":"the probability of recovery. If the likelihood of","page_number":122,"box":{"x":492,"y":630,"width":334,"height":12}},{"id":"c4c89a43-e3e7-4015-96c6-42898ab7235b","block_type":"box","text":"recovery materially decreases, due to, for example,","page_number":122,"box":{"x":117,"y":645,"width":377,"height":12}},{"id":"af14c680-fe8b-459a-bc4c-923167e6a4a9","block_type":"box","text":"a change in tax regulation or approach in the foreign","page_number":122,"box":{"x":494,"y":645,"width":385,"height":12}},{"id":"9304bd00-9026-41b5-b4e0-2899fa0d8c01","block_type":"box","text":"country, accruals in a Fund’s net asset value for such","page_number":122,"box":{"x":116,"y":661,"width":387,"height":12}},{"id":"5cf900af-fe4b-4147-8136-d4690b263ba4","block_type":"box","text":"refunds may be written down partially or in full,","page_number":122,"box":{"x":509,"y":661,"width":336,"height":12}},{"id":"8ad6430d-86e1-4a68-8796-cebc39e1f5a2","block_type":"box","text":"which will adversely affect the Fund’s net asset value.","page_number":122,"box":{"x":116,"y":676,"width":389,"height":12}},{"id":"bc610a02-991a-4e8e-a077-12f194085c6f","block_type":"box","text":"Shareholders in a Fund at the time an accrual is","page_number":122,"box":{"x":511,"y":676,"width":348,"height":10}},{"id":"e1481b25-4786-4a31-9738-269bb118aebd","block_type":"box","text":"written down will bear the impact of t","page_number":122,"box":{"x":116,"y":692,"width":265,"height":12}},{"id":"c13bc908-7431-4419-9a5b-e8e5a4b1e51e","block_type":"box","text":"he resulting reduction in net asset","page_number":122,"box":{"x":382,"y":692,"width":244,"height":12}},{"id":"f28805ca-744f-421b-a9aa-b50dc6ad6984","block_type":"box","text":"value regardless of whether they","page_number":122,"box":{"x":631,"y":692,"width":238,"height":12}},{"id":"583fb53e-cd6b-4dd0-8925-0487a0bafd9a","block_type":"box","text":"were shareholders during the accrual period. Converse","page_number":122,"box":{"x":116,"y":707,"width":400,"height":12}},{"id":"291cb324-a256-4276-b3d8-64de9e6b32f8","block_type":"box","text":"ly, if a Fund receives a tax refund that has not","page_number":122,"box":{"x":518,"y":707,"width":331,"height":12}},{"id":"9756e53b-84d3-4137-8050-3dba1c5b0888","block_type":"box","text":"been previously accrued, shareholders in the Fund at t","page_number":122,"box":{"x":117,"y":723,"width":396,"height":12}},{"id":"bf1eaa9f-1b37-449c-9b50-c3c4088bc9af","block_type":"box","text":"he time of the successful recovery will benefit from","page_number":122,"box":{"x":514,"y":723,"width":365,"height":12}},{"id":"7b2d91cb-0b55-4c2f-8ab2-1dbdfdfa284e","block_type":"box","text":"the resulting increase in the Fund’s net asset value.","page_number":122,"box":{"x":116,"y":738,"width":373,"height":12}},{"id":"83f4b131-48e0-4805-a279-d2e8e3a9faee","block_type":"box","text":"Shareholders who disposed of their shares prior to","page_number":122,"box":{"x":496,"y":738,"width":366,"height":12}},{"id":"4b1cde46-546d-4f79-bdb3-fec653aeb318","block_type":"box","text":"such time will not benefit from such increase in the Fund’s net asset value.","page_number":122,"box":{"x":116,"y":754,"width":540,"height":9}},{"id":"613c2c0b-bcd6-4106-8c2c-3d489b36c3d4","block_type":"box","text":"U.S. Economic Trading Partners Risk.","page_number":122,"box":{"x":117,"y":785,"width":280,"height":12}},{"id":"236d6c80-c96e-413e-8209-c7b1d9054b83","block_type":"box","text":"The United States is a significant, and in some cases the most","page_number":122,"box":{"x":404,"y":785,"width":464,"height":12}},{"id":"4ce5e3d4-267d-4ace-8146-ff8effc5fdf4","block_type":"box","text":"significant, trading partner of, or foreign investor in, certain countries in which a Fund may invest. As a","page_number":122,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"17124ec8-b014-4046-b325-5b45d855ee40","block_type":"box","text":"result, economic conditions of such countries may be particularly affected by changes in the U.S.","page_number":122,"box":{"x":117,"y":816,"width":717,"height":12}},{"id":"fc5c40d3-3182-4a2d-87c8-fc4d28806f0e","block_type":"box","text":"economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs, changes","page_number":122,"box":{"x":116,"y":831,"width":770,"height":12}},{"id":"c4eb2454-17e8-4439-930c-c802eb8f6c71","block_type":"box","text":"in the U.S. dollar exchange rate or an economic slowdown in the United States may have a material","page_number":122,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"fe102007-2dcc-45c4-b40e-50bf6301aadb","block_type":"box","text":"adverse effect on a country’s economic conditions and, as a result, securities to which the Fund has","page_number":122,"box":{"x":116,"y":862,"width":746,"height":12}},{"id":"d05b5c83-e832-433c-8515-820d0237a44c","block_type":"box","text":"exposure. Circumstances could arise that could prevent the timely payment of interest or principal on","page_number":122,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"87f463bf-439a-44bf-bd0b-89726a51acb4","block_type":"box","text":"II-39","page_number":122,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2647dd3e-6b38-42a3-8b44-61ce94b0d161","block_type":"box","text":"NM1026U-6039989-122/256","page_number":122,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"07820932-18bf-4621-846b-40b724a3914f","block_type":"box","text":"U.S. Government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result","page_number":123,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"6a44de24-2b3c-40a1-be8e-e65f6b1a0474","block_type":"box","text":"in substantial negative consequences for the U.S. economy and the global financial system.","page_number":123,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"a068622d-cc1a-417c-a870-58a3274ae9be","block_type":"box","text":"There are strained relations between the United States and a number of foreign countries, including","page_number":123,"box":{"x":116,"y":135,"width":745,"height":12}},{"id":"75e6739f-f602-4634-9b89-ea90a3910d81","block_type":"box","text":"traditional allies, such as certain European countries, and historical adversaries, such as North Korea,","page_number":123,"box":{"x":116,"y":151,"width":761,"height":11}},{"id":"f6dc7ee6-f148-4bb2-b7f5-732f0e2613d2","block_type":"box","text":"Iran, China and Russia. If these relations were to worsen, it could adversely affect U.S. issuers as well","page_number":123,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"b65c5262-4a37-4084-acf9-04fb8ee7012a","block_type":"box","text":"as non-U.S. issuers that rely on the United States for trade. The United States has also experienced","page_number":123,"box":{"x":116,"y":181,"width":748,"height":12}},{"id":"4d18f0b9-fc12-462c-baa7-f537725235ad","block_type":"box","text":"increased internal unrest and discord. If these trends were to continue, it may have an adverse impact","page_number":123,"box":{"x":117,"y":197,"width":761,"height":12}},{"id":"b8a7a287-6f62-4e59-85c9-ade580a441b2","block_type":"box","text":"on the U.S. economy and many of the issuers in which a Fund may invest.","page_number":123,"box":{"x":116,"y":212,"width":557,"height":12}},{"id":"3b73ab53-6a5a-4362-83b1-14790ee1827a","block_type":"box","text":"Funding Agreements.","page_number":123,"box":{"x":116,"y":245,"width":171,"height":12}},{"id":"36746fbf-89c6-4c4f-b35c-dd178c9b1be8","block_type":"box","text":"Certain Funds may invest in Guaranteed Investment Contracts and similar","page_number":123,"box":{"x":289,"y":245,"width":561,"height":12}},{"id":"fbdcc78f-74b5-42a6-912f-afd4e0d6d60f","block_type":"box","text":"funding agreements. In connection with these investments, a Fund makes cash contributions to a","page_number":123,"box":{"x":116,"y":260,"width":727,"height":12}},{"id":"48f7bc68-c55f-4796-bdda-b3c2471b36f4","block_type":"box","text":"deposit fund of an insurance company’s general account. The insurance company then credits to the","page_number":123,"box":{"x":116,"y":276,"width":753,"height":12}},{"id":"bd9c9b4a-db05-405c-81a9-2834d374d17b","block_type":"box","text":"Fund on a monthly basis guaranteed interest, which is based on an index. The funding agreements","page_number":123,"box":{"x":117,"y":291,"width":740,"height":12}},{"id":"4f076014-ba5c-41d4-894a-83df853470a1","block_type":"box","text":"provide that this guaranteed interest will not be less than a certain minimum rate. The purchase price","page_number":123,"box":{"x":117,"y":307,"width":753,"height":12}},{"id":"9f04d085-2ed6-4521-a482-ffd85a23cf93","block_type":"box","text":"paid for a funding agreement becomes part of the general assets of the insurance company, and the","page_number":123,"box":{"x":117,"y":322,"width":749,"height":12}},{"id":"3da70cc2-6b56-4fe2-98ba-cf9d90f16a70","block_type":"box","text":"contract is paid from the general assets of the insurance company. Generally, funding agreements are","page_number":123,"box":{"x":116,"y":338,"width":764,"height":12}},{"id":"037ef7dc-bde7-4d4d-a994-39c7e6db0df4","block_type":"box","text":"not assignable or transferable without the permission of the issuing insurance companies, and an","page_number":123,"box":{"x":117,"y":353,"width":726,"height":12}},{"id":"2d0e5304-78d3-43fd-a77e-3eefd67a5ac2","block_type":"box","text":"active secondary market in some funding agreements does not currently exist.","page_number":123,"box":{"x":116,"y":369,"width":586,"height":12}},{"id":"b609c0eb-4935-48d5-bffb-d3e7a391c43c","block_type":"box","text":"Guarantees","page_number":123,"box":{"x":117,"y":401,"width":91,"height":10}},{"id":"aa66e357-d5e5-43a2-98b8-106ef3966051","block_type":"box","text":".","page_number":123,"box":{"x":209,"y":409,"width":3,"height":2}},{"id":"56efca96-5d07-4934-abad-604735aeaa98","block_type":"box","text":"A Fund may purchase securities which contain guarantees issued by an entity separate","page_number":123,"box":{"x":213,"y":401,"width":660,"height":12}},{"id":"35ec4fda-0cff-4e0c-95e3-bd1fc1f4c5f4","block_type":"box","text":"from the issuer of the security. Generally, the guarantor of a security (often an affiliate of the issuer) will","page_number":123,"box":{"x":116,"y":417,"width":771,"height":12}},{"id":"f8006715-6b28-4da4-8504-a959de5990d4","block_type":"box","text":"fulfill an issuer’s payment obligations under a security if the issuer is unable to do so.","page_number":123,"box":{"x":116,"y":432,"width":634,"height":12}},{"id":"36d377f1-518d-4ecd-bef1-ac1f2d2b0bc8","block_type":"box","text":"Illiquid Investments.","page_number":123,"box":{"x":116,"y":465,"width":160,"height":11}},{"id":"0944389e-7555-42d7-8893-11e00598ae3b","block_type":"box","text":"Each Fund may not acquire any illiquid investment if, immediately after the","page_number":123,"box":{"x":278,"y":465,"width":563,"height":12}},{"id":"254dc43b-74b5-49b5-9a2b-d86dbc134384","block_type":"box","text":"acquisition, a Fund would have invested more than 15% of its net assets in illiquid investments. An","page_number":123,"box":{"x":116,"y":480,"width":737,"height":12}},{"id":"33c43aeb-a11a-432c-99d7-e8f7be96cf53","block_type":"box","text":"illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in","page_number":123,"box":{"x":117,"y":496,"width":753,"height":12}},{"id":"6ac7d13f-cf1e-4a18-b3bc-0d4105d97da6","block_type":"box","text":"current market conditions in seven calendar days or less without the sale or disposition significantly","page_number":123,"box":{"x":116,"y":511,"width":742,"height":12}},{"id":"93793768-ce61-4c0f-92a6-ba3572fddabd","block_type":"box","text":"changing the market value of the investment. Liquid investments may become illiquid after purchase by","page_number":123,"box":{"x":116,"y":527,"width":771,"height":12}},{"id":"25257a91-b85b-425d-89b0-74cc804acee7","block_type":"box","text":"a Fund, particularly during periods of market turmoil. There can be no assurance that a security or","page_number":123,"box":{"x":116,"y":542,"width":733,"height":12}},{"id":"9286c82c-4de3-4575-af67-1510555f9029","block_type":"box","text":"instrument that is deemed to be liquid when purchased will continue to be liquid for as long as it is held","page_number":123,"box":{"x":117,"y":558,"width":766,"height":12}},{"id":"11fea38f-0a74-42ec-8c98-02965f7cac37","block_type":"box","text":"by a Fund, and any security or instrument held by the Fund may be deemed an illiquid investment","page_number":123,"box":{"x":117,"y":573,"width":729,"height":12}},{"id":"5849a16f-bc57-4ec7-a430-74ec4a3758ca","block_type":"box","text":"pursuant to the Fund’s liquidity risk management program. A Fund’s illiquid investments may reduce","page_number":123,"box":{"x":117,"y":589,"width":747,"height":12}},{"id":"ee9eef50-64cf-47e8-be74-d7f34cecc4d8","block_type":"box","text":"the returns of the Fund because it may be difficult to sell the illiquid investments at an advantageous","page_number":123,"box":{"x":116,"y":604,"width":748,"height":12}},{"id":"8fafe06b-514e-45e1-891a-8d541da01de1","block_type":"box","text":"time or price. In addition, if a Fund is limited in its ability to dispose of illiquid investments during","page_number":123,"box":{"x":116,"y":620,"width":713,"height":12}},{"id":"27eb4803-ab83-40d1-b8cf-13da18b6f299","block_type":"box","text":"periods when shareholders are redeeming or selling their shares or the Fund’s net assets otherwise","page_number":123,"box":{"x":117,"y":635,"width":744,"height":12}},{"id":"58a5cce9-fc10-40c8-a424-025d30c4b401","block_type":"box","text":"shrink, the Fund will need to dispose of liquid securities to meet redemption requests and illiquid","page_number":123,"box":{"x":116,"y":651,"width":718,"height":12}},{"id":"d36f4004-753b-4ed9-87b7-3c6eb6049d18","block_type":"box","text":"securities will become a larger portion of the Fund’s holdings. If illiquid investments exceed 15% of a","page_number":123,"box":{"x":116,"y":666,"width":745,"height":12}},{"id":"f25a16f0-1fce-4006-a0eb-444b702f1c0d","block_type":"box","text":"Fund’s net assets, the Liquidity Rule (as defined below) and the Liquidity Program (as defined below)","page_number":123,"box":{"x":117,"y":682,"width":749,"height":12}},{"id":"e32aa03e-35cb-4ab2-b510-84d770b7d24e","block_type":"box","text":"will require that certain remedial actions be taken. Illiquid investments may trade at a discount from","page_number":123,"box":{"x":116,"y":697,"width":733,"height":12}},{"id":"5880e3ac-84da-4d2c-9f1f-2ca29ba3f55e","block_type":"box","text":"comparable liquid investments. Investment of a Fund’s assets in illiquid investments may restrict the","page_number":123,"box":{"x":116,"y":713,"width":742,"height":12}},{"id":"9cb219b5-eafc-44c0-b760-190b2efcb9e4","block_type":"box","text":"ability of the Fund to dispose of its investments in a timely fashion and for a fair price as well as its","page_number":123,"box":{"x":116,"y":728,"width":728,"height":12}},{"id":"3e1eb5fe-fcbb-4018-b7f6-81e1cb9f62ae","block_type":"box","text":"ability to take advantage of market opportunities. The risks associated with illiquidity will be particularly","page_number":123,"box":{"x":116,"y":744,"width":760,"height":12}},{"id":"8e3cd752-e085-4133-8329-0c282f81e5bc","block_type":"box","text":"acute where a Fund’s operations require cash, such as when the Fund redeems shares or pays","page_number":123,"box":{"x":116,"y":759,"width":709,"height":12}},{"id":"4f1134a5-aae0-4d5d-a29c-bfb8480d8f53","block_type":"box","text":"dividends, and could result in the Fund borrowing to meet short-term cash requirements or incurring","page_number":123,"box":{"x":116,"y":775,"width":740,"height":12}},{"id":"9f6b2a54-5d46-4e44-a49f-54135da8ce31","block_type":"box","text":"capital losses on the sale of illiquid investments.","page_number":123,"box":{"x":116,"y":790,"width":355,"height":12}},{"id":"de21b2e3-39ff-4fa9-be68-4b9caecbc1e0","block_type":"box","text":"Index Funds.","page_number":123,"box":{"x":116,"y":823,"width":102,"height":9}},{"id":"547c90f8-e02c-44ad-a75c-54dfbcd0b35c","block_type":"box","text":"Cash Flows; Expenses.","page_number":123,"box":{"x":117,"y":846,"width":173,"height":12}},{"id":"9d0dc9b0-0498-4a12-8093-7894d10b4e1e","block_type":"box","text":"The ability of each Fund to satisfy its investment objective depends to some","page_number":123,"box":{"x":291,"y":846,"width":573,"height":12}},{"id":"b38719e7-6b22-43aa-8238-4d1ce087da3b","block_type":"box","text":"extent on the Manager’s ability to manage cash flow (primarily from purchases and redemptions and","page_number":123,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"4a5a1ea5-16a0-4bb8-9a01-ed8b359d6e5c","block_type":"box","text":"distributions from the Fund’s investments). The Manager will make investment changes to a Fund’s","page_number":123,"box":{"x":116,"y":877,"width":742,"height":12}},{"id":"9068c479-c9d4-4b15-a037-ca8188b99593","block_type":"box","text":"II-40","page_number":123,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e6f3cfa3-7454-4175-98a2-fac5f0ea036b","block_type":"box","text":"NM1026U-6039989-123/256","page_number":123,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"723d1d7a-108a-441d-a83e-9d788b6c3595","block_type":"box","text":"portfolio to accommodate cash flow while continuing to seek to replicate the total return of the Fund’s","page_number":124,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"bf2dc69c-95e0-4521-acd3-185a8beb18d2","block_type":"box","text":"target index. Investors should also be aware that the investment performance of each index is a","page_number":124,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"ad39506e-e2d6-447b-b60a-108abff54f67","block_type":"box","text":"hypothetical number which does not take into account brokerage commissions and other transaction","page_number":124,"box":{"x":117,"y":118,"width":749,"height":12}},{"id":"6bd66950-07cc-4bab-aa13-e490b3e670df","block_type":"box","text":"costs, custody and other costs of investing, and any incremental operating costs (e.g., transfer agency","page_number":124,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"dc3a9e6a-b9e0-43fc-a741-a28018bdbd1f","block_type":"box","text":"and accounting costs) that will be borne by the Funds. Finally, since each Fund seeks to replicate the","page_number":124,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"c15d4b23-0eee-4b61-903b-b8d85f0fd0b9","block_type":"box","text":"total return of its target index, the Manager generally will not attempt to judge the merits of any","page_number":124,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"4357b74d-6c08-47fc-9ac0-991b10853ce9","block_type":"box","text":"particular security as an investment.","page_number":124,"box":{"x":117,"y":180,"width":272,"height":12}},{"id":"56b8f3dd-49d0-48e4-9eae-4012e5a0456b","block_type":"box","text":"Tracking Error Risk","page_number":124,"box":{"x":118,"y":211,"width":143,"height":12}},{"id":"6c20e837-6d37-48ec-92a2-0a9d385d602d","block_type":"box","text":". A Fund may be subject to tracking error, which is the divergence of the Fund’s","page_number":124,"box":{"x":261,"y":211,"width":594,"height":12}},{"id":"753ae98e-1130-48c8-b8e4-cccfe9ed8213","block_type":"box","text":"performance from that of the Underlying Index. 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MSCI makes no express","page_number":126,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"6cbf03cd-a9b7-44ab-a938-94cc1f8d44db","block_type":"box","text":"or implied warranties, and hereby expressly disclaims all warranties of merchantability or fitness for a","page_number":126,"box":{"x":116,"y":180,"width":755,"height":12}},{"id":"3e5f3a78-6dbd-4c10-a624-13f71683789a","block_type":"box","text":"particular purpose with respect to an MSCI Index or any data included therein. 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Municipal tender option bonds,","page_number":127,"box":{"x":117,"y":444,"width":751,"height":12}},{"id":"a980e9f0-b056-4f3e-aa0f-b0ab97fc7cb2","block_type":"box","text":"both taxable and tax-exempt, which may include inverse floating rate debt instruments, (including","page_number":127,"box":{"x":117,"y":459,"width":725,"height":12}},{"id":"b024ad9b-463b-45de-968f-3394b25b9d02","block_type":"box","text":"residual interests thereon) are excluded from this 10% limitation.","page_number":127,"box":{"x":117,"y":475,"width":483,"height":12}},{"id":"c9f10033-352c-4327-ba52-1e0850a421e0","block_type":"box","text":"Inflation Risk.","page_number":127,"box":{"x":116,"y":506,"width":109,"height":9}},{"id":"8249d7bf-b79c-4334-a608-3f199f79e2d7","block_type":"box","text":"Like all funds, the Funds are subject to inflation risk. 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Inflation rates may change frequently and significantly due to a number","page_number":127,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"27159a4d-23cf-4cc4-bb03-29fbe313ec19","block_type":"box","text":"of potential factors, including, among others, unexpected economic shifts or changes in fiscal or","page_number":127,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"8c323f51-8741-46e5-970b-b26d6f7e19f2","block_type":"box","text":"monetary policies.","page_number":127,"box":{"x":117,"y":583,"width":139,"height":12}},{"id":"bee30292-9cf3-438e-8883-ee513a1e089f","block_type":"box","text":"Initial Public Offering (“IPO”) Risk.","page_number":127,"box":{"x":116,"y":614,"width":275,"height":12}},{"id":"8745717d-4003-45c6-81e3-05acdc040a02","block_type":"box","text":"The volume of IPOs and the levels at which the newly issued","page_number":127,"box":{"x":392,"y":614,"width":462,"height":12}},{"id":"625e678c-765b-4a3e-8361-5efff3afa92a","block_type":"box","text":"stocks trade in the secondary market are affected by the performance of the stock market overall. If","page_number":127,"box":{"x":116,"y":630,"width":743,"height":12}},{"id":"cb532aa6-e3e5-4d40-9606-50d92978d2a0","block_type":"box","text":"IPOs are brought to the market, availability may be limited and a Fund may not be able to buy any","page_number":127,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"05e8e65c-3d8d-4f92-af1f-ad9bbfe1fa67","block_type":"box","text":"shares at the offering price, or if it is able to buy shares, it may not be able to buy as many shares at","page_number":127,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"73a0b7b1-9441-408a-84e0-d37339c39260","block_type":"box","text":"the offering price as it would like. In addition, the prices of securities involved in IPOs are often subject","page_number":127,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"59549f09-2219-46e9-9a6b-6c36ffc2ae1e","block_type":"box","text":"to greater and more unpredictable price changes than more established stocks. IPOs have the","page_number":127,"box":{"x":116,"y":692,"width":701,"height":12}},{"id":"83e9197c-e012-4f26-a1ca-5a7d8683a106","block_type":"box","text":"potential to produce substantial gains. A Fund may hold shares from an IPO for only a short period of","page_number":127,"box":{"x":117,"y":707,"width":751,"height":12}},{"id":"5d6ad948-46d7-48d8-983e-4b46e0edb97a","block_type":"box","text":"time given possible price volatility. This may result in increased portfolio turnover and expenses, such","page_number":127,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"c728eb0d-5d38-4f12-a1eb-c760b80a0e55","block_type":"box","text":"as commissions and transaction costs, and potentially result in taxable gains that the Fund may","page_number":127,"box":{"x":116,"y":738,"width":709,"height":12}},{"id":"094d523a-1031-442b-bb59-4e6169978191","block_type":"box","text":"subsequently distribute to shareholders. There is no assurance that any Fund will have access to","page_number":127,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"f1893ff4-f6a4-4638-b7ec-6fcdf2d39f6a","block_type":"box","text":"profitable IPOs and therefore investors should not rely on any past gains from IPOs as an indication of","page_number":127,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"babc1c35-9ad8-4489-ad70-ea36c4a86246","block_type":"box","text":"future performance. The investment performance of a Fund during periods when it is unable to invest","page_number":127,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"668e6787-ecf3-4be2-b83c-066bc3742a01","block_type":"box","text":"significantly or at all in IPOs may be lower than during periods when it is able to do so. In addition, as a","page_number":127,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"84b2ad06-c208-4422-a090-8f638865ca6a","block_type":"box","text":"Fund increases in size, the impact of IPOs on its performance will generally decrease. Securities","page_number":127,"box":{"x":117,"y":816,"width":716,"height":12}},{"id":"fcda548e-8669-4fb9-9095-009d920b7b69","block_type":"box","text":"issued in IPOs are subject to many of the same risks as investing in companies with smaller market","page_number":127,"box":{"x":117,"y":831,"width":743,"height":12}},{"id":"be6fa3af-a673-405f-bfe7-c06460136737","block_type":"box","text":"capitalizations. Securities issued in IPOs have no trading history, and information about the companies","page_number":127,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"f6b0aa30-e97b-4e92-a78d-6d439799aad6","block_type":"box","text":"may be available for very limited periods.","page_number":127,"box":{"x":117,"y":862,"width":308,"height":12}},{"id":"a4475abb-9abe-4ebb-9d20-03ab7e656ad1","block_type":"box","text":"II-44","page_number":127,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"64b8203b-7d82-416f-b5c8-049868d737ba","block_type":"box","text":"NM1026U-6039989-127/256","page_number":127,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4b9bcf75-0782-49e1-bb0d-df7d4fd3a156","block_type":"box","text":"Investment in Emerging Markets.","page_number":128,"box":{"x":116,"y":87,"width":268,"height":12}},{"id":"be08d6b1-f3ea-41bc-9a68-8fc153ef9dd2","block_type":"box","text":"General.","page_number":128,"box":{"x":117,"y":110,"width":68,"height":10}},{"id":"6adc8b64-eb62-4b57-90b0-a88d9460bb73","block_type":"box","text":"Certain Funds may invest in the securities of issuers domiciled in various countries with emerging","page_number":128,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"828e0b05-ae7c-483a-91de-3530eb19d51a","block_type":"box","text":"capital markets. Unless otherwise provided in a Fund’s Prospectus, a country with an emerging capital","page_number":128,"box":{"x":116,"y":149,"width":765,"height":12}},{"id":"4b94998a-5456-4777-ac9e-f349f814d862","block_type":"box","text":"market is any country that is (i) generally recognized to be an emerging market country by the","page_number":128,"box":{"x":117,"y":165,"width":700,"height":12}},{"id":"48e40e02-eff4-4385-933c-bb49283da53d","block_type":"box","text":"international financial community, such as the International Finance Corporation, or","page_number":128,"box":{"x":117,"y":180,"width":617,"height":12}},{"id":"c1b661c8-f38c-491f-8c82-a5a5d01b364f","block_type":"box","text":"determined by the","page_number":128,"box":{"x":739,"y":180,"width":139,"height":12}},{"id":"4ff64900-f9e5-4538-8a30-682fbc525f77","block_type":"box","text":"World Bank to have a low, middle or middle upper income economy; (ii) classified by the United","page_number":128,"box":{"x":116,"y":196,"width":714,"height":12}},{"id":"82ccccb5-afb1-4a49-88f5-04be9d68c5fb","block_type":"box","text":"Nations or its authorities to be developing; and/or (iii) included in a broad-based index that is generally","page_number":128,"box":{"x":117,"y":211,"width":762,"height":12}},{"id":"843822f7-0142-4062-98cb-5b08681f79a0","block_type":"box","text":"representative of emerging markets. Countries with emerging markets can be found in regions such as","page_number":128,"box":{"x":117,"y":227,"width":766,"height":12}},{"id":"4b0b3ef3-2187-416c-ba5c-ff0a19d8d962","block_type":"box","text":"Asia, Latin America, Eastern Europe and Africa.","page_number":128,"box":{"x":116,"y":242,"width":361,"height":12}},{"id":"4936480b-57f6-4fc1-8e2e-6d1efae68d68","block_type":"box","text":"Investments in the securities of issuers domiciled in countries with emerging capital markets involve","page_number":128,"box":{"x":117,"y":273,"width":743,"height":12}},{"id":"b7c69644-c3d7-429a-9559-849a5709d9b0","block_type":"box","text":"certain additional risks that do not generally apply to investments in securities of issuers in more","page_number":128,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"e0db443d-3e83-472c-96bf-dbe9be1fb24e","block_type":"box","text":"developed capital markets, such as (i) low or non-existent trading volume, resulting in market illiquidity","page_number":128,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"d30567c6-fdd9-4843-8252-fc9cec8334d8","block_type":"box","text":"and increased volatility in prices for such securities, as compared to securities of comparable issuers in","page_number":128,"box":{"x":116,"y":320,"width":771,"height":12}},{"id":"2f9c12d7-d9cb-45d0-a319-b7dbd8ed6dc9","block_type":"box","text":"more developed capital markets; (ii) uncertain national policies and social, political and economic","page_number":128,"box":{"x":117,"y":335,"width":723,"height":12}},{"id":"765a3bc6-2591-4c48-943d-8558fd0d1fb3","block_type":"box","text":"instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of","page_number":128,"box":{"x":117,"y":351,"width":718,"height":12}},{"id":"404dc832-038f-44c4-8b2c-6bc5e8c3c90d","block_type":"box","text":"inflation or unfavorable diplomatic developments; (iii) possible fluctuations in exchange rates, differing","page_number":128,"box":{"x":117,"y":366,"width":758,"height":12}},{"id":"1af81c79-9a19-4ee1-96ed-a00ae8288827","block_type":"box","text":"legal systems and the existence or possible imposition of exchange controls, custodial restrictions or","page_number":128,"box":{"x":117,"y":382,"width":750,"height":12}},{"id":"dd678a3e-fe6e-45f8-b1df-876ebbcb6ccb","block_type":"box","text":"other foreign or U.S. Governmental laws or restrictions applicable to such investments; (iv) national","page_number":128,"box":{"x":116,"y":397,"width":741,"height":12}},{"id":"c8a938ae-1328-4081-8a91-8957637c166d","block_type":"box","text":"policies that may limit a Fund’s investment opportunities such as restrictions on investment in issuers","page_number":128,"box":{"x":117,"y":413,"width":754,"height":12}},{"id":"e9e980ce-564d-4ae5-8d3d-d80bdb66a829","block_type":"box","text":"or industries deemed sensitive to national interests; and (v) the lack or relatively early development of","page_number":128,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"56f94b9e-75b7-4713-80f9-cee4baca14eb","block_type":"box","text":"legal structures governing private and foreign investments and private property. In addition to","page_number":128,"box":{"x":117,"y":444,"width":695,"height":12}},{"id":"7e1c54ee-4549-4880-b883-d5b3746a3f85","block_type":"box","text":"withholding taxes on investment income, some countries with emerging markets may impose","page_number":128,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"7fb730ea-290b-46ea-9db7-1b76598afb3c","block_type":"box","text":"differential capital gains taxes on foreign investors.","page_number":128,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"970ad36d-f9d0-4a3a-8734-5323174c4209","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":128,"box":{"x":117,"y":506,"width":699,"height":12}},{"id":"e9e757ea-31b9-4e73-8d5f-506f57346812","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":128,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"c07de037-8044-477d-bc7a-3d67ed9af73f","block_type":"box","text":"stability characteristic of more developed countries. In such a dynamic environment, there can be no","page_number":128,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"c6e130cb-e511-4729-8193-9cde46c48465","block_type":"box","text":"assurance that any or all of these capital markets will continue to present viable investment","page_number":128,"box":{"x":116,"y":552,"width":681,"height":12}},{"id":"2b55604b-6441-4357-9237-66616806ac95","block_type":"box","text":"opportunities for a Fund. In the past, governments of such nations have expropriated substantial","page_number":128,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"ea766fa0-3d9f-449d-ab1c-7d464711504f","block_type":"box","text":"amounts of private property, and most claims of the property owners have never been fully settled.","page_number":128,"box":{"x":116,"y":583,"width":736,"height":12}},{"id":"e5b6a896-0029-48b9-936b-ff82b2c22fa6","block_type":"box","text":"There is no assurance that such expropriations will not reoccur. In such an event, it is possible that a","page_number":128,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"c90c6523-befc-4043-8107-0ce5653702b7","block_type":"box","text":"Fund could lose the entire value of its investments in the affected market. As a result the risks","page_number":128,"box":{"x":117,"y":614,"width":700,"height":10}},{"id":"ef9cde7d-492f-457c-9483-25f79ae94354","block_type":"box","text":"described above, including the risks of nationalization or expropriation of assets, may be heightened. In","page_number":128,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"6914039f-339b-4571-b63a-f2204636e970","block_type":"box","text":"addition, unanticipated political or social developments may affect the value of investments in these","page_number":128,"box":{"x":116,"y":645,"width":742,"height":12}},{"id":"0547d17b-8b7b-418a-b941-e6f9e3b839a6","block_type":"box","text":"countries and the availability to a Fund of additional investments. The small size and inexperience of","page_number":128,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"92459906-e76e-401e-aa4d-1ba7734d5b61","block_type":"box","text":"the securities markets in certain of these countries and the limited volume of trading in securities in","page_number":128,"box":{"x":116,"y":676,"width":732,"height":12}},{"id":"a8cbbafc-dfae-462f-b127-bc3ced680255","block_type":"box","text":"these countries may make investments in the countries illiquid and more volatile than investments in","page_number":128,"box":{"x":116,"y":692,"width":742,"height":12}},{"id":"cabe3dce-ef4f-4f76-ac36-a6cd6b2db016","block_type":"box","text":"more established markets.","page_number":128,"box":{"x":117,"y":707,"width":195,"height":10}},{"id":"8f78866d-409c-4928-ac62-0330f357f39c","block_type":"box","text":"Also, there may be less publicly available information about issuers in emerging markets than would be","page_number":128,"box":{"x":116,"y":738,"width":765,"height":12}},{"id":"e8581c38-2b6b-40be-895f-db655bfd7475","block_type":"box","text":"available about issuers in more developed capital markets, and such issuers may not be subject to","page_number":128,"box":{"x":116,"y":754,"width":732,"height":12}},{"id":"92ec631f-6891-4ae5-a05c-4d5132dc14ff","block_type":"box","text":"accounting, auditing and financial reporting standards and requirements comparable to those to which","page_number":128,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"e8d3f648-8526-4eec-afb9-881b19dd00a9","block_type":"box","text":"U.S. companies are subject. In certain countries with emerging capital markets, reporting standards","page_number":128,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"e57cdef2-7d8d-4c80-a884-cc6d1127fe0a","block_type":"box","text":"vary widely. As a result, traditional investment measurements used in the United States, such as price/","page_number":128,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"82552bc9-c78c-43a4-a1e6-b5ad0f4f7b80","block_type":"box","text":"earnings ratios, may not be applicable. Emerging market securities may be substantially less liquid","page_number":128,"box":{"x":116,"y":816,"width":731,"height":12}},{"id":"2c4686b4-6feb-4736-bd23-cb3fdfd1cfc1","block_type":"box","text":"than, and more volatile than, those of mature markets, and company shares may be held by a limited","page_number":128,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"3abbebab-9d77-4623-a22f-25e44a785dd0","block_type":"box","text":"number of persons. This may adversely affect the timing and pricing of the Fund’s acquisition or","page_number":128,"box":{"x":117,"y":847,"width":715,"height":12}},{"id":"c205f1eb-4231-427d-8a49-1b389f51a1b5","block_type":"box","text":"disposal of securities.","page_number":128,"box":{"x":116,"y":862,"width":165,"height":12}},{"id":"df9eb826-aafd-4b16-a0fe-0016fa3fa02e","block_type":"box","text":"II-45","page_number":128,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7d625e8f-4bfc-4dcf-be38-a69213a897c2","block_type":"box","text":"NM1026U-6039989-128/256","page_number":128,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"53d9bce0-a469-4b44-ab26-915e266a47dd","block_type":"box","text":"Practices in relation to settlement of securities transactions in emerging markets involve higher risks","page_number":129,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"c255ed1f-4f2d-4c64-b339-38d4b77af868","block_type":"box","text":"than those in developed markets, in part because a Fund will need to use brokers and counterparties","page_number":129,"box":{"x":116,"y":103,"width":755,"height":11}},{"id":"3d3e45dd-9c46-4773-8275-52f2c069af54","block_type":"box","text":"that are less well capitalized, and custody and registration of assets in some countries may be","page_number":129,"box":{"x":116,"y":118,"width":703,"height":12}},{"id":"339ad8c2-c8e7-42aa-8e62-99f1e2161c63","block_type":"box","text":"unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer or refusal","page_number":129,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"8d78ee53-4753-49c6-b87e-f302a6bfb739","block_type":"box","text":"to recognize ownership exists in some emerging markets, and, along with other factors, could result in","page_number":129,"box":{"x":116,"y":149,"width":762,"height":12}},{"id":"f15de839-3354-4b0e-bcda-93ad7794139b","block_type":"box","text":"ownership registration being completely lost. A Fund would absorb any loss resulting from such","page_number":129,"box":{"x":116,"y":165,"width":712,"height":12}},{"id":"2ec14e38-c048-444c-9b4d-f7e34564c043","block_type":"box","text":"registration problems and may have no successful claim for compensation.","page_number":129,"box":{"x":117,"y":180,"width":560,"height":12}},{"id":"3a068797-bf73-4eab-adb8-6f748e4e5901","block_type":"box","text":"Investment in non-dollar denominated securities including securities from issuers located in emerging","page_number":129,"box":{"x":117,"y":211,"width":755,"height":12}},{"id":"998cb61d-c651-4ecf-a0c9-2aacb1cb0269","block_type":"box","text":"market countries may be on either a currency hedged or unhedged basis, and the Funds may hold","page_number":129,"box":{"x":117,"y":227,"width":735,"height":12}},{"id":"3a8c70a9-1501-414e-bc19-6883d5de7fa3","block_type":"box","text":"from time to time various foreign currencies pending investment or conversion into U.S. dollars. Some","page_number":129,"box":{"x":116,"y":242,"width":761,"height":12}},{"id":"0b8bfd39-16b6-4d37-afa0-9bf0bf77f0dc","block_type":"box","text":"of these instruments may have the characteristics of futures contracts. In addition, certain Funds may","page_number":129,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"3c720c1f-c85a-4165-a14a-283642836ed7","block_type":"box","text":"engage in foreign currency exchange transactions to seek to protect against changes in the level of","page_number":129,"box":{"x":116,"y":273,"width":742,"height":12}},{"id":"87e78615-5401-42fe-a246-d44fb0f6916b","block_type":"box","text":"future exchange rates which would adversely affect the Fund’s performance. These investments and","page_number":129,"box":{"x":116,"y":289,"width":752,"height":12}},{"id":"02a91d60-8e47-4cec-8c4c-ad182921c33c","block_type":"box","text":"transactions involving foreign securities, currencies, options (including options that relate to foreign","page_number":129,"box":{"x":116,"y":304,"width":738,"height":12}},{"id":"816972f7-a6f6-454d-9a0a-6d60fcaed610","block_type":"box","text":"currencies), futures, hedging and cross-hedging are described under “Derivatives.”","page_number":129,"box":{"x":116,"y":320,"width":619,"height":12}},{"id":"0efee5c1-9173-4947-ba85-c35e5e61c3fa","block_type":"box","text":"Risks of Investing in Asia-Pacific Countries.","page_number":129,"box":{"x":116,"y":351,"width":328,"height":12}},{"id":"e08b6d93-e46e-4b7e-b1b3-56639fd27ed1","block_type":"box","text":"In addition to the risks of foreign investing and the risks of","page_number":129,"box":{"x":445,"y":351,"width":432,"height":12}},{"id":"697a042f-4197-4e58-8216-c6a8520c8bc9","block_type":"box","text":"investing in developing markets, the developing market Asia-Pacific countries in which a Fund may","page_number":129,"box":{"x":117,"y":366,"width":738,"height":12}},{"id":"f513b768-6faf-4764-a88e-83b9ca216234","block_type":"box","text":"invest are subject to certain additional or specific risks. Certain Funds may make substantial","page_number":129,"box":{"x":117,"y":382,"width":687,"height":12}},{"id":"af1b83b3-2d56-4564-88b1-528847808104","block_type":"box","text":"investments in Asia-Pacific countries. In many of these markets, there is a high concentration of market","page_number":129,"box":{"x":117,"y":397,"width":771,"height":12}},{"id":"cec388c2-993f-452e-8439-85d0e7a6b65c","block_type":"box","text":"capitalization and trading volume in a small number of issuers representing a limited number of","page_number":129,"box":{"x":116,"y":413,"width":710,"height":12}},{"id":"d19efeae-c40e-45d5-a8e0-a324da5a1fe2","block_type":"box","text":"industries, as well as a high concentration of investors and financial intermediaries. Many of these","page_number":129,"box":{"x":117,"y":428,"width":730,"height":12}},{"id":"1279d48f-5bd2-4141-a5bb-4b076cb1a980","block_type":"box","text":"markets also may be affected by developments with respect to more established markets in the region","page_number":129,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"0e05d4f2-886b-4c18-8993-2aeba0e002b9","block_type":"box","text":"such as in Japan and Hong Kong. Brokers in developing market Asia-Pacific countries typically are","page_number":129,"box":{"x":116,"y":459,"width":739,"height":12}},{"id":"f541599f-e785-42af-b12f-b06689b9ce05","block_type":"box","text":"fewer in number and less well capitalized than brokers in the United States. These factors, combined","page_number":129,"box":{"x":116,"y":475,"width":754,"height":12}},{"id":"d99dfeb3-e112-4a3a-95dc-f44e9a6bf5f1","block_type":"box","text":"with the U.S. regulatory requirements for open-end investment companies and the restrictions on","page_number":129,"box":{"x":116,"y":490,"width":725,"height":12}},{"id":"85b310d7-3a84-46db-8aa4-1f2d92941be3","block_type":"box","text":"foreign investment discussed below, result in potentially fewer investment opportunities for a Fund and","page_number":129,"box":{"x":116,"y":506,"width":766,"height":12}},{"id":"097c53d3-16c7-4c1d-bf06-a6f2aab6b0d7","block_type":"box","text":"may have an adverse impact on the investment performance of the Fund.","page_number":129,"box":{"x":117,"y":521,"width":550,"height":12}},{"id":"697295a9-6134-4b02-8c86-456aad2cec6c","block_type":"box","text":"Many of the developing market Asia-Pacific countries may be subject to a greater degree of economic,","page_number":129,"box":{"x":117,"y":552,"width":757,"height":12}},{"id":"8301be01-443d-4b67-8d73-484120f9981b","block_type":"box","text":"political and social instability than is the case in the United States and Western European countries.","page_number":129,"box":{"x":117,"y":568,"width":736,"height":12}},{"id":"584c72ee-c40b-499f-b47f-098b317e55a9","block_type":"box","text":"Such instability may result from, among other things: (i) authoritarian governments or military","page_number":129,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"5bbc15a4-588b-4552-8906-8ff4cf24feec","block_type":"box","text":"involvement in political and economic decision-making, including changes in government through extra","page_number":129,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"898b4f02-f1f4-4fb6-856c-7b8d49472bdb","block_type":"box","text":"constitutional means; (ii) popular unrest associated with demands for improved political, economic and","page_number":129,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"94ba9362-f1d3-4b12-9f3c-c14180986161","block_type":"box","text":"social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and","page_number":129,"box":{"x":116,"y":630,"width":703,"height":12}},{"id":"5e2dcc32-f490-4ae3-9780-cd166ec49307","block_type":"box","text":"(v) ethnic, religious and racial disaffection. In addition, the governments of many of such countries, such","page_number":129,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"aff9f163-f075-495b-90f6-dd4e939fc0b0","block_type":"box","text":"as Indonesia, have a substantial role in regulating and supervising the economy. Another risk common","page_number":129,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"d4e0be4d-c9e2-48af-8b89-ce6f4a1dca87","block_type":"box","text":"to most such countries is that the economy is heavily export oriented and, accordingly, is dependent","page_number":129,"box":{"x":116,"y":676,"width":735,"height":12}},{"id":"b6bf784a-0275-471b-8e0f-76ca65c05342","block_type":"box","text":"upon international trade. The existence of overburdened infrastructure and obsolete financial systems","page_number":129,"box":{"x":117,"y":692,"width":745,"height":12}},{"id":"9f160680-b15c-4def-8deb-7de8d7215400","block_type":"box","text":"also presents risks in certain countries, as do environmental problems. Certain economies also depend","page_number":129,"box":{"x":116,"y":707,"width":757,"height":12}},{"id":"d1325a12-fcf5-4ff5-8e35-d8b4ef92fe71","block_type":"box","text":"to a significant degree upon exports of primary commodities and, therefore, are vulnerable to changes in","page_number":129,"box":{"x":116,"y":723,"width":766,"height":12}},{"id":"1baf3311-3738-49b6-8fed-2c2497741a90","block_type":"box","text":"commodity prices that, in turn, may be affected by a variety of factors.","page_number":129,"box":{"x":116,"y":738,"width":511,"height":12}},{"id":"977c5485-6d64-406f-8df4-8362aff52bbd","block_type":"box","text":"The legal systems in certain developing market Asia-Pacific countries also may have an adverse","page_number":129,"box":{"x":116,"y":769,"width":717,"height":12}},{"id":"09d907cc-cd87-4248-85af-7f95befcd396","block_type":"box","text":"impact on the Fund. For example, while the potential liability of a shareholder in a U.S. corporation with","page_number":129,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"a1163f0d-f1bf-4424-83c8-69fd3177809d","block_type":"box","text":"respect to acts of the corporation is generally limited to the amount of the shareholder’s investment, the","page_number":129,"box":{"x":117,"y":800,"width":766,"height":12}},{"id":"bbd83697-014d-4e15-a806-0f73d528783c","block_type":"box","text":"notion of limited liability is less clear in certain emerging market Asia-Pacific countries. Similarly, the","page_number":129,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"e3b2e014-214d-4443-967e-cf8bc039f270","block_type":"box","text":"rights of investors in developing market Asia-Pacific companies may be more limited than those of","page_number":129,"box":{"x":117,"y":831,"width":732,"height":12}},{"id":"f19e2021-1081-4d59-a595-c74e13179de6","block_type":"box","text":"shareholders of U.S. corporations. It may be difficult or impossible to obtain and/or enforce a judgment","page_number":129,"box":{"x":116,"y":847,"width":765,"height":12}},{"id":"e0cd0b48-37ad-48f1-980f-de332b3e89c4","block_type":"box","text":"in a developing market Asia-Pacific country.","page_number":129,"box":{"x":117,"y":862,"width":330,"height":12}},{"id":"2a1c8030-77f7-4eea-9490-3435bf36e37f","block_type":"box","text":"II-46","page_number":129,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fe683c62-52ea-4c53-b9fb-16e74dd29864","block_type":"box","text":"NM1026U-6039989-129/256","page_number":129,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9b1f2b92-1257-47f3-b21a-e9da1cc56b86","block_type":"box","text":"Governments of many developing market Asia-Pacific countries have exercised and continue to","page_number":130,"box":{"x":117,"y":87,"width":714,"height":12}},{"id":"c0fec466-4d65-4297-ac03-bff0d898e9d0","block_type":"box","text":"exercise substantial influence over many aspects of the private sector. In certain cases, the","page_number":130,"box":{"x":116,"y":102,"width":683,"height":13}},{"id":"10061c2c-accc-4396-9b4f-e1dd4a877bf4","block_type":"box","text":"government owns or controls many companies, including the largest in the country. Accordingly,","page_number":130,"box":{"x":116,"y":118,"width":718,"height":12}},{"id":"9cf48b0a-c95a-4741-b17f-09ed0629456c","block_type":"box","text":"government actions in the future could have a significant effect on economic conditions in developing","page_number":130,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"fcf0728a-cc0f-48dd-a03f-d97a9716d442","block_type":"box","text":"market Asia-Pacific countries, which could affect private sector companies and a Fund itself, as well as","page_number":130,"box":{"x":117,"y":149,"width":768,"height":12}},{"id":"b921bffc-222d-42d1-bf5c-4075cd6dbf0c","block_type":"box","text":"the value of securities in the Fund’s portfolio. In addition, economic statistics of developing market","page_number":130,"box":{"x":116,"y":165,"width":731,"height":12}},{"id":"12e0255c-07a5-4c64-8689-4d5299543331","block_type":"box","text":"Asia-Pacific countries may be less reliable than economic statistics of more developed nations.","page_number":130,"box":{"x":116,"y":180,"width":710,"height":12}},{"id":"1c37ec26-c2ab-444e-aab0-11c401d8c6bd","block_type":"box","text":"In addition to the relative lack of publicly available information about developing market Asia-Pacific","page_number":130,"box":{"x":117,"y":211,"width":741,"height":12}},{"id":"b9593980-f972-447d-9f6d-1416a8892d68","block_type":"box","text":"issuers and the possibility that such issuers may not be subject to the same accounting, auditing and","page_number":130,"box":{"x":117,"y":227,"width":752,"height":12}},{"id":"1e1107a5-4628-4519-a85b-9d84285f4666","block_type":"box","text":"financial reporting standards as U.S. companies, inflation accounting rules in some developing market","page_number":130,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"8d40e793-6b9c-40ce-aa6e-8fa70f042dc9","block_type":"box","text":"Asia-Pacific countries require companies that keep accounting records in the local currency, for both","page_number":130,"box":{"x":116,"y":258,"width":750,"height":12}},{"id":"f19526ab-69b1-4347-92b1-01786a89137f","block_type":"box","text":"tax and accounting purposes, to restate certain assets and liabilities on the company’s balance sheet","page_number":130,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"dd942af3-4bb0-466a-8b0f-10a3411fe81b","block_type":"box","text":"in order to express items in terms of currency of constant purchasing power. Inflation accounting may","page_number":130,"box":{"x":117,"y":289,"width":756,"height":12}},{"id":"37c65690-4eee-4f7f-b388-bdc367925eb5","block_type":"box","text":"indirectly generate losses or profits for certain developing market Asia-Pacific companies.","page_number":130,"box":{"x":117,"y":304,"width":669,"height":12}},{"id":"8601f520-1d6b-4688-a917-b5528c69bc76","block_type":"box","text":"Satisfactory custodial services for investment securities may not be available in some developing Asia","page_number":130,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"50f86cb8-df66-4fe1-acb3-4e58487f1d54","block_type":"box","text":"Pacific countries, which may result in the Fund incurring additional costs and delays in providing","page_number":130,"box":{"x":117,"y":351,"width":716,"height":12}},{"id":"96c08148-99bf-4315-85b1-d3b60ffe8ed7","block_type":"box","text":"transportation and custody services for such securities outside such countries.","page_number":130,"box":{"x":116,"y":366,"width":586,"height":12}},{"id":"c1752bf1-ef5e-4916-8b72-6813d1d2464b","block_type":"box","text":"Certain developing Asia-Pacific countries, such as the Philippines, India and Turkey, are especially","page_number":130,"box":{"x":117,"y":397,"width":738,"height":12}},{"id":"39ba4f9b-081e-4afa-a29b-b9a3a672c694","block_type":"box","text":"large debtors to commercial banks and foreign governments.","page_number":130,"box":{"x":117,"y":413,"width":456,"height":12}},{"id":"740482aa-f8aa-422f-a6d2-2aa5d772f6bb","block_type":"box","text":"Natural disasters in Asia-Pacific countries, and the resulting damage, could have a severe and","page_number":130,"box":{"x":117,"y":444,"width":705,"height":12}},{"id":"a4ef9f24-d548-4c73-87be-c9b3b82f6f42","block_type":"box","text":"negative impact on a Fund’s investment portfolio and, in the longer term, could impair the ability of","page_number":130,"box":{"x":117,"y":459,"width":732,"height":12}},{"id":"82d4a7cd-6a9f-40f5-8a4c-ffdbaa297f16","block_type":"box","text":"issuers in which the Fund invests to conduct their businesses in the manner normally conducted.","page_number":130,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"8934a311-8796-4d41-a700-151b0760e602","block_type":"box","text":"Fund management may determine that, notwithstanding otherwise favorable investment criteria, it may","page_number":130,"box":{"x":117,"y":506,"width":766,"height":12}},{"id":"62446c0f-1676-42ba-b7d4-cf2cc67ed0e3","block_type":"box","text":"not be practicable or appropriate to invest in a particular developing Asia-Pacific country. A Fund may","page_number":130,"box":{"x":117,"y":521,"width":757,"height":12}},{"id":"93767dc6-9f36-4e81-9f98-f784efbbc36c","block_type":"box","text":"invest in countries in which foreign investors, including management of the Fund, have had no or","page_number":130,"box":{"x":117,"y":537,"width":722,"height":12}},{"id":"8927fe72-e677-4d99-b7ca-1f1ab1665b5e","block_type":"box","text":"limited prior experience.","page_number":130,"box":{"x":117,"y":552,"width":182,"height":12}},{"id":"a0fd51d7-6f7b-486e-bc2c-9c875dd77419","block_type":"box","text":"Restrictions on Foreign Investments in Asia-Pacific Countries.","page_number":130,"box":{"x":116,"y":583,"width":458,"height":12}},{"id":"b9b872dc-198e-463e-af76-4c8ca4b31ec8","block_type":"box","text":"Some developing Asia-Pacific countries","page_number":130,"box":{"x":576,"y":583,"width":305,"height":12}},{"id":"7cdff917-52ad-4be2-922f-95f25e96d21d","block_type":"box","text":"prohibit or impose substantial restrictions on investments in their capital markets, particularly their","page_number":130,"box":{"x":117,"y":599,"width":728,"height":12}},{"id":"c893488c-37e2-4785-a98d-d66723f4da25","block_type":"box","text":"equity markets, by foreign entities such as a Fund. As illustrations, certain countries may require","page_number":130,"box":{"x":116,"y":614,"width":719,"height":12}},{"id":"4ff3d629-4713-463d-9627-797c8f01459b","block_type":"box","text":"governmental approval prior to investments by foreign persons or limit the amount of investment by","page_number":130,"box":{"x":116,"y":630,"width":741,"height":12}},{"id":"9da17237-e2f4-4dfc-91d3-e08c7afb6440","block_type":"box","text":"foreign persons in a particular company or limit the investment by foreign persons to only a specific","page_number":130,"box":{"x":116,"y":645,"width":740,"height":12}},{"id":"2f300042-58ab-4b9e-8e07-f001fe5831c7","block_type":"box","text":"class of securities of a company which may have less advantageous terms (including price and","page_number":130,"box":{"x":116,"y":661,"width":705,"height":12}},{"id":"58556c59-3427-4af9-9e9e-f2fd0eaa0c0e","block_type":"box","text":"shareholder rights) than securities of the company available for purchase by nationals. There can be","page_number":130,"box":{"x":116,"y":676,"width":745,"height":12}},{"id":"9b465839-4065-4a44-a833-9ed0e2f6c3fc","block_type":"box","text":"no assurance that a Fund will be able to obtain required governmental approvals in a timely manner. In","page_number":130,"box":{"x":117,"y":692,"width":762,"height":12}},{"id":"9cd3433f-23d8-4095-8ab7-afe11643b4c9","block_type":"box","text":"addition, changes to restrictions on foreign ownership of securities subsequent to a Fund’s purchase of","page_number":130,"box":{"x":116,"y":707,"width":765,"height":12}},{"id":"80fafb05-9d04-4350-9ad1-5fbef8f12073","block_type":"box","text":"such securities may have an adverse effect on the value of such shares. Certain countries may restrict","page_number":130,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"2d403d98-6af3-4c4f-94af-7f2353189527","block_type":"box","text":"investment opportunities in issuers or industries deemed important to national interests.","page_number":130,"box":{"x":117,"y":738,"width":647,"height":12}},{"id":"020dffdf-8027-4c62-9a11-92e75222eb0d","block_type":"box","text":"The manner in which foreign investors may invest in companies in certain developing Asia-Pacific","page_number":130,"box":{"x":116,"y":769,"width":724,"height":12}},{"id":"22d2e3ac-a719-4f3b-a6f9-fc48d411cc42","block_type":"box","text":"countries, as well as limitations on such investments, also may have an adverse impact on the","page_number":130,"box":{"x":116,"y":785,"width":700,"height":12}},{"id":"6fe5ced7-b888-4f29-8e08-b3e97b56e241","block_type":"box","text":"operations of a Fund. For example, a Fund may be required in certain of such countries to invest","page_number":130,"box":{"x":116,"y":800,"width":717,"height":12}},{"id":"16eb346c-7203-4124-9aa8-aa4d71082430","block_type":"box","text":"initially through a local broker or other entity and then have the shares purchased re-registered in the","page_number":130,"box":{"x":117,"y":816,"width":748,"height":12}},{"id":"87d8bc08-738c-4785-8af8-8f7a3ccdfdfc","block_type":"box","text":"name of the Fund. Re-registration may in some instances not be able to occur on a timely basis,","page_number":130,"box":{"x":117,"y":831,"width":718,"height":12}},{"id":"14bb6551-a472-45e0-807b-ed7a486d5047","block_type":"box","text":"resulting in a delay during which a Fund may be denied certain of its rights as an investor, including","page_number":130,"box":{"x":117,"y":847,"width":742,"height":12}},{"id":"66f0d6d7-a351-416d-9c9d-8a82366f9f1c","block_type":"box","text":"rights as to dividends or to be made aware of certain corporate actions. There also may be instances","page_number":130,"box":{"x":117,"y":862,"width":753,"height":12}},{"id":"4ea75ca9-2625-4bd0-86fa-4b6d9c2a88a2","block_type":"box","text":"where a Fund places a purchase order but is subsequently informed, at the time of re-registration, that","page_number":130,"box":{"x":116,"y":878,"width":764,"height":12}},{"id":"9b1ba46b-4c29-48db-bacc-6413a334a4d8","block_type":"box","text":"II-47","page_number":130,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f150839e-4359-4f23-96e0-c3754a6d8b75","block_type":"box","text":"NM1026U-6039989-130/256","page_number":130,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"dd3a8f1e-8f89-4a94-8e52-a4bad275b1c1","block_type":"box","text":"the permissible allocation of the investment to foreign investors has been filled, depriving the Fund of","page_number":131,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"af3f67fe-5915-43e5-9041-474a3cee5d33","block_type":"box","text":"the ability to make its desired investment at that time.","page_number":131,"box":{"x":116,"y":103,"width":400,"height":12}},{"id":"edd1116b-0bbd-42b6-b400-1fcca2d63552","block_type":"box","text":"Substantial limitations may exist in certain countries with respect to a Fund’s ability to repatriate","page_number":131,"box":{"x":116,"y":131,"width":714,"height":12}},{"id":"460896b3-e56e-49d0-b6a0-e3d21abac36a","block_type":"box","text":"investment income, capital or the proceeds of sales of securities by foreign investors. A Fund could be","page_number":131,"box":{"x":117,"y":146,"width":763,"height":12}},{"id":"a8b98b32-6cd9-47ac-8971-66fc03c01d0b","block_type":"box","text":"adversely affected by delays in, or a refusal to grant, any required governmental approval for","page_number":131,"box":{"x":116,"y":162,"width":693,"height":12}},{"id":"54d33912-a951-4ab1-8c24-b0ab1d4f1bca","block_type":"box","text":"repatriation of capital, as well as by the application to the Fund of any restrictions on investments. It is","page_number":131,"box":{"x":117,"y":177,"width":759,"height":12}},{"id":"f910db29-8b23-4674-9733-1aa46cd15431","block_type":"box","text":"possible that certain countries may impose currency controls or other restrictions relating to their","page_number":131,"box":{"x":117,"y":193,"width":719,"height":12}},{"id":"35ae1965-3c53-458e-8459-a51d1fcb3e1a","block_type":"box","text":"currencies or to securities of issuers in those countries. To the extent that such restrictions have the","page_number":131,"box":{"x":116,"y":208,"width":746,"height":10}},{"id":"03bb8ed6-0c21-4111-938a-eb976e7e8ab1","block_type":"box","text":"effect of making certain investments illiquid, securities may not be available for sale to meet","page_number":131,"box":{"x":116,"y":224,"width":685,"height":12}},{"id":"cac1b850-a989-4b76-a200-3a7f9ea7434e","block_type":"box","text":"redemptions. Depending on a variety of financial factors, the percentage of a Fund’s portfolio subject to","page_number":131,"box":{"x":117,"y":239,"width":770,"height":12}},{"id":"e544c2a1-202d-4d03-a1e3-45bef61ef4d5","block_type":"box","text":"currency controls may increase. In the event other countries impose similar controls, the portion of the","page_number":131,"box":{"x":116,"y":255,"width":763,"height":12}},{"id":"f82c3e6c-2bd5-4bb7-8200-f422d5c0de30","block_type":"box","text":"Fund’s assets that may be used to meet redemptions may be further decreased. Even where there is","page_number":131,"box":{"x":117,"y":270,"width":754,"height":12}},{"id":"40117224-0bbf-4a37-b3f8-3497b7980d3b","block_type":"box","text":"no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects","page_number":131,"box":{"x":117,"y":286,"width":771,"height":12}},{"id":"c3e5bf3f-6248-4974-ad66-54d49370e99e","block_type":"box","text":"of the operations of a Fund (for example, if funds may be withdrawn only in certain currencies and/or","page_number":131,"box":{"x":116,"y":301,"width":751,"height":13}},{"id":"1b444190-b224-429d-827f-bc4cec850184","block_type":"box","text":"only at an exchange rate established by the government).","page_number":131,"box":{"x":116,"y":317,"width":433,"height":12}},{"id":"ae54a550-368e-4bcb-92e7-8fb39beda00d","block_type":"box","text":"In certain countries, banks or other financial institutions may be among the leading companies or have","page_number":131,"box":{"x":117,"y":345,"width":763,"height":12}},{"id":"881ac85d-8c0c-46cd-afa9-78ed51343297","block_type":"box","text":"actively traded securities available for investment. The Investment Company Act restricts a Fund’s","page_number":131,"box":{"x":116,"y":361,"width":734,"height":12}},{"id":"5889dea4-1a2f-4941-9982-2c7b50e2574a","block_type":"box","text":"investments in any equity securities of an issuer that, in its most recent fiscal year, derived more than","page_number":131,"box":{"x":117,"y":376,"width":755,"height":12}},{"id":"349e50d0-3738-4beb-ba76-15578b87dc89","block_type":"box","text":"15% of its revenues from “securities related activities,” as defined by the rules thereunder. These","page_number":131,"box":{"x":118,"y":392,"width":722,"height":12}},{"id":"69c864fa-2dd1-4481-8a00-0614914b7104","block_type":"box","text":"provisions may restrict a Fund’s investments in certain foreign banks and other financial institutions.","page_number":131,"box":{"x":117,"y":407,"width":744,"height":12}},{"id":"0c03827d-1e4e-42f9-8196-c3c0db15307b","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":131,"box":{"x":117,"y":436,"width":699,"height":12}},{"id":"95a9c48e-05f4-4837-ac6c-e738bb26ae5c","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":131,"box":{"x":116,"y":451,"width":726,"height":12}},{"id":"6eb73d83-7221-4af9-bd72-46530a73a37f","block_type":"box","text":"stability characteristic of more developed countries. Some of these countries may have in the past","page_number":131,"box":{"x":116,"y":467,"width":732,"height":12}},{"id":"9363897b-a3fc-4ba7-9160-334876a121b5","block_type":"box","text":"failed to recognize private property rights and have at times nationalized or expropriated the assets of","page_number":131,"box":{"x":116,"y":482,"width":759,"height":12}},{"id":"9aefe5f5-0566-4ddd-b541-7d4c06ea3fa8","block_type":"box","text":"private companies. As a result the risks described above, including the risks of nationalization or","page_number":131,"box":{"x":117,"y":498,"width":718,"height":12}},{"id":"162f248a-f445-4c83-8ce2-cc6e19ea6ac0","block_type":"box","text":"expropriation of assets, may be heightened. 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The small size and inexperience of the securities markets in","page_number":131,"box":{"x":117,"y":544,"width":770,"height":12}},{"id":"dcbe9451-018b-40fc-b11a-813cb1efb512","block_type":"box","text":"certain of these countries and the limited volume of trading in securities in these countries may make","page_number":131,"box":{"x":116,"y":560,"width":753,"height":12}},{"id":"77d9d6e3-c536-4a3a-bde8-e7f1fb1ec11e","block_type":"box","text":"investments in the countries illiquid and more volatile than investments in Japan or most Western","page_number":131,"box":{"x":117,"y":575,"width":725,"height":12}},{"id":"a3dd4dcc-25e4-434b-9140-bfae7d797b7b","block_type":"box","text":"European countries. There may be little financial or accounting information available with respect to","page_number":131,"box":{"x":117,"y":591,"width":741,"height":12}},{"id":"ccadf0b0-90b0-435a-a08f-f20f1f76e3a3","block_type":"box","text":"issuers located in certain emerging market countries, and it may be difficult to assess the value or","page_number":131,"box":{"x":117,"y":606,"width":729,"height":12}},{"id":"87257b3d-c3df-4676-8168-a998f6433d83","block_type":"box","text":"prospects of an investment in such issuers.","page_number":131,"box":{"x":117,"y":622,"width":325,"height":12}},{"id":"b81a8a9c-4fa8-4e4e-adb3-98c5d0f38c62","block_type":"box","text":"The expense ratios of the Funds investing significantly in foreign securities can be expected to be","page_number":131,"box":{"x":116,"y":650,"width":728,"height":12}},{"id":"82b2feee-2983-4f50-abe8-20654ae193d5","block_type":"box","text":"higher than those of Funds investing primarily in domestic securities. 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The Russian securities market suffers from a variety of problems","page_number":131,"box":{"x":116,"y":756,"width":704,"height":12}},{"id":"2561a4e3-2936-477a-b0b2-2d368680357f","block_type":"box","text":"described above in “Investment in Emerging Markets” not encountered in more developed markets.","page_number":131,"box":{"x":116,"y":771,"width":736,"height":13}},{"id":"d0a35530-879c-43a1-811f-625714150ad2","block_type":"box","text":"The Russian securities market is relatively new, and a substantial portion of securities transactions in","page_number":131,"box":{"x":116,"y":787,"width":749,"height":12}},{"id":"287e1d11-45c4-47e3-a4f6-dd1b1912d49d","block_type":"box","text":"Russia are privately negotiated outside of stock exchanges. The inexperience of the Russian securities","page_number":131,"box":{"x":117,"y":802,"width":763,"height":13}},{"id":"025dbd26-b1d7-4c35-91ca-2acebb24d558","block_type":"box","text":"market and the limited volume of trading in securities in the market may make obtaining accurate","page_number":131,"box":{"x":117,"y":818,"width":718,"height":12}},{"id":"7e7047a8-703d-4520-b705-6d11b791e5d6","block_type":"box","text":"prices on portfolio securities from independent sources more difficult than in more developed markets.","page_number":131,"box":{"x":117,"y":833,"width":761,"height":12}},{"id":"00920691-a621-4738-91eb-c4c5c449b751","block_type":"box","text":"Because of the underdeveloped state of Russia’s se","page_number":131,"box":{"x":117,"y":862,"width":378,"height":12}},{"id":"d6927001-9796-44ad-8091-48223975a203","block_type":"box","text":"curities markets and banking and telecommunication","page_number":131,"box":{"x":496,"y":862,"width":388,"height":12}},{"id":"9817aa8d-9fea-4dae-9e55-c20083860a45","block_type":"box","text":"systems, settlement, clearing and registration of securi","page_number":131,"box":{"x":116,"y":877,"width":396,"height":12}},{"id":"40950141-c08c-46a1-8b86-1d2ee570a648","block_type":"box","text":"ties transactions are subject to additional risks.","page_number":131,"box":{"x":513,"y":877,"width":344,"height":12}},{"id":"ba65b514-8822-4c00-8a7f-3f7b7aa0b6f7","block_type":"box","text":"II-48","page_number":131,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"47cbe956-5f32-47a7-851d-939c59fc0b3c","block_type":"box","text":"NM1026U-6039989-131/256","page_number":131,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"48fdc567-6808-46d3-9e01-0ea0bb0f436d","block_type":"box","text":"Prior to 2013, there was no central registration","page_number":132,"box":{"x":117,"y":87,"width":341,"height":12}},{"id":"b0dff1c9-5117-4f7f-9298-221d709a2dd5","block_type":"box","text":"system for equity share registration in Russia and","page_number":132,"box":{"x":458,"y":87,"width":365,"height":12}},{"id":"ac065dd3-8aef-4cb1-83f4-7355470cd100","block_type":"box","text":"registration was carried out either by the issuers them","page_number":132,"box":{"x":117,"y":103,"width":388,"height":12}},{"id":"2e9aff4f-d9af-4d0f-85ac-18fd7a41faa4","block_type":"box","text":"selves or by registrars located throughout Russia.","page_number":132,"box":{"x":507,"y":103,"width":365,"height":12}},{"id":"a51ad821-010f-4017-98ea-17f74cca4703","block_type":"box","text":"These registrars may not have been subject to effective state supervision or licensed with any","page_number":132,"box":{"x":116,"y":118,"width":686,"height":12}},{"id":"e2cf7c07-ecaf-4303-8ac1-97d03d468c4c","block_type":"box","text":"governmental entity. In 2013, Russia established","page_number":132,"box":{"x":116,"y":134,"width":359,"height":12}},{"id":"c233c5cd-1fa6-434d-94b4-d8d979f05ae5","block_type":"box","text":"the National Settlement Depository (“NSD”) as a","page_number":132,"box":{"x":475,"y":134,"width":356,"height":12}},{"id":"2f357b32-04a0-4643-bce3-73941e7d9048","block_type":"box","text":"recognized central securities depository, and title to Russian equities held through the NSD is now based","page_number":132,"box":{"x":117,"y":149,"width":766,"height":12}},{"id":"6416abe1-001f-45b9-8912-a900ba0fbb1d","block_type":"box","text":"on the records of the NSD and not on the records of","page_number":132,"box":{"x":116,"y":165,"width":382,"height":9}},{"id":"a30a1df3-9fc7-494b-acf0-def69dd66f30","block_type":"box","text":"the local registrars. 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Russia","page_number":132,"box":{"x":117,"y":366,"width":735,"height":12}},{"id":"8ff4ba22-8a28-423c-a6ad-e95df4e39ef5","block_type":"box","text":"launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the","page_number":132,"box":{"x":117,"y":382,"width":720,"height":12}},{"id":"3b52d8c6-0809-4bfd-8dde-271c6816345a","block_type":"box","text":"military action, resulting sanctions and resulting future market disruptions, including declines in its","page_number":132,"box":{"x":117,"y":397,"width":727,"height":12}},{"id":"3f0d7e13-ede7-4b14-b301-dbd2fec45cd1","block_type":"box","text":"stock markets and the value of the ruble against the U.S. dollar, are impossible to predict. 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Actual and threatened responses to such","page_number":132,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"81cf0ae7-76e6-4098-b3bf-b7a2dfd62ec4","block_type":"box","text":"military action may also impact the markets for certain Russian commodities, such as oil and natural","page_number":132,"box":{"x":117,"y":552,"width":747,"height":12}},{"id":"ce5e153b-63e9-4e66-94f2-5fb5ee06b7df","block_type":"box","text":"gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such","page_number":132,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"0755a9f8-6e15-4693-bb80-e8e36a99a0a7","block_type":"box","text":"sectors globally.","page_number":132,"box":{"x":116,"y":583,"width":125,"height":12}},{"id":"9fed8a6f-2286-4ad6-ba23-c2a6eb2425ff","block_type":"box","text":"Governments in the United States and many other countries (collectively, the “Sanctioning Bodies”)","page_number":132,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"29839efd-1c4e-43d4-bace-a596bfa767ab","block_type":"box","text":"have imposed economic sanctions, which can consist of prohibiting certain securities trades, certain","page_number":132,"box":{"x":117,"y":630,"width":745,"height":12}},{"id":"dd0b00ac-940c-4054-b3e3-e8e674a47c03","block_type":"box","text":"private transactions in the energy sector, asset freezes and prohibition of all business, against certain","page_number":132,"box":{"x":117,"y":645,"width":757,"height":12}},{"id":"27ad7d6f-ea38-4f26-a7c2-b132ca357e8c","block_type":"box","text":"Russian individuals, including politicians, and Russian corporate and banking entities. The Sanctioning","page_number":132,"box":{"x":117,"y":661,"width":760,"height":12}},{"id":"75f43b18-b915-4b3a-874a-ed2e4a6d6ba5","block_type":"box","text":"Bodies, or others, could also institute broader sanctions on Russia, including banning Russia from","page_number":132,"box":{"x":117,"y":676,"width":725,"height":12}},{"id":"d24bd83b-957b-44d7-bbd3-f9f960be0c77","block_type":"box","text":"global payments systems that facilitate cross-border payments. These sanctions, or even the threat of","page_number":132,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"005d23d5-d0f0-4a16-9cf7-dd60cf56e898","block_type":"box","text":"further sanctions, may result in the decline of the value and liquidity of Russian securities, a weakening","page_number":132,"box":{"x":116,"y":707,"width":763,"height":12}},{"id":"f1eb9045-9fed-47c5-800f-fd21c6f28963","block_type":"box","text":"of the ruble or other adverse consequences to the Russian economy. These sanctions have resulted","page_number":132,"box":{"x":116,"y":723,"width":746,"height":12}},{"id":"0f532dc6-5351-499a-b1de-a05ce973de09","block_type":"box","text":"and may continue to result in the immediate freeze of Russian securities and/or funds invested in","page_number":132,"box":{"x":116,"y":738,"width":719,"height":12}},{"id":"31cb84ca-bedd-4c5a-877e-a852c67e57ca","block_type":"box","text":"prohibited assets, impairing the ability of a Fund to buy, sell, receive or deliver those securities and/or","page_number":132,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"b53f2770-b686-4f8f-b944-06978b189d47","block_type":"box","text":"assets. 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Such ability could be restricted or revoked by the Saudi Arabian","page_number":132,"box":{"x":116,"y":831,"width":757,"height":12}},{"id":"01148f9b-6e1d-447a-88b9-fd0a125d4f0d","block_type":"box","text":"government at any time, and unforeseen risks could materialize due to foreign ownership in such","page_number":132,"box":{"x":116,"y":847,"width":724,"height":12}},{"id":"ec8043cb-e072-4d69-b215-809f7863c018","block_type":"box","text":"securities. In addition, the Capital Market Authority (“CMA”) places investment limitations on the","page_number":132,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"0a263d7a-1961-408d-a64a-9c2e09a759fa","block_type":"box","text":"ownership of Saudi Arabian issuers by foreign investors, including a limitation on a Fund’s ownership","page_number":132,"box":{"x":116,"y":878,"width":753,"height":12}},{"id":"23f533c9-5e21-4f3c-89bf-01826de4965b","block_type":"box","text":"II-49","page_number":132,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ede06ee4-065f-42cf-8a55-03cfe41dcfc1","block_type":"box","text":"NM1026U-6039989-132/256","page_number":132,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c09dbe4f-5a23-47e3-a615-983c0f421454","block_type":"box","text":"of any single issuer listed on the Saudi Arabian Stock Exchange, which may prevent a Fund from","page_number":133,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"ed6e1fbc-860e-4704-a2de-43862e115b6f","block_type":"box","text":"investing in accordance with its strategy and contribute to tracking error against the Underlying Index.","page_number":133,"box":{"x":117,"y":103,"width":757,"height":12}},{"id":"d4717461-cd03-4028-83f6-a08e8f44cf3c","block_type":"box","text":"These restrictions may be changed or new restrictions, such as licensing requirements, special","page_number":133,"box":{"x":116,"y":118,"width":710,"height":12}},{"id":"c17067bc-4075-4117-80c4-682d54cca65c","block_type":"box","text":"approvals or additional foreign taxes, may be instituted at any time. A Fund may not be able to obtain","page_number":133,"box":{"x":116,"y":134,"width":756,"height":12}},{"id":"1bc5f626-a13b-40cb-828c-f93b36560057","block_type":"box","text":"or maintain any such licenses or approvals and may not be able to buy and sell securities at full value.","page_number":133,"box":{"x":116,"y":149,"width":763,"height":12}},{"id":"2f20f834-177b-4198-ae65-8f6910c84a82","block_type":"box","text":"Major disruptions or regulatory changes could occur in the Saudi Arabian market, any of which could","page_number":133,"box":{"x":117,"y":165,"width":750,"height":12}},{"id":"541dfe3e-d0d0-4bbc-a800-dcee3639777a","block_type":"box","text":"negatively impact a Fund. These risks may be exacerbated, compared to more developed markets,","page_number":133,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"b8398633-1d92-41c8-ac7c-90f08c0f72ce","block_type":"box","text":"given the limited history of foreign investment in the Saudi Arabian market. Investments in Saudi","page_number":133,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"74a973e4-47a1-4556-844a-8e926643e091","block_type":"box","text":"Arabia may also be subject to loss due to expropriation or nationalization of assets and property or the","page_number":133,"box":{"x":116,"y":211,"width":764,"height":12}},{"id":"373865e5-bfd0-475b-9708-0da8afc38544","block_type":"box","text":"imposition of restrictions on additional foreign investments and repatriation of capital. Such heightened","page_number":133,"box":{"x":117,"y":227,"width":764,"height":12}},{"id":"cccd5482-ac60-4b04-b002-b160b553b2f3","block_type":"box","text":"risks may include, among others, restrictions on and government intervention in international trade,","page_number":133,"box":{"x":117,"y":242,"width":739,"height":12}},{"id":"8a1afeb4-dcf1-4390-9a7a-affb924c787c","block_type":"box","text":"confiscatory taxation, political instability, including authoritarian and/or military involvement in","page_number":133,"box":{"x":116,"y":258,"width":694,"height":12}},{"id":"801755d8-9254-4360-942e-8eebfa30f60d","block_type":"box","text":"governmental decision making, armed conflict, crime and instability as a result of religious, ethnic and/","page_number":133,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"ab642b8d-aafa-4e8b-8a64-6c26056857ed","block_type":"box","text":"or socioeconomic unrest. Saudi Arabia has privatized, or has begun the process of privatizing, certain","page_number":133,"box":{"x":116,"y":289,"width":759,"height":12}},{"id":"93ef667c-a197-4e10-b019-25ce5092de49","block_type":"box","text":"entities and industries. Newly privatized companies may face strong competition from government","page_number":133,"box":{"x":116,"y":304,"width":733,"height":12}},{"id":"85f1ea4e-909d-4259-a786-bdf67ebc23a6","block_type":"box","text":"sponsored competitors that have not been privatized. In some instances, investors in newly privatized","page_number":133,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"550f8105-f6ac-45a3-8770-76bc05543e97","block_type":"box","text":"entities have suffered losses due to the inability of the newly privatized entities to adjust quickly to a","page_number":133,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"e1837926-7e1f-4741-9947-d6b0043b4925","block_type":"box","text":"competitive environment or changing regulatory and legal standards or, in some cases, due to","page_number":133,"box":{"x":116,"y":351,"width":703,"height":12}},{"id":"b91b02ec-1c94-4246-b433-5d6c20dfcacd","block_type":"box","text":"re-nationalization of such privatized entities. There is no assurance that similar losses will not recur.","page_number":133,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"7e5881ea-83d2-4033-be80-88b6fe82ec19","block_type":"box","text":"Further, under income tax laws imposed by the Department of Zakat and Income Tax, dividends paid","page_number":133,"box":{"x":117,"y":382,"width":754,"height":12}},{"id":"19a206f2-4df7-4266-907b-9718210e4dd5","block_type":"box","text":"by a Saudi Arabian company to foreign stockholders are generally subject to a 5% withholding tax","page_number":133,"box":{"x":117,"y":397,"width":730,"height":12}},{"id":"e854224d-bb0b-450a-83d3-88522c3be4ca","block_type":"box","text":"(different tax rates may apply pursuant to an applicable treaty). Saudi Arabia is highly reliant on income","page_number":133,"box":{"x":117,"y":413,"width":770,"height":12}},{"id":"fd39189f-1815-4b86-815c-c08525b54745","block_type":"box","text":"from the sale of petroleum and trade with other countries involved in the sale of petroleum, and its","page_number":133,"box":{"x":116,"y":428,"width":732,"height":12}},{"id":"ade67f0d-3f22-41c5-a78d-39183e6ce4a3","block_type":"box","text":"economy is therefore vulnerable to changes in foreign currency values and the market for petroleum.","page_number":133,"box":{"x":116,"y":444,"width":753,"height":12}},{"id":"73e7b349-33a3-4bbc-a2ff-1e621cd792e0","block_type":"box","text":"As global demand for petroleum fluctuates, Saudi Arabia may be significantly impacted.","page_number":133,"box":{"x":116,"y":459,"width":655,"height":12}},{"id":"1db0c33f-47f5-46b0-94bc-749a81979b6f","block_type":"box","text":"Like most Middle Eastern governments, the government of Saudi Arabia exercises substantial","page_number":133,"box":{"x":117,"y":490,"width":701,"height":12}},{"id":"da802eb0-ed76-48dd-a355-f9ddcbec87b8","block_type":"box","text":"influence over many aspects of the private sector. Although liberalization in the wider economy is","page_number":133,"box":{"x":117,"y":506,"width":724,"height":12}},{"id":"afbe511d-31c8-4656-b81f-442b22d80de0","block_type":"box","text":"underway, in many areas it has lagged significantly: restrictions on foreign ownership persist, and the","page_number":133,"box":{"x":117,"y":521,"width":755,"height":12}},{"id":"15815f48-5afb-43a3-b655-212891868b23","block_type":"box","text":"government has an ownership stake in many key industries. The situation is exacerbated by the fact","page_number":133,"box":{"x":116,"y":537,"width":748,"height":12}},{"id":"aa62df0d-dd35-4379-86ab-8dac69ae5877","block_type":"box","text":"that Saudi Arabia is governed by an absolute monarchy. Saudi Arabia has historically experienced","page_number":133,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"4dbf6949-164a-4393-aa2e-d498010a899d","block_type":"box","text":"strained relations with economic partners worldwide, including other countries in the Middle East due to","page_number":133,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"86b6a87e-335f-42f7-b177-5257af8f8d43","block_type":"box","text":"geopolitical events. Incidents involving a Middle Eastern country’s or the region’s security, including","page_number":133,"box":{"x":116,"y":583,"width":742,"height":12}},{"id":"3eecc878-6640-4293-93d2-44038bf9263a","block_type":"box","text":"terrorism, may cause uncertainty in their markets and may adversely affect its economy and a Fund’s","page_number":133,"box":{"x":116,"y":599,"width":757,"height":12}},{"id":"8cebcc55-9e36-45bc-834c-4cffd1e09b35","block_type":"box","text":"investments. Governmental actions in the future could have a significant effect on economic conditions","page_number":133,"box":{"x":117,"y":614,"width":766,"height":12}},{"id":"5ff9bfa3-23e8-4e96-9090-81b734aa4489","block_type":"box","text":"in Saudi Arabia, which could affect private sector companies and a Fund, as well as the value of","page_number":133,"box":{"x":117,"y":630,"width":717,"height":12}},{"id":"0033352a-c6b9-4c2a-88ef-51bb9de21e8c","block_type":"box","text":"securities in a Fund’s portfolio. Any economic sanctions on Saudi Arabian individuals or Saudi Arabian","page_number":133,"box":{"x":116,"y":645,"width":765,"height":12}},{"id":"94412e75-3227-4eeb-898b-ed4a636b32b9","block_type":"box","text":"corporate entities, or even the threat of sanctions, may result in the decline of the value and liquidity of","page_number":133,"box":{"x":116,"y":661,"width":760,"height":12}},{"id":"b1e2f094-0109-4cc2-973f-4d5f9984b872","block_type":"box","text":"Saudi Arabian securities, a weakening of the Saudi riyal or other adverse consequences to the Saudi","page_number":133,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"3c6d45b6-36b2-4936-a8c4-8606737cb4e2","block_type":"box","text":"Arabian economy. In addition, Saudi Arabia’s economy relies heavily on cheap, foreign labor, and","page_number":133,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"e62cad11-ee11-4232-bd01-8ddb15ece612","block_type":"box","text":"changes in the availability of this labor supply could have an adverse effect on the economy.","page_number":133,"box":{"x":116,"y":707,"width":684,"height":12}},{"id":"ae176a97-ff7b-43b7-958f-e2778f11051c","block_type":"box","text":"The securities markets in Saudi Arabia may not be as developed as those in other countries. As a","page_number":133,"box":{"x":116,"y":738,"width":725,"height":12}},{"id":"b8306b90-f73d-48ef-b5fd-39b1b8443adb","block_type":"box","text":"result, securities markets in Saudi Arabia are subject to greater risks associated with market volatility,","page_number":133,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"0df5e839-5c94-4fa4-b7da-a310b54155f8","block_type":"box","text":"lower market capitalization, lower trading volume, illiquidity, inflation, greater price fluctuations,","page_number":133,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"2cc4dde2-2388-4cda-bd58-2899a48dac36","block_type":"box","text":"uncertainty regarding the existence of trading markets, governmental control and heavy regulation of","page_number":133,"box":{"x":117,"y":785,"width":747,"height":12}},{"id":"2b1c6b02-a7d7-4626-bd9d-96fa6e344a56","block_type":"box","text":"labor and industry. Shares of certain Saudi Arabian companies tend to trade less frequently than those","page_number":133,"box":{"x":117,"y":800,"width":761,"height":12}},{"id":"3948227a-4832-4548-ab3d-4b5f168a6dd9","block_type":"box","text":"of companies on exchanges in more developed markets. Such infrequent trading may adversely affect","page_number":133,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"6995b1db-5c34-4bf2-b3f1-c080166fd0b4","block_type":"box","text":"the pricing of these securities and a Fund’s ability to sell these securities in the future. Current","page_number":133,"box":{"x":116,"y":831,"width":701,"height":12}},{"id":"9899cac8-aee0-41fb-8052-55d8522c4d67","block_type":"box","text":"regulations in Saudi Arabian markets may require a Fund to execute trades of securities through a","page_number":133,"box":{"x":117,"y":847,"width":733,"height":12}},{"id":"de07784e-1c0f-4522-8e91-0bfe2143eb98","block_type":"box","text":"single broker. As a result, the Manager will have less flexibility to choose among brokers on behalf of a","page_number":133,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"f7c7c956-7533-44e7-8d91-faab6530f8b8","block_type":"box","text":"Fund than is typically the case for investment managers.","page_number":133,"box":{"x":117,"y":878,"width":424,"height":12}},{"id":"6881c152-0975-4427-8940-bfdf8e6b0ac1","block_type":"box","text":"II-50","page_number":133,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0ec4971f-86cc-44e1-8a9f-3ea0a4ea365f","block_type":"box","text":"NM1026U-6039989-133/256","page_number":133,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"51081de4-3982-4340-889c-a6ac60b6c573","block_type":"box","text":"Although the political situation in Saudi Arabia is largely stable, Saudi Arabia has historically","page_number":134,"box":{"x":116,"y":87,"width":687,"height":12}},{"id":"4fb1372f-5c85-4c73-be94-b010a2e1f24e","block_type":"box","text":"experienced political instability, and there remains the possibility that the stability will not hold in the","page_number":134,"box":{"x":116,"y":103,"width":741,"height":12}},{"id":"b8e84261-75f8-4db9-a868-6c527095fee7","block_type":"box","text":"future or that instability in the larger Middle East region could adversely impact the economy of Saudi","page_number":134,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"8b8a6061-b53e-4953-92d7-528d53891da3","block_type":"box","text":"Arabia. Instability may be caused by military developments, government interventions in the","page_number":134,"box":{"x":116,"y":134,"width":686,"height":12}},{"id":"3f828d9b-eca7-4b93-8b15-e13713eaa8e1","block_type":"box","text":"marketplace, terrorism, extremist attitudes, attempted social or political reforms, religious differences,","page_number":134,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"0cd4714b-3bc7-4893-a437-04ff01f71464","block_type":"box","text":"or other factors. Additionally, anti-Western views held by certain groups in the Middle East may","page_number":134,"box":{"x":116,"y":165,"width":710,"height":12}},{"id":"1a8a7f0f-da5f-499c-9eb2-b085373e115a","block_type":"box","text":"influence government policies regarding foreign investment. Further developments in U.S. relations","page_number":134,"box":{"x":117,"y":180,"width":740,"height":12}},{"id":"721288a6-fd2d-4937-a1c6-870335d0090c","block_type":"box","text":"with Saudi Arabia and other Middle-Eastern countries may affect these attitudes and policies. The U.S.","page_number":134,"box":{"x":116,"y":196,"width":768,"height":12}},{"id":"f239e711-25cc-4c9e-9d9f-592135d3f4b9","block_type":"box","text":"is a significant, and in some cases the most significant, trading partner of, or foreign investor in, Saudi","page_number":134,"box":{"x":117,"y":211,"width":760,"height":12}},{"id":"5856c2b6-9a2e-4ef8-a446-3c927d86d8f7","block_type":"box","text":"Arabia. As a result, economic conditions of Saudi Arabia may be particularly affected by changes in the","page_number":134,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"0783d728-4551-453e-8dde-424a124f1115","block_type":"box","text":"U.S. economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs,","page_number":134,"box":{"x":117,"y":242,"width":738,"height":12}},{"id":"6f30cb21-ba12-40f2-87c9-3842eede1d04","block_type":"box","text":"changes in the U.S. dollar exchange rate or an economic slowdown in the U.S. may have a material","page_number":134,"box":{"x":116,"y":258,"width":746,"height":12}},{"id":"845cfc22-ba46-4eda-982a-dfa05062e836","block_type":"box","text":"adverse effect on the economic conditions of Saudi Arabia and, as a result, securities to which the","page_number":134,"box":{"x":116,"y":273,"width":733,"height":11}},{"id":"4a26b06d-9587-4af4-89a8-71275b6429df","block_type":"box","text":"Fund has exposure. Political instability in North Africa and the larger Middle East region has caused","page_number":134,"box":{"x":117,"y":289,"width":743,"height":12}},{"id":"0d04a1c8-61ad-4468-aae3-51c50c3782c0","block_type":"box","text":"significant disruptions to many industries. Continued political and social unrest in these areas may","page_number":134,"box":{"x":116,"y":304,"width":732,"height":12}},{"id":"dd8fc660-15fb-4f82-b08a-685c7e54930a","block_type":"box","text":"negatively affect the value of securities in a Fund’s portfolio.","page_number":134,"box":{"x":117,"y":320,"width":449,"height":12}},{"id":"3053158b-39f9-425e-9825-5de3626e03a9","block_type":"box","text":"Certain issuers located in Saudi Arabia may operate in, or have dealings with, countries subject to","page_number":134,"box":{"x":117,"y":351,"width":731,"height":12}},{"id":"fe0f6800-eb6e-4ea6-a0e0-b579e83ee30b","block_type":"box","text":"sanctions and/or embargoes imposed by the U.S. Government and the United Nations and/or countries","page_number":134,"box":{"x":116,"y":366,"width":772,"height":12}},{"id":"05f89a27-0726-4dfa-b69c-06ec74570cff","block_type":"box","text":"identified by the U.S. Government as state sponsors of terrorism. As a result, an issuer may sustain","page_number":134,"box":{"x":117,"y":382,"width":744,"height":12}},{"id":"b8fac6b8-cce0-4672-8956-25383136d89f","block_type":"box","text":"damage to its reputation if it is identified as an issuer which operates in, or has dealings with, such","page_number":134,"box":{"x":116,"y":397,"width":734,"height":12}},{"id":"d6fd7ed4-b197-46f9-aa79-11658370ac18","block_type":"box","text":"countries. A Fund, as an investor in such issuers will be indirectly subject to those risks.","page_number":134,"box":{"x":116,"y":413,"width":655,"height":12}},{"id":"5b6dac7e-4ac0-4941-b98b-9801c23b3035","block_type":"box","text":"Risks of Investing in Venezuela.","page_number":134,"box":{"x":116,"y":444,"width":237,"height":12}},{"id":"5018d93d-1585-4842-9bba-5189f62d043f","block_type":"box","text":"Investment in Venezuela may subject a Fund to legal, regulatory,","page_number":134,"box":{"x":354,"y":444,"width":493,"height":12}},{"id":"77a0682f-85dd-49b8-ae37-b17f1a249b71","block_type":"box","text":"political, currency, security, expropriation and/or nationalization of assets and economic risk specific to","page_number":134,"box":{"x":117,"y":459,"width":764,"height":12}},{"id":"30083809-f35d-4032-8a0c-a3c55ff7241c","block_type":"box","text":"Venezuela. Venezuela is extremely well endowed with natural resources, including oil and natural gas,","page_number":134,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"1ebbf4b9-c9c6-41a3-b968-1e061cc1fac1","block_type":"box","text":"and its economy is heavily dependent on export of natural resources to key trading partners. Any act of","page_number":134,"box":{"x":116,"y":490,"width":770,"height":12}},{"id":"7aec5c3f-15a8-46ac-bcd1-45b1ac1d9bf7","block_type":"box","text":"terrorism, an armed conflict or a breakdown of a key trading relationship that disrupts the production or","page_number":134,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"8762cd99-a820-4ad4-b0fe-5c08cb8b137d","block_type":"box","text":"export of natural resources will likely negatively affect the Venezuelan economy. The government","page_number":134,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"08ad910e-262f-4183-9234-828f0ccd5894","block_type":"box","text":"continues to control key sectors of the economy, including upstream oil and gas production, and has","page_number":134,"box":{"x":116,"y":537,"width":749,"height":12}},{"id":"e596f2a6-08d9-4da7-989a-2ca32e843a4e","block_type":"box","text":"sought to increase its role in key sectors, such as telecommunications and steel. Meanwhile,","page_number":134,"box":{"x":116,"y":552,"width":692,"height":12}},{"id":"6b2b6e59-d492-41e0-8e5a-eeb4d00eca2d","block_type":"box","text":"ambiguities in the investment environment remain, such as continued high levels of bureaucracy and","page_number":134,"box":{"x":116,"y":568,"width":753,"height":12}},{"id":"fe858204-e704-4d07-b0d5-17562d2f3015","block_type":"box","text":"corruption, large macroeconomic imbalances, and political and policy uncertainty. Friction continues","page_number":134,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"d008f249-7039-477b-8afe-a95f7f53b0bd","block_type":"box","text":"between the governments of the U.S. and Venezuela. The U.S. has imposed economic sanctions,","page_number":134,"box":{"x":117,"y":599,"width":731,"height":12}},{"id":"06408460-5de0-4695-8fb7-296af97c0b84","block_type":"box","text":"which consist of asset freezes and sectoral sanctions, on certain Venezuelan individuals and","page_number":134,"box":{"x":116,"y":614,"width":693,"height":11}},{"id":"d20e07b8-23b6-4681-9b18-9b02abe54f8f","block_type":"box","text":"Venezuelan corporate entities, and on the Venezuelan government. The U.S. could also institute","page_number":134,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"89965410-3da0-4b9f-8f2a-6e3ed9b8974d","block_type":"box","text":"broader sanctions on Venezuela. The U.S. has also taken military action against Venezuela in an effort","page_number":134,"box":{"x":117,"y":645,"width":769,"height":12}},{"id":"6c290d9d-6d14-4f33-9f28-cc2f4b3f4984","block_type":"box","text":"to effect regime change. Military action, sanctions, or even the threat of further military action and","page_number":134,"box":{"x":116,"y":661,"width":721,"height":12}},{"id":"3cfded58-e1a9-4d9a-809a-d8732e2361d4","block_type":"box","text":"sanctions, may result in the decline of the value and liquidity of Venezuelan securities, a weakening of","page_number":134,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"937d7ca1-6756-4b83-ace9-3a73d380669b","block_type":"box","text":"the bolivar or other adverse consequences to the Venezuelan economy. These sanctions impair the","page_number":134,"box":{"x":116,"y":692,"width":741,"height":12}},{"id":"941cffb6-496e-4f4d-a1b2-b9afe48c3386","block_type":"box","text":"ability of a Fund to buy, sell, receive or deliver those securities and/or assets. Additional sanctions","page_number":134,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"29b57528-a884-4ced-85f0-544fd3586477","block_type":"box","text":"against Venezuela may in the future be imposed by the U.S. or other countries. These factors, among","page_number":134,"box":{"x":116,"y":723,"width":755,"height":12}},{"id":"4a945d96-9259-4e11-80fa-58127f4ba9dc","block_type":"box","text":"others, can have a negative impact on a Fund’s investments.","page_number":134,"box":{"x":116,"y":738,"width":451,"height":12}},{"id":"0d7a9282-1b7c-41d5-8001-c60b9c3a8e3b","block_type":"box","text":"Brady Bonds.","page_number":134,"box":{"x":116,"y":769,"width":99,"height":12}},{"id":"fb555ef3-976b-46c6-9902-33aa24b426eb","block_type":"box","text":"Certain Funds may invest in Brady Bonds. A Fund’s emerging market debt securities","page_number":134,"box":{"x":222,"y":769,"width":628,"height":12}},{"id":"6425d7b9-6908-4431-8457-1ffea0e62464","block_type":"box","text":"may include emerging market governmental debt obligations commonly referred to as Brady Bonds.","page_number":134,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"2cef1d30-4aa3-47a6-8a52-89785c88d980","block_type":"box","text":"Brady Bonds are securities created through the exchange of existing commercial bank loans to","page_number":134,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"2a1121d2-c249-4ed9-bbfb-6e40a82a4b11","block_type":"box","text":"sovereign entities for new obligations in connection with debt restructurings under a debt restructuring","page_number":134,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"2ea79752-0160-45e4-9355-b443da132637","block_type":"box","text":"plan introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the “Brady Plan”). Brady","page_number":134,"box":{"x":117,"y":831,"width":760,"height":12}},{"id":"b631ab8f-eb8f-4469-8f8b-c3e889885c3b","block_type":"box","text":"Plan debt restructurings have been implemented in a number of countries, including: Argentina,","page_number":134,"box":{"x":117,"y":847,"width":713,"height":12}},{"id":"28b1489c-d7cf-427e-9a36-ce513f2f4405","block_type":"box","text":"Bolivia, Brazil, Bulgaria, Costa Rica, the Dominican Republic, Ecuador, Jordan, Mexico, Niger, Nigeria,","page_number":134,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"6ff91430-0982-493f-bddc-af3cb141eb9e","block_type":"box","text":"Panama, Peru, the Philippines, Poland, Uruguay, Venezuela, and Vietnam. 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Brady Bonds are not considered to","page_number":135,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"80dd5298-82fa-46a0-adb2-f3e4a8fda6e0","block_type":"box","text":"be U.S. Government Securities. U.S. dollar-denominated, collateralized Brady Bonds, which may be","page_number":135,"box":{"x":117,"y":165,"width":747,"height":12}},{"id":"24f3e036-8c50-4e8d-90d5-8d4e6f517a47","block_type":"box","text":"fixed rate par bonds or floating rate discount bonds, are generally collateralized in full as to principal by","page_number":135,"box":{"x":116,"y":180,"width":768,"height":12}},{"id":"e8b0e261-d4b3-47d4-a03a-76d64742eb2d","block_type":"box","text":"U.S. Treasury zero-coupon bonds having the same maturity as the Brady Bonds. Interest payments on","page_number":135,"box":{"x":117,"y":196,"width":767,"height":12}},{"id":"6a4803d9-8776-4bae-bd28-c486154e3099","block_type":"box","text":"these Brady Bonds generally are collateralized on a one-year or longer rolling-forward basis by cash or","page_number":135,"box":{"x":116,"y":211,"width":769,"height":12}},{"id":"35477702-1002-43a0-9977-3d10081c9aca","block_type":"box","text":"securities in an amount that, in the case of fixed rate bonds, is equal to at least one year of interest","page_number":135,"box":{"x":116,"y":227,"width":738,"height":12}},{"id":"1cbf46ed-e06a-48ac-b7a0-ad48dd4d0f36","block_type":"box","text":"payments or, in the case of floating rate bonds, initially is equal to at least one year’s interest payments","page_number":135,"box":{"x":117,"y":242,"width":769,"height":12}},{"id":"505cd579-23f5-4bb3-8595-563c467145e6","block_type":"box","text":"based on the applicable interest rate at that time and is adjusted at regular intervals thereafter. Certain","page_number":135,"box":{"x":117,"y":258,"width":764,"height":12}},{"id":"77aa4cd6-ff07-44af-b046-5847389670ca","block_type":"box","text":"Brady Bonds are entitled to “value recovery payments” in certain circumstances, which in effect","page_number":135,"box":{"x":117,"y":273,"width":711,"height":12}},{"id":"c8b70a8e-0edb-40a9-b567-3639aa59d741","block_type":"box","text":"constitute supplemental interest payments but generally are not collateralized. Brady Bonds are often","page_number":135,"box":{"x":116,"y":289,"width":757,"height":12}},{"id":"411d845b-a709-4fae-a733-5b99b7c8f915","block_type":"box","text":"viewed as having three or four valuation components: (i) the collateralized repayment of principal at","page_number":135,"box":{"x":116,"y":304,"width":743,"height":12}},{"id":"e694fe5f-6b92-4cf5-91b3-c6b9efe46974","block_type":"box","text":"final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and","page_number":135,"box":{"x":116,"y":320,"width":753,"height":12}},{"id":"74ee5ed8-b8b0-4c01-991a-b85bffe165b0","block_type":"box","text":"(iv) any uncollateralized repayment of principal at maturity (the uncollateralized amounts constitute the","page_number":135,"box":{"x":117,"y":335,"width":763,"height":12}},{"id":"ac435348-c257-45b6-9897-7bd54f7fa7ad","block_type":"box","text":"“residual risk”).","page_number":135,"box":{"x":116,"y":351,"width":116,"height":12}},{"id":"727dc0af-ccc5-4162-9c2f-2c53ad6ec6f3","block_type":"box","text":"Brady Bonds involve various risk factors described above associated with investing in foreign","page_number":135,"box":{"x":117,"y":382,"width":695,"height":12}},{"id":"924d36fe-1297-4702-a900-7c7443d060cb","block_type":"box","text":"securities, including the history of defaults with respect to commercial bank loans by public and private","page_number":135,"box":{"x":116,"y":397,"width":765,"height":12}},{"id":"a1ddfaad-7287-4914-917a-a9fe1bd577eb","block_type":"box","text":"entities of countries issuing Brady Bonds. In light of the residual risk of Brady Bonds and, among other","page_number":135,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"60470f09-7a1f-4c05-b6a0-9e9b59912cb0","block_type":"box","text":"factors, the history of defaults, investments in Brady Bonds are considered speculative. There can be","page_number":135,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"2215df1e-2d16-47bc-87a5-87d0c1b54eeb","block_type":"box","text":"no assurance that Brady Bonds in which the Funds may invest will not be subject to restructuring","page_number":135,"box":{"x":117,"y":444,"width":723,"height":12}},{"id":"9b312dbc-df29-440f-b1dd-71e2a6c73986","block_type":"box","text":"arrangements or to requests for new credit, which may cause the Funds to suffer a loss of interest or","page_number":135,"box":{"x":116,"y":459,"width":752,"height":12}},{"id":"999fbaa9-9fec-41ed-9ff3-a3edc562d8e3","block_type":"box","text":"principal on any of its holdings.","page_number":135,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"4a6866fb-7ac4-42ab-98ff-1a09df248d87","block_type":"box","text":"China Investments Risk.","page_number":135,"box":{"x":117,"y":506,"width":185,"height":9}},{"id":"146baf3f-9948-43b2-821b-1b110ec2bb11","block_type":"box","text":"Investments in securities of companies domiciled in the People’s Republic of China (“China” or the","page_number":135,"box":{"x":117,"y":529,"width":734,"height":12}},{"id":"b99051a5-7d4c-40c8-836b-ae8587ec0389","block_type":"box","text":"“PRC”), including certain Hong Kong-listed and U.S.-listed securities, involve a high degree of risk and","page_number":135,"box":{"x":116,"y":544,"width":764,"height":12}},{"id":"741ce6af-6494-430e-9f0b-01afc842fe7c","block_type":"box","text":"special considerations not typically associated with investing in the U.S. securities markets. Such","page_number":135,"box":{"x":116,"y":560,"width":725,"height":12}},{"id":"75bf989a-3eb3-4b4b-bacd-44cd7c955a8a","block_type":"box","text":"heightened risks include, among others, an authoritarian government, popular unrest associated with","page_number":135,"box":{"x":117,"y":576,"width":753,"height":11}},{"id":"69f0ac92-bcb6-4f2c-a252-6ea193cb2e19","block_type":"box","text":"demands for improved political, economic and social conditions, the impact of regional conflict on the","page_number":135,"box":{"x":116,"y":591,"width":754,"height":12}},{"id":"f5c45a83-8be8-4cce-bbd5-bf1bea4beb29","block_type":"box","text":"economy and hostile relations with other countries.","page_number":135,"box":{"x":116,"y":607,"width":382,"height":11}},{"id":"7ec96070-db0e-4e07-a697-d30823ee227a","block_type":"box","text":"Military conflicts, either in response to internal social unrest or conflicts with other countries, could","page_number":135,"box":{"x":117,"y":637,"width":729,"height":12}},{"id":"a188519a-14db-4232-8e58-ea2a7b96336f","block_type":"box","text":"disrupt economic development. The Chinese economy is vulnerable to the long-running disagreements","page_number":135,"box":{"x":116,"y":653,"width":769,"height":12}},{"id":"d276007b-304b-46d2-ac27-05ff338c5e25","block_type":"box","text":"and religious and nationalist disputes with Tibet and the Xinjiang region. Since 1997, there have been","page_number":135,"box":{"x":116,"y":668,"width":752,"height":12}},{"id":"090a08fc-916f-4952-88d9-2bdc587ff1fe","block_type":"box","text":"tensions between the Chinese government and many people in Hong Kong who perceive China as","page_number":135,"box":{"x":116,"y":684,"width":733,"height":12}},{"id":"cc71c2af-0dca-44ed-8fce-aafdfc22804f","block_type":"box","text":"tightening control over Hong Kong’s semi-autonomous liberal political, economic, legal, and social","page_number":135,"box":{"x":116,"y":700,"width":725,"height":12}},{"id":"22ba5a58-b947-499f-8e37-06262b221ba7","block_type":"box","text":"framework. Protests and unrest have increased tensions even further. Due to the interconnected","page_number":135,"box":{"x":116,"y":715,"width":716,"height":9}},{"id":"876ccd83-3d11-471f-9f91-7632f833c0f5","block_type":"box","text":"nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty","page_number":135,"box":{"x":117,"y":730,"width":756,"height":13}},{"id":"627487cf-7f4b-4912-8408-c077c131bff9","block_type":"box","text":"in the Hong Kong and Chinese markets. China has a complex territorial dispute regarding the","page_number":135,"box":{"x":117,"y":746,"width":691,"height":12}},{"id":"b70ffac8-4890-4223-bccd-8fc88ccfe02d","block_type":"box","text":"sovereignty of Taiwan and has made threats of invasion. Taiwan-based companies and individuals are","page_number":135,"box":{"x":116,"y":761,"width":761,"height":13}},{"id":"7cab58d1-a4fd-49fe-9d0e-d06a55a6e8ff","block_type":"box","text":"significant investors in China. The continuing hostility between China and Taiwan may have an adverse","page_number":135,"box":{"x":116,"y":777,"width":767,"height":12}},{"id":"ab333198-16f5-4e22-a526-8de617fb722f","block_type":"box","text":"impact on the value of the Fund’s investments in China or Taiwan, may cause a suspension in a","page_number":135,"box":{"x":117,"y":792,"width":712,"height":13}},{"id":"50f6ebc2-cbc3-4d82-86ca-86a16a8eea80","block_type":"box","text":"Fund’s ability to trade in certain securities or other assets or may otherwise make such investments","page_number":135,"box":{"x":117,"y":808,"width":736,"height":12}},{"id":"fcd7b0f1-e892-42c8-8a85-a2c02b944326","block_type":"box","text":"impracticable or impossible. Any escalation of hostility between China and Taiwan would likely have a","page_number":135,"box":{"x":117,"y":823,"width":753,"height":13}},{"id":"aba50987-fcd1-4ece-b2a9-94ccc72d20ea","block_type":"box","text":"significant adverse impact on the value of the Fund’s investments in both countries and the region. In","page_number":135,"box":{"x":116,"y":839,"width":755,"height":12}},{"id":"204d39ff-cac0-4f7c-9a40-365fbe48978d","block_type":"box","text":"addition, China has strained international relations with Japan, India, the Philippines and other","page_number":135,"box":{"x":116,"y":854,"width":703,"height":12}},{"id":"2f7b9ea4-97e1-4bc1-9dfb-c86c4f82ea39","block_type":"box","text":"neighbors due to territorial disputes, historical animosities and other defense concerns. Frictions","page_number":135,"box":{"x":117,"y":870,"width":717,"height":12}},{"id":"744ba150-3941-49a8-8ace-64ab10cef125","block_type":"box","text":"II-52","page_number":135,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"3229ee50-adc0-44cf-91b0-f2f6b5746258","block_type":"box","text":"NM1026U-6039989-135/256","page_number":135,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"89d7d133-11d8-4067-8afc-febb5b245169","block_type":"box","text":"between China and the Philippines in the South China Sea pose a risk of escalation potentially leading","page_number":136,"box":{"x":117,"y":87,"width":765,"height":12}},{"id":"926e00ab-46e2-4f7f-a78f-d6d79d52e40c","block_type":"box","text":"to military conflict. Additionally, China is alleged to have participated in state-sponsored cyberattacks","page_number":136,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"14413524-38da-44b0-aabb-4b0ec88d80d2","block_type":"box","text":"against foreign companies and foreign governments. Actual and threatened responses to such activity","page_number":136,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"a527707a-20b9-4cc4-a969-bd5084cf69f4","block_type":"box","text":"and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks","page_number":136,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"d2a40f09-10f2-480d-8a7b-c36a80093833","block_type":"box","text":"on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers","page_number":136,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"c42afee2-943f-4bff-9dac-3f695e29fa6a","block_type":"box","text":"of securities in which a Fund invests. China could be affected by military events on the Korean","page_number":136,"box":{"x":116,"y":165,"width":705,"height":12}},{"id":"636e32c8-bc5c-4364-8557-217868cada09","block_type":"box","text":"peninsula or internal instability within North Korea. These situations may cause uncertainty in the","page_number":136,"box":{"x":117,"y":180,"width":723,"height":12}},{"id":"31d296dc-d7a3-4249-8ad1-4399983f8990","block_type":"box","text":"Chinese market and may adversely affect the performance of the Chinese economy.","page_number":136,"box":{"x":117,"y":196,"width":631,"height":12}},{"id":"94e16143-2590-4424-a125-756a3efc3d54","block_type":"box","text":"The Chinese government has implemented economic reforms in order to liberalize trade policy,","page_number":136,"box":{"x":116,"y":227,"width":712,"height":12}},{"id":"4e8c8571-bc99-4299-9a54-3a769bab2691","block_type":"box","text":"promote foreign investment in the economy, reduce government control of the economy and develop","page_number":136,"box":{"x":117,"y":242,"width":752,"height":12}},{"id":"1480ba80-9336-44b2-a145-1a43afa4b2c1","block_type":"box","text":"market mechanisms. However, the Chinese government still exercises substantial influence over many","page_number":136,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"4ada530f-9066-4699-830f-31c35510e9c1","block_type":"box","text":"aspects of the private sector and may own or control many companies. Chinese companies, such as","page_number":136,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"bdf47861-f1a6-4767-945c-5d9e84c6565b","block_type":"box","text":"those in the financial services or technology sectors, and potentially other sectors in the future, are","page_number":136,"box":{"x":116,"y":289,"width":736,"height":12}},{"id":"5ee0e9bc-3d92-4c0c-8c5c-6299ec133a89","block_type":"box","text":"subject to the risk that Chinese authorities can intervene in their operations and structure. The Chinese","page_number":136,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"d73527c3-77e4-43ef-9b91-12475ee6c14b","block_type":"box","text":"government continues to maintain a major role in economic policymaking and investing in China","page_number":136,"box":{"x":116,"y":320,"width":717,"height":12}},{"id":"c2fc44d7-f566-4d0f-abe1-5e9d6be340bd","block_type":"box","text":"involves risk of loss due to expropriation, nationalization, confiscation of assets and property or the","page_number":136,"box":{"x":117,"y":335,"width":736,"height":12}},{"id":"a0c191c0-286f-4d35-949c-f7c7b9820159","block_type":"box","text":"imposition of restrictions on foreign investments and on repatriation of capital invested.","page_number":136,"box":{"x":117,"y":351,"width":647,"height":12}},{"id":"641d4599-99ce-42a9-ae1b-dd203184cbce","block_type":"box","text":"The Chinese government may intervene in the Chinese financial markets, such as by the imposition of","page_number":136,"box":{"x":116,"y":382,"width":764,"height":12}},{"id":"bc0ff174-987c-4d61-b3c1-61970d49732f","block_type":"box","text":"trading restrictions, a ban on “naked” short selling or the suspension of short selling for certain stocks.","page_number":136,"box":{"x":116,"y":397,"width":761,"height":12}},{"id":"fc38bc36-ab39-483f-80d3-45a65ace75f8","block_type":"box","text":"This may affect market price and liquidity of these stocks, and may have an unpredictable impact on","page_number":136,"box":{"x":116,"y":413,"width":748,"height":12}},{"id":"e78aaa5f-b220-4369-b82c-186c9c431dca","block_type":"box","text":"the investment activities of the Funds. Furthermore, such market interventions may have a negative","page_number":136,"box":{"x":116,"y":428,"width":745,"height":12}},{"id":"30d551f3-3636-40e3-bc3f-77679c0f0bdc","block_type":"box","text":"impact on market sentiment which may in turn affect the performance of the securities markets and as","page_number":136,"box":{"x":117,"y":444,"width":762,"height":12}},{"id":"b5ed2da2-1df9-49b7-9ec1-fb42193446b5","block_type":"box","text":"a result the performance of the Funds.","page_number":136,"box":{"x":116,"y":459,"width":290,"height":12}},{"id":"107e34f1-969e-419c-99e0-b6229b8165cd","block_type":"box","text":"In addition, there is less regulation and monitoring of Chinese securities markets and the activities of","page_number":136,"box":{"x":117,"y":490,"width":749,"height":12}},{"id":"c11f4c36-7908-494d-aeab-17a4407e5d7d","block_type":"box","text":"investors, brokers and other participants than in the United States. Accordingly, issuers of securities in","page_number":136,"box":{"x":117,"y":506,"width":763,"height":12}},{"id":"3012e45b-5f65-4bb3-bf88-85cb4a95ec76","block_type":"box","text":"China, including Chinese companies that are listed on U.S. exchanges, are not subject to the same","page_number":136,"box":{"x":117,"y":521,"width":741,"height":12}},{"id":"1d92fc2a-b5b8-4257-92b3-24838ebdcd68","block_type":"box","text":"degree of regulation as are U.S. issuers with respect to such matters as insider trading rules, tender","page_number":136,"box":{"x":116,"y":537,"width":747,"height":12}},{"id":"99dbb340-8fcf-44a1-8b12-2e43db2dd3ce","block_type":"box","text":"offer regulation, accounting standards or auditor oversight, stockholder proxy requirements and the","page_number":136,"box":{"x":116,"y":552,"width":740,"height":12}},{"id":"184d3b9f-886a-427f-a28f-ab2afb23b623","block_type":"box","text":"requirements mandating timely and accurate disclosure of information. Securities markets in China are","page_number":136,"box":{"x":117,"y":568,"width":766,"height":12}},{"id":"07f46f5d-9bb9-4771-a8e9-88159e4bac6f","block_type":"box","text":"in the process of change and further development. This may lead to trading volatility, difficulty in the","page_number":136,"box":{"x":117,"y":583,"width":744,"height":12}},{"id":"37f1cfb2-f67b-4824-b451-c61e4e759071","block_type":"box","text":"settlement and recording of transactions and difficulty in interpreting and applying the relevant","page_number":136,"box":{"x":116,"y":599,"width":701,"height":12}},{"id":"6b284bbf-28c5-4de8-9537-1b83f8d770c5","block_type":"box","text":"regulation. Custodians may not be able to offer the level of service and safe-keeping in relation to the","page_number":136,"box":{"x":117,"y":614,"width":755,"height":12}},{"id":"ab8faaab-cdb1-4b8a-a7fa-ee8886c82a2e","block_type":"box","text":"settlement and administration of securities in China that is customary in more developed markets. In","page_number":136,"box":{"x":116,"y":630,"width":748,"height":12}},{"id":"45e9b0a3-353a-40c7-adab-1136be4a16fc","block_type":"box","text":"particular, there is a risk that a Fund may not be recognized as the owner of securities that are held on","page_number":136,"box":{"x":117,"y":645,"width":764,"height":12}},{"id":"d3a61ce2-229d-49ee-aaef-298e55d3810c","block_type":"box","text":"behalf of the Fund by a subcustodian.","page_number":136,"box":{"x":117,"y":661,"width":278,"height":12}},{"id":"141bd0fd-e330-4148-bbe3-6149dea53475","block_type":"box","text":"There may be significant obstacles to obtaining information necessary for investigations into or","page_number":136,"box":{"x":116,"y":692,"width":702,"height":12}},{"id":"04f9056c-1913-44c3-8e99-5b48066fcb0f","block_type":"box","text":"litigation against Chinese companies, and shareholders may have limited legal remedies. The Funds","page_number":136,"box":{"x":117,"y":707,"width":745,"height":12}},{"id":"a9192a20-f60f-4b54-b1df-6ef5e62d888d","block_type":"box","text":"do not select investments based on investor protection considerations.","page_number":136,"box":{"x":116,"y":723,"width":522,"height":12}},{"id":"4604dae2-5320-473d-9e92-3d28cb308587","block_type":"box","text":"The Chinese government historically took positions that prevented the U.S. Public Company","page_number":136,"box":{"x":116,"y":754,"width":684,"height":12}},{"id":"86c45ffe-17f1-41e6-894b-75b49a9e4482","block_type":"box","text":"Accounting Oversight Board (“PCAOB”) from inspecting the audit work and practices of accounting","page_number":136,"box":{"x":116,"y":769,"width":732,"height":12}},{"id":"832cd99b-dca9-4a35-a26b-6caef8b56946","block_type":"box","text":"firms in mainland China and Hong Kong for compliance with U.S. law and professional standards. On","page_number":136,"box":{"x":116,"y":785,"width":751,"height":12}},{"id":"c4e62eb7-be9a-4b05-ab5e-6d3edf7f5abc","block_type":"box","text":"August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory","page_number":136,"box":{"x":116,"y":800,"width":729,"height":12}},{"id":"bac5138b-41d7-4c75-bae9-516bd4983c02","block_type":"box","text":"Commission and the Ministry of Finance of the PRC, which marked the first step toward opening","page_number":136,"box":{"x":117,"y":816,"width":714,"height":12}},{"id":"42b7caf5-d682-4a39-ac50-b5fa7f5231e1","block_type":"box","text":"access for the PCAOB to inspect and investigate registered public accounting firms headquartered in","page_number":136,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"7dc86ba3-fafa-44d4-9e62-0cab2e0a7559","block_type":"box","text":"mainland China and Hong Kong completely in accordance with U.S. law. However, as this","page_number":136,"box":{"x":117,"y":847,"width":672,"height":12}},{"id":"78d27cd8-7b14-43a6-bd89-74520dc1905f","block_type":"box","text":"development is relatively recent, the implementation of the Statement of Protocol remains to be tested.","page_number":136,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"09c34ead-f97f-48b4-9668-ea936f2f63c9","block_type":"box","text":"Audits performed by PCAOB-registered accounting firms in mainland China and Hong Kong may be","page_number":136,"box":{"x":116,"y":878,"width":747,"height":12}},{"id":"9ad8f2b0-dbc4-4eb3-ae07-b309e007e5db","block_type":"box","text":"II-53","page_number":136,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d4596de3-a767-4355-bfb8-8dc71b59decd","block_type":"box","text":"NM1026U-6039989-136/256","page_number":136,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7325d1c1-3588-404c-b194-0f5200107228","block_type":"box","text":"less reliable than those performed by firms subject to PCAOB inspection. Accordingly, information","page_number":137,"box":{"x":117,"y":87,"width":730,"height":12}},{"id":"1b3b2129-24f0-4e2f-a20a-66fd3ade4cb0","block_type":"box","text":"about the Chinese securities in which the Funds invest may be less reliable or complete. Under","page_number":137,"box":{"x":116,"y":102,"width":712,"height":13}},{"id":"f70fd428-a056-4fbe-8c34-5e644a393cd3","block_type":"box","text":"amendments to the Sarbanes-Oxley Act enacted in December 2020, which requires that the PCAOB","page_number":137,"box":{"x":116,"y":118,"width":752,"height":12}},{"id":"1ec86eda-9144-4d0d-8b68-d3903e6edb19","block_type":"box","text":"be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer, Chinese companies with","page_number":137,"box":{"x":117,"y":134,"width":743,"height":12}},{"id":"8cf6d13b-377f-450a-ae53-b9f459b2147c","block_type":"box","text":"securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the","page_number":137,"box":{"x":116,"y":149,"width":670,"height":12}},{"id":"89f3a394-2f56-4e81-a902-2be65b0503dc","block_type":"box","text":"accounting firm.","page_number":137,"box":{"x":116,"y":165,"width":123,"height":12}},{"id":"dda9b933-71e6-4742-a585-7ba9e94d42a6","block_type":"box","text":"The Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange","page_number":137,"box":{"x":116,"y":196,"width":763,"height":12}},{"id":"65bf2951-0006-4ccd-995a-d56ceb0cfa92","block_type":"box","text":"control policies and repatriation restrictions imposed by the Chinese government. The imposition of","page_number":137,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"8059696d-257b-4ed2-8690-854135911787","block_type":"box","text":"currency controls may negatively impact performance and liquidity of the Funds as capital may become","page_number":137,"box":{"x":116,"y":227,"width":772,"height":12}},{"id":"3f89881d-5966-4a52-9709-e6f801b4c978","block_type":"box","text":"trapped in the PRC. The Funds could be adversely affected by delays in, or a refusal to grant, any","page_number":137,"box":{"x":116,"y":242,"width":732,"height":12}},{"id":"28f16e30-b441-42a1-a187-bf86089dbb7e","block_type":"box","text":"required governmental approval for repatriation of capital, as well as by the application to the Funds of","page_number":137,"box":{"x":117,"y":258,"width":762,"height":12}},{"id":"cae5e96c-3992-47de-90b2-a3b7a8d828b0","block_type":"box","text":"any restrictions on investments. Investing in entities either in, or which have a substantial portion of","page_number":137,"box":{"x":116,"y":273,"width":740,"height":12}},{"id":"4646d7ad-957f-4b76-b991-3d216c8a0d38","block_type":"box","text":"their operations in, the PRC may require the Funds to adopt special procedures, seek local","page_number":137,"box":{"x":116,"y":289,"width":680,"height":12}},{"id":"72dc0d88-2147-4015-bafd-53fe23fe9be9","block_type":"box","text":"government approvals or take other actions, each of which may involve additional costs and delays to","page_number":137,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"b8ddbfc8-8569-461a-b675-fb77c1be7cf5","block_type":"box","text":"the Funds. The Fund may also incur costs in connection with conversions between U.S. dollars and","page_number":137,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"81fc9bfc-e27e-424c-86d3-687a2ae77644","block_type":"box","text":"RMB, as well as in connection with conversions between the two separate types of RMB, the onshore","page_number":137,"box":{"x":117,"y":335,"width":758,"height":12}},{"id":"b41a87e0-5ea1-4a19-9132-7b58322eca93","block_type":"box","text":"RMB (“CNY”) and the offshore RMB (“CNH”).","page_number":137,"box":{"x":117,"y":351,"width":340,"height":12}},{"id":"1b233ece-7553-4c44-a95f-e0bd04c2191e","block_type":"box","text":"Many Chinese companies listed on U.S. exchanges use variable interest entities or “VIEs” in their","page_number":137,"box":{"x":117,"y":382,"width":727,"height":12}},{"id":"e72537da-cdd8-4848-b7d7-f3d1b01a245d","block_type":"box","text":"structure as a result of foreign ownership restrictions. In a VIE structure, a Chinese operating company","page_number":137,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"1c25ce2e-baa3-40a5-b82c-f002510c0768","block_type":"box","text":"establishes a shell company in another jurisdiction to issue stock to public shareholders. When a VIE","page_number":137,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"4fc2d594-8d3b-44c5-998a-72ed95532b11","block_type":"box","text":"structure is used by a Chinese company to list its stock in the U.S., instead of owning the equity","page_number":137,"box":{"x":116,"y":428,"width":715,"height":12}},{"id":"b5daecb0-0c79-40cc-a736-bde70b49e938","block_type":"box","text":"securities of the Chinese company, the U.S.-listed shell company directly or indirectly enters into","page_number":137,"box":{"x":116,"y":444,"width":721,"height":12}},{"id":"e76a2bb2-3d7d-4b28-b502-b76875c047a9","block_type":"box","text":"contracts with the Chinese operating company under Chinese law. These contracts provide the U.S.-","page_number":137,"box":{"x":116,"y":459,"width":749,"height":12}},{"id":"e8761db6-e673-4f59-b84b-202b87c8fc97","block_type":"box","text":"listed shell company with only economic exposure to the Chinese company and do not represent","page_number":137,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"ad5179b5-e344-4a2c-8a41-536153128337","block_type":"box","text":"equity ownership in the operating company.","page_number":137,"box":{"x":116,"y":490,"width":329,"height":12}},{"id":"e407e1b0-dee3-4a7a-a74e-cbd1f7487ab6","block_type":"box","text":"While VIEs are a longstanding practice that is well known to Chinese officials and regulators, they have","page_number":137,"box":{"x":116,"y":521,"width":770,"height":12}},{"id":"ba023151-a598-452d-991d-93a025354db9","block_type":"box","text":"not been formally recognized under Chinese law. The Chinese government has provided guidance to","page_number":137,"box":{"x":117,"y":537,"width":754,"height":12}},{"id":"7057ca8e-c4a0-419e-9d99-2896cd3b694c","block_type":"box","text":"and placed restrictions on Chinese-based companies raising capital offshore, including through VIEs.","page_number":137,"box":{"x":116,"y":552,"width":755,"height":12}},{"id":"2c0cede7-9247-40c9-9b43-8c65b88f9eb9","block_type":"box","text":"In 2023, the China Securities Regulatory Commission (“CSRC”) released new rules that permit the use","page_number":137,"box":{"x":117,"y":568,"width":768,"height":12}},{"id":"6070b731-6ce0-4876-8c7b-4eec526c441d","block_type":"box","text":"of VIE structures, provided they abide by Chinese laws and register with the CSRC. The rules,","page_number":137,"box":{"x":116,"y":583,"width":705,"height":12}},{"id":"d10e36c1-fa1c-475f-a35d-66f1622e494c","block_type":"box","text":"however, may cause Chinese companies to undergo greater scrutiny and add costs to VIE structures.","page_number":137,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"acc665e1-40f6-4670-95a6-9b35a54b070c","block_type":"box","text":"Intervention, rulemaking or guidance by the Chinese government with respect to VIE structures or the","page_number":137,"box":{"x":117,"y":614,"width":758,"height":12}},{"id":"be3bf1b5-f12c-4113-a77a-4fd9d98ca2ee","block_type":"box","text":"non-enforcement of VIE-related contractual rights could significantly affect the operating company’s","page_number":137,"box":{"x":117,"y":630,"width":742,"height":12}},{"id":"eb7411f7-d6c4-4e56-8d83-b718e9ba8b97","block_type":"box","text":"business in China, the enforceability of the U.S.-listed shell company’s contractual arrangements with","page_number":137,"box":{"x":117,"y":645,"width":756,"height":12}},{"id":"f9e227e5-abd6-429a-8370-8f741178db60","block_type":"box","text":"the Chinese company and the value of the U.S.-listed stock. Further, the VIE contractual arrangement","page_number":137,"box":{"x":116,"y":661,"width":757,"height":12}},{"id":"9e7873ba-3664-45f6-89e8-b4f5ffed52c5","block_type":"box","text":"would likely be subject to Chinese law and jurisdiction, and remedies available to the U.S.-listed shell","page_number":137,"box":{"x":116,"y":676,"width":748,"height":12}},{"id":"c2c8d1da-f14b-49c6-b238-3364f132037b","block_type":"box","text":"company are uncertain and could be ineffective. In addition to the risk of government intervention,","page_number":137,"box":{"x":116,"y":692,"width":724,"height":12}},{"id":"5a6fe10d-a7ff-43ee-9e79-18d608382765","block_type":"box","text":"investments through a VIE structure are subject to the risk that the China-based company (or its","page_number":137,"box":{"x":117,"y":707,"width":711,"height":12}},{"id":"9a7eb506-8041-4c3b-af45-e922b4c1f67c","block_type":"box","text":"officers, directors, or Chinese equity owners) may breach those contractual arrangements, or Chinese","page_number":137,"box":{"x":116,"y":723,"width":757,"height":12}},{"id":"09a19ff5-75a9-486b-b96f-21e1a54c53d0","block_type":"box","text":"law changes in a way that adversely affects the enforceability of these arrangements, or those","page_number":137,"box":{"x":117,"y":738,"width":697,"height":12}},{"id":"03caec23-988c-4857-9a8d-79c066457036","block_type":"box","text":"contracts are otherwise not enforceable under Chinese law, in which case the Fund may suffer","page_number":137,"box":{"x":116,"y":754,"width":703,"height":12}},{"id":"2d0fefc8-ff95-4071-98ba-469d567f9bed","block_type":"box","text":"significant losses on its investments through a VIE structure with little or no recourse available. Any","page_number":137,"box":{"x":116,"y":769,"width":736,"height":12}},{"id":"34f143cb-2cc0-4f75-a6ad-7b85c0e21319","block_type":"box","text":"change in the operations of entities in a VIE structure, the status of VIE contractual arrangements or","page_number":137,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"345b45c2-fb1b-484d-bd35-5bcc209fcbc7","block_type":"box","text":"the legal or regulatory environment in China, generally or with respect to specific industries, could","page_number":137,"box":{"x":116,"y":800,"width":723,"height":12}},{"id":"aac562aa-0d17-4ff4-90a8-35a97fbe7ea7","block_type":"box","text":"result in significant, and possibly permanent and/or total, losses to a Fund.","page_number":137,"box":{"x":117,"y":816,"width":550,"height":12}},{"id":"0fd22bd8-bc40-4828-87cd-820d311e193d","block_type":"box","text":"While the Chinese economy has experienced past periods of rapid growth, there is no assurance that","page_number":137,"box":{"x":116,"y":847,"width":758,"height":12}},{"id":"a12f6c82-0503-4803-9c52-bb511523fd93","block_type":"box","text":"such growth rates will recur. Other economic challenges for China include indebtedness, weak","page_number":137,"box":{"x":116,"y":862,"width":706,"height":12}},{"id":"ef276ef2-9088-425d-a44c-91531f592256","block_type":"box","text":"consumer demand, trade tensions, and an aging population. China continues to face pressure from its","page_number":137,"box":{"x":116,"y":878,"width":763,"height":12}},{"id":"62b87884-7ce8-4ca8-914d-0eaebd5336b6","block_type":"box","text":"II-54","page_number":137,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8b4a641e-6d0b-4d12-b927-f49309ab9709","block_type":"box","text":"NM1026U-6039989-137/256","page_number":137,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"98520d59-a57a-495a-9ac3-ebe81399a11c","block_type":"box","text":"trading partners over its exporting of its excess industrial capacity and overall approach to economic","page_number":138,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"2a607cce-b57e-466c-b43e-9b3044f2015a","block_type":"box","text":"management. China’s economy is heavily dependent on export growth. Reduction in spending on","page_number":138,"box":{"x":117,"y":102,"width":727,"height":13}},{"id":"b8186373-8a06-48ce-b424-c273c19120ed","block_type":"box","text":"Chinese products and services, supply chain diversification, institution of additional tariffs, sanctions or","page_number":138,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"7192cb21-5b48-4756-823c-7e8381d3c11f","block_type":"box","text":"other trade barriers (including as a result of heightened trade tensions between China and the United","page_number":138,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"5630122a-cdb7-4d10-8f19-2527f6a1cba9","block_type":"box","text":"States or in response to actual or alleged Chinese cyber activity) or a downturn in any of the","page_number":138,"box":{"x":116,"y":149,"width":688,"height":12}},{"id":"f81f1a3f-8266-4c72-8e46-90cfcb12c04d","block_type":"box","text":"economies of China’s key trading partners may have an adverse impact on the Chinese economy and","page_number":138,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"08fbb8a3-e656-4e37-a253-e842d98343b7","block_type":"box","text":"the companies in which a Fund invests. Certain Chinese companies (which may change from time to","page_number":138,"box":{"x":116,"y":180,"width":753,"height":12}},{"id":"1b45da3c-df68-4263-9135-2c474eec6425","block_type":"box","text":"time) are directly or indirectly subject to economic or trade restrictions imposed by the U.S. or other","page_number":138,"box":{"x":116,"y":196,"width":741,"height":12}},{"id":"08b75b4b-1024-4a26-8c66-1530ae0e8a50","block_type":"box","text":"governments due to national security, human rights or other concerns of such government. For","page_number":138,"box":{"x":116,"y":211,"width":709,"height":12}},{"id":"7c340c3d-17dc-4c3d-b455-fffb0cbbe53e","block_type":"box","text":"example, certain foreign technology companies are subject to U.S. export controls as those companies","page_number":138,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"3cc047b2-40cc-4cd7-90f4-ae8a085fa568","block_type":"box","text":"are believed to pose a risk to U.S. interests. The U.S. also bans imports of goods produced in certain","page_number":138,"box":{"x":116,"y":242,"width":755,"height":12}},{"id":"859a1c0f-3cd0-4b9f-aad1-5f667d6c70d9","block_type":"box","text":"regions of China or by certain Chinese companies due to concerns about forced labor. Such","page_number":138,"box":{"x":117,"y":258,"width":688,"height":12}},{"id":"e77b31ac-2873-49cc-9e2d-31ac9b7a4985","block_type":"box","text":"restrictions may have unanticipated and adverse effects on the Chinese economy and companies. Any","page_number":138,"box":{"x":117,"y":273,"width":767,"height":12}},{"id":"847e24a8-44f1-4ca4-abac-a067c7c746d1","block_type":"box","text":"action that targets Chinese financial markets or securities exchanges could interfere with orderly","page_number":138,"box":{"x":116,"y":289,"width":719,"height":12}},{"id":"69d9dc03-13ca-4766-a97d-096415bffe30","block_type":"box","text":"trading, delay settlement or cause market disruptions. Certain companies may be subject to economic","page_number":138,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"185eed2b-9a80-4ca1-b14e-f411007ff16d","block_type":"box","text":"or trade restrictions (but not investment restrictions) imposed by the U.S. or other governments due to","page_number":138,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"542ebd55-ab4b-4c17-9d92-6d576e9ba47a","block_type":"box","text":"national security, human rights or other concerns of such government. So long as these restrictions do","page_number":138,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"c4cde2c0-32d3-4a8d-aecc-c0c39400fa9a","block_type":"box","text":"not include restrictions on investments, the Fund may invest in such companies.","page_number":138,"box":{"x":117,"y":351,"width":599,"height":12}},{"id":"6f0cf277-5ca4-4f76-805c-f73e751cf2d4","block_type":"box","text":"The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative","page_number":138,"box":{"x":116,"y":383,"width":760,"height":12}},{"id":"ad7cd08f-6a12-48ec-9b0f-b9de637c7ac6","block_type":"box","text":"guidance or enforcement, possibly with retroactive effect. The interpretation, applicability and","page_number":138,"box":{"x":116,"y":399,"width":695,"height":12}},{"id":"712d486e-41b5-4489-ad48-1c41f1b7e106","block_type":"box","text":"enforcement of such laws by PRC tax authorities are not as consistent and transparent as those of","page_number":138,"box":{"x":116,"y":414,"width":737,"height":12}},{"id":"a1f2fa7d-d1e3-4491-917d-30cd247f3ed3","block_type":"box","text":"more developed nations, and may vary over time and from region to region. The application and","page_number":138,"box":{"x":117,"y":430,"width":716,"height":12}},{"id":"fb6390ec-9f3c-4b3b-962c-b63746ad0ef8","block_type":"box","text":"enforcement of PRC tax rules could have a significant adverse effect on a Fund and its investors,","page_number":138,"box":{"x":116,"y":445,"width":727,"height":12}},{"id":"6653f708-957d-4c93-be26-d574bf17f73f","block_type":"box","text":"particularly in relation to capital gains withholding tax imposed upon non-residents. In addition, the","page_number":138,"box":{"x":117,"y":461,"width":732,"height":12}},{"id":"09ec0fe3-c359-4a13-95c2-5fbead13769c","block_type":"box","text":"accounting, auditing and financial reporting standards and practices applicable to Chinese companies","page_number":138,"box":{"x":116,"y":476,"width":759,"height":12}},{"id":"023dbbf1-14c2-4dc0-a794-14cb6118c049","block_type":"box","text":"may be less rigorous, and may result in significant differences between financial statements prepared","page_number":138,"box":{"x":117,"y":492,"width":757,"height":12}},{"id":"c26441a0-aacb-4962-ab16-62d248c98a36","block_type":"box","text":"in accordance with PRC accounting standards and practice and those prepared in accordance with","page_number":138,"box":{"x":117,"y":507,"width":739,"height":12}},{"id":"e6e20836-9497-4628-88f5-49e9d01df229","block_type":"box","text":"international accounting standards.","page_number":138,"box":{"x":117,"y":523,"width":264,"height":12}},{"id":"662cd698-b9ba-4edc-98fb-7a3f50a4ec0c","block_type":"box","text":"From time to time and in recent years, China has experienced outbreaks of infectious illnesses and the","page_number":138,"box":{"x":117,"y":555,"width":767,"height":13}},{"id":"1d137a48-8d52-4150-9dfb-7c87210dcb65","block_type":"box","text":"country may be subject to other public health threats, infectious illnesses, diseases or similar issues in","page_number":138,"box":{"x":116,"y":571,"width":763,"height":12}},{"id":"a1e4814d-6e9b-444f-8cab-6dde14a46d8f","block_type":"box","text":"the future. Any spread of an infectious illness, public health threat or similar issue could reduce","page_number":138,"box":{"x":116,"y":586,"width":709,"height":13}},{"id":"86b97ae7-4327-469c-98d6-4ccc3644bfcb","block_type":"box","text":"consumer demand or economic output, result in market closures, travel restrictions or quarantines, and","page_number":138,"box":{"x":116,"y":602,"width":770,"height":12}},{"id":"6433247d-dd81-4630-ae13-ab5758f7b790","block_type":"box","text":"generally have a significant impact on the Chinese economy, which in turn could adversely affect a","page_number":138,"box":{"x":116,"y":617,"width":738,"height":13}},{"id":"ee38b249-b0f0-4527-b4e2-6f678f47945a","block_type":"box","text":"Fund’s investments.","page_number":138,"box":{"x":117,"y":633,"width":153,"height":10}},{"id":"1e4d6a36-d084-41c1-90d9-b703198309d1","block_type":"box","text":"Risk of Investing through Stock Connect.","page_number":138,"box":{"x":116,"y":666,"width":302,"height":12}},{"id":"d83b9b6e-b544-45a1-9294-16555b73942f","block_type":"box","text":"General.","page_number":138,"box":{"x":117,"y":690,"width":62,"height":9}},{"id":"35ec4ee3-7485-4f61-a3e8-41a818967dea","block_type":"box","text":"China A-shares are equity securities of companies domiciled in China that trade on Chinese","page_number":138,"box":{"x":186,"y":690,"width":681,"height":12}},{"id":"8e499237-ccaf-41af-a7f1-29ae1e5e8710","block_type":"box","text":"stock exchanges such as the Shanghai Stock Exchange (“SSE”), the Shenzhen Stock Exchange","page_number":138,"box":{"x":116,"y":705,"width":718,"height":12}},{"id":"3db542b4-3fd5-48b2-a149-bd80d960e26c","block_type":"box","text":"(“SZSE”) and the Beijing Stock Exchange (“BSE”) (“A-shares”). Foreign investment in A-shares on the","page_number":138,"box":{"x":117,"y":721,"width":756,"height":12}},{"id":"7097bd94-b838-4c9e-988e-6381dc8ebe6d","block_type":"box","text":"SSE and SZSE is not permitted, other than pursuant to available exceptions, such as through a","page_number":138,"box":{"x":116,"y":736,"width":707,"height":12}},{"id":"0fc51a3c-20b8-4fad-853e-e42dc003b17c","block_type":"box","text":"qualified foreign investor approved pursuant to the relevant mainland China laws and regulations as","page_number":138,"box":{"x":116,"y":752,"width":740,"height":12}},{"id":"87cc4c3e-473f-43e1-8534-9e4b595c68dd","block_type":"box","text":"may be promulgated and/or amended from time to time (“QFI”).","page_number":138,"box":{"x":117,"y":767,"width":468,"height":12}},{"id":"c7177c40-85d0-4487-b007-ce164d6bce04","block_type":"box","text":"Investment in eligible exchange traded funds and A-shares listed and traded on the SSE or SZSE","page_number":138,"box":{"x":117,"y":800,"width":723,"height":12}},{"id":"5f7f695b-65e6-4355-80d9-4da54c294e9c","block_type":"box","text":"(“Stock Connect Securities”) is also permitted through the Shanghai-Hong Kong Stock Connect","page_number":138,"box":{"x":117,"y":815,"width":706,"height":13}},{"id":"3c4a5633-ffbf-4033-94ce-60fe52995c92","block_type":"box","text":"program or the Shenzhen-Hong Kong Stock Connect program, as applicable (each, a “Stock Connect”","page_number":138,"box":{"x":117,"y":831,"width":764,"height":12}},{"id":"5902d623-bea2-4d34-9b92-84a6709c4eb4","block_type":"box","text":"and collectively, “Stock Connects”). Each Stock Connect is a securities trading and clearing links","page_number":138,"box":{"x":116,"y":846,"width":722,"height":13}},{"id":"02eaaae4-3fe6-4530-9d16-76c6414df125","block_type":"box","text":"program established by The Stock Exchange of Hong Kong Limited (“SEHK”), the Hong Kong","page_number":138,"box":{"x":117,"y":862,"width":699,"height":12}},{"id":"f022f257-22d3-4645-961e-acc77a993543","block_type":"box","text":"Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE, as applicable, and China","page_number":138,"box":{"x":116,"y":877,"width":700,"height":13}},{"id":"571ca610-5fed-495b-8722-40980467035f","block_type":"box","text":"II-55","page_number":138,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1be1d5a1-d352-4304-b130-2331954f690f","block_type":"box","text":"NM1026U-6039989-138/256","page_number":138,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4a9b84ed-9ff9-408c-b898-8552459f1ed1","block_type":"box","text":"Securities Depository and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock","page_number":139,"box":{"x":116,"y":87,"width":753,"height":12}},{"id":"6bb98a5c-b985-4ea5-8272-078c77948bb7","block_type":"box","text":"market access between the PRC and Hong Kong by permitting investors to trade and settle shares on","page_number":139,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"64aad38d-2e5c-42cc-bdda-4d0d567c3831","block_type":"box","text":"each market through their local securities brokers. Under Stock Connects, a Fund’s trading of Stock","page_number":139,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"c20cd5f9-3f42-41f7-920d-dca782d8d527","block_type":"box","text":"Connect Securities listed on the SSE or SZSE, as applicable, would be effectuated through its Hong","page_number":139,"box":{"x":117,"y":134,"width":747,"height":12}},{"id":"2ad3ee75-2c3a-453e-a69e-11fd86f8b867","block_type":"box","text":"Kong broker and a securities trading service company established by SEHK.","page_number":139,"box":{"x":117,"y":149,"width":572,"height":12}},{"id":"a2b2e2f0-db90-4134-8cdb-4d257f70303e","block_type":"box","text":"Although no individual investment quotas or licensing requirements apply to investors in Stock","page_number":139,"box":{"x":116,"y":180,"width":703,"height":12}},{"id":"8c1259e4-9cc7-4fa0-949e-d8f289f5eccd","block_type":"box","text":"Connect, trading through a Stock Connect’s Northbound Trading Link is subject to daily investment","page_number":139,"box":{"x":117,"y":196,"width":738,"height":12}},{"id":"5f82a3bf-e5ae-46db-a822-47dc7b03c4ad","block_type":"box","text":"quota limitations which require that buy orders for Stock Connect Securities be rejected once the daily","page_number":139,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"eeda243e-0de3-46fd-9eb6-d00f307caf02","block_type":"box","text":"quota is exceeded (although a Fund will be permitted to sell their Stock Connect Securities regardless","page_number":139,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"551e5cef-1108-4442-b964-65571fdf46ef","block_type":"box","text":"of the quota). These limitations may restrict a Fund from investing in Stock Connect Securities on a","page_number":139,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"d7f62afc-931c-4e1d-9363-389187386b63","block_type":"box","text":"timely basis, which could affect the Fund’s ability to effectively pursue its investment strategy.","page_number":139,"box":{"x":116,"y":258,"width":698,"height":12}},{"id":"cafb7598-cc51-47ce-9262-37edb35bca7e","block_type":"box","text":"Investment quotas are also subject to change. Investment in Stock Connect Securities through a Stock","page_number":139,"box":{"x":117,"y":273,"width":767,"height":12}},{"id":"38249f93-80e8-40d4-b504-f8db645ad16c","block_type":"box","text":"Connect is subject to trading, clearance and settlement procedures that could pose risks to a Fund.","page_number":139,"box":{"x":117,"y":289,"width":741,"height":12}},{"id":"1954129a-9053-4b17-a5f7-b566b6bcec2d","block_type":"box","text":"Stock Connect Securities purchased through Stock Connects generally may not be sold or otherwise","page_number":139,"box":{"x":116,"y":304,"width":753,"height":12}},{"id":"b0ac6917-f493-4039-9ef8-931400defbcd","block_type":"box","text":"transferred other than through Stock Connects in accordance with applicable rules. For example, the","page_number":139,"box":{"x":116,"y":320,"width":752,"height":12}},{"id":"0553421b-8cda-4fa4-aa0e-7c6e2a8daec2","block_type":"box","text":"PRC regulations require that in order for an investor to sell any Stock Connect Securities on a certain","page_number":139,"box":{"x":117,"y":335,"width":755,"height":12}},{"id":"ce0376fc-84b5-408b-8459-69d7d6cfea86","block_type":"box","text":"trading day, there must be sufficient Stock Connect Securities in the investor’s account before the","page_number":139,"box":{"x":116,"y":351,"width":730,"height":12}},{"id":"662e5086-218b-4254-90a5-76b3709b7ab8","block_type":"box","text":"market opens on that day. If there are insufficient Stock Connect Securities in the investor’s account,","page_number":139,"box":{"x":117,"y":366,"width":751,"height":12}},{"id":"6f041a3b-1e59-4c14-a04c-d18d41333bd9","block_type":"box","text":"the sell order will be rejected by the SSE or SZSE, as applicable. SEHK carries out pre-trade checking","page_number":139,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"c2f6f05a-2a21-47f3-aba5-c2bff552222c","block_type":"box","text":"on sell orders of certain stocks listed on the SSE market (“SSE Securities”) or SZSE market (“SZSE","page_number":139,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"39e92882-e68c-4d2b-ab8c-a146a6eaef3b","block_type":"box","text":"Securities”) of its participants (","page_number":139,"box":{"x":116,"y":413,"width":226,"height":12}},{"id":"ad3582f0-da11-4140-a274-2fbbb103d503","block_type":"box","text":"i.e.","page_number":139,"box":{"x":343,"y":413,"width":20,"height":9}},{"id":"eafe71cd-d3cf-450e-8860-a1ce86430c8e","block_type":"box","text":", stock brokers) to ensure that this requirement is satisfied. While","page_number":139,"box":{"x":366,"y":413,"width":486,"height":12}},{"id":"42ef5a44-2256-4f32-81d9-a174b39202b4","block_type":"box","text":"shares must be designated as eligible to be traded under a Stock Connect, those shares may also lose","page_number":139,"box":{"x":116,"y":428,"width":770,"height":12}},{"id":"d6d32897-61ac-4a53-aeec-6c2bf42dbaeb","block_type":"box","text":"such designation, and if this occurs, such shares may be sold but cannot be purchased through a","page_number":139,"box":{"x":116,"y":444,"width":728,"height":12}},{"id":"47ffdc8c-c760-4e7a-8bbb-6f9daf43c498","block_type":"box","text":"Stock Connect. In addition, Stock Connects will only operate on days when both the Chinese and Hong","page_number":139,"box":{"x":116,"y":459,"width":771,"height":12}},{"id":"a66521d5-c9cc-47ce-a238-f19780856156","block_type":"box","text":"Kong markets are open for trading, and banking services are available in both markets on the","page_number":139,"box":{"x":117,"y":475,"width":698,"height":12}},{"id":"e5ae2e3c-dd19-4cce-a674-add9b75e7bd7","block_type":"box","text":"corresponding settlement days. Therefore, an investment in Stock Connect Securities through a Stock","page_number":139,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"5c2d97ed-cee5-426f-9f32-dcd66763accf","block_type":"box","text":"Connect may subject a Fund to a risk of price fluctuations on days when the Chinese market is open,","page_number":139,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"74d01c91-2189-4c58-8b6e-52cd704dc37c","block_type":"box","text":"but a Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on the Stock","page_number":139,"box":{"x":117,"y":521,"width":745,"height":12}},{"id":"76aaabf0-79b0-4366-bc83-25e2fb92c9a0","block_type":"box","text":"Connect Securities market. If an investor buys Stock Connect Securities on day “T,” the investor will","page_number":139,"box":{"x":117,"y":537,"width":746,"height":12}},{"id":"e9e60ece-061f-431a-a315-52c0a893b891","block_type":"box","text":"only be able to sell the Stock Connect Securities on or after day T+1. Further, since all trades of Stock","page_number":139,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"75aa064d-3004-4465-962b-d205113c34d5","block_type":"box","text":"Connect Securities must be settled in RMB, investors must have timely access to a reliable supply of","page_number":139,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"18adad93-e5e9-44f8-844f-67645c503c85","block_type":"box","text":"offshore RMB, which cannot be guaranteed. There is also no assurance that RMB will not be subject to","page_number":139,"box":{"x":116,"y":583,"width":771,"height":12}},{"id":"5b4fcb25-ed03-4e67-b625-751e9935ba78","block_type":"box","text":"devaluation. Any devaluation of RMB could adversely affect a Fund’s investments. If a Fund holds a","page_number":139,"box":{"x":116,"y":599,"width":746,"height":12}},{"id":"d6b91462-e1e4-4e1f-9362-f2097901a0d8","block_type":"box","text":"class of shares denominated in a local currency other than RMB, the Fund will be exposed to currency","page_number":139,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"c72ee978-33ba-414a-aabf-a5a8a5a2ef96","block_type":"box","text":"exchange risk if the Fund converts the local currency into RMB for investments in Stock Connect","page_number":139,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"3e5924b9-a775-455c-b616-603770600362","block_type":"box","text":"Securities. A Fund may also incur conversion costs.","page_number":139,"box":{"x":116,"y":645,"width":390,"height":12}},{"id":"f005ad3d-42c2-4720-8899-d1557f5d3f32","block_type":"box","text":"Stock Connect Securities held through the nominee structure under a Stock Connect will be held","page_number":139,"box":{"x":116,"y":676,"width":716,"height":12}},{"id":"71ce0c14-0585-496d-8c20-97f09ad9eab1","block_type":"box","text":"through HKSCC as nominee on behalf of investors. The precise nature and rights of a Fund as the","page_number":139,"box":{"x":116,"y":692,"width":731,"height":12}},{"id":"f2c3308e-29fc-4ee0-80a9-8df5f9817386","block_type":"box","text":"beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well","page_number":139,"box":{"x":117,"y":707,"width":725,"height":12}},{"id":"24352b2e-8794-424a-8c63-063b1917d68a","block_type":"box","text":"defined under the PRC laws. There is a lack of a clear definition of, and distinction between, legal","page_number":139,"box":{"x":116,"y":723,"width":722,"height":12}},{"id":"c3579326-0873-4aa0-9254-077785e932c6","block_type":"box","text":"ownership and beneficial ownership under the PRC laws and there have been few cases involving a","page_number":139,"box":{"x":116,"y":738,"width":742,"height":12}},{"id":"aceca152-40c4-4c78-95aa-31df5589f286","block_type":"box","text":"nominee account structure in the PRC courts. The exact nature and methods of enforcement of the","page_number":139,"box":{"x":117,"y":754,"width":735,"height":9}},{"id":"9713ad49-b3a6-4fc0-b7f8-458f74ab8e5c","block_type":"box","text":"rights and interests of a Fund under the PRC laws is also uncertain. In the unlikely event that HKSCC","page_number":139,"box":{"x":117,"y":769,"width":751,"height":12}},{"id":"ccf4e0f7-a150-44b5-88d4-927c27decc5c","block_type":"box","text":"becomes subject to winding up proceedings in Hong Kong, there is a risk that the SSE Securities or","page_number":139,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"48bb4262-dabf-41d1-a477-bbe4b4182bc8","block_type":"box","text":"SZSE Securities may not be regarded as held for the beneficial ownership of a Fund or as part of the","page_number":139,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"65abcdb6-cbc1-4464-82b4-40a618b80461","block_type":"box","text":"general assets of HKSCC available for general distribution to its creditors. Notwithstanding the fact that","page_number":139,"box":{"x":116,"y":816,"width":765,"height":12}},{"id":"6f307065-e5da-4210-accd-298ee088b8c0","block_type":"box","text":"HKSCC does not claim proprietary interests in the SSE Securities or SZSE Securities held in its","page_number":139,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"0767161c-51f3-49c2-9679-df15204b73a1","block_type":"box","text":"omnibus stock account in the CSDCC, the CSDCC as the share registrar for SSE- or SZSE-listed","page_number":139,"box":{"x":116,"y":847,"width":729,"height":12}},{"id":"a4c0a882-0c0e-4216-8307-f19b28c61cd0","block_type":"box","text":"companies will still treat HKSCC as one of the shareholders when it handles corporate actions in","page_number":139,"box":{"x":116,"y":862,"width":722,"height":12}},{"id":"e82dba1d-488a-4c31-86d9-837286f6d940","block_type":"box","text":"respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting","page_number":139,"box":{"x":117,"y":878,"width":749,"height":12}},{"id":"fa91cdd6-a68a-4643-9765-07bbfeb24c6a","block_type":"box","text":"II-56","page_number":139,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1f362269-bab3-4e4a-b8fe-494286a11ba2","block_type":"box","text":"NM1026U-6039989-139/256","page_number":139,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a6b082d2-98b9-4842-ab44-09e1ba3bdd6b","block_type":"box","text":"SSE Securities and SZSE Securities and keeps participants of Central Clearing and Settlement","page_number":140,"box":{"x":116,"y":87,"width":712,"height":12}},{"id":"199e458e-2a7b-4411-a9be-34391a0c4f1d","block_type":"box","text":"System (“CCASS”) informed of all such corporate actions that require CCASS participants to take","page_number":140,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"e9af28ba-ad3b-4373-973e-fa0bab78360b","block_type":"box","text":"steps in order to participate in them. Investors may only exercise their voting rights by providing their","page_number":140,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"7842dd1f-1a3a-461b-a41c-294d69ac8829","block_type":"box","text":"voting instructions to HKSCC through participants of CCASS. All voting instructions from CCASS","page_number":140,"box":{"x":116,"y":134,"width":724,"height":12}},{"id":"b5bcd469-9c79-4ce5-84ab-706a977d13dc","block_type":"box","text":"participants will be consolidated by HKSCC, who will then submit a combined single voting instruction","page_number":140,"box":{"x":117,"y":149,"width":757,"height":12}},{"id":"fb27f4bb-d719-411a-9ea5-b032927721a1","block_type":"box","text":"to the relevant SSE- or SZSE-listed company. As a result, a Fund may suffer difficulties or delays in","page_number":140,"box":{"x":116,"y":165,"width":745,"height":12}},{"id":"719268d9-94c4-451e-aba7-66219c49c207","block_type":"box","text":"enforcing its rights in SSE Securities or SZSE Securities.","page_number":140,"box":{"x":116,"y":180,"width":427,"height":12}},{"id":"824cd6f1-6a9b-489b-b18b-5da5fcb051b1","block_type":"box","text":"Hong Kong’s Investor Compensation Fund is established to pay compensation to investors of any","page_number":140,"box":{"x":117,"y":211,"width":728,"height":12}},{"id":"af3fab80-cf73-4bf4-922e-9ea19579635e","block_type":"box","text":"nationality who suffer pecuniary losses as a result of default of a licensed intermediary or authorized","page_number":140,"box":{"x":117,"y":227,"width":747,"height":12}},{"id":"0848ac59-754a-4bf6-b07b-f93f02bde0cb","block_type":"box","text":"financial institution in relation to exchange-traded products in Hong Kong. For defaults occurring on or","page_number":140,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"2b002bf1-7279-40f0-ab5a-5d9bbe2b49ef","block_type":"box","text":"after January 1, 2020, Hong Kong’s Investor Compensation Fund covers investors’ losses in relation to","page_number":140,"box":{"x":116,"y":258,"width":769,"height":12}},{"id":"9cef0280-65e0-4ed1-905f-60109c438b5c","block_type":"box","text":"securities (i) that are traded on the SSE or the SZSE and (ii) in respect of which an order for sale or","page_number":140,"box":{"x":116,"y":273,"width":743,"height":12}},{"id":"44ba33d1-2299-4269-a1d4-f59bbe733412","block_type":"box","text":"purchase is permitted to be routed through the Northbound Trading Link of a Stock Connect. On the","page_number":140,"box":{"x":117,"y":289,"width":746,"height":12}},{"id":"c9cfcf1f-662d-4103-9f01-5aa2de2f80e0","block_type":"box","text":"other hand, since a Fund carries out Northbound trading through securities brokers in Hong Kong but","page_number":140,"box":{"x":116,"y":304,"width":756,"height":12}},{"id":"73471b87-9ddc-4b13-b314-df4142e0c92c","block_type":"box","text":"not PRC brokers, it is not protected by the China Securities Investor Protection Fund in the PRC.","page_number":140,"box":{"x":117,"y":320,"width":722,"height":12}},{"id":"8cf6365d-d3df-4208-9e4d-d9a97c2f0277","block_type":"box","text":"Market participants are able to participate in Stock Connects subject to meeting certain information","page_number":140,"box":{"x":117,"y":351,"width":737,"height":12}},{"id":"09a51e4c-590e-44b1-b7b0-039411bd78a1","block_type":"box","text":"technology capability, risk management and other requirements as may be specified by the relevant","page_number":140,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"f280bae7-8497-4816-a302-cf2929afbd9e","block_type":"box","text":"exchange and/or clearing house. Further, the “connectivity” in Stock Connects requires routing of","page_number":140,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"23f3becc-a114-4259-8b65-7024b7ede9bc","block_type":"box","text":"orders across the border of Hong Kong and the PRC. This requires the development of new","page_number":140,"box":{"x":116,"y":397,"width":687,"height":12}},{"id":"cae38b1e-a55c-4204-8774-f15d8c52c484","block_type":"box","text":"information technology systems on the part of SEHK and exchange participants. There is no assurance","page_number":140,"box":{"x":117,"y":413,"width":771,"height":12}},{"id":"7c36055a-65e6-4ddb-b3fb-2a1163a0479b","block_type":"box","text":"that the systems of SEHK and market participants will function properly or will continue to be adapted","page_number":140,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"1722a9c7-dc81-4775-845a-5d7e39b4ddf1","block_type":"box","text":"to changes and developments in both markets. In the event that the relevant systems fail to function","page_number":140,"box":{"x":116,"y":444,"width":747,"height":12}},{"id":"3d4cb84c-ffc6-44db-b8a2-36a119acda96","block_type":"box","text":"properly, trading in Stock Connect Securities through Stock Connects could be disrupted.","page_number":140,"box":{"x":117,"y":459,"width":667,"height":12}},{"id":"753c6cd7-eb69-44b1-939b-ae6e3fa086a9","block_type":"box","text":"The Shanghai-Hong Kong Stock Connect program launched in November 2014 and the Shenzhen","page_number":140,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"a4afada1-9fad-44ab-8012-258b915913f9","block_type":"box","text":"Hong Kong Stock Connect program launched in December 2016. Each program does not have an","page_number":140,"box":{"x":117,"y":506,"width":733,"height":12}},{"id":"762cf144-c9fa-4ae9-bd33-d00847991f63","block_type":"box","text":"extensive operating history. New or revised regulations may be issued from time to time by the","page_number":140,"box":{"x":116,"y":521,"width":707,"height":12}},{"id":"9af52ba5-7066-4ee8-8d20-2434b47e85c2","block_type":"box","text":"regulators and stock exchanges in China and Hong Kong in connection with operations, legal","page_number":140,"box":{"x":117,"y":537,"width":695,"height":12}},{"id":"5212b615-3269-4894-bb2c-78e8bd606db5","block_type":"box","text":"enforcement and cross-border trades under Stock Connects. In addition, there can be no assurance","page_number":140,"box":{"x":116,"y":552,"width":748,"height":11}},{"id":"56c2dfd9-8124-4fea-a0c5-a08f83a50afd","block_type":"box","text":"that Stock Connect will not be discontinued. A Fund may be adversely affected as a result of such","page_number":140,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"47e490d5-d294-42b7-b2ff-66a05e09ec27","block_type":"box","text":"changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ","page_number":140,"box":{"x":116,"y":583,"width":714,"height":12}},{"id":"51dc101c-7f59-47c9-ad9f-0fda11bd786e","block_type":"box","text":"significantly and issues may arise from the differences on an on-going basis. In the event that the","page_number":140,"box":{"x":116,"y":599,"width":727,"height":12}},{"id":"f0ad4aa5-2b12-47c0-8313-b04b3fb15b40","block_type":"box","text":"relevant systems fail to function properly, trading in both markets through Stock Connects could be","page_number":140,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"09e6d284-1a06-48a3-8000-5ef10c616a30","block_type":"box","text":"disrupted and a Fund’s ability to achieve its investment objective may be adversely affected. In","page_number":140,"box":{"x":116,"y":630,"width":708,"height":12}},{"id":"2f67b1b7-2fd4-4a59-ae02-8e63ab1c1125","block_type":"box","text":"addition, a Fund’s investments in Stock Connect Securities through Stock Connects are generally","page_number":140,"box":{"x":116,"y":645,"width":728,"height":12}},{"id":"8415b591-4f5f-47b8-9e12-b2833f3b601e","block_type":"box","text":"subject to Chinese securities regulations and listing rules, among other restrictions. Further, different","page_number":140,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"16fbbe4c-a747-44f7-9eb0-d0985816d48c","block_type":"box","text":"fees, costs and taxes are imposed on foreign investors acquiring Stock Connect Securities through","page_number":140,"box":{"x":116,"y":676,"width":733,"height":12}},{"id":"e2dd2b2b-e8aa-4922-a4b6-689606e8814e","block_type":"box","text":"Stock Connects, and these fees, costs and taxes may be higher than comparable fees, costs and","page_number":140,"box":{"x":116,"y":692,"width":722,"height":12}},{"id":"539824e5-cca9-4a5f-956a-0891aa808d27","block_type":"box","text":"taxes imposed on owners of other securities providing similar investment exposure.","page_number":140,"box":{"x":116,"y":707,"width":618,"height":12}},{"id":"4398d70f-079f-49fc-ba49-39b118229b40","block_type":"box","text":"Suspension Risk.","page_number":140,"box":{"x":117,"y":738,"width":127,"height":12}},{"id":"0cec9158-a787-4685-a528-fd572fe83dbb","block_type":"box","text":"SSE Securities and SZSE Securities may only be bought from, or sold to, a Fund at","page_number":140,"box":{"x":251,"y":738,"width":620,"height":12}},{"id":"00027fb8-ecd5-4b82-9ca5-0225b2ca2a0c","block_type":"box","text":"times when the relevant SSE Securities and SZSE Securities may be sold or purchased on the","page_number":140,"box":{"x":116,"y":754,"width":704,"height":12}},{"id":"62e89e72-5e58-4abf-a8ce-f9d7789e0635","block_type":"box","text":"relevant Chinese stock exchange. The SSE Securities and SZSE Securities markets have a higher","page_number":140,"box":{"x":117,"y":769,"width":733,"height":12}},{"id":"90baddb7-1843-45ef-b5d5-79b2ab58c791","block_type":"box","text":"propensity for trading suspensions than many other global equity markets. Each of the SEHK, SSE and","page_number":140,"box":{"x":117,"y":785,"width":765,"height":12}},{"id":"a937ccb9-db1c-4d93-8f88-4211bd445a9f","block_type":"box","text":"SZSE reserves the right to suspend trading of SSE Securities and SZSE Securities purchased on the","page_number":140,"box":{"x":116,"y":800,"width":751,"height":12}},{"id":"1ef391b5-79fa-4779-b0a5-846c3d3f0306","block_type":"box","text":"Stock Connects if necessary for ensuring an orderly and fair market and ensuring that risks are","page_number":140,"box":{"x":116,"y":816,"width":705,"height":12}},{"id":"2ae9a67f-3e13-4c7f-a6ec-c2d3c7446385","block_type":"box","text":"managed prudently. Consent from the relevant regulator would be sought before a suspension of","page_number":140,"box":{"x":117,"y":831,"width":724,"height":12}},{"id":"ad3f9fdc-c485-48fd-a61c-cf506e6526ba","block_type":"box","text":"Northbound trading is triggered. The relevant PRC government authority may also impose “circuit","page_number":140,"box":{"x":117,"y":847,"width":727,"height":12}},{"id":"ff9670d5-ef6c-42eb-9b90-8b81c41e166e","block_type":"box","text":"breakers” and other measures to halt or suspend Northbound trading. Where a suspension in the","page_number":140,"box":{"x":117,"y":862,"width":725,"height":12}},{"id":"340b1c7a-b32a-40c4-b54a-03d4ee39194d","block_type":"box","text":"Northbound trading through Stock Connect is effected, the Fund’s ability to access the PRC market will","page_number":140,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"9b56f384-fcca-42c7-a829-edc93af0a582","block_type":"box","text":"II-57","page_number":140,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0bc3685c-edbd-4432-b90a-ad4e6fc4654a","block_type":"box","text":"NM1026U-6039989-140/256","page_number":140,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"631a5aea-8a14-4044-88b5-3d2f589d7205","block_type":"box","text":"be adversely affected. Trading suspensions in certain stocks could lead to greater market execution","page_number":141,"box":{"x":117,"y":87,"width":745,"height":12}},{"id":"655351e9-5e85-4207-b35f-d2e4b3347b97","block_type":"box","text":"risk and costs for a Fund. The SSE and SZSE currently","page_number":141,"box":{"x":117,"y":102,"width":415,"height":13}},{"id":"3fd0a8d6-61c9-4602-a94a-4ee78d0d155e","block_type":"box","text":"apply a daily price limit, generally set at 10%,","page_number":141,"box":{"x":533,"y":102,"width":340,"height":13}},{"id":"a7ea6f07-cf4d-40cc-8276-182fff23c826","block_type":"box","text":"of the amount of fluctuation permitted in the prices of the relevant SSE Securities and SZSE Securities","page_number":141,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"f344ffcd-34ee-49aa-8cb0-b9839ba73e15","block_type":"box","text":"during a single trading day. The daily price limit refers to price movements only and does not restrict","page_number":141,"box":{"x":116,"y":134,"width":747,"height":12}},{"id":"3ad05e70-222a-478a-98ac-94ad258bb5c9","block_type":"box","text":"trading within the relevant limit. There can be no assurance that a liquid market on an exchange will","page_number":141,"box":{"x":116,"y":149,"width":744,"height":12}},{"id":"150db922-1e5b-4ee9-9482-69d31b2d2feb","block_type":"box","text":"exist for any particular SSE Security or SZSE Security or for any particular time.","page_number":141,"box":{"x":116,"y":165,"width":598,"height":12}},{"id":"e8e98232-4418-404d-8c90-f6883557b344","block_type":"box","text":"Risk of Investing in the China Interbank Bond Market through Bond Connect.","page_number":141,"box":{"x":116,"y":192,"width":575,"height":12}},{"id":"1b33e5b1-4188-402a-876c-7ee95f503cb5","block_type":"box","text":"A Fund may invest","page_number":141,"box":{"x":691,"y":192,"width":144,"height":12}},{"id":"5dc31419-fe5a-4b9a-9218-00b5c6cfcec4","block_type":"box","text":"directly in the domestic bond market in the PRC (the “China Interbank Bond Market”) through the","page_number":141,"box":{"x":116,"y":207,"width":724,"height":12}},{"id":"07fd609e-5a7f-4169-ae14-98aee48bdbb2","block_type":"box","text":"northbound trading of Bond Connect (“Bond Connect”). Bond Connect is an initiative launched in July","page_number":141,"box":{"x":117,"y":223,"width":755,"height":12}},{"id":"56351881-9a54-4267-bc30-c86094f31ae2","block_type":"box","text":"2017 for mutual bond market access between the PRC and Hong Kong, established by the China","page_number":141,"box":{"x":116,"y":238,"width":729,"height":12}},{"id":"aa84dc23-97a8-4632-b6f9-507e94be677c","block_type":"box","text":"Foreign Exchange Trade System & National Interbank Funding Centre (“CFETS”), China Central","page_number":141,"box":{"x":117,"y":254,"width":722,"height":12}},{"id":"0d0772f2-6475-465a-899f-0afcd85bdea8","block_type":"box","text":"Depository & Clearing Co., Ltd (“CDCC”), Shanghai Clearing House (“SCH”), Hong Kong Exchanges","page_number":141,"box":{"x":117,"y":269,"width":752,"height":12}},{"id":"cb687e64-c825-4267-85ac-6903258b35a7","block_type":"box","text":"and Clearing Limited (“HKEX”) and Central Moneymarkets Unit (“CMU”). Under the prevailing","page_number":141,"box":{"x":116,"y":285,"width":699,"height":12}},{"id":"cd386435-bf28-45da-9abe-7a4d022f985e","block_type":"box","text":"regulations in the PRC, eligible foreign investors are allowed to invest in the bonds circulated in the","page_number":141,"box":{"x":117,"y":300,"width":738,"height":12}},{"id":"f6efded4-63a1-4e62-ba83-7951eace9c05","block_type":"box","text":"China Interbank Bond Market through Bond Connect. Eligible foreign investors may submit trade","page_number":141,"box":{"x":117,"y":316,"width":721,"height":12}},{"id":"586d259e-790a-41a3-aedb-07a896226cc8","block_type":"box","text":"requests for bonds circulated in the China Interbank Bond Market through offshore electronic bond","page_number":141,"box":{"x":117,"y":331,"width":735,"height":12}},{"id":"273b3c7e-4da5-43a9-b36f-0046f260f13b","block_type":"box","text":"trading platforms (such as Tradeweb), which will in turn transmit their requests for quotation to CFETS.","page_number":141,"box":{"x":116,"y":347,"width":768,"height":12}},{"id":"6f3ecee6-08e1-4fc1-a8b2-297f61db4be5","block_type":"box","text":"CFETS will send the requests for quotation to a number of approved onshore dealers (including market","page_number":141,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"ae724780-736a-4af7-a323-cf8f2e37042c","block_type":"box","text":"makers and others engaged in the market making business) in the PRC. The approved onshore","page_number":141,"box":{"x":117,"y":378,"width":715,"height":12}},{"id":"ff9760b8-ed09-4c49-9099-b02fc37d8109","block_type":"box","text":"dealer(s) will respond to the requests for quotation via CFETS and CFETS will send their responses to","page_number":141,"box":{"x":116,"y":393,"width":765,"height":12}},{"id":"0c054010-3635-4d17-b6fb-424cead57ac5","block_type":"box","text":"those eligible foreign investors through the same offshore electronic bond trading platforms. Once the","page_number":141,"box":{"x":116,"y":409,"width":759,"height":12}},{"id":"b0168940-e9de-48ab-96a0-778da1e6ca6b","block_type":"box","text":"eligible foreign investor accepts the quotation, the trade is concluded on CFETS.","page_number":141,"box":{"x":116,"y":424,"width":603,"height":12}},{"id":"a6c9143f-717b-4c85-90ac-7e73cc05430a","block_type":"box","text":"The settlement and custody of bonds traded in the China Interbank Bond Market under Bond Connect","page_number":141,"box":{"x":116,"y":451,"width":761,"height":12}},{"id":"eb893fbc-d28d-4a2e-82af-7ab35ffe05bf","block_type":"box","text":"will be effected through the settlement and custody link between CMU, as an offshore custody agent,","page_number":141,"box":{"x":116,"y":467,"width":755,"height":12}},{"id":"945e5087-5caf-4fd9-a518-3f7b0b684b52","block_type":"box","text":"and CDCC and SCH, as onshore custodians and clearing institutions in the PRC. Under the settlement","page_number":141,"box":{"x":116,"y":482,"width":768,"height":12}},{"id":"4087729b-40dc-4994-8bc8-9a66e010bc54","block_type":"box","text":"link, CDCC or SCH will effect gross settlement of confirmed trades onshore and CMU will process","page_number":141,"box":{"x":117,"y":498,"width":730,"height":12}},{"id":"d09ab131-f479-458c-95a9-97288b3ef8a0","block_type":"box","text":"bond settlement instructions from CMU members on behalf of eligible foreign investors in accordance","page_number":141,"box":{"x":117,"y":513,"width":757,"height":12}},{"id":"07555ddb-2e3d-4e27-a3ca-e52af1a37112","block_type":"box","text":"with its relevant rules. Since the introduction in August 2018 of delivery versus payment (DVP)","page_number":141,"box":{"x":116,"y":529,"width":705,"height":12}},{"id":"de9c48fb-7f32-4a75-b8f9-c37320e5a7e6","block_type":"box","text":"settlement in respect of Bond Connect, the movement of cash and securities is carried out","page_number":141,"box":{"x":116,"y":544,"width":675,"height":12}},{"id":"99a144b3-3a78-4a1f-96cc-d1121a4fdc77","block_type":"box","text":"simultaneously on a real-time basis. Pursuant to the prevailing regulations in the PRC, CMU, as the","page_number":141,"box":{"x":116,"y":560,"width":743,"height":12}},{"id":"f853b7bd-c0fd-4261-bb42-3d220da799fd","block_type":"box","text":"offshore custody agent recognized by the Hong Kong Monetary Authority, will open omnibus nominee","page_number":141,"box":{"x":116,"y":575,"width":759,"height":12}},{"id":"7e8a9e52-184a-4705-8e51-d41dcfe78e0c","block_type":"box","text":"accounts with the onshore custody agent recognized by the People’s Bank of China (","page_number":141,"box":{"x":116,"y":591,"width":631,"height":12}},{"id":"09885931-c674-4d86-9dcf-16a52f6fe69e","block_type":"box","text":"i.e.","page_number":141,"box":{"x":749,"y":591,"width":20,"height":9}},{"id":"809d1b39-495d-4206-982d-ccf19bc0ba8e","block_type":"box","text":", CDCC and","page_number":141,"box":{"x":772,"y":591,"width":94,"height":11}},{"id":"be93e234-69b5-4228-9b1a-2136cf1280a4","block_type":"box","text":"SCH). All bonds traded by eligible foreign investors through Bond Connect will be registered in the","page_number":141,"box":{"x":116,"y":606,"width":734,"height":12}},{"id":"00393e38-254b-4d18-84d0-8e28f430192f","block_type":"box","text":"name of CMU, which will hold such bonds as a nominee owner. Therefore, a Fund will be exposed to","page_number":141,"box":{"x":117,"y":622,"width":754,"height":12}},{"id":"b3e703cf-1345-4b45-b707-3ed8553ac736","block_type":"box","text":"custody risks with respect to CMU. In the remote event of a CDCC or SCH default, CMU’s liabilities in","page_number":141,"box":{"x":116,"y":637,"width":759,"height":12}},{"id":"08dae24b-4218-4d53-900d-fcab624571cc","block_type":"box","text":"Bond Connect bonds under its market contracts with clearing participants will be limited to assisting","page_number":141,"box":{"x":117,"y":653,"width":741,"height":12}},{"id":"0d64fd70-4eb1-4f94-bec6-30d67f13cc2d","block_type":"box","text":"clearing participants in pursuing their claims against CDCC or SCH. The Fund may suffer delay in the","page_number":141,"box":{"x":116,"y":668,"width":753,"height":12}},{"id":"7791aafe-c9bd-40bb-92df-c7ef98aaea01","block_type":"box","text":"recovery process or may not fully recover its losses from CDCC or SCH. In addition, as the relevant","page_number":141,"box":{"x":117,"y":684,"width":739,"height":12}},{"id":"1ea2e3b8-1db5-4f25-b598-cff6541c6bcf","block_type":"box","text":"filings, registration with the People’s Bank of China, and account opening have to be carried out by","page_number":141,"box":{"x":116,"y":699,"width":733,"height":13}},{"id":"056d16cc-f435-4871-a6ac-26d6f05cc4e2","block_type":"box","text":"third parties, including CMU, CDCC, SCH, and CFETS, a Fund is subject to the risks of default or","page_number":141,"box":{"x":116,"y":715,"width":723,"height":12}},{"id":"c639fab2-9b63-4bde-b5d8-f462777dab58","block_type":"box","text":"errors on the part of such third parties.","page_number":141,"box":{"x":116,"y":730,"width":284,"height":12}},{"id":"80d5ec72-6a5a-4bb5-b0e2-df1d6208ead5","block_type":"box","text":"The precise nature and rights of a Fund as the beneficial owner of the bonds traded in the China","page_number":141,"box":{"x":116,"y":758,"width":715,"height":12}},{"id":"993113cf-63bd-47cc-80d6-6fc289899451","block_type":"box","text":"Interbank Bond Market through CMU as nominee is not well-defined under PRC law. There is a lack of","page_number":141,"box":{"x":117,"y":773,"width":761,"height":12}},{"id":"801a75c1-0f16-458b-b613-675d4db6de5f","block_type":"box","text":"a clear definition of, and distinction between, legal ownership and beneficial ownership under PRC law","page_number":141,"box":{"x":116,"y":789,"width":760,"height":12}},{"id":"ced75978-2ee1-406a-b918-feb13aa7a5f3","block_type":"box","text":"and there have been few cases involving a nominee account structure in the PRC courts. The exact","page_number":141,"box":{"x":116,"y":804,"width":741,"height":12}},{"id":"74659275-93b5-49f1-82d3-073d5b4b2072","block_type":"box","text":"nature and methods of enforcement of the rights and interests of a Fund under PRC law are also","page_number":141,"box":{"x":117,"y":820,"width":717,"height":12}},{"id":"eef1c1b9-dc17-4f85-bbff-d8f6cf5a98e7","block_type":"box","text":"uncertain.","page_number":141,"box":{"x":117,"y":835,"width":77,"height":10}},{"id":"eb8c302a-8aa3-48c7-8e68-21238d679826","block_type":"box","text":"Market volatility and potential lack of liquidity due to low trading volume of certain bonds in the China","page_number":141,"box":{"x":117,"y":862,"width":750,"height":12}},{"id":"b300149f-f5b4-4577-a163-9345dc7a717b","block_type":"box","text":"Interbank Bond Market may result in prices of certain bonds traded on such market fluctuating","page_number":141,"box":{"x":117,"y":878,"width":702,"height":12}},{"id":"2e4b9b4e-1df8-4a2d-b787-78139ce8519c","block_type":"box","text":"II-58","page_number":141,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"919a34e2-b8d2-496d-b4f6-4a03a228a395","block_type":"box","text":"NM1026U-6039989-141/256","page_number":141,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9a304b32-3bcd-400e-9160-fdb5afff7dfe","block_type":"box","text":"significantly. A Fund investing in such market is therefore subject to liquidity and volatility risks. The","page_number":142,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"98fb9c31-53ad-4897-96c9-543447858561","block_type":"box","text":"bid-ask spreads of the prices of such securities may be large, and a Fund may therefore incur","page_number":142,"box":{"x":117,"y":102,"width":700,"height":13}},{"id":"0f493487-8a59-4dee-8461-5de7ad3c8df1","block_type":"box","text":"significant costs and may suffer losses when selling such investments. The bonds traded in the China","page_number":142,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"4102d750-a23c-4bd6-8c12-cf384dbf9645","block_type":"box","text":"Interbank Bond Market may be difficult or impossible to sell, which may impact a Fund’s ability to","page_number":142,"box":{"x":117,"y":134,"width":722,"height":12}},{"id":"e5211e8d-ac11-4fff-acd8-63d42a57f121","block_type":"box","text":"acquire or dispose of such securities at their expected prices.","page_number":142,"box":{"x":116,"y":149,"width":460,"height":12}},{"id":"05843a17-08db-4781-ab25-e723c5630f04","block_type":"box","text":"Investing in the China Interbank Bond Market through Bond Connect is also subject to regulatory risks.","page_number":142,"box":{"x":117,"y":177,"width":766,"height":12}},{"id":"b9a0af90-db22-46d4-8a62-cb1e61b249a5","block_type":"box","text":"The relevant rules and regulations are subject to change, which may have potential retrospective","page_number":142,"box":{"x":116,"y":193,"width":724,"height":12}},{"id":"8f371320-8f9b-443e-8ac8-f720e7c28f81","block_type":"box","text":"effect, and there can be no assurance that Bond Connect will not be discontinued or abolished.","page_number":142,"box":{"x":116,"y":208,"width":711,"height":11}},{"id":"b6cc3398-d697-45ee-aa88-05dbbaf57bf5","block_type":"box","text":"Furthermore, the securities regimes and legal systems of China and Hong Kong differ significantly and","page_number":142,"box":{"x":117,"y":223,"width":764,"height":13}},{"id":"ab4932ae-a8a0-4041-a39a-30bd14a0bbeb","block_type":"box","text":"issues may arise based on these differences. In the event that the relevant authorities suspend","page_number":142,"box":{"x":117,"y":239,"width":709,"height":12}},{"id":"6f4b5c46-eb59-43cb-859a-9adf408285e3","block_type":"box","text":"account opening or trading on the China Interbank Bond Market, a Fund’s ability to invest in the China","page_number":142,"box":{"x":116,"y":254,"width":762,"height":13}},{"id":"d9047512-7e90-43d1-a8dc-0b1c2396252d","block_type":"box","text":"Interbank Bond Market will be adversely affected and limited. In such event, the Fund’s ability to","page_number":142,"box":{"x":117,"y":270,"width":716,"height":12}},{"id":"aa24ce21-86a7-4978-85b8-1e7b2ba1cd3f","block_type":"box","text":"achieve its investment objective will be negatively affected and, after exhausting other trading","page_number":142,"box":{"x":116,"y":285,"width":699,"height":13}},{"id":"78ad6d33-019b-4b7f-a2e1-b4b68a200a8f","block_type":"box","text":"alternatives, the Fund may suffer substantial losses as a result. Further, if Bond Connect is not","page_number":142,"box":{"x":116,"y":301,"width":707,"height":12}},{"id":"b34e8f9f-bc2f-44c8-be0a-f51ef7853069","block_type":"box","text":"operating, a Fund may not be able to acquire or dispose of bonds through Bond Connect in a timely","page_number":142,"box":{"x":116,"y":316,"width":745,"height":13}},{"id":"98c0f783-c564-4a96-9a53-7930b8349ed0","block_type":"box","text":"manner, which could adversely affect the Fund’s performance.","page_number":142,"box":{"x":117,"y":332,"width":467,"height":12}},{"id":"3b27da98-da79-432e-931d-aaaaf7ec3048","block_type":"box","text":"Trading through Bond Connect is performed through newly developed trading platforms and","page_number":142,"box":{"x":116,"y":360,"width":687,"height":12}},{"id":"d236bc42-6d24-438b-a813-111e5fb8cadd","block_type":"box","text":"operational systems. There is no assurance that such systems will function properly or will continue to","page_number":142,"box":{"x":116,"y":375,"width":761,"height":12}},{"id":"9fa55b15-82be-4d9e-8bc5-3fa415f018e9","block_type":"box","text":"be adapted to changes and developments in the market. In the event that the relevant systems fail to","page_number":142,"box":{"x":117,"y":391,"width":753,"height":12}},{"id":"59b93d38-c8cd-4245-9a1e-e82cbb8d9f8f","block_type":"box","text":"function properly, trading through Bond Connect may be disrupted. A Fund’s ability to trade through","page_number":142,"box":{"x":116,"y":406,"width":744,"height":12}},{"id":"4c7edaa3-ba51-48ea-b3df-d19c66720eec","block_type":"box","text":"Bond Connect (and hence to pursue its investment strategy) may therefore be adversely affected. In","page_number":142,"box":{"x":117,"y":422,"width":749,"height":12}},{"id":"dd7a17b0-55ee-4fac-9284-296e85a862a5","block_type":"box","text":"addition, where a Fund invests in the China Interbank Bond Market through Bond Connect, it may be","page_number":142,"box":{"x":116,"y":437,"width":753,"height":12}},{"id":"ff4d0bcd-618a-4258-8d60-baf4174da88a","block_type":"box","text":"subject to risks of delays inherent in the order placing and/or settlement systems.","page_number":142,"box":{"x":116,"y":453,"width":607,"height":12}},{"id":"551a0bcf-5eab-43ab-8b40-49c638b7d831","block_type":"box","text":"Bond Connect trades are settled in Chinese currency, the RMB, which is currently restricted and not","page_number":142,"box":{"x":117,"y":481,"width":746,"height":12}},{"id":"6dc99590-7843-4814-8cb1-bcb4462e55d8","block_type":"box","text":"freely convertible. As a result, a Fund will be exposed to currency risk, and it cannot be guaranteed","page_number":142,"box":{"x":116,"y":496,"width":740,"height":12}},{"id":"7579ac5a-41a3-4aad-818d-8050acc653a4","block_type":"box","text":"that investors will have timely access to a reliable supply of RMB.","page_number":142,"box":{"x":116,"y":512,"width":490,"height":12}},{"id":"24fd5b52-4d28-4781-a94a-8da0178245ae","block_type":"box","text":"Tax Risk — Withholding Income Tax Risk.","page_number":142,"box":{"x":118,"y":540,"width":317,"height":12}},{"id":"c25a1f83-281a-405b-88ad-b1d9d49a836f","block_type":"box","text":"According to PRC tax regulations, a 10% withholding income tax is imposed on PRC sourced","page_number":142,"box":{"x":116,"y":561,"width":697,"height":13}},{"id":"6a8a452e-ee5b-4983-a756-ab702ff43722","block_type":"box","text":"dividends and interests from non-government bonds paid to a non-PRC tax resident enterprise, unless","page_number":142,"box":{"x":116,"y":577,"width":765,"height":12}},{"id":"4e2c7c97-491c-463a-a2f2-1fd65cd82937","block_type":"box","text":"the rate is reduced under an applicable tax treaty. From a technical perspective, withholding income","page_number":142,"box":{"x":116,"y":593,"width":746,"height":12}},{"id":"81fc6248-8248-409a-ac45-d5155d144b30","block_type":"box","text":"tax is also applicable to capital gains realized by foreign investors on the disposal of PRC equity","page_number":142,"box":{"x":116,"y":608,"width":717,"height":12}},{"id":"e59f42e9-dc1d-4cd1-9464-9f980821f103","block_type":"box","text":"interests.","page_number":142,"box":{"x":117,"y":624,"width":72,"height":9}},{"id":"dcf98db9-117f-45f1-a122-d04ed8626ae4","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":142,"box":{"x":116,"y":651,"width":735,"height":12}},{"id":"e1c78fb3-43a1-4db5-8cc2-e7356c8cef8c","block_type":"box","text":"On November 14, 2014, the Ministry of Finance (“MoF”), China Securities Regulatory Commission and","page_number":142,"box":{"x":116,"y":679,"width":761,"height":12}},{"id":"b5aeab2a-9f14-49eb-8c3c-f5335f6196f5","block_type":"box","text":"the State Taxation Administration (“STA”), acting with State Council’s approval, jointly released Circular","page_number":142,"box":{"x":116,"y":695,"width":767,"height":12}},{"id":"22a2b387-124d-4172-b119-398b107763c4","block_type":"box","text":"79, which temporarily exempts Qualified Foreign Institutional Investors (“QFIIs”) and Renminbi","page_number":142,"box":{"x":116,"y":710,"width":699,"height":12}},{"id":"94a29767-940a-439d-bcaa-f8100be79866","block_type":"box","text":"Qualified Foreign Institutional Investors (“RQFIIs”) from tax on capital gains derived from the trading of","page_number":142,"box":{"x":116,"y":726,"width":760,"height":12}},{"id":"9b995c6a-edc4-4288-b830-dd70a4cf1316","block_type":"box","text":"shares and other equity interest investments on or after November 17, 2014. Subsequently, Circulars","page_number":142,"box":{"x":116,"y":741,"width":751,"height":12}},{"id":"8e0ff0a4-8462-411d-b071-f0f84f2adf62","block_type":"box","text":"81 and 127 were issued to temporarily exempt tax on capital gains derived from trading of equity","page_number":142,"box":{"x":116,"y":757,"width":716,"height":12}},{"id":"5197e4aa-fbef-4295-8c4b-c665d03100c8","block_type":"box","text":"securities of companies domiciled in the PRC that trade on Chinese stock exchanges (“A-Shares”)","page_number":142,"box":{"x":116,"y":772,"width":729,"height":12}},{"id":"5437b14d-170a-4b34-80b1-cba77c42b49d","block_type":"box","text":"through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect","page_number":142,"box":{"x":116,"y":788,"width":764,"height":12}},{"id":"c7dff91f-6889-42a1-ba6c-1a23e2227554","block_type":"box","text":"program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). The duration of","page_number":142,"box":{"x":117,"y":803,"width":746,"height":12}},{"id":"c3797a80-6848-47c3-a517-6b0292075e75","block_type":"box","text":"the temporary exemptions is not stated in the circulars and is subject to termination by the PRC tax","page_number":142,"box":{"x":116,"y":819,"width":735,"height":12}},{"id":"d1ac6e62-f8ef-4593-b0e7-a0922adc22a6","block_type":"box","text":"authorities with or without notice.","page_number":142,"box":{"x":116,"y":834,"width":249,"height":10}},{"id":"1846c307-da0a-4997-8eff-3b4a8190517c","block_type":"box","text":"On November 22, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":142,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"8de372e7-bdfd-4594-a7bb-98eaab4e18c4","block_type":"box","text":"institutional investors are temporarily exempt from withholding income tax with respect to interest","page_number":142,"box":{"x":117,"y":878,"width":723,"height":12}},{"id":"9ac37142-4bec-4b11-bb34-7831b6bd8bc4","block_type":"box","text":"II-59","page_number":142,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"33998ba6-c92a-4779-a6f7-527095327340","block_type":"box","text":"NM1026U-6039989-142/256","page_number":142,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8f0ee4ed-b1e5-44e8-834e-b888961fed1f","block_type":"box","text":"income on bonds derived from the PRC bond market from November 7, 2018 to November 6, 2021.","page_number":143,"box":{"x":117,"y":87,"width":745,"height":11}},{"id":"bf988284-f992-4437-a37f-548c0a366dcb","block_type":"box","text":"On November 22, 2021, the MoF and STA issued Public Notice 34 to extend the temporary exemption","page_number":143,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"182d7524-a150-4d2a-b5ab-38bdfc9009cc","block_type":"box","text":"from November 7, 2021 to December 31, 2025. On January 15, 2026, it was announced via Public","page_number":143,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"61ed1397-351e-411e-9d18-1b08be3802b0","block_type":"box","text":"Notice No. 5 of 2026 that the exemption was extended through December 31, 2027.","page_number":143,"box":{"x":117,"y":134,"width":628,"height":12}},{"id":"31134ab0-bf3a-4c9a-bed1-6f17a661f62d","block_type":"box","text":"Value Added Tax (“VAT”) Risk—","page_number":143,"box":{"x":118,"y":165,"width":225,"height":12}},{"id":"8c275442-4bb7-4d69-88c5-6ee8dadeadf1","block_type":"box","text":"k—From May 1, 2016, VAT applies to certain income derived by the","page_number":143,"box":{"x":342,"y":165,"width":501,"height":12}},{"id":"86685f37-5c44-48d5-aee3-142f25c045c9","block_type":"box","text":"Fund, including PRC sourced interest income on non-government bonds and trading gains.","page_number":143,"box":{"x":117,"y":180,"width":681,"height":12}},{"id":"b9c0a22d-4929-46e7-ba25-7f3bf8a5c90d","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":143,"box":{"x":116,"y":211,"width":735,"height":12}},{"id":"a2cbfc58-8f3e-4221-9e20-4592ef22c022","block_type":"box","text":"VAT exemptions currently apply to capital gains from trading of QFII and RQFII products, A-Shares","page_number":143,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"f4bda25e-1444-4a1e-8339-ed8dc68a577d","block_type":"box","text":"traded on the Stock Connects and debt securities traded in the China Interbank Bond Market.","page_number":143,"box":{"x":116,"y":258,"width":699,"height":9}},{"id":"27407141-fd35-4231-9be3-ff88c664478e","block_type":"box","text":"On November 7, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":143,"box":{"x":116,"y":289,"width":694,"height":12}},{"id":"d6cbea07-d2c9-4596-b1e3-e1f435b085bd","block_type":"box","text":"institutional investors are temporarily exempt from VAT with respect to interest income on bonds","page_number":143,"box":{"x":117,"y":304,"width":718,"height":12}},{"id":"d7a6d2d8-5136-412e-ac69-2d4213b5f9e4","block_type":"box","text":"derived from the PRC bond market from November 7, 2018 to November 6, 2021. On November 22,","page_number":143,"box":{"x":116,"y":320,"width":750,"height":11}},{"id":"dd69f52a-b1b7-4b6a-8d21-d380ddd01f12","block_type":"box","text":"2021, the MoF and STA jointly issued Public Notice 34 to extend the temporary exemption from","page_number":143,"box":{"x":116,"y":335,"width":714,"height":12}},{"id":"244ca2a6-dca4-406b-a943-184376fe4eda","block_type":"box","text":"November 7, 2021 to December 31, 2025. However, on July 31, 2025, the MoF and STA jointly issued","page_number":143,"box":{"x":117,"y":351,"width":764,"height":12}},{"id":"ba549ca6-47ec-464d-aba3-daacaa478b54","block_type":"box","text":"Public Notice No 4 of 2025, stating that VAT will apply with respect to interest income derived from","page_number":143,"box":{"x":117,"y":366,"width":735,"height":12}},{"id":"5cd0be17-c79c-4506-a480-268d66a41685","block_type":"box","text":"treasury bonds, local government bonds and financial bonds issued on or after August 8, 2025. It is","page_number":143,"box":{"x":116,"y":382,"width":742,"height":12}},{"id":"a74ed3f5-f7f1-4946-ae6a-8f7b82bfad2b","block_type":"box","text":"understood that Public Notice No 4 of 2025 does not supersede the afore-mentioned exemption for","page_number":143,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"435d2bc7-9405-4ac9-931b-01a41f8939a8","block_type":"box","text":"foreign institutional investors. This exemption was extended through December 31, 2027.","page_number":143,"box":{"x":116,"y":413,"width":668,"height":12}},{"id":"4f174545-1b91-4eb1-8a84-a0f392307c71","block_type":"box","text":"Any changes in PRC tax law, future clarifications thereof, and/or subsequent retroactive enforcement","page_number":143,"box":{"x":116,"y":444,"width":754,"height":12}},{"id":"592445a7-4dac-42ce-9520-5e564dc7bccc","block_type":"box","text":"by the PRC tax authorities may result in a loss which could be material to the Fund. There is a risk the","page_number":143,"box":{"x":117,"y":459,"width":761,"height":12}},{"id":"2380bf98-ac75-4e97-98eb-9a709680f848","block_type":"box","text":"PRC tax authorities may withdraw the temporary tax exemptions in the future and seek to collect taxes","page_number":143,"box":{"x":117,"y":475,"width":765,"height":12}},{"id":"7cffb3f6-508b-46db-a529-86ebf383bb76","block_type":"box","text":"realized on the sale of A-Shares or PRC sourced interest income on non-government bonds received","page_number":143,"box":{"x":117,"y":490,"width":756,"height":12}},{"id":"7721b918-883c-4d15-81b3-16c5e76a690e","block_type":"box","text":"by the Fund without giving any prior notice. If the temporary tax exemptions are withdrawn, any taxes","page_number":143,"box":{"x":117,"y":506,"width":755,"height":12}},{"id":"008c9451-a71b-492f-ae06-2bf2f933f3c2","block_type":"box","text":"may be directly borne by or indirectly passed on to the Fund and may result in a substantial impact to","page_number":143,"box":{"x":117,"y":521,"width":755,"height":12}},{"id":"32fbc5ef-5604-485b-abab-0c67e9304ae1","block_type":"box","text":"its net asset value. As with any net asset value adjustment, investors may be advantaged or","page_number":143,"box":{"x":117,"y":537,"width":687,"height":12}},{"id":"669c042f-f56f-45e3-bc66-49cf0b09d1f5","block_type":"box","text":"disadvantaged depending on when the investors purchased and/or sold the shares of the Fund. There","page_number":143,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"74737cc6-ef1d-4f57-afdb-166b89b39670","block_type":"box","text":"will be no retrospective restatement of the Fund’s net asset value.","page_number":143,"box":{"x":116,"y":568,"width":494,"height":12}},{"id":"4e2709bc-c6e2-4581-b04a-b1de1621d5b9","block_type":"box","text":"BlackRock will keep the provisioning policy for tax liability under review and may, in its discretion from","page_number":143,"box":{"x":117,"y":599,"width":758,"height":12}},{"id":"13a9916c-4837-4d2a-9456-452cf4f64cb3","block_type":"box","text":"time to time, make a provision for potential tax liabilities if in its opinion such provision is warranted or","page_number":143,"box":{"x":116,"y":614,"width":756,"height":12}},{"id":"4ff2c091-e358-421c-b223-aa25259c36cb","block_type":"box","text":"as further clarified by the PRC in notifications.","page_number":143,"box":{"x":116,"y":630,"width":345,"height":12}},{"id":"acf5509b-a875-4924-9a85-4a0da931bc4e","block_type":"box","text":"Investment in Other Investment Companies.","page_number":143,"box":{"x":116,"y":661,"width":350,"height":12}},{"id":"3ca1d592-183b-4441-8d37-1b082c82d17b","block_type":"box","text":"Each Fund may, subject to applicable law, invest in","page_number":143,"box":{"x":474,"y":661,"width":378,"height":12}},{"id":"455b54e9-38a8-494f-9f5b-cde2dcbefb03","block_type":"box","text":"other investment companies (including investment companies managed by BlackRock and its","page_number":143,"box":{"x":116,"y":676,"width":694,"height":12}},{"id":"34d177aa-0490-4101-a378-e1cbc76851f8","block_type":"box","text":"affiliates), including money market funds and ETFs, which are typically open-end funds or unit","page_number":143,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"03818397-4d3b-452e-adcf-8ebef0ebd591","block_type":"box","text":"investment trusts listed on a stock exchange. Under Section 12(d)(1)(A) of the Investment Company","page_number":143,"box":{"x":117,"y":707,"width":743,"height":12}},{"id":"b4409559-15e6-4ca0-93ad-87119601e81d","block_type":"box","text":"Act, however, a Fund may invest up to 10% of its total assets in securities of other investment","page_number":143,"box":{"x":116,"y":723,"width":696,"height":12}},{"id":"df6a89fe-38bd-4afc-bbbf-505e2f291b5b","block_type":"box","text":"companies (measured at the time of such investment). In addition, under Section 12(d)(1)(A) of the","page_number":143,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"6b1b92b0-3cd8-4b7e-92b9-151db9582563","block_type":"box","text":"Investment Company Act a Fund may not acquire securities of an investment company if such","page_number":143,"box":{"x":117,"y":754,"width":698,"height":12}},{"id":"9983735e-5319-4de6-b109-26a31ab3da65","block_type":"box","text":"acquisition would cause the Fund to own more than 3% of the total outstanding voting stock of such","page_number":143,"box":{"x":116,"y":769,"width":739,"height":12}},{"id":"7d74d1ef-574d-43e6-ad87-0bca7d8bca72","block_type":"box","text":"investment company and a Fund may not invest in another investment company if such investment","page_number":143,"box":{"x":117,"y":785,"width":734,"height":12}},{"id":"aa7cd58c-88c2-4ea9-b6cb-625fe76b5e13","block_type":"box","text":"would cause more than 5% of the value of the Fund’s total assets to be invested in securities of such","page_number":143,"box":{"x":116,"y":800,"width":747,"height":10}},{"id":"ff0baf08-ebb9-45bf-8701-020d8fab07df","block_type":"box","text":"investment company. (These limits do not restrict a Feeder Fund from investing all of its assets in","page_number":143,"box":{"x":117,"y":816,"width":721,"height":12}},{"id":"c4f53ca9-c79e-4fae-9ab3-bd18aa78362a","block_type":"box","text":"shares of its Master Portfolio.) In addition to the restrictions on investing in other investment companies","page_number":143,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"6b67e561-7c54-4da9-8345-4892f547a734","block_type":"box","text":"discussed above, under Section 12(d)(1)(C) of the Investment Company Act a Fund may not invest in","page_number":143,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"e3ba0140-3097-4277-90c2-b8d6622f5e82","block_type":"box","text":"a registered closed-end investment company if such investment would cause the Fund and other","page_number":143,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"029b2ea4-e491-4a8d-8b4e-8b935dba225a","block_type":"box","text":"BlackRock-advised investment companies to own more than 10% of the total outstanding voting stock","page_number":143,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"b4d01ba2-2496-4f01-91b8-44a4fdf8ae53","block_type":"box","text":"II-60","page_number":143,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f6c649f9-9cd0-4c05-b092-6821f8687a16","block_type":"box","text":"NM1026U-6039989-143/256","page_number":143,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6a5acf99-81e4-4e0f-8bc8-f2ea9d5f9287","block_type":"box","text":"of such closed-end investment company. Pursuant to Section 12(d)(1)(G) of the Investment Company","page_number":144,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"fda9b711-b203-4c72-831b-966b57aed0da","block_type":"box","text":"Act, these percentage limitations do not apply to investments in affiliated investment companies,","page_number":144,"box":{"x":116,"y":102,"width":719,"height":13}},{"id":"8a5bef6e-a825-4360-b0bc-3d2472c220dc","block_type":"box","text":"including ETFs, subject to certain conditions. In addition, a Fund may be able to rely on certain rules","page_number":144,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"8e2ef4fa-a72b-4028-b39e-f5ebf6d9c6c6","block_type":"box","text":"under the Investment Company Act to invest in shares of money market funds or other investment","page_number":144,"box":{"x":117,"y":134,"width":733,"height":12}},{"id":"147d6506-95bd-45fe-bfd9-33e4a90cc09e","block_type":"box","text":"companies beyond the statutory limits noted above, but subject to certain conditions.","page_number":144,"box":{"x":116,"y":149,"width":633,"height":12}},{"id":"f0a307e6-b574-4f71-92b5-5d947d2ef878","block_type":"box","text":"As with other investments, investments in other investment companies are subject to market and","page_number":144,"box":{"x":116,"y":180,"width":723,"height":12}},{"id":"eeca7cb6-9a39-412f-ac02-7c08c264b67b","block_type":"box","text":"selection risk.","page_number":144,"box":{"x":116,"y":196,"width":106,"height":9}},{"id":"a8f2691d-46c2-460d-9b48-55280ed7e0db","block_type":"box","text":"Shares of investment companies, such as closed-end fund investment companies, that trade on an","page_number":144,"box":{"x":116,"y":227,"width":740,"height":11}},{"id":"51cb2c29-c31f-4e28-81ed-6b14a93ee94a","block_type":"box","text":"exchange may at times be acquired at market prices representing premiums to their NAVs. In addition,","page_number":144,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"7fda8835-6d79-4702-9b4c-e03f63804867","block_type":"box","text":"investment companies held by a Fund that trade on an exchange could trade at a discount from NAV,","page_number":144,"box":{"x":117,"y":258,"width":758,"height":12}},{"id":"209a738b-8828-439e-bc6d-42e8766cb431","block_type":"box","text":"and such discount could increase while the Fund holds the shares. If the market price of shares of an","page_number":144,"box":{"x":116,"y":273,"width":756,"height":12}},{"id":"87aa4c2b-a30d-478e-a783-1e9df413135e","block_type":"box","text":"exchange-traded investment company decreases below the price that the Fund paid for the shares and","page_number":144,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"69030e46-e5a3-4d09-b81b-410e7a7525b1","block_type":"box","text":"the Fund were to sell its shares of such investment company at a time when the market price is lower","page_number":144,"box":{"x":116,"y":304,"width":757,"height":12}},{"id":"ff9f7a66-57ee-430c-bd3e-bbbb0fb33d1d","block_type":"box","text":"than the price at which it purchased the shares, the Fund would experience a loss.","page_number":144,"box":{"x":116,"y":320,"width":617,"height":12}},{"id":"e649d679-8d7a-4f60-9933-2115e33f7aac","block_type":"box","text":"In addition, if a Fund acquires shares in investment companies, including affiliated investment","page_number":144,"box":{"x":117,"y":351,"width":698,"height":12}},{"id":"5acc03ad-ab94-42cf-9170-81bfd98329a1","block_type":"box","text":"companies, shareholders would bear both their proportionate share of expenses in the Fund and,","page_number":144,"box":{"x":116,"y":366,"width":727,"height":12}},{"id":"071bc684-4bed-491e-958d-e97b3905c132","block_type":"box","text":"indirectly, the expenses of such investment companies. Such expenses, both at the Fund level and","page_number":144,"box":{"x":117,"y":382,"width":739,"height":12}},{"id":"32565cd2-3960-4128-8821-1d40dfeb4769","block_type":"box","text":"acquired investment company level, would include management and advisory fees, unless such fees","page_number":144,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"35bd49f3-f4e6-4bf2-a5fc-0a0bc344f68c","block_type":"box","text":"have been waived by BlackRock. Please see the relevant Fund’s Prospectus to determine whether any","page_number":144,"box":{"x":117,"y":413,"width":769,"height":12}},{"id":"afc558c2-dd64-47e5-8547-569126b70e62","block_type":"box","text":"such management and advisory fees have been waived by BlackRock. Investments by a Fund in","page_number":144,"box":{"x":116,"y":428,"width":724,"height":12}},{"id":"5abec122-150c-44f3-92ed-bfb559d6f0e3","block_type":"box","text":"wholly owned investment entities created under the laws of certain countries will not be deemed an","page_number":144,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"540c77cf-e3e3-4cff-93d6-083b20981739","block_type":"box","text":"investment in other investment companies. Pursuant to guidance issued by the staff of the","page_number":144,"box":{"x":117,"y":459,"width":674,"height":12}},{"id":"9776a99c-046b-460e-b160-2f11bbf06b2d","block_type":"box","text":"Commission, fees and expenses of money market funds used for the investment of cash collateral","page_number":144,"box":{"x":117,"y":475,"width":733,"height":12}},{"id":"e78980bd-8f8a-4fa2-b828-aeaef2d4a5a8","block_type":"box","text":"received in connection with loans of Fund securities are not treated as “acquired fund fees and","page_number":144,"box":{"x":117,"y":490,"width":706,"height":12}},{"id":"d5d10677-8b83-4e63-8333-613c6d88104b","block_type":"box","text":"expenses,” which are fees and expenses charged by other investment companies and pooled","page_number":144,"box":{"x":116,"y":506,"width":701,"height":12}},{"id":"dc74afea-0a5a-4848-933b-2e114d5174c1","block_type":"box","text":"investment vehicles in which a Fund invests a portion of its assets.","page_number":144,"box":{"x":117,"y":521,"width":498,"height":12}},{"id":"155ba2a3-f218-4be2-bd75-3a7f005671a1","block_type":"box","text":"To the extent shares of a Fund are held by another f","page_number":144,"box":{"x":116,"y":552,"width":380,"height":12}},{"id":"dd13861b-8763-4e6c-be42-ee88f2bc5ab8","block_type":"box","text":"und, the ability of the Fund it","page_number":144,"box":{"x":497,"y":552,"width":205,"height":12}},{"id":"8cc817c1-0eb8-43ad-9128-647676ec708d","block_type":"box","text":"self to purchase other","page_number":144,"box":{"x":702,"y":552,"width":163,"height":12}},{"id":"a4560841-f872-4c34-8807-97ac2eb1f3e8","block_type":"box","text":"funds may be limited. In addition, a fund of funds (","page_number":144,"box":{"x":116,"y":568,"width":363,"height":12}},{"id":"b462eeee-b17c-434c-b176-4c8cb11c68ac","block_type":"box","text":"e.g.","page_number":144,"box":{"x":480,"y":570,"width":25,"height":10}},{"id":"07a88b24-9886-48db-ab10-fed7e0a85820","block_type":"box","text":", an investment company that seeks to meet its","page_number":144,"box":{"x":508,"y":568,"width":347,"height":12}},{"id":"07fb43da-64c0-45b0-ba4b-dcf575196b40","block_type":"box","text":"investment objective by investing significantly in","page_number":144,"box":{"x":117,"y":583,"width":350,"height":12}},{"id":"326b01dd-807a-4261-8e9b-fe2660f9b1d2","block_type":"box","text":"other investment companies)","page_number":144,"box":{"x":468,"y":583,"width":215,"height":12}},{"id":"a6ca8fe2-6b1c-4683-bdbd-3ae911209e90","block_type":"box","text":"may be limited in its ability","page_number":144,"box":{"x":684,"y":583,"width":195,"height":12}},{"id":"654f5fac-dddd-47cc-b287-35359d5c45de","block_type":"box","text":"to purchase underlying funds if such underlying f","page_number":144,"box":{"x":116,"y":599,"width":353,"height":12}},{"id":"7414a300-14f1-4a02-8467-41ab6eb2706a","block_type":"box","text":"unds themselves own shares of underlying funds.","page_number":144,"box":{"x":470,"y":599,"width":364,"height":12}},{"id":"e411ef21-6e87-4ae0-ae62-13315aa34195","block_type":"box","text":"A number of publicly traded closed-end investment companies have been organized to facilitate","page_number":144,"box":{"x":116,"y":630,"width":715,"height":12}},{"id":"8b3215d7-99d1-49fd-966a-83e0ac0a8746","block_type":"box","text":"indirect foreign investment in developing countries, and certain of such countries, such as Thailand,","page_number":144,"box":{"x":117,"y":645,"width":743,"height":12}},{"id":"bf0a368b-351b-425b-b843-d834be8d51c2","block_type":"box","text":"South Korea, Chile and Brazil, have specifically authorized such funds. There also are investment","page_number":144,"box":{"x":116,"y":661,"width":725,"height":12}},{"id":"e3fbd59a-c793-4252-b129-d63291a37b29","block_type":"box","text":"opportunities in certain of such countries in pooled vehicles that resemble open-end investment","page_number":144,"box":{"x":116,"y":676,"width":708,"height":12}},{"id":"303ad49d-2eae-49ed-b731-c7c68c2e5678","block_type":"box","text":"companies. The restrictions on investments in securities of investment companies set forth above may","page_number":144,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"bbc8e44c-e731-4eac-9400-f2d72af21eb7","block_type":"box","text":"limit opportunities for a Fund to invest indirectly in certain developing countries.","page_number":144,"box":{"x":117,"y":707,"width":585,"height":12}},{"id":"0105bd40-1fe1-44cc-bd8e-01a66b7de07c","block_type":"box","text":"Issuer Insolvency Risk.","page_number":144,"box":{"x":116,"y":738,"width":185,"height":12}},{"id":"5a6c7228-a5b7-4239-beea-2cff08cd514d","block_type":"box","text":"Certain Funds’ potential exposure to financially or operationally troubled","page_number":144,"box":{"x":307,"y":738,"width":532,"height":12}},{"id":"22b68d1e-4472-4e52-aeec-5bad75eb5c7d","block_type":"box","text":"issuers involves a high degree of credit and market risk, which may be heightened during an economic","page_number":144,"box":{"x":117,"y":754,"width":761,"height":12}},{"id":"5824089f-179b-41aa-a479-83a4b205504b","block_type":"box","text":"downturn or recession. Should an issuer of securities held by a Fund become involved in a bankruptcy","page_number":144,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"442df24e-e746-4ca3-ae11-6328ac74a800","block_type":"box","text":"proceeding, reorganization or financial restructuring, a wide variety of considerations make an","page_number":144,"box":{"x":117,"y":785,"width":695,"height":12}},{"id":"3ad448ae-a760-494c-9e8d-257957e506f8","block_type":"box","text":"evaluation of the outcome of the Fund’s exposure to the issuer uncertain.","page_number":144,"box":{"x":116,"y":800,"width":542,"height":12}},{"id":"1dd554f6-7246-4229-8cb9-7c54129dd66f","block_type":"box","text":"During the period of a bankruptcy proceeding, reorganization or financial restructuring, it is unlikely that","page_number":144,"box":{"x":117,"y":831,"width":769,"height":12}},{"id":"aaa919a9-166c-441a-890e-ae860617fe2c","block_type":"box","text":"a Fund will receive any interest payments on the securities of the issuer. A Fund will be subject to","page_number":144,"box":{"x":116,"y":847,"width":728,"height":12}},{"id":"1a2c4f7f-01ef-4a9b-ae8a-5cfa537b745a","block_type":"box","text":"significant uncertainty as to whether the reorganization or restructuring will be completed, and the Fund","page_number":144,"box":{"x":116,"y":862,"width":772,"height":12}},{"id":"e3f41a67-007d-4a30-8c57-ec6c98417da9","block_type":"box","text":"may bear certain extraordinary expenses to protect and recover its investment. A Fund will also be","page_number":144,"box":{"x":117,"y":878,"width":735,"height":12}},{"id":"0b33eab7-e1ef-43dd-a69b-145c30ac2a63","block_type":"box","text":"II-61","page_number":144,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"d525ee27-a3c8-4dcd-b22e-2915c2ee7ac3","block_type":"box","text":"NM1026U-6039989-144/256","page_number":144,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d8d01866-9bc3-4f7b-aca9-a06e658418c2","block_type":"box","text":"subject to significant uncertainty as to when and in what manner and for what value the obligations","page_number":145,"box":{"x":116,"y":87,"width":737,"height":12}},{"id":"3d3b1ad2-b1ac-4694-aaab-6f451642a8be","block_type":"box","text":"evidenced by the securities of the issuer held by the Fund will eventually be satisfied.","page_number":145,"box":{"x":116,"y":102,"width":637,"height":13}},{"id":"6271ffd9-1061-44f9-8f9d-d50e23e3cda7","block_type":"box","text":"Even if a plan of reorganization or restructuring is adopted with respect to the securities of the issuer","page_number":145,"box":{"x":117,"y":134,"width":741,"height":12}},{"id":"a1d4ae7e-1c5b-405a-9754-6cf5572ae239","block_type":"box","text":"held by the Fund, there can be no assurance that the securities or other assets received by a Fund in","page_number":145,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"eaa7f95b-3251-4e11-a9be-4566172778c5","block_type":"box","text":"connection with such plan of reorganization or restructuring will not have a lower value or income","page_number":145,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"d684df6e-b4f8-41d3-9272-8ca47e251698","block_type":"box","text":"potential than may have been anticipated or no value. A Fund may be unable to enforce its claims or","page_number":145,"box":{"x":117,"y":180,"width":742,"height":12}},{"id":"2c821029-1412-4458-9314-a395ccf958e6","block_type":"box","text":"rights in any collateral or may have its claims or security interest in any collateral challenged, disallowed","page_number":145,"box":{"x":117,"y":196,"width":767,"height":12}},{"id":"24dc0726-2b2b-4fc0-9a68-c5d867ad6eda","block_type":"box","text":"or subordinated to the claims or security interests of other creditors. In addition, amendments to the U.S.","page_number":145,"box":{"x":116,"y":211,"width":772,"height":12}},{"id":"080d49c9-fa9f-4fc9-a163-3b5739900086","block_type":"box","text":"Bankruptcy Code or other relevant laws could alter the expected outcome or introduce greater","page_number":145,"box":{"x":117,"y":227,"width":695,"height":12}},{"id":"ddd1e9e2-7083-4c49-94cd-8ccf3e9dbbc1","block_type":"box","text":"uncertainty regarding the outcome of the Fund’s securities holdings in the issuer. In a bankruptcy","page_number":145,"box":{"x":117,"y":242,"width":716,"height":12}},{"id":"55853244-54f9-446e-8420-df57eba59339","block_type":"box","text":"proceeding, a reorganization or restructuring, the securities of the issuer held by a Fund could be","page_number":145,"box":{"x":117,"y":258,"width":716,"height":12}},{"id":"5f0cdb71-e966-473f-83ea-b9247ab19ee9","block_type":"box","text":"re-characterized or a Fund may receive different securities or other assets, including equity securities.","page_number":145,"box":{"x":117,"y":273,"width":752,"height":12}},{"id":"f6c2e8fe-3b94-4bf0-bd7e-6f2e20e7dc76","block_type":"box","text":"These types of equity securities include, but are not limited to: common stock; preferred stock (including","page_number":145,"box":{"x":116,"y":289,"width":768,"height":12}},{"id":"0bbe9433-91e7-45a9-9659-ea5ebb91125a","block_type":"box","text":"convertible preferred stock); bonds, notes and debentures convertible into common or preferred stock;","page_number":145,"box":{"x":116,"y":304,"width":756,"height":12}},{"id":"f6b37586-42b7-4123-800a-a9ffbe2a77c1","block_type":"box","text":"stock purchase warrants and rights; equity interests in trusts; and depositary receipts. Equity securities","page_number":145,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"e30c38fc-eabd-4725-8248-4cb3833f11e7","block_type":"box","text":"are subject to changes in value, and their value may be more volatile than those of other asset classes.","page_number":145,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"83bc857d-2a17-4513-bc94-9d80aa37fc89","block_type":"box","text":"Holders of equity securities are subject to more risk than holders of debt securities because the status of","page_number":145,"box":{"x":117,"y":351,"width":771,"height":12}},{"id":"c29537dd-40bd-4e09-962f-6d6cd97cfaec","block_type":"box","text":"equity holders is subordinate to debtholders in an issuer’s capital structure. The value of equity","page_number":145,"box":{"x":116,"y":366,"width":701,"height":12}},{"id":"8bf95641-6261-4a33-9f6f-08a9371c8daa","block_type":"box","text":"securities received by a Fund could decline if the financial condition of the issuer deteriorates or if","page_number":145,"box":{"x":116,"y":382,"width":721,"height":12}},{"id":"3b4341fc-cff9-4243-b0bb-eb4ac3ea57c2","block_type":"box","text":"overall market and economic conditions, or conditions within the issuer’s region or industry, deteriorate.","page_number":145,"box":{"x":116,"y":397,"width":764,"height":12}},{"id":"57ecd99c-806b-4203-9219-5b966bdd1648","block_type":"box","text":"To the extent that a Fund receives other assets in connection with a bankruptcy proceeding,","page_number":145,"box":{"x":116,"y":428,"width":681,"height":12}},{"id":"e723fc56-a85e-43c6-a503-0bfc0ab12fde","block_type":"box","text":"reorganization or financial restructuring, the Fund may also be subject to additional risks associated with","page_number":145,"box":{"x":117,"y":444,"width":770,"height":12}},{"id":"d8e626ba-ba59-46f8-aa80-ade54fb71c4c","block_type":"box","text":"the assets received. One example of assets that a Fund could receive is an interest in one or more","page_number":145,"box":{"x":116,"y":459,"width":730,"height":12}},{"id":"638f8d94-7984-4b32-826c-79a35e9ec5bf","block_type":"box","text":"loans made to the issuer as part of a workout agreed to by a consortium of lienholders and creditors of","page_number":145,"box":{"x":117,"y":475,"width":756,"height":12}},{"id":"f1bc6e39-68bb-4bc9-ba85-d165cce17134","block_type":"box","text":"the issuer. A Fund may receive such interests in loans to the extent permitted by the Investment","page_number":145,"box":{"x":116,"y":490,"width":710,"height":12}},{"id":"ee4e2a58-cf6e-4fb7-b657-465a1c5ae0e1","block_type":"box","text":"Company Act.","page_number":145,"box":{"x":117,"y":506,"width":108,"height":12}},{"id":"e5bc482e-18a5-422c-b3ad-1f220745e86d","block_type":"box","text":"Securities or other assets received in a reorganization or restructuring typically entail a higher degree","page_number":145,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"7921ff8b-7e19-4b4c-98a9-186f6e78aaa9","block_type":"box","text":"of risk than investments in securities of issuers that have not undergone a reorganization or","page_number":145,"box":{"x":116,"y":552,"width":684,"height":12}},{"id":"ec1a4ea2-e0f2-4278-9cda-75622a1dc683","block_type":"box","text":"restructuring and may be subject to heavy selling or downward pricing pressure after completion of the","page_number":145,"box":{"x":117,"y":568,"width":765,"height":12}},{"id":"bd7da50f-98ff-4dd2-abed-18552f92cc2c","block_type":"box","text":"reorganization or restructuring. The post-reorganization/restructuring assets and securities may also be","page_number":145,"box":{"x":117,"y":583,"width":771,"height":12}},{"id":"88e29914-c92d-486b-ad9d-6c3edb58fa8a","block_type":"box","text":"illiquid and difficult to sell or value. If a Fund participates in negotiations with respect to a plan of","page_number":145,"box":{"x":117,"y":599,"width":715,"height":12}},{"id":"f0b6bd33-dae3-4246-aa9c-f23b0b634077","block_type":"box","text":"reorganization or restructuring with respect to securities of the issuer held by a Fund, the Fund also","page_number":145,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"f27be879-232f-4123-b588-e28c8ab227c2","block_type":"box","text":"may be restricted from disposing such securities for a period of time. If a Fund becomes involved in","page_number":145,"box":{"x":117,"y":630,"width":741,"height":12}},{"id":"bb6b89c9-f68e-43e2-8c39-6e95f08e0eba","block_type":"box","text":"such proceedings, the Fund may have more active participation in the affairs of the issuer than that","page_number":145,"box":{"x":116,"y":645,"width":740,"height":12}},{"id":"33f6016f-b70c-4171-a308-b37c306f2f47","block_type":"box","text":"assumed generally by an investor.","page_number":145,"box":{"x":116,"y":661,"width":254,"height":12}},{"id":"18e76872-5e92-4c0f-b47b-00565ab27b13","block_type":"box","text":"Lease Obligations.","page_number":145,"box":{"x":116,"y":692,"width":148,"height":12}},{"id":"6e097817-ca03-4a2d-b521-61689d82abd8","block_type":"box","text":"A Fund may hold participation certificates in a lease, an installment purchase","page_number":145,"box":{"x":270,"y":692,"width":571,"height":12}},{"id":"cb0269d6-19e9-4987-8d8d-5ad0b1f0affc","block_type":"box","text":"contract, or a conditional sales contract (“lease obligations”). The Manager will monitor the credit","page_number":145,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"a7a31c93-d814-4413-8a82-e23533260734","block_type":"box","text":"standing of each borrower and each entity providing credit support and/or a put option relating to lease","page_number":145,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"3ef895e1-6427-4376-80b7-0304ed0acb5e","block_type":"box","text":"obligations.","page_number":145,"box":{"x":116,"y":738,"width":83,"height":12}},{"id":"7e18bac4-49ed-41a0-9dd3-57c722864120","block_type":"box","text":"Life Settlement Investments.","page_number":145,"box":{"x":116,"y":769,"width":227,"height":10}},{"id":"b2e64874-5541-41aa-8126-d1e3bb1f502e","block_type":"box","text":"A Fund may invest in life settlements, which are sales to third parties,","page_number":145,"box":{"x":349,"y":769,"width":514,"height":12}},{"id":"3eefd393-a818-4bb7-bfae-7b0072612e3d","block_type":"box","text":"such as the Fund, of existing life insurance contracts for more than their cash surrender value but less","page_number":145,"box":{"x":116,"y":785,"width":757,"height":12}},{"id":"d1d9691d-3183-4067-bdd7-3d11cf7a3cf3","block_type":"box","text":"than the net benefits to be paid under the policies. When a Fund acquires such a contract, it pays the","page_number":145,"box":{"x":116,"y":800,"width":751,"height":12}},{"id":"3541e864-adeb-4dc6-a5a3-47d917aa9ad2","block_type":"box","text":"policy premiums in return for the expected receipt of the net benefit as the beneficiary under the policy.","page_number":145,"box":{"x":117,"y":816,"width":761,"height":12}},{"id":"542e4346-279e-44cf-9fb0-66bc5c64ddae","block_type":"box","text":"Investments in these contracts involve certain risks, including liquidity risk, credit risk of the insurance","page_number":145,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"a16894a8-f3ac-4ace-a33a-eddacdd379e6","block_type":"box","text":"company, and inaccurate estimations of life expectancy of the insured individuals (viators). These","page_number":145,"box":{"x":116,"y":847,"width":729,"height":12}},{"id":"daee124f-c734-4be6-bdb3-c7428ca74fe8","block_type":"box","text":"policies may be considered illiquid because they are bought and sold in a secondary market through","page_number":145,"box":{"x":117,"y":862,"width":748,"height":12}},{"id":"19f55d9d-a435-4c12-a826-02fd50bd4c1f","block_type":"box","text":"life settlement agents. Also, in the event of a bankruptcy of the insurance carrier for a policy, the Fund","page_number":145,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"35c46371-c568-4e6c-ad94-14fdbd5882be","block_type":"box","text":"II-62","page_number":145,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"f4edfd7c-e892-4bb1-8d2f-ac94371db851","block_type":"box","text":"NM1026U-6039989-145/256","page_number":145,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"42141d4d-316b-4c05-ba36-68a409843aaf","block_type":"box","text":"may receive reduced or no benefits under the contract. A Fund seeks to minimize credit risk by","page_number":146,"box":{"x":117,"y":87,"width":708,"height":12}},{"id":"d98d4bac-fa4b-42ff-a614-04deea840a90","block_type":"box","text":"investing in policies issued by a diverse range of highly-rated insurance carriers. Furthermore, a Fund","page_number":146,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"2e859d6d-c65e-47ef-9ddb-1265d739bbc0","block_type":"box","text":"may encounter losses on its investments if there is an inaccurate estimation of the life expectancies of","page_number":146,"box":{"x":117,"y":118,"width":761,"height":12}},{"id":"b4bbc1cd-0135-493b-9230-5b52b23658a8","block_type":"box","text":"viators. A Fund intends to reduce this life expectancy risk by investing only in contracts where the life","page_number":146,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"0af4e3af-c66d-4203-8cd0-66abd28fcc30","block_type":"box","text":"expectancy was reviewed by an experienced actuary, as well as by diversifying its investments across","page_number":146,"box":{"x":116,"y":149,"width":763,"height":12}},{"id":"e67b45db-0388-44fe-83e8-0b8805e997d9","block_type":"box","text":"viators of varying ages and medical profiles. In addition, it is unclear whether the income from life","page_number":146,"box":{"x":116,"y":165,"width":725,"height":12}},{"id":"359c907b-90a0-416e-9b52-224c02ff5bac","block_type":"box","text":"settlements is qualifying income for purposes of the IRS 90% gross income test a Fund must satisfy","page_number":146,"box":{"x":116,"y":180,"width":746,"height":12}},{"id":"5563bd02-69e5-44a3-b51e-dc14949c182a","block_type":"box","text":"each year to qualify as a regulated investment company. A Fund intends to monitor its investments to","page_number":146,"box":{"x":116,"y":196,"width":758,"height":12}},{"id":"3ba792d1-dead-476e-97a9-e716a53b15b4","block_type":"box","text":"ensure that the Fund remains qualified as a regulated investment company.","page_number":146,"box":{"x":116,"y":211,"width":567,"height":12}},{"id":"d527db54-1133-43a9-bb6b-dc699e561437","block_type":"box","text":"Liquidity Risk Management.","page_number":146,"box":{"x":116,"y":242,"width":221,"height":12}},{"id":"c430d486-07a9-4c1f-b7cf-a26073d54d09","block_type":"box","text":"Rule 22e-4 under the Investment Company Act (the “Liquidity Rule”)","page_number":146,"box":{"x":338,"y":242,"width":517,"height":12}},{"id":"95d48025-b2a3-41d4-a371-497948053297","block_type":"box","text":"requires open-end funds, such as the Funds, to adopt a liquidity risk management program and","page_number":146,"box":{"x":117,"y":258,"width":712,"height":12}},{"id":"f956eb46-5f9c-4a59-a2ee-e770394f0641","block_type":"box","text":"enhance disclosures regarding fund liquidity. As required by the Liquidity Rule, the Funds have","page_number":146,"box":{"x":116,"y":273,"width":709,"height":12}},{"id":"91fccb79-80bd-46dc-b9b8-1dd8a218694f","block_type":"box","text":"implemented a liquidity risk management program (the “Liquidity Program”), and the Boards of","page_number":146,"box":{"x":117,"y":289,"width":704,"height":12}},{"id":"47785547-a37f-4654-ad3d-647edc532770","block_type":"box","text":"Directors of the Funds, including a majority of the independent Directors, have appointed the Manager","page_number":146,"box":{"x":117,"y":304,"width":762,"height":12}},{"id":"91315447-3161-47dc-8c1b-05832e6df7e4","block_type":"box","text":"as the liquidity risk program administrator of the Liquidity Program. Under the Liquidity Program, the","page_number":146,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"6631404f-39e5-4d16-b31c-65ff6e2f8243","block_type":"box","text":"Manager assesses, manages, and periodically reviews each Fund’s liquidity risk and classifies each","page_number":146,"box":{"x":117,"y":335,"width":746,"height":12}},{"id":"3890969d-4e14-47d2-8316-e83619931464","block_type":"box","text":"investment held by a Fund as a “highly liquid investment,” “moderately liquid investment,” “less liquid","page_number":146,"box":{"x":117,"y":351,"width":750,"height":12}},{"id":"01210473-47de-4cda-89d4-0b0329842238","block_type":"box","text":"investment” or “illiquid investment.” The Liquidity Rule defines “liquidity risk” as the risk that a Fund","page_number":146,"box":{"x":117,"y":366,"width":736,"height":12}},{"id":"dce75301-6396-4477-ae81-73c3feddb3f6","block_type":"box","text":"could not meet requests to redeem shares issued by the Fund without significant dilution of the","page_number":146,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"170d49ef-d5bf-48d6-8bdf-3842c1c0daa9","block_type":"box","text":"remaining investors’ interests in the Fund. The liquidity of a Fund’s portfolio investments is determined","page_number":146,"box":{"x":117,"y":397,"width":762,"height":12}},{"id":"899601dc-b857-404a-b5b7-2ee79f41c89e","block_type":"box","text":"based on relevant market, trading and investment-specific considerations under the Liquidity Program.","page_number":146,"box":{"x":117,"y":413,"width":764,"height":12}},{"id":"51f308a2-fa55-4c75-927e-b77a24afc148","block_type":"box","text":"To the extent that an investment is deemed to be an illiquid investment or a less liquid investment, a","page_number":146,"box":{"x":116,"y":428,"width":747,"height":12}},{"id":"f9964914-e51f-4e36-a06a-4c14ecda748d","block_type":"box","text":"Fund can expect to be exposed to greater liquidity risk.","page_number":146,"box":{"x":117,"y":444,"width":411,"height":12}},{"id":"12dbbbb7-9006-4a1a-9431-a726c2bf21a9","block_type":"box","text":"Master Limited Partnerships.","page_number":146,"box":{"x":116,"y":475,"width":225,"height":12}},{"id":"d8754eb6-e7c1-4f39-87c4-3a82cd07b884","block_type":"box","text":"Certain Funds may invest in publicly traded master limited partnerships","page_number":146,"box":{"x":342,"y":475,"width":526,"height":12}},{"id":"d12182df-e02c-4db5-976c-954d8f184604","block_type":"box","text":"(“MLPs”) which are limited partnerships or limited liab","page_number":146,"box":{"x":117,"y":490,"width":386,"height":12}},{"id":"0a99535c-0c98-4f2b-8ee3-86fd8995d318","block_type":"box","text":"ility companies taxable as partnerships for U.S.","page_number":146,"box":{"x":504,"y":490,"width":346,"height":12}},{"id":"951f1be4-ad75-444b-9b8c-2c9751ed8e9f","block_type":"box","text":"federal income tax purposes. MLPs may derive income and gains from the exploration, development,","page_number":146,"box":{"x":116,"y":506,"width":740,"height":12}},{"id":"754018dc-28af-4898-8e43-b3f37a9a05be","block_type":"box","text":"mining or production, processing, refining, transporta","page_number":146,"box":{"x":117,"y":521,"width":382,"height":12}},{"id":"09513241-a3fb-400b-bbc8-08001daaece9","block_type":"box","text":"tion (including pipelines transporting gas, oil, or","page_number":146,"box":{"x":500,"y":521,"width":346,"height":12}},{"id":"1e44e53a-b7c2-4a48-ae0f-18ddb8b2c9b4","block_type":"box","text":"products thereof), or the marketing of any mineral or","page_number":146,"box":{"x":117,"y":537,"width":379,"height":12}},{"id":"d8eb3060-2fe8-4671-b0f9-e8e61aed1742","block_type":"box","text":"r natural resources. MLPs generally have two classes","page_number":146,"box":{"x":495,"y":537,"width":390,"height":12}},{"id":"0710a7d7-2fdd-49e2-97b4-db859dca3929","block_type":"box","text":"of owners, the general partner","page_number":146,"box":{"x":116,"y":552,"width":224,"height":12}},{"id":"fd209842-7b2e-4813-9aa1-a501aa02fb1f","block_type":"box","text":"and limited partners. When investing in an MLP, a Fund intends to","page_number":146,"box":{"x":340,"y":552,"width":486,"height":12}},{"id":"c43c03bf-d0ca-4211-bf1f-413d06051367","block_type":"box","text":"purchase publicly traded common units issued to limit","page_number":146,"box":{"x":117,"y":568,"width":388,"height":12}},{"id":"ea82b894-436b-43b1-91c8-785067b5c6b0","block_type":"box","text":"ed partners of the MLP. The general partner is","page_number":146,"box":{"x":506,"y":568,"width":342,"height":12}},{"id":"c7f1bbc6-3648-4f50-8684-8eae2d9714f6","block_type":"box","text":"typically owned by a major energy company, an investm","page_number":146,"box":{"x":116,"y":583,"width":407,"height":12}},{"id":"a437b639-847a-4284-aa4f-83b30b8f8e0f","block_type":"box","text":"ent fund, the direct managem","page_number":146,"box":{"x":525,"y":583,"width":213,"height":12}},{"id":"1efbf6cd-1b6c-46ef-a3e9-b72ab6917df6","block_type":"box","text":"ent of the MLP or is","page_number":146,"box":{"x":739,"y":583,"width":147,"height":10}},{"id":"59a85925-53ad-472e-8e2f-9b3855b8ad84","block_type":"box","text":"an entity owned by one or more of such parties. The","page_number":146,"box":{"x":116,"y":599,"width":384,"height":12}},{"id":"4f60fe84-b98b-4dda-95d7-c52b51aa688f","block_type":"box","text":"general partner may be structured as a private or","page_number":146,"box":{"x":501,"y":599,"width":361,"height":12}},{"id":"7f41110e-1a98-497e-87b8-a4d11f17741f","block_type":"box","text":"publicly traded corporation or other","page_number":146,"box":{"x":117,"y":614,"width":253,"height":12}},{"id":"e9abf0b9-df31-4016-9835-56702e76a3bb","block_type":"box","text":"r entity. The general partner typically controls the operations and","page_number":146,"box":{"x":370,"y":614,"width":468,"height":12}},{"id":"b24302e7-892f-40eb-86c1-fe2d6589e898","block_type":"box","text":"management of the MLP through an up to 2% equity intere","page_number":146,"box":{"x":117,"y":630,"width":426,"height":12}},{"id":"3f73f0a8-7d66-46fa-9c80-83abaa3bb87a","block_type":"box","text":"st in the MLP plus, in many cases, ownership","page_number":146,"box":{"x":544,"y":630,"width":334,"height":12}},{"id":"da85528f-cc65-42f3-8e22-6dcfb3e7dae2","block_type":"box","text":"of common units and subordinated units. Limited partner","page_number":146,"box":{"x":116,"y":645,"width":411,"height":12}},{"id":"3bda173c-0579-434f-b885-316687614167","block_type":"box","text":"s own the remainder of the partnership, through","page_number":146,"box":{"x":527,"y":645,"width":351,"height":12}},{"id":"a8e7cebb-c9e0-4224-91be-a6480ec09351","block_type":"box","text":"ownership of common units, and have a limited role","page_number":146,"box":{"x":116,"y":661,"width":375,"height":12}},{"id":"495804ab-6d0e-4836-b138-d374922eec1d","block_type":"box","text":"in the partnership’s operations and management.","page_number":146,"box":{"x":497,"y":661,"width":355,"height":12}},{"id":"6aa7ce86-4155-4c9a-9117-2856df97bd26","block_type":"box","text":"MLPs are typically structured such that common units and general partner interests have first priority to","page_number":146,"box":{"x":117,"y":692,"width":764,"height":12}},{"id":"9552f52d-100a-4893-b2c3-88fa2169453e","block_type":"box","text":"receive quarterly cash distributions up to an established minimum amount (“minimum quarterly","page_number":146,"box":{"x":117,"y":707,"width":701,"height":12}},{"id":"67698957-4b05-47e7-98cc-cbf744171e4b","block_type":"box","text":"distributions” or “MQD”). Common and general partner interests also accrue arrearages in distributions","page_number":146,"box":{"x":116,"y":723,"width":762,"height":12}},{"id":"8e2c85a9-ca30-4b22-b945-843c771506ff","block_type":"box","text":"to the extent the MQD is not paid. Once common and general partner interests have been paid,","page_number":146,"box":{"x":116,"y":738,"width":708,"height":12}},{"id":"2f5c1243-ba65-4aaf-ba79-09122c731af7","block_type":"box","text":"subordinated units receive distributions of up to the MQD; however, subordinated units do not accrue","page_number":146,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"7f45f6f3-e86b-46ad-9bd4-04ee9172618e","block_type":"box","text":"arrearages. Distributable cash in excess of the MQD paid to both common and subordinated units is","page_number":146,"box":{"x":116,"y":769,"width":743,"height":12}},{"id":"f6806e97-08d0-4c5d-88b9-641dd6af3762","block_type":"box","text":"distributed to both common and subordinated units generally on a pro rata basis. The general partner","page_number":146,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"9793fdd2-936c-4ad2-937b-a78de6b33ba7","block_type":"box","text":"is also eligible to receive incentive distributions if the general partner operates the business in a","page_number":146,"box":{"x":117,"y":800,"width":707,"height":12}},{"id":"d5372b31-d7d3-476d-b555-73de5c0bd12f","block_type":"box","text":"manner which results in distributions paid per common unit surpassing specified target levels. As the","page_number":146,"box":{"x":117,"y":816,"width":746,"height":12}},{"id":"c1850ab2-c236-4c3b-91ab-d1c6b9496b12","block_type":"box","text":"general partner increases cash distributions to the limited partners, the general partner receives an","page_number":146,"box":{"x":116,"y":831,"width":739,"height":12}},{"id":"78d8ab02-7393-4207-8d07-0bff8030a1a6","block_type":"box","text":"increasingly higher percentage of the incremental cash distributions. A common arrangement provides","page_number":146,"box":{"x":117,"y":847,"width":764,"height":12}},{"id":"7c368691-9cdc-4c5e-b8be-c3f8a278c571","block_type":"box","text":"that the general partner can reach a tier where it receives 50% of every incremental dollar paid to","page_number":146,"box":{"x":116,"y":862,"width":727,"height":12}},{"id":"232622b0-82f2-4ce0-a146-71206fefdfb6","block_type":"box","text":"common and subordinated unit holders. These incentive distributions encourage the general partner to","page_number":146,"box":{"x":116,"y":878,"width":767,"height":12}},{"id":"62b9bf17-1ae1-4b8b-9b32-d6ee66db18a8","block_type":"box","text":"II-63","page_number":146,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c29761c4-596c-48b3-ad31-37da0ac0ddf6","block_type":"box","text":"NM1026U-6039989-146/256","page_number":146,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"582506a6-9b0a-40df-b2fc-e920005c6901","block_type":"box","text":"streamline costs, increase capital expenditures and acquire assets in order to increase the","page_number":147,"box":{"x":116,"y":87,"width":676,"height":12}},{"id":"414ec3be-0c09-44d7-a206-53a28a072abe","block_type":"box","text":"partnership’s cash flow and raise the quarterly cash distribution in order to reach higher tiers. Such","page_number":147,"box":{"x":117,"y":102,"width":736,"height":13}},{"id":"177d5e62-61dc-4e62-9569-75f9203f98d1","block_type":"box","text":"results benefit all security holders of the MLP.","page_number":147,"box":{"x":117,"y":118,"width":343,"height":12}},{"id":"7e33ac0f-3d88-44b5-9109-742cedf110ee","block_type":"box","text":"MLP common units represent a limited partnership interest in the MLP. Common units are listed and","page_number":147,"box":{"x":117,"y":148,"width":748,"height":12}},{"id":"c4ba4f48-17cc-414a-a6d6-e25034facb98","block_type":"box","text":"traded on U.S. securities exchanges, with their value fluctuating predominantly based on prevailing","page_number":147,"box":{"x":116,"y":163,"width":739,"height":13}},{"id":"b8f76c60-945a-4e23-83a3-be8f378bc014","block_type":"box","text":"market conditions and the success of the MLP. Certain Funds intend to purchase common units in","page_number":147,"box":{"x":117,"y":179,"width":733,"height":12}},{"id":"ddd16cd3-22d4-436b-9f2f-e784a7997d4a","block_type":"box","text":"market transactions. Unlike owners of common stock of a corporation, owners of common units have","page_number":147,"box":{"x":117,"y":194,"width":752,"height":12}},{"id":"0119e589-10ad-4efd-93b2-84e4ae0e9d43","block_type":"box","text":"limited voting rights and have no ability to annually elect directors. In the event of liquidation, common","page_number":147,"box":{"x":117,"y":210,"width":758,"height":12}},{"id":"808e1f48-d41d-4a06-8f75-58ad51e4c5ab","block_type":"box","text":"units have preference over subordinated units, but not over debt or preferred units, to the remaining","page_number":147,"box":{"x":117,"y":225,"width":744,"height":13}},{"id":"0594bf3d-9df3-43d6-a738-c5d25dc2d069","block_type":"box","text":"assets of the MLP.","page_number":147,"box":{"x":116,"y":241,"width":144,"height":9}},{"id":"b5897d3c-f799-4251-b216-5138c3d2cf86","block_type":"box","text":"Merger Transaction Risk.","page_number":147,"box":{"x":116,"y":271,"width":200,"height":12}},{"id":"8106ff32-b07f-48c8-bea4-04bdb3367c63","block_type":"box","text":"A Fund may buy stock of the target company in an announced merger","page_number":147,"box":{"x":317,"y":271,"width":531,"height":12}},{"id":"e42e7c87-511e-4637-a9ba-57efb710d61d","block_type":"box","text":"transaction prior to the consummation of such transaction. In that circumstance, a Fund would expect","page_number":147,"box":{"x":116,"y":286,"width":757,"height":12}},{"id":"60081304-772f-4013-b2fb-13659087fb6e","block_type":"box","text":"to receive an amount (whether in cash, stock of the acquiring company or a combination of both) in","page_number":147,"box":{"x":116,"y":302,"width":740,"height":12}},{"id":"3f34e22d-ecd1-4b46-a474-a75ad627928e","block_type":"box","text":"excess of the purchase price paid by the Fund for the target company’s stock. However, a Fund is","page_number":147,"box":{"x":116,"y":317,"width":733,"height":12}},{"id":"41c874c8-af9a-4739-9fcc-2b7fa9bd5fb2","block_type":"box","text":"subject to the risk that the merger transaction may be canceled, delayed or restructured, in which case","page_number":147,"box":{"x":116,"y":333,"width":766,"height":12}},{"id":"4b8c48f6-15f2-4787-971c-fecd10e0c3df","block_type":"box","text":"a Fund’s holding of the target company’s stock may not result in any profit for the Fund and may lose","page_number":147,"box":{"x":116,"y":348,"width":754,"height":12}},{"id":"a768cbae-7bc3-4aaf-9b37-b639870f5c37","block_type":"box","text":"significant value.","page_number":147,"box":{"x":116,"y":364,"width":129,"height":12}},{"id":"38f40a71-6517-46da-bd1a-55dc90b909ca","block_type":"box","text":"Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S.","page_number":147,"box":{"x":116,"y":394,"width":737,"height":12}},{"id":"cac822a0-00c4-4f0f-b3d9-b52ce49bf54a","block_type":"box","text":"Banks.","page_number":147,"box":{"x":116,"y":409,"width":54,"height":10}},{"id":"52a891c4-35ff-482d-be8e-b9b17e91796e","block_type":"box","text":"Certain Funds may purchase bank obligations, such as certificates of deposit, notes, bankers’","page_number":147,"box":{"x":171,"y":409,"width":705,"height":12}},{"id":"0a9ad8bb-1f46-401a-9d9f-bd96b95ef491","block_type":"box","text":"acceptances and time deposits, including instruments issued or supported by the credit of U.S. or","page_number":147,"box":{"x":116,"y":425,"width":728,"height":12}},{"id":"30948582-1dbc-41ff-b6cb-efc6c09366e3","block_type":"box","text":"foreign banks or savings institutions having total assets at the time of purchase in excess of $1 billion.","page_number":147,"box":{"x":116,"y":440,"width":761,"height":12}},{"id":"268f4f40-f98d-421a-a0f1-440fe69b3352","block_type":"box","text":"These obligations may be general obligations of the parent bank or may be limited to the issuing","page_number":147,"box":{"x":116,"y":456,"width":719,"height":12}},{"id":"30f4754c-af67-41ea-bff4-a493d04e305e","block_type":"box","text":"branch or subsidiary by the terms of a specific obligation or by government regulation. The assets of a","page_number":147,"box":{"x":117,"y":471,"width":761,"height":12}},{"id":"78e8d9e6-28c9-4e42-a40a-fb70222363bc","block_type":"box","text":"bank or savings institution will be deemed to include the assets of its domestic and foreign branches","page_number":147,"box":{"x":117,"y":487,"width":747,"height":12}},{"id":"cd977c77-65be-4296-ae8f-13f0747af75c","block_type":"box","text":"for purposes of a Fund’s investment policies. Investments in short-term bank obligations may include","page_number":147,"box":{"x":116,"y":502,"width":753,"height":12}},{"id":"e12fcf7e-6d22-46cb-903e-be159cc22c2b","block_type":"box","text":"obligations of foreign banks and domestic branches of foreign banks, and also foreign branches of","page_number":147,"box":{"x":116,"y":518,"width":734,"height":12}},{"id":"ca0b7cac-9b37-43f8-8415-518903957677","block_type":"box","text":"domestic banks.","page_number":147,"box":{"x":116,"y":533,"width":126,"height":10}},{"id":"f8d483ab-10bb-46f9-a74b-afe43a9330cc","block_type":"box","text":"To the extent consistent with their investment objectives, a Fund may invest in debt obligations of","page_number":147,"box":{"x":116,"y":563,"width":727,"height":12}},{"id":"46a07050-7703-4c7b-a582-8e97c5308a93","block_type":"box","text":"domestic or foreign corporations and banks, and may acquire commercial obligations issued by","page_number":147,"box":{"x":116,"y":579,"width":713,"height":12}},{"id":"df00883d-4e55-41ac-b172-7df62f0dffb5","block_type":"box","text":"Canadian corporations and Canadian counterparts of U.S. corporations, as well as Europaper, which is","page_number":147,"box":{"x":117,"y":594,"width":769,"height":12}},{"id":"6dad3c2f-33e2-4cac-b006-7a62cbb78557","block_type":"box","text":"U.S. dollar-denominated commercial paper of a foreign issuer.","page_number":147,"box":{"x":117,"y":610,"width":466,"height":12}},{"id":"33a5edf8-17ad-445b-a9a1-e7ed8d5c2d44","block_type":"box","text":"Money Market Securities.","page_number":147,"box":{"x":116,"y":640,"width":201,"height":12}},{"id":"0f4a4caa-7d78-4bf5-891e-3add27211799","block_type":"box","text":"Certain Funds may invest in a broad range of short-term, high quality, U.S.","page_number":147,"box":{"x":318,"y":640,"width":564,"height":12}},{"id":"ab650b69-9eee-420d-a3a2-3ff8086e567b","block_type":"box","text":"dollar-denominated instruments, such as government, bank, commercial and other obligations that are","page_number":147,"box":{"x":116,"y":655,"width":765,"height":12}},{"id":"39cf3b4c-2fe3-4f19-a654-d133a0bf1399","block_type":"box","text":"available in the money markets. In particular, the Funds may invest in:","page_number":147,"box":{"x":116,"y":671,"width":519,"height":12}},{"id":"b8e069f9-fdf1-43c8-8e65-85797da9c7ab","block_type":"box","text":"(a) U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks","page_number":147,"box":{"x":150,"y":701,"width":729,"height":12}},{"id":"75f0d051-8cf2-4081-9959-f5e22e95f66b","block_type":"box","text":"or savings institutions with total assets in excess of $1 billion (including obligations of foreign","page_number":147,"box":{"x":184,"y":715,"width":684,"height":13}},{"id":"c54b8db9-a24f-4062-90ea-8f14899c88ac","block_type":"box","text":"branches of such banks);","page_number":147,"box":{"x":184,"y":732,"width":186,"height":12}},{"id":"68c71c89-36fb-45f2-aaa7-8884915e19b8","block_type":"box","text":"(b) high quality commercial paper and other obligations issued or guaranteed by U.S. and foreign","page_number":147,"box":{"x":150,"y":754,"width":728,"height":12}},{"id":"06092032-b5d3-4611-b91a-276247f3bbee","block_type":"box","text":"corporations and other issuers rated (at the time of purchase) A-2 or higher by S&P, Prime-2","page_number":147,"box":{"x":184,"y":770,"width":686,"height":12}},{"id":"6785235d-dbd4-460f-9f0c-4c1aca341c72","block_type":"box","text":"or higher by Moody’s or F-2 or higher by Fitch, as well as high quality corporate bonds rated","page_number":147,"box":{"x":184,"y":785,"width":681,"height":12}},{"id":"13373aa8-038d-4a3c-bf76-05aa6cd6c608","block_type":"box","text":"(at the time of purchase) A or higher by those rating agencies;","page_number":147,"box":{"x":184,"y":801,"width":459,"height":12}},{"id":"c79a196a-28e4-4899-b90a-8d24f55297c8","block_type":"box","text":"(c) unrated notes, paper and other instruments that are of comparable quality to the instruments","page_number":147,"box":{"x":150,"y":823,"width":720,"height":13}},{"id":"3912c02a-e53b-42bc-ae98-72535856e48b","block_type":"box","text":"described in (b) above as determined by the Fund’s Manager;","page_number":147,"box":{"x":184,"y":839,"width":463,"height":12}},{"id":"b5038200-4e10-4075-a988-5e9701db02d3","block_type":"box","text":"(d) asset-backed securities (including interests in pools of assets such as mortgages, installment","page_number":147,"box":{"x":150,"y":862,"width":730,"height":12}},{"id":"39717299-98a1-4f1b-bce5-64afbbc74ece","block_type":"box","text":"purchase obligations and credit card receivables);","page_number":147,"box":{"x":184,"y":877,"width":374,"height":12}},{"id":"23192940-cf4d-409d-bbb0-46ed4869cdc4","block_type":"box","text":"II-64","page_number":147,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8e4de4e7-f5fc-4138-94c3-cb982f0f2b87","block_type":"box","text":"NM1026U-6039989-147/256","page_number":147,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e5ddafec-af64-49d6-926a-c6ac01f30f0b","block_type":"box","text":"(e) securities issued or guaranteed as to principal and interest by the U.S. Government or by its","page_number":148,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"b66bd60d-276c-42d0-b988-7abeb7f363f6","block_type":"box","text":"agencies or authorities and related custodial receipts;","page_number":148,"box":{"x":184,"y":103,"width":401,"height":12}},{"id":"12289371-aef3-4def-945c-e569130f8797","block_type":"box","text":"(f) dollar-denominated securities issued or guaranteed by foreign governments or their political","page_number":148,"box":{"x":150,"y":126,"width":719,"height":12}},{"id":"b9e3c0de-12ab-4607-83bf-817204e5036f","block_type":"box","text":"subdivisions, agencies or authorities;","page_number":148,"box":{"x":184,"y":141,"width":279,"height":12}},{"id":"b080fcaa-cb64-4c4d-abac-611b967634a7","block_type":"box","text":"(g) funding agreements issued by highly-rated U.S. insurance companies;","page_number":148,"box":{"x":150,"y":165,"width":561,"height":12}},{"id":"a7349061-d7bd-4d4b-9997-c4b979a3648d","block_type":"box","text":"(h) securities issued or guaranteed by state or local governmental bodies;","page_number":148,"box":{"x":150,"y":188,"width":560,"height":12}},{"id":"bf11cdbe-e060-4487-b988-d2a97e59acd8","block_type":"box","text":"(i) repurchase agreements relating to the above instruments;","page_number":148,"box":{"x":150,"y":211,"width":469,"height":12}},{"id":"12110757-52b2-4749-a39a-13809dfd9235","block_type":"box","text":"(j) municipal bonds and notes whose principal and interest payments are guaranteed by the U.S.","page_number":148,"box":{"x":150,"y":234,"width":736,"height":12}},{"id":"5e4cc1e3-ef60-407e-8e1f-9166487fc194","block_type":"box","text":"Government or one of its agencies or authorities or which otherwise depend directly or","page_number":148,"box":{"x":184,"y":250,"width":646,"height":12}},{"id":"5f1454ed-e439-4918-9724-358d0b28ad46","block_type":"box","text":"indirectly on the credit of the United States;","page_number":148,"box":{"x":184,"y":265,"width":325,"height":12}},{"id":"cca35b7d-1926-4878-a08e-161bea10917b","block_type":"box","text":"(k) fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or","page_number":148,"box":{"x":150,"y":289,"width":730,"height":12}},{"id":"3d54228a-02f0-4d95-bffd-9ec3ed65c32a","block_type":"box","text":"higher by Moody’s, SP-2 or A-2 or higher by S&P, or F-2 or higher by Fitch;","page_number":148,"box":{"x":184,"y":304,"width":563,"height":12}},{"id":"5cfbdc4f-7a71-46c6-9f7a-535fd513b4b5","block_type":"box","text":"(l) tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by","page_number":148,"box":{"x":150,"y":327,"width":675,"height":12}},{"id":"7b427b66-439b-4021-8f2a-2af5309e7d71","block_type":"box","text":"Moody’s, A-2 or higher by S&P, or F-2 or higher by Fitch;","page_number":148,"box":{"x":184,"y":343,"width":428,"height":12}},{"id":"6004045e-28bc-44d6-ae1a-8c4f44a6c6aa","block_type":"box","text":"(m) municipal bonds rated A or higher by Moody’s, S&P or Fitch;","page_number":148,"box":{"x":150,"y":366,"width":488,"height":12}},{"id":"7694d375-c87e-4492-bfdb-744a4f4ed841","block_type":"box","text":"(n) unrated notes, paper or other instruments that are of comparable quality to the instruments","page_number":148,"box":{"x":150,"y":389,"width":713,"height":12}},{"id":"6e8ad173-67e7-42d0-a8bd-91aff30a067b","block_type":"box","text":"described above, as determined by the Fund’s Manager under guidelines established by the","page_number":148,"box":{"x":184,"y":405,"width":688,"height":12}},{"id":"40ef6ec9-5c04-4270-a161-55c3e2c1517f","block_type":"box","text":"Board; and","page_number":148,"box":{"x":184,"y":420,"width":86,"height":12}},{"id":"9caf3339-bdb5-4e89-9163-9728333d36be","block_type":"box","text":"(o) municipal bonds and notes which are guaranteed as to principal and interest by the U.S.","page_number":148,"box":{"x":150,"y":444,"width":693,"height":12}},{"id":"1eb6709c-0a4c-4c37-87f8-1f427bf28eb0","block_type":"box","text":"Government or an agency or instrumentality thereof or which otherwise depend directly or","page_number":148,"box":{"x":184,"y":459,"width":671,"height":12}},{"id":"ab732e73-c63f-49da-9072-11481a2f571b","block_type":"box","text":"indirectly on the credit of the United States.","page_number":148,"box":{"x":184,"y":475,"width":325,"height":12}},{"id":"9cf6bbaf-67ba-4c30-a58d-26cc59a4d0cd","block_type":"box","text":"Mortgage-Related Securities.","page_number":148,"box":{"x":116,"y":506,"width":236,"height":12}},{"id":"98abc03c-198c-4cc1-b6e5-c3722a9af047","block_type":"box","text":"Mortgage-Backed Securities.","page_number":148,"box":{"x":116,"y":529,"width":214,"height":12}},{"id":"0e8cff55-b893-4abf-9808-773a6bc185be","block_type":"box","text":"Mortgage-backed securities represent interests in pools of mortgages in","page_number":148,"box":{"x":332,"y":529,"width":544,"height":12}},{"id":"322f6bb1-3625-43df-b457-ffdd3b16cc3e","block_type":"box","text":"which payments of both principal and interest on the securities are generally made monthly, in effect","page_number":148,"box":{"x":116,"y":544,"width":749,"height":12}},{"id":"3218494a-68af-44d5-a0f2-07bc3734eeab","block_type":"box","text":"“passing through” monthly payments made by borrowers on the residential or commercial mortgage","page_number":148,"box":{"x":116,"y":560,"width":745,"height":12}},{"id":"967f9aef-5136-4279-bab3-ee05e2e05103","block_type":"box","text":"loans that underlie the securities (net of any fees paid to the issuer or guarantor of the securities).","page_number":148,"box":{"x":117,"y":575,"width":728,"height":12}},{"id":"0cc698ba-e8ed-4663-901d-e4e6cdb31dd8","block_type":"box","text":"Mortgage-backed securities differ from other forms of debt securities, which normally provide for","page_number":148,"box":{"x":117,"y":591,"width":718,"height":12}},{"id":"191f1f55-3de4-45c2-b64c-46e6f0335b1f","block_type":"box","text":"periodic payment of interest in fixed amounts with principal payments at maturity or specified call","page_number":148,"box":{"x":117,"y":606,"width":721,"height":12}},{"id":"44666fc4-a7bb-49e8-9ec7-78cdca179e59","block_type":"box","text":"dates.","page_number":148,"box":{"x":116,"y":622,"width":50,"height":9}},{"id":"77064d3e-0209-4df7-99af-45024cf7a5b9","block_type":"box","text":"Mortgage-backed securities are subject to the general risks associated with investing in real estate","page_number":148,"box":{"x":117,"y":653,"width":736,"height":12}},{"id":"98fc550f-556c-42de-ba5a-8e0dfd482307","block_type":"box","text":"securities; that is, they may lose value if the value of the underlying real estate to which a pool of","page_number":148,"box":{"x":116,"y":668,"width":718,"height":12}},{"id":"0b1e12a0-db7f-4b94-8eb4-728788b1a874","block_type":"box","text":"mortgages relates declines. In addition, investments in mortgage-backed securities involve certain","page_number":148,"box":{"x":117,"y":684,"width":726,"height":12}},{"id":"96ce5a69-22bb-47a7-8812-698abfb2f28c","block_type":"box","text":"specific risks. These risks include the failure of a party to meet its commitments under the related","page_number":148,"box":{"x":116,"y":699,"width":720,"height":13}},{"id":"a3e8c2c2-3ba1-41cd-b0d6-eed01ded4e2e","block_type":"box","text":"operative documents, adverse interest rate changes and the effects of prepayments on mortgage cash","page_number":148,"box":{"x":116,"y":715,"width":762,"height":12}},{"id":"6dd3af42-c2f3-4317-a15d-cd5bba62ad06","block_type":"box","text":"flows. Mortgage-backed securities are “pass-through” securities, meaning that principal and interest","page_number":148,"box":{"x":116,"y":730,"width":740,"height":13}},{"id":"256979b5-bd06-4140-81fa-167ef3076a40","block_type":"box","text":"payments made by the borrower on the underlying mortgages are passed through to a Fund.","page_number":148,"box":{"x":117,"y":746,"width":687,"height":12}},{"id":"c238aa3c-53d8-4d50-8b5e-2a6176fbd658","block_type":"box","text":"Accordingly, the value of mortgage-backed securities in which a Fund invests may be particularly","page_number":148,"box":{"x":116,"y":761,"width":720,"height":13}},{"id":"174c6bdf-9107-444d-a225-5f669a4b5b5f","block_type":"box","text":"sensitive to changes in prevailing interest rates, and, like other fixed income investments, the ability of","page_number":148,"box":{"x":116,"y":777,"width":757,"height":12}},{"id":"a50bb1c1-8b4b-478c-a046-f0083c70c93c","block_type":"box","text":"a Fund to utilize these instruments successfully may depend in part upon the ability of the Manager to","page_number":148,"box":{"x":116,"y":792,"width":754,"height":13}},{"id":"f94bbcd4-f043-4b33-bfc2-ea73c77cf239","block_type":"box","text":"forecast interest rates and other economic factors correctly. The value of mortgage-backed securities,","page_number":148,"box":{"x":116,"y":808,"width":755,"height":12}},{"id":"7c14b715-2809-4937-9ae5-fb2e2508a581","block_type":"box","text":"like that of traditional fixed-income securities, typically increases when interest rates fall and decreases","page_number":148,"box":{"x":117,"y":823,"width":762,"height":13}},{"id":"d81a9c07-df15-4bb8-b6f1-369a1541f561","block_type":"box","text":"when interest rates rise. However, mortgage-backed securities differ from traditional fixed-income","page_number":148,"box":{"x":116,"y":839,"width":729,"height":12}},{"id":"0ebbed6e-4bb6-400d-a29a-305aae0d2b84","block_type":"box","text":"securities because of their potential for prepayment without penalty. The price paid by a Fund for its","page_number":148,"box":{"x":116,"y":854,"width":745,"height":13}},{"id":"6355431d-5684-4764-ad3e-231caf284e58","block_type":"box","text":"mortgage-backed securities, the yield the Fund expects to receive from such securities and the","page_number":148,"box":{"x":117,"y":870,"width":709,"height":12}},{"id":"21b2f9a7-b2f8-4bd8-8cdf-a0a69490817d","block_type":"box","text":"II-65","page_number":148,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fbbce36c-8d99-42f7-be3f-49c79ef88dad","block_type":"box","text":"NM1026U-6039989-148/256","page_number":148,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bc7a123a-cc64-4891-9977-0f73489ec3bc","block_type":"box","text":"weighted average life of the securities are based on a number of factors, including the anticipated rate","page_number":149,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"5e3cadd1-d587-44ae-9f0d-579864fc774c","block_type":"box","text":"of prepayment of the underlying mortgages. In a period of declining interest rates, borrowers may","page_number":149,"box":{"x":116,"y":102,"width":727,"height":13}},{"id":"0576f7cd-7261-424a-bf38-f890cd2d2eca","block_type":"box","text":"prepay the underlying mortgages more quickly than anticipated, thereby reducing the yield to maturity","page_number":149,"box":{"x":117,"y":118,"width":757,"height":12}},{"id":"ef5acae9-c465-4305-80f5-0a8f6c88747b","block_type":"box","text":"and the average life of the mortgage-backed securities. Moreover, when a Fund reinvests the proceeds","page_number":149,"box":{"x":116,"y":134,"width":772,"height":12}},{"id":"725a4a9f-f5a7-4fcb-9b92-a87a205b005e","block_type":"box","text":"of a prepayment in these circumstances, it will likely receive a rate of interest that is lower than the rate","page_number":149,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"0e4d8611-7351-48af-9e2e-9a2c4ab09f5f","block_type":"box","text":"on the security that was prepaid.","page_number":149,"box":{"x":116,"y":165,"width":247,"height":12}},{"id":"17eb4cb1-b822-4df6-b43b-2bfe2f5191d1","block_type":"box","text":"To the extent that a Fund purchases mortgage-backed securities at a premium, mortgage foreclosures","page_number":149,"box":{"x":116,"y":196,"width":766,"height":12}},{"id":"b3778061-af70-4d84-91ad-aea7381edd90","block_type":"box","text":"and principal prepayments may result in a loss to the extent of the premium paid. If a Fund buys such","page_number":149,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"aeff7138-4918-4769-84ef-608237afff3a","block_type":"box","text":"securities at a discount, both scheduled payments of principal and unscheduled prepayments will","page_number":149,"box":{"x":116,"y":227,"width":726,"height":12}},{"id":"6b7692d2-5e09-4b3a-b511-86151d34b058","block_type":"box","text":"increase current and total returns and will accelerate the recognition of income, which, when distributed","page_number":149,"box":{"x":117,"y":242,"width":771,"height":12}},{"id":"11b7d3f5-9dd3-4fc5-bf98-ef6b9aceb29d","block_type":"box","text":"to shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of","page_number":149,"box":{"x":116,"y":258,"width":762,"height":12}},{"id":"463678a2-093f-45d8-a87f-dbc2e795afd3","block_type":"box","text":"the underlying mortgages may occur at a slower than expected rate, creating maturity extension risk.","page_number":149,"box":{"x":116,"y":273,"width":753,"height":12}},{"id":"8d15fc36-c969-40fb-a948-f095130686cc","block_type":"box","text":"This particular risk may effectively change a security that was considered short- or intermediate-term at","page_number":149,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"ff818e50-9b61-4677-8f40-57f013b1f183","block_type":"box","text":"the time of purchase into a long-term security. Since the value of long-term securities generally","page_number":149,"box":{"x":116,"y":304,"width":709,"height":12}},{"id":"61c1a8fe-d681-4a63-9005-d33df5fdaa6b","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than that of shorter-term securities,","page_number":149,"box":{"x":116,"y":320,"width":736,"height":12}},{"id":"c7eda944-6df9-4cd5-8dcc-3cfa7e8b99b0","block_type":"box","text":"maturity extension risk could increase the inherent volatility of the Fund. Under certain interest rate and","page_number":149,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"f4c6c1be-09f6-4c3a-97cf-62334dd07831","block_type":"box","text":"prepayment scenarios, a Fund may fail to recoup fully its investment in mortgage-backed securities","page_number":149,"box":{"x":117,"y":351,"width":740,"height":12}},{"id":"82134f5c-fde1-411a-a50c-48a88f032ac5","block_type":"box","text":"notwithstanding any direct or indirect governmental or agency guarantee.","page_number":149,"box":{"x":117,"y":366,"width":547,"height":12}},{"id":"b98e481b-c391-422b-90f9-3caca894cbca","block_type":"box","text":"There are currently three types of mortgage pass-through securities: (1) those issued by the U.S.","page_number":149,"box":{"x":116,"y":397,"width":725,"height":12}},{"id":"96e3f0a2-582f-4403-894d-01d0b1fe6cca","block_type":"box","text":"Government or one of its agencies or instrumentalities, such as the Government National Mortgage","page_number":149,"box":{"x":117,"y":413,"width":742,"height":12}},{"id":"69b44956-bcf0-4a19-9f58-4931f67849a4","block_type":"box","text":"Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal","page_number":149,"box":{"x":116,"y":428,"width":770,"height":12}},{"id":"17f6a6fe-0d00-4d21-a220-4992b9237919","block_type":"box","text":"Home Loan Mortgage Corporation (“Freddie Mac”); (2) those issued by private issuers that represent","page_number":149,"box":{"x":117,"y":444,"width":753,"height":12}},{"id":"3b4474b3-d0b9-4e07-bcdc-66e709de6c34","block_type":"box","text":"an interest in or are collateralized by pass-through securities issued or guaranteed by the U.S.","page_number":149,"box":{"x":116,"y":459,"width":704,"height":12}},{"id":"68691171-f706-44a5-920c-31e573df52ef","block_type":"box","text":"Government or one of its agencies or instrumentalities; and (3) those issued by private issuers that","page_number":149,"box":{"x":117,"y":475,"width":737,"height":12}},{"id":"f3017ad7-b927-44f2-99c9-a54261542ea3","block_type":"box","text":"represent an interest in or are collateralized by whole mortgage loans or pass-through securities","page_number":149,"box":{"x":117,"y":490,"width":717,"height":12}},{"id":"cb898b32-9fe9-4328-a75b-e45641a0524c","block_type":"box","text":"without a government guarantee but that usually have some form of private credit enhancement.","page_number":149,"box":{"x":116,"y":506,"width":720,"height":12}},{"id":"f20b3812-1e01-444d-a8fb-eac5c5bd1e1c","block_type":"box","text":"Ginnie Mae is a wholly owned U.S. Government corporation within the Department of Housing and","page_number":149,"box":{"x":117,"y":537,"width":736,"height":12}},{"id":"b897616d-a215-49ed-b8fd-5493a67a99c8","block_type":"box","text":"Urban Development. Ginnie Mae is authorized to guarantee, with the full faith and credit of the U.S.","page_number":149,"box":{"x":117,"y":552,"width":741,"height":12}},{"id":"be3ab941-68f8-4ecb-86b8-00244abb0adc","block_type":"box","text":"Government, the timely payment of principal and interest on securities issued by the institutions","page_number":149,"box":{"x":117,"y":568,"width":713,"height":12}},{"id":"5820a638-34d2-4913-b724-394652cb4839","block_type":"box","text":"approved by Ginnie Mae (such as savings and loan institutions, commercial banks and mortgage","page_number":149,"box":{"x":116,"y":583,"width":725,"height":12}},{"id":"c4998f3c-c2ab-46d1-bcf6-001b791eb051","block_type":"box","text":"banks), and backed by pools of Federal Housing Administration (“FHA”)-insured or Veterans’","page_number":149,"box":{"x":117,"y":599,"width":693,"height":12}},{"id":"8834a7ea-a448-4192-ac41-270e718a9764","block_type":"box","text":"Administration (“VA”)-guaranteed mortgages. Pass-through certificates guaranteed by Ginnie Mae","page_number":149,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"f47c2688-8b54-477d-86c8-731c2f658085","block_type":"box","text":"(such certificates are also known as “Ginnie Maes”) are guaranteed as to the timely payment of","page_number":149,"box":{"x":117,"y":630,"width":711,"height":12}},{"id":"dc608166-6236-47e2-9d9a-96be4401122b","block_type":"box","text":"principal and interest by Ginnie Mae, whose guarantee is backed by the full faith and credit of the","page_number":149,"box":{"x":117,"y":645,"width":725,"height":12}},{"id":"6ce56799-bb22-420d-875f-75be9c0361fc","block_type":"box","text":"United States. Ginnie Mae certificates also are supported by the authority of Ginnie Mae to borrow","page_number":149,"box":{"x":117,"y":661,"width":729,"height":12}},{"id":"af337ffa-4714-46c6-8845-8cf11119035d","block_type":"box","text":"funds from the U.S. Treasury Department to make payments under its guarantee. Mortgage-related","page_number":149,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"39a213a1-9c4a-44ea-bf1e-2fb5a66a6ac1","block_type":"box","text":"securities issued by Fannie Mae include Fannie Mae guaranteed Mortgage Pass-Through Certificates","page_number":149,"box":{"x":116,"y":692,"width":756,"height":12}},{"id":"8c90ceba-9e90-4a9e-8903-8d36b22d5d23","block_type":"box","text":"(also known as “Fannie Maes”), which are guaranteed as to timely payment of principal and interest by","page_number":149,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"6f1d00a2-166a-4813-9bf5-39aaf3acb9c8","block_type":"box","text":"Fannie Mae. They are not backed by or entitled to the full faith and credit of the United States, but are","page_number":149,"box":{"x":117,"y":723,"width":754,"height":12}},{"id":"0fcd7008-8455-4bc1-9659-d8a859c0ab90","block_type":"box","text":"supported by the right of Fannie Mae to borrow from the U.S. Treasury Department. Fannie Mae was","page_number":149,"box":{"x":116,"y":738,"width":750,"height":12}},{"id":"380f572a-40c6-4f11-a5bd-2f8f82b4f0cd","block_type":"box","text":"established as a federal agency in 1938 and in 1968 was chartered by Congress as a private","page_number":149,"box":{"x":116,"y":754,"width":690,"height":12}},{"id":"fa3d897f-02db-4dc8-9e64-f69924f84ca9","block_type":"box","text":"shareholder-owned company. Mortgage-related securities issued by Freddie Mac include Freddie Mac","page_number":149,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"49d7f679-2818-4aab-9e1c-1c1c904c2655","block_type":"box","text":"Mortgage Participation Certificates (also known as “Freddie Macs” or “PCs”). Freddie Mac is a","page_number":149,"box":{"x":117,"y":785,"width":697,"height":12}},{"id":"68339ae0-203c-4070-8169-09edcb2d5061","block_type":"box","text":"stockholder-owned corporation chartered by Congress in 1970. Freddie Macs are not guaranteed by","page_number":149,"box":{"x":116,"y":800,"width":745,"height":12}},{"id":"40eed882-a920-4153-b38b-bf6f25c21af1","block_type":"box","text":"the United States or by any Federal Home Loan Banks and do not constitute a debt or obligation of the","page_number":149,"box":{"x":116,"y":816,"width":763,"height":12}},{"id":"29892c90-2bb8-407d-995b-4a6429015b29","block_type":"box","text":"United States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of","page_number":149,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"0ef985bc-0ef7-49d2-8c19-432fd17b63e7","block_type":"box","text":"interest, which is guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or","page_number":149,"box":{"x":117,"y":847,"width":735,"height":12}},{"id":"5ef19280-7552-4a54-ae2a-b483d0db6b4d","block_type":"box","text":"timely payment of all principal payments on the underlying mortgage loans. While Freddie Mac","page_number":149,"box":{"x":116,"y":862,"width":707,"height":12}},{"id":"79031eb2-13f1-43c9-80af-a8f35e017ac1","block_type":"box","text":"generally does not guarantee timely payment of principal, Freddie Mac may remit the amount due on","page_number":149,"box":{"x":116,"y":878,"width":753,"height":12}},{"id":"1357191d-1a60-4625-ba91-1ec4473c9d46","block_type":"box","text":"II-66","page_number":149,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"23645793-bddf-4a49-bc07-059723849653","block_type":"box","text":"NM1026U-6039989-149/256","page_number":149,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"78ca7fb7-48a2-41a6-a05d-2f1775b9fdc9","block_type":"box","text":"account of its guarantee of ultimate payment of principal at any time after default on an underlying","page_number":150,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"9f95bf0f-6f03-45d6-ba6c-981871b828dd","block_type":"box","text":"mortgage, but in no event later than one year after it becomes payable.","page_number":150,"box":{"x":117,"y":102,"width":532,"height":13}},{"id":"c0a076a5-7533-47bf-a644-009cbd1cca09","block_type":"box","text":"Private mortgage pass-through securities are structured similarly to Ginnie Mae, Fannie Mae, and","page_number":150,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"46c9af27-beb9-488c-99a2-ba92ac79ba8d","block_type":"box","text":"Freddie Mac mortgage pass-through securities and are issued by originators of and investors in","page_number":150,"box":{"x":117,"y":149,"width":714,"height":12}},{"id":"e993520d-fd81-403b-9c7d-13d3124262d8","block_type":"box","text":"mortgage loans, including depository institutions, mortgage banks, investment banks and special","page_number":150,"box":{"x":117,"y":165,"width":722,"height":12}},{"id":"1573e1c2-ba5d-4f37-b880-7d7ecac6be32","block_type":"box","text":"purpose subsidiaries of the foregoing.","page_number":150,"box":{"x":117,"y":180,"width":284,"height":12}},{"id":"af908bd3-3ea9-45c6-91c8-7c44a539d12e","block_type":"box","text":"Pools created by private mortgage pass-through issuers generally offer a higher rate of interest than","page_number":150,"box":{"x":117,"y":211,"width":747,"height":12}},{"id":"4ddd9cbd-3c56-42ad-845a-3646bf85ad3d","block_type":"box","text":"government and government-related pools because there are no direct or indirect government or","page_number":150,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"25a95cf8-7204-452a-a0db-b8710f7d0e56","block_type":"box","text":"agency guarantees of payments in the private pools. However, timely payment of interest and principal","page_number":150,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"11802cbb-8138-47f4-9784-6a7bc2ac7921","block_type":"box","text":"of these pools may be supported by various forms of insurance or guarantees, including individual","page_number":150,"box":{"x":116,"y":258,"width":732,"height":12}},{"id":"0acc418c-8d6a-4786-b82c-4dd25cf81e83","block_type":"box","text":"loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by","page_number":150,"box":{"x":117,"y":273,"width":769,"height":12}},{"id":"1a1b02ae-64f9-4a2b-a6bb-28ccb04090a6","block_type":"box","text":"governmental entities, private insurers and the mortgage poolers. The insurance and guarantees and","page_number":150,"box":{"x":116,"y":289,"width":756,"height":12}},{"id":"867fa468-fb87-4898-b3db-adc356ec6470","block_type":"box","text":"the creditworthiness of the issuers thereof will be considered in determining whether a mortgage","page_number":150,"box":{"x":116,"y":304,"width":720,"height":12}},{"id":"e077bac2-8ee3-4afe-9104-6b6b969c3241","block_type":"box","text":"related security meets a Fund’s investment quality standards. There can be no assurance that the","page_number":150,"box":{"x":117,"y":320,"width":731,"height":12}},{"id":"2f0221d8-aae3-467d-8107-0f86f9bb60c4","block_type":"box","text":"private insurers or guarantors can meet their obligations under the insurance policies or guarantee","page_number":150,"box":{"x":117,"y":335,"width":734,"height":12}},{"id":"a4ac29ba-53d0-4508-b8d7-c18d3756cb77","block_type":"box","text":"arrangements. Private mortgage pass-through securities may be bought without insurance or","page_number":150,"box":{"x":116,"y":351,"width":696,"height":12}},{"id":"e2ba2f8b-d178-44c4-8721-8b087ead012c","block_type":"box","text":"guarantees if, through an examination of the loan experience and practices of the originator/servicers","page_number":150,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"193a1bd9-78a1-499f-96c9-eaf5d4c5b96b","block_type":"box","text":"and poolers, the Manager determines that the securities meet a Fund’s quality standards. Any","page_number":150,"box":{"x":116,"y":382,"width":703,"height":12}},{"id":"2ab04fe9-05d5-4bb6-a064-fa73e9126984","block_type":"box","text":"mortgage-related securities that are issued by private issuers have some exposure to subprime loans","page_number":150,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"5ea0d46a-c5ce-4994-9c34-21463be820fe","block_type":"box","text":"as well as to the mortgage and credit markets generally.","page_number":150,"box":{"x":116,"y":413,"width":422,"height":12}},{"id":"16df9f0b-e8b9-47a3-b407-ec4cb180c5b1","block_type":"box","text":"In addition, mortgage-related securities that are issued by private issuers are not subject to the","page_number":150,"box":{"x":117,"y":444,"width":707,"height":12}},{"id":"f710e8bf-d8da-4e9f-9d52-abf4e6fc8932","block_type":"box","text":"underwriting requirements for the underlying mortgages that are applicable to those mortgage-related","page_number":150,"box":{"x":117,"y":459,"width":757,"height":12}},{"id":"b9e63057-4327-484e-9401-de84984cc3aa","block_type":"box","text":"securities that have a government or government-sponsored entity guarantee. As a result, the","page_number":150,"box":{"x":116,"y":475,"width":702,"height":12}},{"id":"26593096-7700-4812-b8f9-31082f583d62","block_type":"box","text":"mortgage loans underlying private mortgage-related securities may, and frequently do, have less","page_number":150,"box":{"x":117,"y":490,"width":722,"height":12}},{"id":"c0e77a56-d504-48f5-8b56-3e64b8de84cb","block_type":"box","text":"favorable collateral, credit risk or other underwriting characteristics than government or government","page_number":150,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"0a785aec-f6b2-42b9-825c-ec1078710f82","block_type":"box","text":"sponsored mortgage-related securities and have wider variances in a number of terms including","page_number":150,"box":{"x":116,"y":521,"width":717,"height":12}},{"id":"006c7c11-cf6f-4ccd-a161-d22daa2e4a97","block_type":"box","text":"interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently","page_number":150,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"18fc6439-f4d7-475e-a261-3dd1e4c154ff","block_type":"box","text":"include second mortgages, high loan-to-value mortgages and manufactured housing loans. The","page_number":150,"box":{"x":117,"y":552,"width":714,"height":12}},{"id":"1a5e9829-dd67-4ac0-9628-8dd2bcc6dac9","block_type":"box","text":"coupon rates and maturities of the underlying mortgage loans in a private-label mortgage-related","page_number":150,"box":{"x":116,"y":568,"width":723,"height":12}},{"id":"497ebb5a-ff36-4d62-85af-07eca34a9336","block_type":"box","text":"securities pool may vary to a greater extent than those included in a government guaranteed pool, and","page_number":150,"box":{"x":116,"y":583,"width":766,"height":12}},{"id":"a7b2178e-c4bb-4ff4-9883-ea8252a1d59e","block_type":"box","text":"the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with","page_number":150,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"d2ea52ea-2e6c-46e4-b24c-eb21f00a8366","block_type":"box","text":"weakened credit histories or with a lower capacity to make timely payments on their loans. For these","page_number":150,"box":{"x":116,"y":614,"width":751,"height":12}},{"id":"dcdd3aa4-c56e-41b2-b135-e1c916e1b6da","block_type":"box","text":"reasons, the loans underlying these securities have had in many cases higher default rates than those","page_number":150,"box":{"x":117,"y":630,"width":763,"height":12}},{"id":"02162e12-3909-44cc-954a-685d16ee17fa","block_type":"box","text":"loans that meet government underwriting requirements.","page_number":150,"box":{"x":117,"y":645,"width":416,"height":12}},{"id":"478702e9-a891-430e-bc1b-5d64ed323310","block_type":"box","text":"The risk of non-payment is greater for mortgage-related securities that are backed by mortgage pools","page_number":150,"box":{"x":116,"y":676,"width":753,"height":12}},{"id":"52c604d1-d4ac-4e0b-a771-78b5cb1bf11d","block_type":"box","text":"that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting","page_number":150,"box":{"x":116,"y":692,"width":740,"height":12}},{"id":"e07b5dbb-0292-4fc5-9622-33e4ac0f4172","block_type":"box","text":"mortgage loan repayments may include a general economic turndown, high unemployment, a general","page_number":150,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"13e754b2-bee9-440d-99bd-8fd502ebf31a","block_type":"box","text":"slowdown in the real estate market, a drop in the market prices of real estate, or an increase in interest","page_number":150,"box":{"x":116,"y":723,"width":763,"height":12}},{"id":"79d8d144-cd29-4272-b586-435607c91d30","block_type":"box","text":"rates resulting in higher mortgage payments by holders of adjustable rate mortgages.","page_number":150,"box":{"x":117,"y":738,"width":631,"height":12}},{"id":"e4260d50-e062-4af0-9ecf-34b86562e92d","block_type":"box","text":"Privately issued mortgage-related securities are not traded on an exchange and there may be a limited","page_number":150,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"0111bf2d-c382-424d-a270-16b505c07c20","block_type":"box","text":"market for the securities, especially when there is a perceived weakness in the mortgage and real","page_number":150,"box":{"x":117,"y":785,"width":724,"height":12}},{"id":"ee1a4308-87a0-4660-a641-e4a7471ac09e","block_type":"box","text":"estate market sectors. Without an active trading market, mortgage-related securities held in a Fund’s","page_number":150,"box":{"x":116,"y":800,"width":748,"height":12}},{"id":"bc764e86-fbe0-49c4-a3d2-58cb933d1d38","block_type":"box","text":"portfolio may be particularly difficult to value because of the complexities involved in assessing the","page_number":150,"box":{"x":117,"y":816,"width":729,"height":12}},{"id":"0a02d941-2f85-4c04-ab13-94069e2d9666","block_type":"box","text":"value of the underlying mortgage loans.","page_number":150,"box":{"x":116,"y":831,"width":299,"height":12}},{"id":"360cbd93-7028-4631-b790-da1cad790cb7","block_type":"box","text":"Collateralized Mortgage Obligations (“CMOs”).","page_number":150,"box":{"x":117,"y":862,"width":343,"height":12}},{"id":"5dc70dc7-4556-4bcc-8c4e-fd4aca2078c3","block_type":"box","text":"CMOs are debt obligations collateralized by residential","page_number":150,"box":{"x":462,"y":862,"width":415,"height":12}},{"id":"015412dc-5060-4e0c-831c-bbbf818ec0c9","block_type":"box","text":"or commercial mortgage loans or residential or commercial mortgage pass-through securities. Interest","page_number":150,"box":{"x":116,"y":878,"width":762,"height":12}},{"id":"b05d5d10-7b92-4866-aead-d3d72c54595e","block_type":"box","text":"II-67","page_number":150,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"eba8ffdd-16a2-4dec-984f-02019304b52e","block_type":"box","text":"NM1026U-6039989-150/256","page_number":150,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d7a97947-09d3-48d0-91f9-e83dc9ff35f1","block_type":"box","text":"and prepaid principal are generally paid monthly. CMOs may be collateralized by whole mortgage","page_number":151,"box":{"x":116,"y":87,"width":729,"height":12}},{"id":"df8104da-dd1d-4694-a3c2-ef733279d3fe","block_type":"box","text":"loans or private mortgage pass-through securities but are more typically collateralized by portfolios of","page_number":151,"box":{"x":117,"y":102,"width":755,"height":13}},{"id":"e8f26f1f-5b9c-4c10-a33f-8ee07362b6b3","block_type":"box","text":"mortgage pass-through securities guaranteed by Ginnie Mae, Freddie Mac, or Fannie Mae. The issuer","page_number":151,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"6dbee30f-787e-4eab-b546-ca029ad8aed6","block_type":"box","text":"of a series of CMOs may elect to be treated as a Real Estate Mortgage Investment Conduit (“REMIC”).","page_number":151,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"4b3595f5-9f82-4c9b-86a2-7b2fcb868b2d","block_type":"box","text":"All future references to CMOs also include REMICs.","page_number":151,"box":{"x":116,"y":149,"width":392,"height":10}},{"id":"b5206e7a-a928-4f21-ada6-0aeb568e58af","block_type":"box","text":"CMOs are structured into multiple classes, often referred to as a “tranche,” each issued at a specific","page_number":151,"box":{"x":117,"y":180,"width":746,"height":12}},{"id":"e3f70ca6-7cf3-4825-a1ad-b5a186edc09e","block_type":"box","text":"adjustable or fixed interest rate, and bearing a different stated maturity date and each must be fully","page_number":151,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"de7cceca-8abf-490c-95c1-03d876b1c90f","block_type":"box","text":"retired no later than its final distribution date. Actual maturity and average life will depend upon the","page_number":151,"box":{"x":117,"y":211,"width":734,"height":12}},{"id":"027a8e97-0ef0-4787-9902-69dffd9e5322","block_type":"box","text":"prepayment experience of the collateral, which is ordinarily unrelated to the stated maturity date.","page_number":151,"box":{"x":117,"y":227,"width":719,"height":12}},{"id":"04090c23-322c-4aa5-a055-5aaa962e2046","block_type":"box","text":"CMOs often provide for a modified form of call protection through a de facto breakdown of the","page_number":151,"box":{"x":117,"y":242,"width":700,"height":12}},{"id":"9a7b0570-91be-4fdb-8f19-cf1f816853ef","block_type":"box","text":"underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of","page_number":151,"box":{"x":117,"y":258,"width":718,"height":12}},{"id":"2bf3cfe1-c2aa-4e72-b90a-572a0831a020","block_type":"box","text":"principal received from the pool of underlying mortgages, including prepayments, is first returned to","page_number":151,"box":{"x":117,"y":273,"width":740,"height":12}},{"id":"93a21abb-3fbe-4d40-83d0-360f5de949f8","block_type":"box","text":"investors holding the shortest maturity class. Investors holding the longer maturity classes usually","page_number":151,"box":{"x":117,"y":289,"width":729,"height":12}},{"id":"7dfe2557-e4fd-492a-84ea-8b2607a0dd44","block_type":"box","text":"receive principal only after the first class has been retired. An investor may be partially protected","page_number":151,"box":{"x":117,"y":304,"width":719,"height":12}},{"id":"1800c438-8365-4da6-bf25-f748f1529e08","block_type":"box","text":"against a sooner than desired return of principal because of the sequential payments.","page_number":151,"box":{"x":116,"y":320,"width":640,"height":12}},{"id":"e32b716a-c8b1-4b1c-8c4f-0522d669862b","block_type":"box","text":"Certain issuers of CMOs are not considered investment companies pursuant to a rule adopted by the","page_number":151,"box":{"x":117,"y":351,"width":755,"height":12}},{"id":"b6e70464-a802-4f75-baa4-e4cd9d2f6b88","block_type":"box","text":"Commission, and a Fund may invest in the securities of such issuers without the limitations imposed by","page_number":151,"box":{"x":117,"y":366,"width":771,"height":12}},{"id":"b7ed09a1-02d1-45d3-80eb-df46a88d84e6","block_type":"box","text":"the Investment Company Act on investments by a Fund in other investment companies. In addition, in","page_number":151,"box":{"x":116,"y":382,"width":761,"height":12}},{"id":"c897bd5c-33a8-435a-bbe4-be496a5cbbb0","block_type":"box","text":"reliance on an earlier Commission interpretation, a Fund’s investments in certain other qualifying","page_number":151,"box":{"x":117,"y":397,"width":721,"height":12}},{"id":"63dd6c71-c318-4e29-9bf8-c36c5b292b8a","block_type":"box","text":"CMOs, which cannot or do not rely on the rule, are also not subject to the limitation of the Investment","page_number":151,"box":{"x":117,"y":413,"width":753,"height":12}},{"id":"e657b1b4-dcf7-4fb9-ba6f-ea4db3b28e42","block_type":"box","text":"Company Act on acquiring interests in other investment companies. In order to be able to rely on the","page_number":151,"box":{"x":117,"y":428,"width":750,"height":12}},{"id":"e7d9899f-5343-431b-8e7a-7a5a7cdc6765","block_type":"box","text":"Commission’s interpretation, these CMOs must be unmanaged, fixed asset issuers, that: (1) invest","page_number":151,"box":{"x":117,"y":444,"width":736,"height":12}},{"id":"fb5a9d37-2352-434b-85be-034ff9fe4d1a","block_type":"box","text":"primarily in mortgage-backed securities; (2) do not issue redeemable securities; (3) operate under","page_number":151,"box":{"x":117,"y":459,"width":730,"height":12}},{"id":"21673278-7a99-4fae-9523-5025e48f17aa","block_type":"box","text":"general exemptive orders exempting them from all provisions of the Investment Company Act; and","page_number":151,"box":{"x":116,"y":475,"width":736,"height":12}},{"id":"7a854503-2560-4d90-b20d-238519f95ec9","block_type":"box","text":"(4) are not registered or regulated under the Investment Company Act as investment companies. To","page_number":151,"box":{"x":117,"y":490,"width":748,"height":12}},{"id":"8af64bcb-0f11-4ba5-98e4-9ffecaae49ce","block_type":"box","text":"the extent that a Fund selects CMOs that cannot rely on the rule or do not meet the above","page_number":151,"box":{"x":116,"y":506,"width":674,"height":12}},{"id":"0ae6db3e-e17d-4662-984e-8a4b934371e4","block_type":"box","text":"requirements, the Fund may not invest more than 10% of its assets in all such entities and may not","page_number":151,"box":{"x":117,"y":521,"width":738,"height":12}},{"id":"fcdccf76-42b5-4c92-9de2-bffd49f462dd","block_type":"box","text":"acquire more than 3% of the voting securities of any single such entity.","page_number":151,"box":{"x":116,"y":537,"width":530,"height":12}},{"id":"d7f0a69a-d032-420e-97c2-bc9a1d4c2d55","block_type":"box","text":"A Fund may also invest in, among other things, parallel pay CMOs, sequential pay CMOs, and floating","page_number":151,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"2ead66a7-7934-4f40-9fc5-873776bee648","block_type":"box","text":"rate CMOs. Parallel pay CMOs are structured to provide payments of principal on each payment date","page_number":151,"box":{"x":117,"y":583,"width":757,"height":12}},{"id":"7186ad0c-3cef-4b0b-92de-62a56f9ca653","block_type":"box","text":"to more than one class, concurrently on a proportionate or disproportionate basis. These simultaneous","page_number":151,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"fb89f0df-13cf-4c0a-9158-24b8f07271ee","block_type":"box","text":"payments are taken into account in calculating the final distribution date of each class. Sequential pay","page_number":151,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"d12ab892-7cf5-40eb-a6e5-2578e3efb497","block_type":"box","text":"CMOs generally pay principal to only one class at a time while paying interest to several classes. A","page_number":151,"box":{"x":117,"y":630,"width":739,"height":12}},{"id":"f873fb3c-e942-41a7-89aa-5004898cc667","block_type":"box","text":"wide variety of REMIC Certificates may be issued in the parallel pay or sequential pay structures.","page_number":151,"box":{"x":116,"y":645,"width":726,"height":12}},{"id":"e7a37b50-b840-4587-9530-856d8f3bbf27","block_type":"box","text":"These securities include accrual certificates (also known as “Z-Bonds”), which only accrue interest at a","page_number":151,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"e76e3d02-0fd3-4ece-af5c-1e6fcc6d68bb","block_type":"box","text":"specified rate until all other certificates having an earlier final distribution date have been retired and","page_number":151,"box":{"x":116,"y":676,"width":740,"height":12}},{"id":"9d0565df-17ca-4bd4-8ce0-7fec12e12ff7","block_type":"box","text":"are converted thereafter to an interest-paying security. Floating rate CMOs are securities whose","page_number":151,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"fd01d0c1-4e42-4d71-b307-b82b8170bc4f","block_type":"box","text":"coupon rate fluctuates according to some formula related to an existing market index or rate. Typical","page_number":151,"box":{"x":116,"y":707,"width":745,"height":12}},{"id":"bffac755-5b17-4730-a324-053f63a50485","block_type":"box","text":"indices would include the eleventh district cost-of-funds index (“COFI”), one-year Treasury yields, and","page_number":151,"box":{"x":117,"y":723,"width":753,"height":12}},{"id":"0b718bb9-ac31-4df5-bed2-297b833d85c3","block_type":"box","text":"ten-year Treasury yields.","page_number":151,"box":{"x":116,"y":738,"width":184,"height":12}},{"id":"48dc4e0f-50ab-4618-9d69-e774692cbcd3","block_type":"box","text":"Classes of CMOs also include planned amortization classes (“PACs”) and targeted amortization classes","page_number":151,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"1efbd3fa-4091-492b-a5fc-47abdca95314","block_type":"box","text":"(“TACs”). PAC bonds generally require payments of a specified amount of principal on each payment","page_number":151,"box":{"x":117,"y":785,"width":742,"height":12}},{"id":"28a95eac-a03d-4e17-a728-824ad8b85f60","block_type":"box","text":"date. The scheduled principal payments for PAC Certificates generally have the highest priority on each","page_number":151,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"1f0cfd10-b877-46e1-91b5-59ac00f013b1","block_type":"box","text":"payment date after interest due has been paid to all classes entitled to receive interest currently.","page_number":151,"box":{"x":117,"y":816,"width":705,"height":12}},{"id":"e82c4b95-1021-4c30-b95e-6d13205fad14","block_type":"box","text":"Shortfalls, if any, are added to the amount payable on the next payment date. The PAC Certificate","page_number":151,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"d703f1f5-7dd1-4d04-b414-5a8aa10e1457","block_type":"box","text":"payment schedule is taken into account in calculating the final distribution date of each class of PAC. In","page_number":151,"box":{"x":117,"y":847,"width":763,"height":12}},{"id":"61284185-65be-4e8a-a040-664c370748af","block_type":"box","text":"order to create PAC tranches, one or more tranches generally must be created that absorb most of the","page_number":151,"box":{"x":116,"y":862,"width":759,"height":12}},{"id":"cb977f49-0d64-47ae-ac44-905b7118649d","block_type":"box","text":"II-68","page_number":151,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"bfdeb0dc-8b75-4bac-8d7c-e35e9dd6665e","block_type":"box","text":"NM1026U-6039989-151/256","page_number":151,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e31b85b0-dfb0-43e7-bf2e-24f54e12d094","block_type":"box","text":"volatility in the underlying mortgage assets. These tranches (often called “supports” or “companion”","page_number":152,"box":{"x":116,"y":87,"width":734,"height":12}},{"id":"9ba644ee-c7e4-458f-8cfd-35fcee386dfe","block_type":"box","text":"tranches) tend to have market prices and yields that are more volatile than the PAC classes.","page_number":152,"box":{"x":116,"y":102,"width":683,"height":13}},{"id":"16f240cf-1416-46e9-8539-c5c63ae92e90","block_type":"box","text":"TACs are similar to PACs in that they require that specified amounts of principal be applied on each","page_number":152,"box":{"x":116,"y":131,"width":745,"height":12}},{"id":"0a9c4b74-ef2d-4278-a2a7-6e4544f48e0f","block_type":"box","text":"payment date to one or more classes of REMIC Certificates. A PAC’s payment schedule, however,","page_number":152,"box":{"x":117,"y":146,"width":738,"height":12}},{"id":"db1adf01-3f7f-4702-8f3a-89dc6acca9cf","block_type":"box","text":"remains in effect as long as prepayment rates on the underlying mortgages do not exceed certain","page_number":152,"box":{"x":117,"y":162,"width":728,"height":12}},{"id":"d61f083b-6bbc-4eee-b24d-82f888e4b018","block_type":"box","text":"ranges. In contrast, a TAC provides investors with protection, to a certain level, against either faster","page_number":152,"box":{"x":117,"y":177,"width":743,"height":12}},{"id":"28709031-2399-44db-8b05-9eb1c2d41983","block_type":"box","text":"than expected or slower than expected prepayment rates, but not both. TACs thus provide more cash","page_number":152,"box":{"x":116,"y":193,"width":759,"height":12}},{"id":"eba778f3-a90d-4b2a-bb68-fb2d66e142c3","block_type":"box","text":"flow stability than a regular sequential paying class, but less than a PAC. TACs also tend to have","page_number":152,"box":{"x":116,"y":208,"width":725,"height":12}},{"id":"15b1e09a-2b6f-4e2b-a19c-76593b23fdce","block_type":"box","text":"market prices and yields that are more volatile than PACs.","page_number":152,"box":{"x":117,"y":224,"width":437,"height":12}},{"id":"ff29a235-9d0c-4c8f-8507-4c6e09d0338a","block_type":"box","text":"Adjustable Rate Mortgage Securities.","page_number":152,"box":{"x":115,"y":252,"width":277,"height":12}},{"id":"0993edee-ef9c-49f2-9dc4-26500ca1fa4e","block_type":"box","text":"Adjustable rate mortgage securities (“ARMs”) are pass-through","page_number":152,"box":{"x":393,"y":252,"width":479,"height":12}},{"id":"d1201755-c57d-42df-89c1-bb9a55db9759","block_type":"box","text":"securities collateralized by mortgages with adjustable rather than fixed rates. ARMs eligible for","page_number":152,"box":{"x":116,"y":268,"width":706,"height":12}},{"id":"9b097347-f298-4dcd-92b4-f7dc9130208f","block_type":"box","text":"inclusion in a mortgage pool generally provide for a fixed initial mortgage interest rate for a set number","page_number":152,"box":{"x":117,"y":283,"width":764,"height":12}},{"id":"a6c4d212-9274-4a30-b104-7ff604b1119d","block_type":"box","text":"of scheduled monthly payments. After that schedule of payments has been completed, the interest","page_number":152,"box":{"x":116,"y":299,"width":736,"height":12}},{"id":"380710a0-6b39-4051-8bfe-06ff5cfb0d7c","block_type":"box","text":"rates are subject to periodic adjustment based on changes to a designated benchmark index.","page_number":152,"box":{"x":117,"y":314,"width":697,"height":12}},{"id":"14d8465b-b4f1-43af-8e7e-18e30aeabbcd","block_type":"box","text":"ARMs contain maximum and minimum rates beyond which the mortgage interest rate may not vary","page_number":152,"box":{"x":116,"y":343,"width":741,"height":12}},{"id":"504c0564-caec-43fc-ae18-d1a0f4674260","block_type":"box","text":"over the lifetime of the security. In addition, certain ARMs provide for additional limitations on the","page_number":152,"box":{"x":116,"y":358,"width":722,"height":12}},{"id":"0ee440bf-3e96-4b5c-abf0-3226f00adb69","block_type":"box","text":"maximum amount by which the mortgage interest rate may adjust for any single adjustment period. In","page_number":152,"box":{"x":117,"y":374,"width":758,"height":12}},{"id":"8893a212-426b-44ec-a8ce-fd740dd91b43","block_type":"box","text":"the event that market rates of interest rise more rapidly to levels above that of the ARM’s maximum","page_number":152,"box":{"x":116,"y":389,"width":741,"height":12}},{"id":"da617861-7132-4b74-a03e-3d49c13e21fe","block_type":"box","text":"rate, the ARM’s coupon may represent a below market rate of interest. In these circumstances, the","page_number":152,"box":{"x":117,"y":405,"width":737,"height":12}},{"id":"25c8a91b-00b8-4a45-a198-4b6867c6222c","block_type":"box","text":"market value of the ARM security will likely have fallen.","page_number":152,"box":{"x":117,"y":420,"width":412,"height":12}},{"id":"424263a4-1841-4299-82af-d3de6ca5e18e","block_type":"box","text":"Certain ARMs contain limitations on changes in the required monthly payment. In the event that a","page_number":152,"box":{"x":117,"y":448,"width":728,"height":13}},{"id":"1f97212e-6278-4f92-9513-8b1c69f86e09","block_type":"box","text":"monthly payment is not sufficient to pay the interest accruing on an ARM, any such excess interest is","page_number":152,"box":{"x":117,"y":464,"width":754,"height":12}},{"id":"19b7d2b7-fc42-4845-a0d7-3d1792a384e3","block_type":"box","text":"added to the principal balance of the mortgage loan, which is repaid through future monthly payments.","page_number":152,"box":{"x":116,"y":480,"width":764,"height":12}},{"id":"52ef6e08-a90b-4d16-91cb-80c9104eb260","block_type":"box","text":"If the monthly payment for such an instrument exceeds the sum of the interest accrued at the","page_number":152,"box":{"x":117,"y":495,"width":695,"height":12}},{"id":"fe41290c-d013-4078-9ef6-58413d6ca058","block_type":"box","text":"applicable mortgage interest rate and the principal payment required at such point to amortize the","page_number":152,"box":{"x":116,"y":511,"width":730,"height":12}},{"id":"bf5a9f89-a4b8-4227-a50c-87bbb491bb90","block_type":"box","text":"outstanding principal balance over the remaining term of the loan, the excess is then used to reduce","page_number":152,"box":{"x":116,"y":526,"width":748,"height":12}},{"id":"dc9aec42-8d88-4310-97a8-f98459ba56e1","block_type":"box","text":"the outstanding principal balance of the ARM.","page_number":152,"box":{"x":116,"y":542,"width":344,"height":12}},{"id":"412b274d-569a-4d73-b92a-3056865e2992","block_type":"box","text":"CMO Residuals.","page_number":152,"box":{"x":117,"y":570,"width":120,"height":9}},{"id":"d3669d8c-b836-4342-9cbb-3f1080e7a3e4","block_type":"box","text":"CMO residuals are derivative mortgage securities issued by agencies or","page_number":152,"box":{"x":238,"y":570,"width":546,"height":12}},{"id":"66766a85-57bc-4566-8d5b-ac0bac31a7c5","block_type":"box","text":"instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans,","page_number":152,"box":{"x":117,"y":585,"width":750,"height":12}},{"id":"c76f34a0-6dc9-408f-a799-d144554488df","block_type":"box","text":"including savings and loan associations, homebuilders, mortgage banks, commercial banks,","page_number":152,"box":{"x":117,"y":601,"width":688,"height":12}},{"id":"4e5f3fb5-d206-4be1-ba1d-984144c47046","block_type":"box","text":"investment banks, and special purpose entities of the foregoing. The cash flow generated by the","page_number":152,"box":{"x":117,"y":616,"width":718,"height":12}},{"id":"982f9c27-c721-41e2-a598-934c8bac6bfd","block_type":"box","text":"mortgage assets underlying a series of CMOs is applied first to make required payments of principal","page_number":152,"box":{"x":117,"y":632,"width":747,"height":12}},{"id":"967ab7ce-6b84-498a-9e11-d304a89b1acc","block_type":"box","text":"and interest on the CMOs and second to pay the related administrative expenses and any","page_number":152,"box":{"x":116,"y":647,"width":673,"height":13}},{"id":"b6346437-a7f2-48bd-8468-00fb1342b6f2","block_type":"box","text":"management fees of the issuer. The residual in a CMO structure generally represents the interest in","page_number":152,"box":{"x":117,"y":663,"width":740,"height":12}},{"id":"8c6f71e4-e835-4b71-b593-b7a5e3e9fc64","block_type":"box","text":"any excess cash flow remaining after making the foregoing payments. Each payment of such excess","page_number":152,"box":{"x":116,"y":678,"width":748,"height":13}},{"id":"2d0a9913-5993-45ed-b939-097b8316f6b7","block_type":"box","text":"cash flow to a holder of the related CMO residual represents income and/or a return of capital. The","page_number":152,"box":{"x":116,"y":694,"width":733,"height":12}},{"id":"b29869b9-bb8e-43b6-850b-27cf4d14c9fa","block_type":"box","text":"amount of residual cash flow resulting from a CMO will depend on, among other things, the","page_number":152,"box":{"x":116,"y":709,"width":676,"height":13}},{"id":"cf3fa6be-a12f-430b-9c79-9831fbf6f774","block_type":"box","text":"characteristics of the mortgage assets, the coupon rate of each class of CMO, prevailing interest rates,","page_number":152,"box":{"x":116,"y":725,"width":762,"height":12}},{"id":"c599eb58-a9b2-450a-b62a-abb40b5f48fc","block_type":"box","text":"the amount of administrative expenses and the prepayment experience on the mortgage assets. In","page_number":152,"box":{"x":116,"y":740,"width":732,"height":13}},{"id":"127e8563-99b3-4a6d-86e1-05dfffe672d9","block_type":"box","text":"part, the yield to maturity on the CMO residuals is extremely sensitive to prepayments on the related","page_number":152,"box":{"x":117,"y":756,"width":743,"height":12}},{"id":"5a011619-db58-4f36-8b77-80a375a5e675","block_type":"box","text":"underlying mortgage assets, in the same manner as an interest-only class of stripped mortgage-related","page_number":152,"box":{"x":117,"y":771,"width":764,"height":13}},{"id":"1cc04815-b6da-4adb-8abd-ba8addb5fd74","block_type":"box","text":"securities. In addition, if a series of a CMO includes a class that bears interest at an adjustable rate,","page_number":152,"box":{"x":116,"y":787,"width":739,"height":12}},{"id":"8bb90c3b-0ca4-4525-80f1-5e0262b8a708","block_type":"box","text":"the yield to maturity on the related CMO residual will also be extremely sensitive to changes in the","page_number":152,"box":{"x":116,"y":802,"width":728,"height":13}},{"id":"defa9223-4802-42fe-9fb7-d9b8feaab41d","block_type":"box","text":"level of the index upon which interest rate adjustments are based. In certain circumstances, a Fund","page_number":152,"box":{"x":117,"y":818,"width":735,"height":12}},{"id":"1519adf7-bafa-498a-8a61-5edf925fecdd","block_type":"box","text":"may fail to recoup fully its initial investment in a CMO residual.","page_number":152,"box":{"x":117,"y":833,"width":466,"height":13}},{"id":"5275cb91-2d27-4ada-b687-50795f9f68e8","block_type":"box","text":"CMO residuals are generally purchased and sold by institutional investors through one or more","page_number":152,"box":{"x":117,"y":862,"width":709,"height":12}},{"id":"b4606bde-da6a-42a0-81ef-5e3888f071e6","block_type":"box","text":"investment banking firms acting as brokers or dealers. Transactions in CMO residuals are generally","page_number":152,"box":{"x":117,"y":877,"width":744,"height":12}},{"id":"b5a1883d-7965-4ec6-9a39-04d7b9234ff2","block_type":"box","text":"II-69","page_number":152,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"84af3259-7442-4260-9d19-3262bac2f7e5","block_type":"box","text":"NM1026U-6039989-152/256","page_number":152,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"555f8216-1700-4bcb-8a48-635bd23789f6","block_type":"box","text":"completed only after careful review of the characteristics of the securities in question. In addition, CMO","page_number":153,"box":{"x":116,"y":87,"width":768,"height":12}},{"id":"e6d06fb9-21b4-4ce0-ba71-066b28f804c6","block_type":"box","text":"residuals may or, pursuant to an exemption therefrom, may not have been registered under the","page_number":153,"box":{"x":117,"y":102,"width":711,"height":13}},{"id":"617b341e-b7da-483c-84c5-2356f9cca589","block_type":"box","text":"Securities Act. Residual interests generally are junior to, and may be significantly more volatile than,","page_number":153,"box":{"x":116,"y":118,"width":748,"height":12}},{"id":"a4e01cbe-a87a-4ad7-b9e3-3960800b1f8d","block_type":"box","text":"“regular” CMO and REMIC interests. CMO residuals, whether or not registered under the Securities","page_number":153,"box":{"x":116,"y":134,"width":744,"height":12}},{"id":"522c8fb6-c6c9-4dce-a7f9-d7e3b3c4055b","block_type":"box","text":"Act, may be subject to certain restrictions on transferability.","page_number":153,"box":{"x":116,"y":149,"width":444,"height":12}},{"id":"4f8e084f-3db8-43ca-b07c-ee4dd765e420","block_type":"box","text":"Stripped Mortgage-Backed Securities.","page_number":153,"box":{"x":117,"y":180,"width":280,"height":12}},{"id":"7e0636b0-2ced-40fd-8376-bda051be22c9","block_type":"box","text":"A Fund may invest in stripped mortgage-backed securities","page_number":153,"box":{"x":399,"y":180,"width":443,"height":12}},{"id":"387df903-1ca3-4c15-b52e-8e7803d3fda0","block_type":"box","text":"(“SMBSs”) issued by agencies or instrumentalities of the United States. SMBSs are derivative multi","page_number":153,"box":{"x":117,"y":196,"width":740,"height":12}},{"id":"7e514463-d7a7-4ea8-9fc2-85e5f43b39b7","block_type":"box","text":"class mortgage-backed securities. SMBS arrangements commonly involve two classes of securities","page_number":153,"box":{"x":116,"y":211,"width":744,"height":12}},{"id":"a148ccae-d1f4-48d4-b1fc-2788664edecf","block_type":"box","text":"that receive different proportions of the interest and principal distributions on a pool of mortgage","page_number":153,"box":{"x":116,"y":227,"width":716,"height":12}},{"id":"0986889b-d7b4-47eb-a997-5c3fa5e36e2f","block_type":"box","text":"assets. A common variety of SMBS is where one class (the principal only or PO class) receives some","page_number":153,"box":{"x":116,"y":242,"width":759,"height":12}},{"id":"a39bd1c2-13c6-4313-ab0a-c3f83d602dd9","block_type":"box","text":"of the interest and most of the principal from the underlying assets, while the other class (the interest","page_number":153,"box":{"x":116,"y":258,"width":752,"height":12}},{"id":"f3e4fe51-cc26-4fb9-9177-5da8876fd93e","block_type":"box","text":"only or IO class) receives most of the interest and the remainder of the principal. In the most extreme","page_number":153,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"ada4a9f7-f6b4-4f04-98b8-a434070cfb2d","block_type":"box","text":"case, the IO class receives all of the interest, while","page_number":153,"box":{"x":116,"y":289,"width":382,"height":11}},{"id":"ebec4e40-2eef-43da-8be1-d6bd4809021c","block_type":"box","text":"the PO class receives all of the principal. While a","page_number":153,"box":{"x":498,"y":289,"width":368,"height":12}},{"id":"b00a4ebd-0249-4959-aeba-48a69a67682a","block_type":"box","text":"Fund may purchase securities of a PO class, a Fund is more likely to purchase the securities of an IO","page_number":153,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"23d937a8-a870-446f-970b-eee44cba5e7b","block_type":"box","text":"class. The yield to maturity of an IO class is extremely sensitive to the rate of principal payments","page_number":153,"box":{"x":116,"y":320,"width":720,"height":12}},{"id":"24022985-ef5a-44cf-992e-61343a86e969","block_type":"box","text":"(including prepayments) on the related underlying assets, and a rapid rate of principal prepayments in","page_number":153,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"b080dad3-cd20-4791-8943-24fbda65a580","block_type":"box","text":"excess of that considered in pricing the securities will have a material adverse effect on an IO","page_number":153,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"5319f8b4-ae3c-4754-aeae-7e162369d26a","block_type":"box","text":"security’s yield to maturity. If the underlying mortgage assets experience greater than anticipated","page_number":153,"box":{"x":116,"y":366,"width":724,"height":12}},{"id":"3c31fbc8-37c0-44c0-9641-b595b2d3a1f2","block_type":"box","text":"payments of principal, a Fund may fail to recoup fully its initial investment in IOs. In addition, there are","page_number":153,"box":{"x":117,"y":382,"width":760,"height":12}},{"id":"0cdc073a-6cd2-4098-b667-6a5a4417b975","block_type":"box","text":"certain types of IOs that represent the interest portion of a particular class as opposed to the interest","page_number":153,"box":{"x":116,"y":397,"width":751,"height":12}},{"id":"efee033c-a607-4460-864a-1f7dea5a1341","block_type":"box","text":"portion of the entire pool. The sensitivity of this type of IO to interest rate fluctuations may be increased","page_number":153,"box":{"x":117,"y":413,"width":768,"height":12}},{"id":"3df659ca-cff8-47a5-9406-32275ebf02a7","block_type":"box","text":"because of the characteristics of the principal portion to which they relate. As a result of the above","page_number":153,"box":{"x":117,"y":428,"width":733,"height":12}},{"id":"2ffe042e-1d8b-44fb-9e09-590f6d599b74","block_type":"box","text":"factors, a Fund generally will purchase IOs only as a component of so called “synthetic” securities. This","page_number":153,"box":{"x":116,"y":444,"width":772,"height":12}},{"id":"94c6b02f-0f73-4289-afa1-afe6ffa586d3","block_type":"box","text":"means that purchases of IOs will be matched with certain purchases of other securities, such as POs,","page_number":153,"box":{"x":117,"y":459,"width":759,"height":12}},{"id":"98ca1f97-29d6-4db0-842a-4b500eac0d7a","block_type":"box","text":"inverse floating rate CMOs or fixed rate securities; as interest rates fall, presenting a greater risk of","page_number":153,"box":{"x":117,"y":475,"width":737,"height":12}},{"id":"fcd39e90-0d6a-48c4-a8df-21c59c2973ae","block_type":"box","text":"unanticipated prepayments of principal, the negative effect on a Fund because of its holdings of IOs","page_number":153,"box":{"x":117,"y":490,"width":744,"height":12}},{"id":"7597c6b5-692a-4734-ade6-c0b92fadd60d","block_type":"box","text":"should be diminished somewhat because of the increased yield on the inverse floating rate CMOs or","page_number":153,"box":{"x":116,"y":506,"width":751,"height":12}},{"id":"aa8a3b02-182c-41ee-974b-76510d940729","block_type":"box","text":"the increased appreciation on the POs or fixed rate securities.","page_number":153,"box":{"x":116,"y":521,"width":465,"height":12}},{"id":"9935a2bf-4857-41df-972e-a94e3bf6139a","block_type":"box","text":"Tiered Index Bonds.","page_number":153,"box":{"x":118,"y":552,"width":147,"height":10}},{"id":"f516b11c-b118-41e1-b572-8c0753477024","block_type":"box","text":"Tiered index bonds are forms of mortgage-related securities. The interest rate on","page_number":153,"box":{"x":266,"y":552,"width":612,"height":12}},{"id":"e70a653e-68cd-4e8a-a9e4-43da4ac5134c","block_type":"box","text":"a tiered index bond is tied to a specified index or","page_number":153,"box":{"x":116,"y":568,"width":365,"height":12}},{"id":"06508b8b-a0d0-4e48-bf48-cb39650a7ef7","block_type":"box","text":"market rate. So long as this index or market rate is","page_number":153,"box":{"x":482,"y":568,"width":380,"height":12}},{"id":"80407ce6-f626-41a2-8f1e-dc2660d1de60","block_type":"box","text":"below a predetermined “strike” rate, the interest rate on the tiered index bond remains fixed. If,","page_number":153,"box":{"x":117,"y":583,"width":704,"height":12}},{"id":"f016cae6-a08b-44c5-b11f-c2d768d8af81","block_type":"box","text":"however, the specified index or market rate rises above the “strike” rate, the interest rate of the tiered","page_number":153,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"f48e6137-51e0-4a16-8e3e-f8f431220d92","block_type":"box","text":"index bond will decrease. Thus, under these circumstances, the interest rate on a tiered index bond,","page_number":153,"box":{"x":117,"y":614,"width":747,"height":11}},{"id":"6e5e78a9-9c8f-48bc-906d-cacce8e9a143","block_type":"box","text":"like an inverse floater, will move in the opposite direction of prevailing interest rates, with the result that","page_number":153,"box":{"x":117,"y":630,"width":767,"height":12}},{"id":"c1998a36-09f9-4515-ad02-730c79f2a417","block_type":"box","text":"the price of the tiered index bond may be considerably more volatile than that of a fixed-rate bond.","page_number":153,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"6d4d4472-2502-4e69-b88f-e6c0c6e51348","block_type":"box","text":"TBA Commitments.","page_number":153,"box":{"x":118,"y":676,"width":142,"height":10}},{"id":"48939de2-bbf8-46e0-815f-3561e9065024","block_type":"box","text":"Certain Funds may enter into “to be announced” or “TBA” commitments. TBA","page_number":153,"box":{"x":267,"y":676,"width":573,"height":12}},{"id":"af8be90a-1aa4-4bdd-aca8-dba18f76deb7","block_type":"box","text":"commitments are forward agreements for the purchase or sale of securities, including mortgage","page_number":153,"box":{"x":116,"y":692,"width":716,"height":12}},{"id":"25c500ec-57c5-4c04-85c9-85812af7a29c","block_type":"box","text":"backed securities for a fixed price, with payment and delivery on an agreed upon future settlement","page_number":153,"box":{"x":117,"y":707,"width":728,"height":12}},{"id":"ec5b2360-58f0-4065-8674-ff11fe8f6e8e","block_type":"box","text":"date. The specific securities to be delivered are not identified at the trade date. However, delivered","page_number":153,"box":{"x":116,"y":723,"width":731,"height":12}},{"id":"e229c578-f7c8-4fde-a79a-90cc2c8d27d4","block_type":"box","text":"securities must meet specified terms, including issuer, rate and mortgage terms. When the Fund enters","page_number":153,"box":{"x":116,"y":738,"width":767,"height":12}},{"id":"544d8bf0-24b6-495c-bb7d-350a1eadff52","block_type":"box","text":"into a TBA commitment for the sale of mortgage-backed securities for a fixed price, with payment and","page_number":153,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"4fa9a28f-eb8e-4a4e-a89b-dd311dbba490","block_type":"box","text":"delivery on an agreed upon future settlement date (which may be referred to as having a short position","page_number":153,"box":{"x":116,"y":769,"width":761,"height":12}},{"id":"bdb72546-e6d3-48bf-b4da-1e17d609d456","block_type":"box","text":"in such TBA securities), the Fund may or may not hold the types of mortgage-backed securities","page_number":153,"box":{"x":117,"y":785,"width":707,"height":12}},{"id":"8dbd984a-d7b3-47ce-bc5b-fea8db65486e","block_type":"box","text":"required to be delivered. See “— When-Issued Securities, Delayed Delivery Securities and Forward","page_number":153,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"edbe045a-0aaf-438a-a58c-0063a999a97c","block_type":"box","text":"Commitments” below.","page_number":153,"box":{"x":117,"y":816,"width":160,"height":9}},{"id":"ef21469d-8031-4145-bc5a-5ca914a1e262","block_type":"box","text":"Mortgage Dollar Rolls.","page_number":153,"box":{"x":116,"y":847,"width":164,"height":12}},{"id":"6151667b-9d3e-4525-bde1-3f0378f8b80a","block_type":"box","text":"Certain Funds may invest in mortgage dollar rolls. In a mortgage dollar roll","page_number":153,"box":{"x":282,"y":847,"width":562,"height":12}},{"id":"2be4ec13-c59f-44b7-bdd6-280ebe17afd4","block_type":"box","text":"transaction, a Fund sells mortgage-backed securities for delivery in the current month and","page_number":153,"box":{"x":116,"y":862,"width":673,"height":12}},{"id":"cf42f7ca-a79e-4240-bfa5-23fe2dddfdfb","block_type":"box","text":"simultaneously contracts to repurchase substantially similar securities on a specified future date. The","page_number":153,"box":{"x":116,"y":878,"width":755,"height":12}},{"id":"04c5b3a7-717f-4d16-b43e-e2a5e461c84f","block_type":"box","text":"II-70","page_number":153,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"128f155f-dba6-433c-b404-b078e863c758","block_type":"box","text":"NM1026U-6039989-153/256","page_number":153,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0535615e-1215-4711-aa01-ed7bc927143d","block_type":"box","text":"securities that are repurchased will bear the same interest rate and a similar maturity as those sold, but","page_number":154,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"c7dab40c-0490-414d-81df-5b146bada819","block_type":"box","text":"pools of mortgages collateralizing those securities may have different prepayment histories than those","page_number":154,"box":{"x":117,"y":102,"width":762,"height":13}},{"id":"d590b93b-f2ed-44dd-931b-8b4c02979b4c","block_type":"box","text":"sold. During the period between the sale and repurchase, a Fund will not be entitled to receive interest","page_number":154,"box":{"x":116,"y":118,"width":765,"height":12}},{"id":"a54a933e-e8aa-4748-bc1f-bd9ab612b559","block_type":"box","text":"and principal payments on the securities sold. Proceeds of the sale will be invested in additional","page_number":154,"box":{"x":116,"y":134,"width":716,"height":12}},{"id":"16e47abb-3f78-47ab-baa7-4f207b8760f5","block_type":"box","text":"instruments for the Fund, and the income from these investments will generate income for the Fund. If","page_number":154,"box":{"x":117,"y":149,"width":762,"height":12}},{"id":"0628b0ee-63fd-4e64-9cf7-41e92b78c44a","block_type":"box","text":"such income does not exceed the income, capital appreciation and gain or loss that would have been","page_number":154,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"84eded3b-9fb4-4a99-b8ff-e614ee1aa9ed","block_type":"box","text":"realized on the securities sold as part of the dollar roll, the use of this technique will diminish the","page_number":154,"box":{"x":117,"y":180,"width":715,"height":12}},{"id":"95cd3f8d-70af-4269-8d56-89e169991927","block_type":"box","text":"investment performance of a Fund compared with what the performance would have been without the","page_number":154,"box":{"x":117,"y":196,"width":759,"height":11}},{"id":"4e2a1540-d335-449c-84df-bd780a60524d","block_type":"box","text":"use of dollar rolls.","page_number":154,"box":{"x":117,"y":211,"width":135,"height":10}},{"id":"c94afd4b-c17d-47a3-b186-dc1fd82c64e8","block_type":"box","text":"Each mortgage dollar roll transaction is accounted for as a sale or purchase of a portfolio security and","page_number":154,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"5e030217-8d28-4b15-9d2a-a4e15ff7df42","block_type":"box","text":"a subsequent purchase or sale of a substantially similar security in the forward market. Transactions in","page_number":154,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"1b9b8b33-9c9a-4ff3-be71-ad473fbb75f9","block_type":"box","text":"mortgage dollar rolls may increase trading costs and portfolio turnover.","page_number":154,"box":{"x":117,"y":273,"width":529,"height":12}},{"id":"73b094dd-6052-4771-8c66-16e830f183d3","block_type":"box","text":"In the event the buyer of the securities under a mortgage dollar roll files for bankruptcy or becomes","page_number":154,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"537e181c-0f4e-41a8-bef5-93555ba6b14d","block_type":"box","text":"insolvent, a Fund’s use of the proceeds of the current sale portion of the transaction may be restricted","page_number":154,"box":{"x":117,"y":320,"width":760,"height":12}},{"id":"dcd46b74-b82a-47c0-bbfd-9665cf8bdb08","block_type":"box","text":"pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s","page_number":154,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"7e80a3bc-b4a7-4653-bd9b-c3d5b4cb2c61","block_type":"box","text":"obligation to purchase the similar securities in the forward transaction.","page_number":154,"box":{"x":116,"y":351,"width":525,"height":12}},{"id":"ac8e5b7b-4630-404a-95f7-0563ff666c11","block_type":"box","text":"A Fund may engage in dollar roll transactions to enhance returns. Successful use of mortgage dollar","page_number":154,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"f8e95fb8-63cb-47da-bbb4-b7d2d645ca3f","block_type":"box","text":"rolls may depend upon the Manager’s ability to correctly predict interest rates and prepayments. Dollar","page_number":154,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"f4be9476-69e9-4972-8fbb-f7a663924add","block_type":"box","text":"rolls involve the risk that the market value of the securities subject to a Fund’s forward purchase","page_number":154,"box":{"x":117,"y":413,"width":716,"height":12}},{"id":"0ac66bf1-d558-470a-a3a7-9f9636f97885","block_type":"box","text":"commitment may decline below, or the market value of the securities subject to a Fund’s forward sale","page_number":154,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"0177241f-8c47-4b21-aba7-6622d96ed63f","block_type":"box","text":"commitment may increase above, the exercise price of the forward commitment. Dollar rolls are","page_number":154,"box":{"x":116,"y":444,"width":715,"height":12}},{"id":"9b572b20-fed2-4b53-a240-ce1faa1dbfcc","block_type":"box","text":"speculative techniques that can be deemed to involve leverage. There is no assurance that dollar rolls","page_number":154,"box":{"x":116,"y":459,"width":763,"height":12}},{"id":"1be8bf86-291d-4caa-adab-9003533e261a","block_type":"box","text":"can be successfully employed.","page_number":154,"box":{"x":116,"y":475,"width":233,"height":12}},{"id":"dc6cede7-6052-4334-a29a-6de1cc18a15a","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":154,"box":{"x":117,"y":506,"width":740,"height":12}},{"id":"3759fd82-1c91-49f2-af20-644d24f185da","block_type":"box","text":"settling securities (e.g., dollar rolls and firm and standby commitments, including TBA commitments)","page_number":154,"box":{"x":116,"y":521,"width":748,"height":12}},{"id":"4520a604-b3a5-420d-9fa8-52b583b0be01","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":154,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"3d98b3d2-ba3b-408d-a94f-c181f61ac4db","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the transaction meets the","page_number":154,"box":{"x":116,"y":552,"width":718,"height":12}},{"id":"d00783e8-5efc-48b2-8cb6-050423d6344a","block_type":"box","text":"Delayed-Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed","page_number":154,"box":{"x":117,"y":568,"width":768,"height":12}},{"id":"0bd09b34-4b3b-440e-98e3-f97d4cdd00fb","block_type":"box","text":"Delivery Securities and Forward Commitments”). If a when-issued, forward-settling or non-standard","page_number":154,"box":{"x":117,"y":583,"width":742,"height":12}},{"id":"aae47153-8d98-4842-81bf-ccd41ae1b349","block_type":"box","text":"settlement cycle security does not satisfy the Delayed-Settlement Securities Provision, then it is treated","page_number":154,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"b402f8ba-27b1-418a-a118-14741a96d371","block_type":"box","text":"as a Derivatives Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":154,"box":{"x":116,"y":614,"width":736,"height":12}},{"id":"acfb7971-4656-4771-8fa9-2db0405004fb","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":154,"box":{"x":117,"y":630,"width":411,"height":12}},{"id":"dc61ad9c-dbb5-4f61-98f8-e103a38fec5f","block_type":"box","text":"Net Interest Margin (NIM) Securities.","page_number":154,"box":{"x":117,"y":661,"width":270,"height":12}},{"id":"9dbdf8e4-eb97-45c0-a634-fdc1d0ad891d","block_type":"box","text":"A Fund may invest in net interest margin (“NIM”) securities.","page_number":154,"box":{"x":394,"y":661,"width":438,"height":12}},{"id":"6e23acc0-181f-47b2-971c-0b129cb7b280","block_type":"box","text":"These securities are derivative interest-only mortgage securities structured off home equity loan","page_number":154,"box":{"x":116,"y":676,"width":711,"height":12}},{"id":"40d3bd3e-72b0-4df8-aab8-6f81370a07fe","block_type":"box","text":"transactions. NIM securities receive any “excess” interest computed after paying coupon costs,","page_number":154,"box":{"x":116,"y":692,"width":704,"height":12}},{"id":"1be28a3e-c60e-4b8b-a495-f9a57da6c4e9","block_type":"box","text":"servicing costs and fees and any credit losses associated with the underlying pool of home equity","page_number":154,"box":{"x":116,"y":707,"width":724,"height":12}},{"id":"bb0ee660-0736-490f-ae8c-867a31bfae25","block_type":"box","text":"loans. Like traditional stripped mortgage-backed securities, the yield to maturity on a NIM security is","page_number":154,"box":{"x":117,"y":723,"width":740,"height":12}},{"id":"586b2400-36a7-4057-a039-d8f52e1e9c31","block_type":"box","text":"sensitive not only to changes in prevailing interest rates but also to the rate of principal payments","page_number":154,"box":{"x":116,"y":738,"width":720,"height":12}},{"id":"2dcff026-a0ec-4c97-869e-7b000c8e63b5","block_type":"box","text":"(including prepayments) on the underlying home equity loans. NIM securities are highly sensitive to","page_number":154,"box":{"x":117,"y":754,"width":735,"height":12}},{"id":"14bae801-cab4-4aa6-89fa-678d8dc00d86","block_type":"box","text":"credit losses on the underlying collateral and the timing in which those losses are taken.","page_number":154,"box":{"x":116,"y":769,"width":651,"height":12}},{"id":"0aa60916-6b33-4616-a491-5bdbb87d8806","block_type":"box","text":"Municipal Investments.","page_number":154,"box":{"x":116,"y":800,"width":177,"height":12}},{"id":"c01fa493-1a1f-4620-9958-6fdbcdd0a8e0","block_type":"box","text":"Certain Funds may invest in obligations issued by or on behalf of states, territories and possessions of","page_number":154,"box":{"x":117,"y":823,"width":759,"height":13}},{"id":"2d275f2a-5943-417b-9823-92c5a479eed8","block_type":"box","text":"the United States and the District of Columbia and their political subdivisions, agencies and","page_number":154,"box":{"x":116,"y":839,"width":681,"height":12}},{"id":"d0d1ee94-d2ba-4ad7-9cee-2566b3214c40","block_type":"box","text":"instrumentalities, the payments from which, in the opinion of bond counsel to the issuer, are excludable","page_number":154,"box":{"x":117,"y":854,"width":770,"height":13}},{"id":"4fbc500a-9c65-45cc-ae7f-e6ef1d44405e","block_type":"box","text":"from gross income for U.S. federal income tax purposes (“Municipal Bonds”). Certain of the Municipal","page_number":154,"box":{"x":116,"y":870,"width":758,"height":12}},{"id":"1d60b7e3-2627-4247-a562-b3fd3bb05640","block_type":"box","text":"II-71","page_number":154,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"2d8f733a-9ce7-40b4-ab88-a0a3d9e301b1","block_type":"box","text":"NM1026U-6039989-154/256","page_number":154,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"353d3c6c-7d5e-4c03-9873-277e59e78978","block_type":"box","text":"Funds may also invest in Municipal Bonds that pay interest excludable from gross income for purposes","page_number":155,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"bffbe076-1628-4914-96f7-ee8e2e250b2a","block_type":"box","text":"of state and local income taxes of the designated state and/or allow the value of a Fund’s shares to be","page_number":155,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"29807439-687c-4945-9312-cda8898c4b44","block_type":"box","text":"exempt from state and local taxes of the designated state (“State Municipal Bonds”). The Municipal","page_number":155,"box":{"x":116,"y":118,"width":740,"height":12}},{"id":"8f170c3a-9e96-4a02-b95e-5fbe8e507e62","block_type":"box","text":"Funds may also invest in securities not issued by or on behalf of a state or territory or by an agency or","page_number":155,"box":{"x":117,"y":134,"width":762,"height":12}},{"id":"97ba06c0-0abf-4cda-a3b8-a93518f5ffca","block_type":"box","text":"instrumentality thereof, if the Manager believes such securities to pay interest excludable from gross","page_number":155,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"82a364ab-2614-451d-b1fe-701d603ad7eb","block_type":"box","text":"income for purposes of U.S. federal income tax and state and local income taxes of the designated","page_number":155,"box":{"x":117,"y":165,"width":738,"height":12}},{"id":"5bff3fe4-f9a6-4ef2-87c7-c8ccfa389510","block_type":"box","text":"state and/or state and local personal property taxes of the designated state (“Non-Municipal","page_number":155,"box":{"x":116,"y":180,"width":686,"height":12}},{"id":"b9d80bf8-055a-4e8d-8fc4-fe43ffbb52b0","block_type":"box","text":"Tax-Exempt Securities”). Non-Municipal Tax-Exempt Securities could include trust certificates or other","page_number":155,"box":{"x":116,"y":196,"width":764,"height":12}},{"id":"3c49f8dc-9e3d-4cae-8981-f7195c617ba2","block_type":"box","text":"instruments evidencing interest in one or more long-term municipal securities. Non-Municipal","page_number":155,"box":{"x":117,"y":211,"width":693,"height":12}},{"id":"e71cae09-da61-4efa-8182-5f3c23a6916a","block_type":"box","text":"Tax-Exempt Securities also may include securities issued by other investment companies that invest in","page_number":155,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"4af243b0-fee6-44e6-ab2f-24de25202765","block_type":"box","text":"municipal bonds, to the extent such investments are permitted by applicable law. Non-Municipal","page_number":155,"box":{"x":117,"y":242,"width":715,"height":12}},{"id":"c75392dc-2811-45eb-b28c-7f38e2e2f0ba","block_type":"box","text":"Tax-Exempt Securities that pay interest excludable from gross income for U.S. federal income tax","page_number":155,"box":{"x":116,"y":258,"width":731,"height":12}},{"id":"f1d0d93a-e1e7-4fcd-a45f-5245bce0f28e","block_type":"box","text":"purposes will be considered “Municipal Bonds” for purposes of a Municipal Fund’s investment objective","page_number":155,"box":{"x":117,"y":273,"width":769,"height":12}},{"id":"1d05841b-3c99-4438-8456-7322439275cc","block_type":"box","text":"and policies. Non-Municipal Tax-Exempt Securities that pay interest excludable from gross income for","page_number":155,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"5138fbbe-55fa-4255-a7a6-0f45e16b4cdc","block_type":"box","text":"purposes of U.S. federal income tax and state and local income taxes of a designated state and/or","page_number":155,"box":{"x":117,"y":304,"width":734,"height":12}},{"id":"ee671b81-141f-4ca7-bfe0-17fdd1b477f2","block_type":"box","text":"allow the value of a Fund’s shares to be exempt from state and local personal property taxes of that","page_number":155,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"abb55e72-1934-40e3-9919-be03deab027e","block_type":"box","text":"state will be considered “State Municipal Bonds” for purposes of the investment objective and policies","page_number":155,"box":{"x":116,"y":335,"width":758,"height":12}},{"id":"6a750743-7af8-441e-ac4f-57baa5b4a43e","block_type":"box","text":"of each of California Municipal Opportunities Fund, New Jersey Municipal Bond Fund, New York","page_number":155,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"d4c73358-fc17-41a4-be8e-738da5bbc2ed","block_type":"box","text":"Municipal Opportunities Fund and Pennsylvania Municipal Bond Fund.","page_number":155,"box":{"x":117,"y":366,"width":527,"height":12}},{"id":"848eec03-be88-47ba-b31c-46238c0e0327","block_type":"box","text":"Risk Factors and Special Considerations Relating to Municipal Bonds.","page_number":155,"box":{"x":116,"y":397,"width":519,"height":12}},{"id":"871f0bf6-0674-4788-abfc-8dc14ea6a551","block_type":"box","text":"The risks and special","page_number":155,"box":{"x":636,"y":397,"width":168,"height":12}},{"id":"95aa799d-8c54-41fb-b1c0-53e1c347351d","block_type":"box","text":"considerations involved in investment in Municipal Bonds vary with the types of instruments being","page_number":155,"box":{"x":116,"y":413,"width":729,"height":12}},{"id":"1a279f18-b1ce-4512-907d-9f97350bef40","block_type":"box","text":"acquired. Investments in Non-Municipal Tax-Exempt Securities may present similar risks, depending","page_number":155,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"84fa0520-eeb2-447c-b95d-b699e0fcc6e0","block_type":"box","text":"on the particular product. Certain municipal instruments in which a Fund may invest may be","page_number":155,"box":{"x":116,"y":444,"width":685,"height":12}},{"id":"04564869-a45f-4079-8a8a-a110369946f0","block_type":"box","text":"characterized as derivatives.","page_number":155,"box":{"x":116,"y":459,"width":218,"height":10}},{"id":"ea24db8a-e012-437a-951a-04fb9b473622","block_type":"box","text":"The value of Municipal Bonds generally may be affected by uncertainties in the municipal markets as a","page_number":155,"box":{"x":116,"y":490,"width":768,"height":12}},{"id":"73626570-da05-487b-ba1a-48f6073fb5c7","block_type":"box","text":"result of legislation or litigation, including legislation or litigation that changes the taxation of Municipal","page_number":155,"box":{"x":117,"y":506,"width":757,"height":12}},{"id":"467aab06-83b8-430b-bf6a-bfc39ef56831","block_type":"box","text":"Bonds or the rights of Municipal Bond holders in the event of a bankruptcy. Municipal bankruptcies are","page_number":155,"box":{"x":117,"y":521,"width":764,"height":12}},{"id":"68457c3e-d3d8-4ac9-bdb9-173d3280fcc8","block_type":"box","text":"rare and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear.","page_number":155,"box":{"x":117,"y":537,"width":732,"height":12}},{"id":"a6648c75-eb13-43ba-8918-3b95559fef65","block_type":"box","text":"Further, the application of state law to Municipal Bond issuers could produce varying results among the","page_number":155,"box":{"x":117,"y":552,"width":770,"height":12}},{"id":"60b5dd25-5917-4975-aac1-09ae886759e2","block_type":"box","text":"states or among Municipal Bond issuers within a state. These uncertainties could have a significant","page_number":155,"box":{"x":116,"y":568,"width":742,"height":12}},{"id":"a78c5035-3a8f-48a1-aaef-bb5ec0ea41eb","block_type":"box","text":"impact on the prices of the Municipal Bonds in which a Fund invests.","page_number":155,"box":{"x":117,"y":583,"width":513,"height":12}},{"id":"766706f9-04cf-4dde-ae17-c210f3b8d0b6","block_type":"box","text":"Description of Municipal Bonds.","page_number":155,"box":{"x":116,"y":614,"width":240,"height":12}},{"id":"76966f2a-f18f-42b6-b03e-877b4579fd82","block_type":"box","text":"Municipal Bonds include debt obligations issued to obtain funds for various public purposes, including","page_number":155,"box":{"x":117,"y":637,"width":757,"height":12}},{"id":"26091588-161d-4e41-a307-ccbc1611f291","block_type":"box","text":"the construction of a wide range of public facilities, refunding of outstanding obligations and obtaining","page_number":155,"box":{"x":116,"y":653,"width":756,"height":12}},{"id":"c1e4088a-17f2-4744-850d-39fb3227b224","block_type":"box","text":"funds for general operating expenses and loans to other public institutions and facilities. In addition,","page_number":155,"box":{"x":116,"y":668,"width":737,"height":12}},{"id":"074dc944-4f7f-4aa3-a412-450c6fba5ca2","block_type":"box","text":"certain types of bonds are issued by or on behalf of public authorities to finance various privately","page_number":155,"box":{"x":116,"y":684,"width":716,"height":12}},{"id":"46f60279-7823-4076-9c8b-d2fa38097153","block_type":"box","text":"owned or operated facilities, including certain facilities for the local furnishing of electric energy or gas,","page_number":155,"box":{"x":116,"y":699,"width":757,"height":13}},{"id":"57baf6f5-4b9e-4dc8-b7d7-4a6cef432645","block_type":"box","text":"sewage facilities, solid waste disposal facilities and other specialized facilities. Such obligations are","page_number":155,"box":{"x":116,"y":715,"width":735,"height":12}},{"id":"3c529ad3-27c7-4661-a377-6b83381a8be3","block_type":"box","text":"included within the term Municipal Bonds if the interest paid thereon is excluded from gross income for","page_number":155,"box":{"x":117,"y":730,"width":760,"height":13}},{"id":"cb80ac6a-7c19-4a4d-a829-8498c446dc17","block_type":"box","text":"U.S. federal income tax purposes and any applicable state and local taxes. Other types of private","page_number":155,"box":{"x":117,"y":746,"width":721,"height":12}},{"id":"f58ea949-9003-424d-8c06-54c8262dcdc0","block_type":"box","text":"activity bonds, the proceeds of which are used for the construction, equipment or improvement of","page_number":155,"box":{"x":116,"y":761,"width":722,"height":13}},{"id":"37be77b4-46dd-4bac-be78-0415a1f31c05","block_type":"box","text":"privately operated industrial or commercial facilities, may constitute Municipal Bonds, although the","page_number":155,"box":{"x":117,"y":777,"width":727,"height":12}},{"id":"e55a147d-e336-4172-a8ff-13608e23156a","block_type":"box","text":"current U.S. federal tax laws place substantial limitations on the size of such issues. The interest on","page_number":155,"box":{"x":116,"y":792,"width":739,"height":12}},{"id":"28405b4a-ed69-4991-8cc4-7200283004d7","block_type":"box","text":"Municipal Bonds may bear a fixed rate or be payable at a variable or floating rate. The two principal","page_number":155,"box":{"x":117,"y":808,"width":736,"height":12}},{"id":"de12b96d-e889-470d-994d-57640e931a1b","block_type":"box","text":"classifications of Municipal Bonds are “general obligation” and “revenue” or “special obligation” bonds,","page_number":155,"box":{"x":116,"y":823,"width":756,"height":13}},{"id":"45467fd2-73c7-49bd-bbdc-b66ccbd407f1","block_type":"box","text":"which latter category includes private activity bonds (“PABs”) (or “industrial development bonds” under","page_number":155,"box":{"x":116,"y":839,"width":764,"height":12}},{"id":"426cc0d5-8f04-4096-89e7-63acf60df012","block_type":"box","text":"pre-1986 law).","page_number":155,"box":{"x":117,"y":854,"width":111,"height":13}},{"id":"7e126224-ea3d-41e9-8928-bbbeb579d3e6","block_type":"box","text":"II-72","page_number":155,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"9bbeaa63-20ab-488c-919c-7b35834a8cab","block_type":"box","text":"NM1026U-6039989-155/256","page_number":155,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6723bb69-5253-413d-8aae-9467519d01b6","block_type":"box","text":"General Obligation Bonds.","page_number":156,"box":{"x":117,"y":87,"width":194,"height":12}},{"id":"07daee8a-1f0c-49d8-9d06-815f255ea87e","block_type":"box","text":"General obligation bonds are secured by the issuer’s pledge of its full faith,","page_number":156,"box":{"x":313,"y":87,"width":565,"height":12}},{"id":"7a4c4bb2-cada-4966-8018-a3a637c66f84","block_type":"box","text":"credit and taxing power for the payment of principal and interest. The taxing power of any","page_number":156,"box":{"x":116,"y":102,"width":668,"height":13}},{"id":"1d60a699-b700-4e1b-8f60-b664a3b7ec93","block_type":"box","text":"governmental entity may be limited, however, by provisions of its state constitution or laws, and an","page_number":156,"box":{"x":116,"y":118,"width":735,"height":12}},{"id":"f9e364a1-15ab-466d-b0a7-19f7e993f4d6","block_type":"box","text":"entity’s creditworthiness will depend on many factors, including potential erosion of its tax base due to","page_number":156,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"cdab27b1-ca8c-48d8-a19c-fc0d153ba717","block_type":"box","text":"population declines, natural disasters, declines in the state’s industrial base or inability to attract new","page_number":156,"box":{"x":117,"y":149,"width":750,"height":12}},{"id":"3f06d949-5dfd-4f53-a673-1e9ad96e4370","block_type":"box","text":"industries, economic limits on the ability to tax without eroding the tax base, state legislative proposals","page_number":156,"box":{"x":117,"y":165,"width":762,"height":12}},{"id":"79865650-3444-4e31-8987-3b198ab65dc0","block_type":"box","text":"or voter initiatives to limit ad valorem real property taxes and the extent to which the entity relies on","page_number":156,"box":{"x":116,"y":180,"width":740,"height":12}},{"id":"02f242b0-22f1-4c57-ad56-79e3e9ba3925","block_type":"box","text":"federal or state aid, access to capital markets or other factors beyond the state’s or entity’s control.","page_number":156,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"d3edc6c4-e62c-49f1-99a2-9637e428d9ea","block_type":"box","text":"Accordingly, the capacity of the issuer of a general obligation bond as to the timely payment of interest","page_number":156,"box":{"x":116,"y":211,"width":765,"height":12}},{"id":"c7033821-cab4-42bd-a6e4-9cfa456cfe60","block_type":"box","text":"and the repayment of principal when due is affected by the issuer’s maintenance of its tax base.","page_number":156,"box":{"x":116,"y":227,"width":717,"height":12}},{"id":"3035bd44-88b3-4abc-8ff0-11669c930d50","block_type":"box","text":"Revenue Bonds.","page_number":156,"box":{"x":116,"y":258,"width":122,"height":9}},{"id":"52a3946e-b162-4c33-803b-023077bef57c","block_type":"box","text":"Revenue bonds are payable only from the revenues derived from a particular facility","page_number":156,"box":{"x":240,"y":258,"width":634,"height":12}},{"id":"69bef9db-ec8f-4b13-850b-e3021a4000ed","block_type":"box","text":"or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific","page_number":156,"box":{"x":116,"y":273,"width":720,"height":12}},{"id":"5a240df2-72a8-4ee3-9d63-3d0b21b5d9e3","block_type":"box","text":"revenue source such as payments from the user of the facility being financed; accordingly, the timely","page_number":156,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"2f00c3bf-d07e-4ab8-b3b8-edba19b81b9c","block_type":"box","text":"payment of interest and the repayment of principal in accordance with the terms of the revenue or","page_number":156,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"76a99725-30de-4fff-9938-32b7073698ae","block_type":"box","text":"special obligation bond is a function of the economic viability of such facility or such revenue source.","page_number":156,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"2bda4e9b-71eb-4e8b-866f-72051f5d0157","block_type":"box","text":"Revenue bonds issued by state or local agencies to finance the development of low-income, multi","page_number":156,"box":{"x":117,"y":351,"width":730,"height":12}},{"id":"8c6f5d4b-787b-4d84-944c-34f96a6eb17e","block_type":"box","text":"family housing involve special risks in addition to those associated with municipal bonds generally,","page_number":156,"box":{"x":116,"y":366,"width":735,"height":12}},{"id":"dfa3fc13-af43-4593-ab68-009949bfdd20","block_type":"box","text":"including that the underlying properties may not generate sufficient income to pay expenses and","page_number":156,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"4b42c314-ddfc-4dd9-9f4c-93725e19ba20","block_type":"box","text":"interest costs. Such bonds are generally non-recourse against the property owner, may be junior to the","page_number":156,"box":{"x":117,"y":397,"width":768,"height":12}},{"id":"c0446c09-65fb-4a5c-89c4-38dcdb24191c","block_type":"box","text":"rights of others with an interest in the properties, may pay interest that changes based in part on the","page_number":156,"box":{"x":117,"y":413,"width":746,"height":12}},{"id":"75863607-ef10-48e7-8f2d-f5bc091f257a","block_type":"box","text":"financial performance of the property, may be prepayable without penalty and may be used to finance","page_number":156,"box":{"x":116,"y":428,"width":760,"height":12}},{"id":"4788ac13-bca6-439d-b2ec-bdf6436f72e7","block_type":"box","text":"the construction of housing developments which, until completed and rented, do not generate income","page_number":156,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"b130f5f9-0788-4982-9c8a-217e8c6da748","block_type":"box","text":"to pay interest. Increases in interest rates payable on senior obligations may make it more difficult for","page_number":156,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"3a769155-8af6-462e-8cce-b579ff40becb","block_type":"box","text":"issuers to meet payment obligations on subordinated bonds.","page_number":156,"box":{"x":117,"y":475,"width":452,"height":12}},{"id":"7839b262-79a8-4e59-91f5-6457242630d3","block_type":"box","text":"PABs.","page_number":156,"box":{"x":116,"y":506,"width":45,"height":9}},{"id":"aa7fcb89-cc0e-4de9-8651-8ecce41bd5e9","block_type":"box","text":"PABs are, in most cases, tax-exempt securities issued by states, municipalities or public","page_number":156,"box":{"x":162,"y":506,"width":666,"height":12}},{"id":"d365fc3b-6c08-49c6-b059-abb455ba4dd6","block_type":"box","text":"authorities to provide funds, usually through a loan or lease arrangement, to a private entity for the","page_number":156,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"d29ff046-d239-4a5d-89be-6423dc107c5c","block_type":"box","text":"purpose of financing construction or improvement of a facility to be used by the entity. Such bonds are","page_number":156,"box":{"x":117,"y":537,"width":762,"height":12}},{"id":"8fe4ae95-53c7-4847-b402-bf422e3c8214","block_type":"box","text":"secured primarily by revenues derived from loan repayments or lease payments due from the entity,","page_number":156,"box":{"x":116,"y":552,"width":747,"height":12}},{"id":"efc5ad21-c63f-496d-9976-9ea0dfc72c2c","block_type":"box","text":"which may or may not be guaranteed by a parent company or otherwise secured. PABs generally are","page_number":156,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"a932e0a3-ec69-4ab2-9762-d584589b01a2","block_type":"box","text":"not secured by a pledge of the taxing power of the issuer of such bonds. Therefore, an investor should","page_number":156,"box":{"x":117,"y":583,"width":764,"height":12}},{"id":"10a8ea4c-cc76-4161-a0ee-5ed7767e3f8a","block_type":"box","text":"understand that repayment of such bonds generally depends on the revenues of a private entity and be","page_number":156,"box":{"x":117,"y":599,"width":771,"height":12}},{"id":"a9793b73-5bfe-4056-901b-3b54a3150531","block_type":"box","text":"aware of the risks that such an investment may entail. The continued ability of an entity to generate","page_number":156,"box":{"x":116,"y":614,"width":741,"height":12}},{"id":"3f35af8e-c525-403e-b55a-50f8db3b2814","block_type":"box","text":"sufficient revenues for the payment of principal and interest on such bonds will be affected by many","page_number":156,"box":{"x":116,"y":630,"width":744,"height":12}},{"id":"f330b8b0-8ae5-490f-b469-b281cd268988","block_type":"box","text":"factors including the size of the entity, its capital structure, demand for its products or services,","page_number":156,"box":{"x":116,"y":645,"width":707,"height":12}},{"id":"83f328de-8535-40da-9e8b-1362caa7c260","block_type":"box","text":"competition, general economic conditions, government regulation and the entity’s dependence on","page_number":156,"box":{"x":116,"y":661,"width":723,"height":12}},{"id":"78dfeb46-4b71-4670-a742-68d50f13c2ab","block_type":"box","text":"revenues for the operation of the particular facility being financed.","page_number":156,"box":{"x":117,"y":676,"width":485,"height":12}},{"id":"259215e5-d6f7-4348-9f09-d1c6a53f3019","block_type":"box","text":"Moral Obligation Bonds.","page_number":156,"box":{"x":116,"y":707,"width":178,"height":12}},{"id":"9f1c0d3b-9798-4ddc-9cc7-7eca2dc79736","block_type":"box","text":"“Moral obligation” bonds are normally issued by special purpose public","page_number":156,"box":{"x":301,"y":707,"width":523,"height":12}},{"id":"d9a1eb64-491f-43f9-86ab-96a3bd64d8cd","block_type":"box","text":"authorities. If an issuer of moral obligation bonds is unable to meet its obligations, the repayment of","page_number":156,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"c55c02c3-c344-417b-861e-205803601f5b","block_type":"box","text":"such bonds becomes a moral commitment but not a legal obligation of the state or municipality that","page_number":156,"box":{"x":116,"y":738,"width":736,"height":12}},{"id":"ddd83f0a-8b35-4d51-8a81-2b2760592953","block_type":"box","text":"created the special purpose public authority that issued the bonds.","page_number":156,"box":{"x":116,"y":754,"width":492,"height":12}},{"id":"567a6bdf-d5d5-4a01-b1e5-94853c6f3693","block_type":"box","text":"Municipal Notes.","page_number":156,"box":{"x":116,"y":785,"width":122,"height":12}},{"id":"80035231-6b3d-4985-a7d9-40a4e0bddca2","block_type":"box","text":"Municipal notes are shorter term municipal debt obligations. They may provide interim","page_number":156,"box":{"x":246,"y":785,"width":636,"height":12}},{"id":"d4a14fe7-7a97-40f2-acdc-709fe280b3f1","block_type":"box","text":"financing in anticipation of tax collection, bond sales or revenue receipts. If there is a shortfall in the","page_number":156,"box":{"x":116,"y":800,"width":737,"height":12}},{"id":"13df5f02-f88e-4270-8b7e-b907a5fea10c","block_type":"box","text":"anticipated proceeds, repayment on the note may be delayed or the note may not be fully repaid, and a","page_number":156,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"611c38b7-4411-4ddb-8283-26d3d99a1b75","block_type":"box","text":"Fund may lose money.","page_number":156,"box":{"x":117,"y":831,"width":174,"height":12}},{"id":"85edc759-0530-4e17-b03c-904bc653326b","block_type":"box","text":"Municipal Commercial Paper.","page_number":156,"box":{"x":116,"y":862,"width":218,"height":12}},{"id":"bced905e-2359-42c2-bee3-2a5b06930125","block_type":"box","text":"Municipal commercial paper is generally unsecured and issued to meet","page_number":156,"box":{"x":335,"y":862,"width":539,"height":12}},{"id":"412996f9-67b9-4e2b-afaa-1f26ef6ab0b2","block_type":"box","text":"short-term financing needs. The lack of security presents some risk of loss to a Fund since, in the","page_number":156,"box":{"x":116,"y":878,"width":728,"height":12}},{"id":"faa7e987-09d9-407a-bf8c-49f46826511b","block_type":"box","text":"II-73","page_number":156,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"bb848b8c-039e-4148-877a-d03b33b6935b","block_type":"box","text":"NM1026U-6039989-156/256","page_number":156,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d540f433-ec6e-4972-bb99-5fd6ea30b76b","block_type":"box","text":"event of an issuer’s bankruptcy, unsecured creditors are repaid only after the secured creditors out of","page_number":157,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"6a46cf05-942a-4eb5-9a6d-5208375c34d1","block_type":"box","text":"the assets, if any, that remain.","page_number":157,"box":{"x":116,"y":102,"width":229,"height":13}},{"id":"5b00b488-b51e-4576-bd90-760a6c8ac5bf","block_type":"box","text":"Municipal Lease Obligations.","page_number":157,"box":{"x":116,"y":134,"width":213,"height":12}},{"id":"6c72a413-12cd-405d-b374-25f8ff3f0a1b","block_type":"box","text":"Also included within the general category of Municipal Bonds are","page_number":157,"box":{"x":331,"y":134,"width":491,"height":12}},{"id":"dd49cb28-0db5-4d6c-a73a-43db7ec96d88","block_type":"box","text":"certificates of participation (“COPs”) issued by government authorities or entities to finance the","page_number":157,"box":{"x":116,"y":149,"width":706,"height":12}},{"id":"7676dc44-6eb6-4b9d-9225-80a0f180cddb","block_type":"box","text":"acquisition or construction of equipment, land and/or facilities. The COPs represent participations in a","page_number":157,"box":{"x":116,"y":165,"width":758,"height":11}},{"id":"9f088113-18b6-4b1b-80cc-bcd82f1ba824","block_type":"box","text":"lease, an installment purchase contract or a conditional sales contract (hereinafter collectively called","page_number":157,"box":{"x":117,"y":180,"width":748,"height":12}},{"id":"7ada32de-e3f8-44fb-867c-d2d74b32c982","block_type":"box","text":"“lease obligations”) relating to such equipment, land or facilities. Municipal leases, like other municipal","page_number":157,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"a405d03c-6178-4158-bb8f-d53ca8fbb154","block_type":"box","text":"debt obligations, are subject to the risk of non-payment. Although lease obligations do not constitute","page_number":157,"box":{"x":116,"y":211,"width":747,"height":12}},{"id":"9fd29fc2-219e-4c33-90c6-e9bb8529b3f1","block_type":"box","text":"general obligations of the issuer for which the issuer’s unlimited taxing power is pledged, a lease","page_number":157,"box":{"x":116,"y":227,"width":721,"height":12}},{"id":"5933eff4-c80c-4e62-9a75-3dffbd6be830","block_type":"box","text":"obligation is frequently backed by the issuer’s covenant to budget for, appropriate and make the","page_number":157,"box":{"x":116,"y":242,"width":716,"height":12}},{"id":"8170bf61-7ae2-4e4f-acc1-8d42a851a46b","block_type":"box","text":"payments due under the lease obligation. However, certain lease obligations contain","page_number":157,"box":{"x":117,"y":258,"width":631,"height":12}},{"id":"7b283c4b-edfe-4373-87b7-240555d7cbf6","block_type":"box","text":"“non-appropriation” clauses, which provide that the issuer has no obligation to make lease or","page_number":157,"box":{"x":116,"y":273,"width":693,"height":12}},{"id":"32bfc71b-f57b-49c5-9793-e9ea7ef48fce","block_type":"box","text":"installment purchase payments in future years unless money is appropriated for such purpose on a","page_number":157,"box":{"x":117,"y":289,"width":739,"height":12}},{"id":"2e8de2cf-d25c-4180-9963-2e7f825f101f","block_type":"box","text":"yearly basis. Although “non-appropriation” lease obligations are secured by the leased property,","page_number":157,"box":{"x":116,"y":304,"width":716,"height":12}},{"id":"d5599eb6-1e96-4ea5-80d3-b1452948e2ef","block_type":"box","text":"disposition of the property in the event of foreclosure might prove difficult. These securities represent a","page_number":157,"box":{"x":116,"y":320,"width":767,"height":12}},{"id":"3323ea71-91ed-472a-abae-40c88cbf5796","block_type":"box","text":"type of financing that has not yet developed the depth of marketability associated with more","page_number":157,"box":{"x":116,"y":335,"width":685,"height":12}},{"id":"c4f99218-8dcf-4dec-ba52-0216077571d1","block_type":"box","text":"conventional securities. Certain investments in lease obligations may be illiquid.","page_number":157,"box":{"x":116,"y":351,"width":596,"height":12}},{"id":"798a4151-5198-4c9f-8b51-6b666c186a8a","block_type":"box","text":"The ability of issuers of municipal leases to make timely lease payments may be adversely impacted in","page_number":157,"box":{"x":116,"y":382,"width":769,"height":12}},{"id":"ed807b15-16cb-4168-aa2f-c51fb928c510","block_type":"box","text":"general economic downturns and as relative governmental cost burdens are allocated and reallocated","page_number":157,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"4a6b16e2-c9e4-4bd1-83f1-ff21df60da4b","block_type":"box","text":"among federal, state and local governmental units. Such non-payment would result in a reduction of","page_number":157,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"f824460f-633f-450f-9fe6-b8f00f109059","block_type":"box","text":"income to a Fund, and could result in a reduction in the value of the municipal lease experiencing","page_number":157,"box":{"x":117,"y":428,"width":726,"height":12}},{"id":"d260bbe6-b114-4daf-a3a8-60339fca9d62","block_type":"box","text":"non-payment and a potential decrease in the NAV of a Fund. Issuers of municipal securities might","page_number":157,"box":{"x":117,"y":444,"width":731,"height":12}},{"id":"899a5313-0f23-4501-a71b-85969b1e2b61","block_type":"box","text":"seek protection under the bankruptcy laws. In the event of bankruptcy of such an issuer, a Fund could","page_number":157,"box":{"x":116,"y":459,"width":762,"height":12}},{"id":"5bd9805e-da77-438e-a909-9448fc935b82","block_type":"box","text":"experience delays and limitations with respect to the collection of principal and interest on such","page_number":157,"box":{"x":116,"y":475,"width":711,"height":12}},{"id":"e66aa966-68c3-4249-9862-66400bbee688","block_type":"box","text":"municipal leases and a Fund may not, in all circumstances, be able to collect all principal and interest","page_number":157,"box":{"x":117,"y":490,"width":755,"height":12}},{"id":"21ce54e2-24b4-46ce-af60-62f85c554993","block_type":"box","text":"to which it is entitled. To enforce its rights in the event of a default in lease payments, a Fund might","page_number":157,"box":{"x":116,"y":506,"width":740,"height":12}},{"id":"7bf9291b-1157-48cd-87a4-d68425cc6fb4","block_type":"box","text":"take possession of and manage the assets securing the issuer’s obligations on such securities, which","page_number":157,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"6832bf29-ec18-4214-9320-1bfa90e3b46c","block_type":"box","text":"may increase a Fund’s operating expenses and adversely affect the NAV of a Fund. When the lease","page_number":157,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"e3cbbee9-61d7-4502-adde-dd3b94f66836","block_type":"box","text":"contains a non-appropriation clause, however, the failure to pay would not be a default and a Fund","page_number":157,"box":{"x":116,"y":552,"width":737,"height":12}},{"id":"33576f32-68f4-468b-828d-8da79c4d7f62","block_type":"box","text":"would not have the right to take possession of the assets. Any income derived from a Fund’s","page_number":157,"box":{"x":116,"y":568,"width":692,"height":12}},{"id":"10411b5e-3ee8-4904-a0f6-054dc50a8d8c","block_type":"box","text":"ownership or operation of such assets may not be tax-exempt. In addition, a Fund’s intention to qualify","page_number":157,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"5673a2b2-7dba-423c-a1c3-c9d716f14240","block_type":"box","text":"as a “regulated investment company” under the Code, may limit the extent to which a Fund may","page_number":157,"box":{"x":116,"y":599,"width":717,"height":12}},{"id":"07abeb7e-41ed-4fa8-8d55-3c87d1cfdced","block_type":"box","text":"exercise its rights by taking possession of such assets, because as a regulated investment company a","page_number":157,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"544368d9-11d1-49a5-a26a-d9dd5051ec8f","block_type":"box","text":"Fund is subject to certain limitations on its investments and on the nature of its income.","page_number":157,"box":{"x":117,"y":630,"width":650,"height":12}},{"id":"c2ba66bc-33e0-4d4f-b270-06af4eafe8d4","block_type":"box","text":"Tender Option Bonds.","page_number":157,"box":{"x":118,"y":661,"width":161,"height":12}},{"id":"a05d7d04-83bc-4f4b-9ef7-c0cae618be6d","block_type":"box","text":"Certain Funds may invest in residual inverse floating rate interest tender option","page_number":157,"box":{"x":286,"y":661,"width":585,"height":12}},{"id":"f52525d3-676b-4a3c-9756-71ec2cf7e1b3","block_type":"box","text":"bonds (“TOB Residuals”), which are derivative interests in Municipal Bonds. The TOB Residuals in","page_number":157,"box":{"x":117,"y":676,"width":730,"height":12}},{"id":"81c3418a-7f8d-4f9b-a722-d089fd74e235","block_type":"box","text":"which the Funds will invest pay interest or income that, in the opinion of counsel to the issuer, is","page_number":157,"box":{"x":116,"y":692,"width":710,"height":12}},{"id":"64d0c081-41b1-4469-b209-44753c911e97","block_type":"box","text":"exempt from regular U.S. federal income tax. BlackRock will not conduct its own analysis of the tax","page_number":157,"box":{"x":116,"y":707,"width":735,"height":12}},{"id":"8ce84b0c-2366-42ed-abcb-c31f10450735","block_type":"box","text":"status of the interest or income paid by TOB Residuals held by the Funds, but will rely on the opinion of","page_number":157,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"b236f614-21a4-49d3-a3e3-40d58935a824","block_type":"box","text":"counsel to the issuer. Although volatile, TOB Residuals typically offer the potential for yields exceeding","page_number":157,"box":{"x":116,"y":738,"width":761,"height":12}},{"id":"14b3741c-3e31-4c93-9f34-4efb79457bb3","block_type":"box","text":"the yields available on fixed rate Municipal Bonds with comparable credit quality. The Funds may","page_number":157,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"394acdc5-9bd3-43ea-8f60-21940f120abb","block_type":"box","text":"invest in TOB Residuals for the purpose of using economic leverage.","page_number":157,"box":{"x":117,"y":769,"width":509,"height":12}},{"id":"3af09264-7a90-4463-8793-5eb19d4abb6e","block_type":"box","text":"TOB Residuals represent beneficial interests in a special purpose trust formed for the purpose of","page_number":157,"box":{"x":116,"y":800,"width":719,"height":12}},{"id":"73083e08-4cf3-4563-96fd-f0e6399c4562","block_type":"box","text":"holding Municipal Bonds contributed by one or more funds (a “TOB Trust”). A TOB Trust typically","page_number":157,"box":{"x":117,"y":816,"width":719,"height":12}},{"id":"117914b1-5cba-4b3a-bae8-d10db431399c","block_type":"box","text":"issues two classes of beneficial interests: short-term floating rate interests (“TOB Floaters”), which are","page_number":157,"box":{"x":117,"y":831,"width":762,"height":12}},{"id":"23d9f412-9cd5-4d5a-a6a0-a6e4494da9dd","block_type":"box","text":"sold to third-party investors, and TOB Residuals, which are generally issued to the fund(s) that","page_number":157,"box":{"x":116,"y":847,"width":706,"height":12}},{"id":"24a267f1-58bf-4ff4-9cf6-4fdf2a39eabf","block_type":"box","text":"transferred Municipal Bonds to the TOB Trust. The Funds may invest in both TOB Floaters and TOB","page_number":157,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"3e70b694-ca42-48e6-b395-4344cacb3575","block_type":"box","text":"Residuals. TOB Floaters may have first priority on the cash flow from the Municipal Bonds held by the","page_number":157,"box":{"x":117,"y":878,"width":759,"height":12}},{"id":"da8678f8-f644-4f51-8c2a-1935ce4e97e8","block_type":"box","text":"II-74","page_number":157,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"332f6ade-bc5a-424d-b10c-84a9c052760d","block_type":"box","text":"NM1026U-6039989-157/256","page_number":157,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5bab0cc1-4257-4f7e-a193-ec648b6e7dad","block_type":"box","text":"TOB Trust and are enhanced with a liquidity support arrangement from a third-party Liquidity Provider","page_number":158,"box":{"x":116,"y":87,"width":760,"height":12}},{"id":"bb7e5520-238f-4574-b683-8d66c16af208","block_type":"box","text":"(defined below) which allows holders to tender their position at par (plus accrued interest). A Fund, as","page_number":158,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"a9610f03-9cd9-42ff-a05f-f5365a152b30","block_type":"box","text":"a holder of TOB Residuals, is paid the residual cash flow from the TOB Trust. A Fund that contributes","page_number":158,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"67978c68-7881-4d2f-aae0-a41d7b83ba06","block_type":"box","text":"the Municipal Bonds to the TOB Trust is paid the cash received by the TOB Trust from the sale of the","page_number":158,"box":{"x":116,"y":134,"width":757,"height":12}},{"id":"7271d54b-7744-45fa-b659-1bffc8dbaf43","block_type":"box","text":"TOB Floaters, less certain transaction costs, and typically will invest the cash to purchase additional","page_number":158,"box":{"x":116,"y":149,"width":746,"height":12}},{"id":"2554a702-410a-4779-b0d7-cb28b8e72909","block_type":"box","text":"Municipal Bonds or other investments permitted by its investment policies. If a Fund ever purchases all","page_number":158,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"02b76f29-eee9-4208-8659-94b0b25aafcb","block_type":"box","text":"or a portion of the TOB Floaters sold by the TOB Trust, it may surrender those TOB Floaters together","page_number":158,"box":{"x":116,"y":180,"width":758,"height":12}},{"id":"b5a0d47b-3e7f-4dce-af91-96a1c3a3d5ea","block_type":"box","text":"with a proportionate amount of TOB Residuals to the TOB Trust in exchange for a proportionate","page_number":158,"box":{"x":116,"y":196,"width":717,"height":12}},{"id":"ccc6c3ed-32de-4575-9f1f-9b54c3ef98d7","block_type":"box","text":"amount of the Municipal Bonds owned by the TOB Trust.","page_number":158,"box":{"x":116,"y":211,"width":427,"height":12}},{"id":"a667393d-9508-4246-a57d-3a32ba33c63e","block_type":"box","text":"Other BlackRock-advised funds may contribute Municipal Bonds to a TOB Trust into which a Fund has","page_number":158,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"9e446c6b-a1ea-4f96-9846-f00615d0a97d","block_type":"box","text":"contributed Municipal Bonds. If multiple BlackRock-advised funds participate in the same TOB Trust,","page_number":158,"box":{"x":116,"y":258,"width":752,"height":11}},{"id":"0409b0c5-2ac1-4a2c-b704-350547455e4d","block_type":"box","text":"the economic rights and obligations under the TOB Residual will generally be shared among the funds","page_number":158,"box":{"x":116,"y":273,"width":764,"height":12}},{"id":"3f2667a9-d409-403d-b6dd-3527dde54b9f","block_type":"box","text":"ratably in proportion to their participation in the TOB Trust.","page_number":158,"box":{"x":117,"y":289,"width":437,"height":12}},{"id":"5d5524b0-4246-45a9-bfb2-112c0a3e44de","block_type":"box","text":"The Municipal Bonds transferred to a TOB Trust typically are high grade Municipal Bonds. In certain","page_number":158,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"0efd4bf8-96cd-4ca3-9b70-1d07366f3a43","block_type":"box","text":"cases, when Municipal Bonds transferred are lower grade Municipal Bonds, the TOB Trust transaction","page_number":158,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"0248f8a7-adb5-4bf3-af0b-9cbd437d4b32","block_type":"box","text":"includes a credit enhancement feature that provides for the timely payment of principal and interest on","page_number":158,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"49ae794d-2dc8-497c-aa7b-fe3c2afb69a2","block_type":"box","text":"the bonds to the TOB Trust by a credit enhancement provider. The TOB Trust would be responsible for","page_number":158,"box":{"x":116,"y":366,"width":770,"height":12}},{"id":"44055e6e-a611-4421-98e5-101301009ec9","block_type":"box","text":"the payment of the credit enhancement fee and a Fund, as a TOB Residual holder, would be","page_number":158,"box":{"x":116,"y":382,"width":693,"height":12}},{"id":"0767a0cc-edbc-4c19-8e5c-26bf893af7e1","block_type":"box","text":"responsible for reimbursement of any payments of principal and interest made by the credit","page_number":158,"box":{"x":117,"y":397,"width":681,"height":12}},{"id":"b4f4347d-e686-4a15-b530-d8bbf7442ab4","block_type":"box","text":"enhancement provider.","page_number":158,"box":{"x":116,"y":413,"width":176,"height":12}},{"id":"46954b2f-49d1-4736-a0b1-4cb204de6167","block_type":"box","text":"The TOB Residuals held by a Fund generally provide the Fund with the right to cause the holders of a","page_number":158,"box":{"x":116,"y":444,"width":760,"height":12}},{"id":"29843ada-8ed3-439f-b05f-5e9d48da0c6f","block_type":"box","text":"proportional share of the TOB Floaters to tender their notes to the TOB Trust at par plus accrued","page_number":158,"box":{"x":117,"y":459,"width":722,"height":12}},{"id":"02df2227-afc7-4664-9ec1-6635445e18ed","block_type":"box","text":"interest. Thereafter, the Fund may withdraw a corresponding share of the Municipal Bonds from the","page_number":158,"box":{"x":117,"y":475,"width":743,"height":12}},{"id":"a08666b2-9196-440f-9c19-12a21ed74f29","block_type":"box","text":"TOB Trust. This transaction, in effect, creates exposure for the Fund to the entire return of the","page_number":158,"box":{"x":116,"y":490,"width":702,"height":12}},{"id":"cb9afa9d-abfa-4773-a754-367600166c08","block_type":"box","text":"Municipal Bonds in the TOB Trust, with a net cash investment by the Fund that is less than the value of","page_number":158,"box":{"x":117,"y":506,"width":770,"height":12}},{"id":"7bc5c968-e470-4012-94ea-f06f52efffb2","block_type":"box","text":"the Municipal Bonds in the TOB Trust. This multiplies the positive or negative impact of the Municipal","page_number":158,"box":{"x":116,"y":521,"width":755,"height":12}},{"id":"b02e1519-36bb-4670-906b-f5f00966c4ab","block_type":"box","text":"Bonds’ return within the Fund (thereby creating leverage). The leverage within a TOB Trust depends","page_number":158,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"57ec2e7c-865c-4898-b509-ff4faf3aa161","block_type":"box","text":"on the value of the Municipal Bonds deposited in the TOB Trust relative to the value of the TOB","page_number":158,"box":{"x":116,"y":552,"width":714,"height":12}},{"id":"593b1f2e-2ee5-4444-b5c4-c5e0abee712e","block_type":"box","text":"Floaters it issues.","page_number":158,"box":{"x":117,"y":568,"width":134,"height":9}},{"id":"529a13cf-43e1-4f51-90d3-73983612782c","block_type":"box","text":"A Fund may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly","page_number":158,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"5d833ff1-97c4-435c-8f87-c30115ab5327","block_type":"box","text":"leveraged if the principal amount of the TOB Floaters issued by the related TOB Trust exceeds 75% of","page_number":158,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"8d8e54a9-0845-4cbb-bc38-c782fcc2938e","block_type":"box","text":"the principal amount of the Municipal Bonds owned by the TOB Trust.","page_number":158,"box":{"x":116,"y":630,"width":523,"height":12}},{"id":"c786c73c-1636-4698-9fe9-7b7b593ec890","block_type":"box","text":"The TOB Trust may be collapsed without the consent of a Fund upon the occurrence of tender option","page_number":158,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"0d1418cc-41fb-48b2-b834-52f4318e60d2","block_type":"box","text":"termination events (“TOTEs”) and mandatory termination events (“MTEs”), as defined in the TOB Trust","page_number":158,"box":{"x":116,"y":676,"width":763,"height":12}},{"id":"dc1bc2a3-77d7-4477-a8e9-ceda655453f3","block_type":"box","text":"agreements. TOTEs include the bankruptcy or default of the issuer of the Municipal Bonds held in the","page_number":158,"box":{"x":116,"y":692,"width":752,"height":12}},{"id":"180dfd05-cafe-4908-9f7f-92dd625828cb","block_type":"box","text":"TOB Trust, a substantial downgrade in the credit quality of the issuer of the Municipal Bonds held in","page_number":158,"box":{"x":116,"y":707,"width":739,"height":12}},{"id":"d497db85-608c-454f-aa01-5e4420e40584","block_type":"box","text":"the TOB Trust, failure of any scheduled payment of principal or interest on the Municipal Bonds, and a","page_number":158,"box":{"x":116,"y":723,"width":758,"height":12}},{"id":"04c89e66-7c30-44bf-8dcb-3da814bdce18","block_type":"box","text":"judgment or ruling that interest on the Municipal Bonds is subject to U.S. federal income taxation.","page_number":158,"box":{"x":115,"y":738,"width":721,"height":12}},{"id":"6ab6a039-f98e-4c56-94e2-5802383bced1","block_type":"box","text":"MTEs may include, among other things, a failed remarketing of the TOB Floaters, the inability of the","page_number":158,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"13752713-3d1b-425e-8f8a-ec57fdd1f8ce","block_type":"box","text":"TOB Trust to obtain renewal of the liquidity support agreement, and a substantial decline in the market","page_number":158,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"e3a4ee16-a49d-4325-a045-1393408e9870","block_type":"box","text":"value of the Municipal Bonds held in the TOB Trust. Upon the occurrence of a TOTE or an MTE, a","page_number":158,"box":{"x":116,"y":785,"width":729,"height":12}},{"id":"aa88750e-875c-49a2-8f64-75487b246c48","block_type":"box","text":"TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee","page_number":158,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"60a24b3a-775a-4e1d-8a47-1b3104776e2f","block_type":"box","text":"of the TOB Trust, the remarketing agent of the TOB Floaters and the Liquidity Provider (defined","page_number":158,"box":{"x":116,"y":816,"width":708,"height":12}},{"id":"f1eecfbe-7cfa-4e5a-a9f4-3fea9ee71290","block_type":"box","text":"below). In the case of an MTE, after the payment of fees, the holders of the TOB Floaters would be","page_number":158,"box":{"x":117,"y":831,"width":739,"height":12}},{"id":"d21d8d95-ac48-4786-9db2-61e80c9f1f3e","block_type":"box","text":"paid senior to the TOB Residual holders (","page_number":158,"box":{"x":117,"y":847,"width":307,"height":12}},{"id":"cbd84a2e-bb82-435e-9212-b39fec024797","block_type":"box","text":"i.e.","page_number":158,"box":{"x":425,"y":847,"width":20,"height":9}},{"id":"4820c094-5132-418d-8896-960b3548b255","block_type":"box","text":", the Fund). In contrast, in the case of a TOTE, after","page_number":158,"box":{"x":448,"y":847,"width":389,"height":12}},{"id":"f2886857-32bd-409d-a4ec-a3b37edca6de","block_type":"box","text":"payment of fees, the holders of TOB Floaters and the TOB Residual holders would be paid pro rata in","page_number":158,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"f3809f9f-3c33-4295-9d56-dbe546e301aa","block_type":"box","text":"proportion to the respective face values of their certificates.","page_number":158,"box":{"x":117,"y":878,"width":443,"height":12}},{"id":"076718f9-9c0f-4d32-812f-5ef85e1682cf","block_type":"box","text":"II-75","page_number":158,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a02aa746-54ab-47f4-8871-e255318ce458","block_type":"box","text":"NM1026U-6039989-158/256","page_number":158,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a0e10247-e58d-4db2-8447-90a6a2976f69","block_type":"box","text":"A Fund may invest in a TOB Trust on either a non-recourse or recourse basis. TOB Trusts are typically","page_number":159,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"6709d0f7-7c15-47f8-94e8-4038605edce0","block_type":"box","text":"supported by a liquidity facility provided by a third-party bank or other financial institution (the “Liquidity","page_number":159,"box":{"x":116,"y":102,"width":766,"height":13}},{"id":"de216cd5-324c-4a9a-8736-326a079c96a5","block_type":"box","text":"Provider”) that allows the holders of the TOB Floaters to tender their TOB Floaters in exchange for","page_number":159,"box":{"x":117,"y":118,"width":734,"height":12}},{"id":"37f4f04a-f35c-461a-b78d-1ff10fa5680f","block_type":"box","text":"payment of par plus accrued interest on any business day (subject to the non-occurrence of a TOTE","page_number":159,"box":{"x":117,"y":134,"width":748,"height":12}},{"id":"45308b16-8c8c-4681-81bc-c09cb7157a43","block_type":"box","text":"described above). Depending on the structure of the TOB Trust, the Liquidity Provider may purchase","page_number":159,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"36a70ec4-a4ab-4545-b5b8-6c540ba23c9f","block_type":"box","text":"the tendered TOB Floaters, or the TOB Trust may draw upon a loan from the Liquidity Provider to","page_number":159,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"fabd62cb-2ba7-472b-8dc3-62eaede98faf","block_type":"box","text":"purchase the tendered TOB Floaters.","page_number":159,"box":{"x":117,"y":180,"width":281,"height":12}},{"id":"9ed60ecd-e104-4e12-9f18-c5e1b1a92c64","block_type":"box","text":"When a Fund invests in TOB Trusts on a non-recourse basis, and the Liquidity Provider is required to","page_number":159,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"23814225-5d39-42e8-a37a-055b6d41317e","block_type":"box","text":"make a payment under the liquidity facility, the Liquidity Provider will typically liquidate all or a portion","page_number":159,"box":{"x":117,"y":227,"width":753,"height":12}},{"id":"cd54c1a5-6d9f-41e6-9a1c-aa8655e1393d","block_type":"box","text":"of the Municipal Bonds held in the TOB Trust and then fund the balance, if any, of the amount owed","page_number":159,"box":{"x":116,"y":242,"width":746,"height":12}},{"id":"ff8b27c7-eeae-4fee-ab1e-c3f5711c7acd","block_type":"box","text":"under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in","page_number":159,"box":{"x":117,"y":258,"width":760,"height":12}},{"id":"fe3e051c-6046-4401-9df5-97c119f3dd59","block_type":"box","text":"a TOB Trust on a recourse basis, it will typically enter into a reimbursement agreement with the","page_number":159,"box":{"x":116,"y":273,"width":712,"height":12}},{"id":"0b8cffe4-7d39-4fb9-a3a9-e0e96ddfa967","block_type":"box","text":"Liquidity Provider pursuant to which the Fund is required to reimburse the Liquidity Provider the","page_number":159,"box":{"x":117,"y":289,"width":712,"height":12}},{"id":"8195d782-1e60-440d-9a88-f8d38c3a7403","block_type":"box","text":"amount of any Liquidation Shortfall. As a result, if the Fund invests in a recourse TOB Trust, the Fund","page_number":159,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"5b095e4c-7d41-495a-bbda-277b3d0a647c","block_type":"box","text":"will bear the risk of loss with respect to any Liquidation Shortfall. If multiple BlackRock-advised funds","page_number":159,"box":{"x":116,"y":320,"width":751,"height":12}},{"id":"625a1b8f-c5ab-4d38-baf1-de0b3dbd1ab6","block_type":"box","text":"participate in any such TOB Trust, these losses will be shared ratably, in proportion to their","page_number":159,"box":{"x":117,"y":335,"width":678,"height":12}},{"id":"1c3991ea-4d6c-4a87-9c3f-7a80da866ca8","block_type":"box","text":"participation in the TOB Trust.","page_number":159,"box":{"x":117,"y":351,"width":227,"height":12}},{"id":"a51ae867-31fc-4a0a-83df-f4bac620f850","block_type":"box","text":"Under accounting rules, Municipal Bonds of a Fund that are deposited into a TOB Trust are","page_number":159,"box":{"x":117,"y":382,"width":682,"height":12}},{"id":"96e3a897-9118-4139-b349-cea4219be8d4","block_type":"box","text":"investments of the Fund and are presented on the Fund’s Schedule of Investments and outstanding","page_number":159,"box":{"x":117,"y":397,"width":745,"height":12}},{"id":"70bd8548-92c4-4de7-bd9d-7213aea00aaa","block_type":"box","text":"TOB Floaters issued by a TOB Trust are presented as liabilities in the Fund’s Statement of Assets and","page_number":159,"box":{"x":116,"y":413,"width":765,"height":12}},{"id":"7aeefa8e-068f-43d3-98af-a476842ebf84","block_type":"box","text":"Liabilities. Interest income from the underlying Municipal Bonds is recorded by a Fund on an accrual","page_number":159,"box":{"x":117,"y":428,"width":747,"height":12}},{"id":"95a93c0d-600b-4163-8683-febafb0b25d4","block_type":"box","text":"basis. Interest expense incurred on the","page_number":159,"box":{"x":117,"y":444,"width":288,"height":12}},{"id":"320e9143-75dc-4ef1-ab1e-893dcba2ad80","block_type":"box","text":"TOB Floaters and other expenses related to remarketing,","page_number":159,"box":{"x":409,"y":444,"width":430,"height":12}},{"id":"74518f44-661f-4fdf-b1d3-9dc69eccebbb","block_type":"box","text":"administration, trustee and other services to a TOB Trust are reported as expenses of a Fund. In","page_number":159,"box":{"x":116,"y":459,"width":722,"height":12}},{"id":"4d6b9921-7f57-4d1b-94d0-595f54edbea1","block_type":"box","text":"addition, under accounting rules, loans made to a TOB Trust sponsored by a Fund may be presented","page_number":159,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"26493ddf-af24-4851-963a-e6349e19b920","block_type":"box","text":"as loans of the Fund in the Fund’s financial statements even if there is no recourse to the Fund’s","page_number":159,"box":{"x":116,"y":490,"width":721,"height":10}},{"id":"c1144dda-7be8-49f9-8452-afb87cc24dbd","block_type":"box","text":"assets.","page_number":159,"box":{"x":116,"y":506,"width":58,"height":9}},{"id":"fca84eb0-8299-4c29-af70-d9ba5624e483","block_type":"box","text":"For TOB Floaters, generally, the interest rate earned will be based upon the market rates for Municipal","page_number":159,"box":{"x":117,"y":537,"width":765,"height":12}},{"id":"82c1b659-44bc-488a-afb3-ce65cf8e104c","block_type":"box","text":"Bonds with maturities or remarketing provisions that are comparable in duration to the periodic interval","page_number":159,"box":{"x":117,"y":552,"width":764,"height":12}},{"id":"5438e4dd-63c4-4dfd-b01b-cb78c85dde7d","block_type":"box","text":"of the tender option. Since the tender option feature has a shorter term than the final maturity or first","page_number":159,"box":{"x":116,"y":568,"width":748,"height":12}},{"id":"a4370676-8166-48cd-aac0-b5aaed495437","block_type":"box","text":"call date of the underlying Municipal Bonds deposited in the TOB Trust, the holder of the TOB Floaters","page_number":159,"box":{"x":116,"y":583,"width":766,"height":12}},{"id":"40878e5a-1638-4bd9-a816-428f85b032d0","block_type":"box","text":"relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as","page_number":159,"box":{"x":117,"y":599,"width":738,"height":12}},{"id":"332fa05d-cefe-44a2-b16b-d193d8cad726","block_type":"box","text":"well as the credit strength of that institution. The risk associated with TOB Floaters, however, may be","page_number":159,"box":{"x":116,"y":614,"width":754,"height":12}},{"id":"b0dab7e8-8a1e-4c92-a178-4f879d3c9622","block_type":"box","text":"increased in the current market environment as a result of recent downgrades to the credit ratings, and","page_number":159,"box":{"x":117,"y":630,"width":767,"height":12}},{"id":"0a585ba7-2db6-4305-bcea-8c22ac255a5c","block_type":"box","text":"thus the perceived reliability and creditworthiness, of many major financial institutions, some of which","page_number":159,"box":{"x":116,"y":645,"width":755,"height":12}},{"id":"4486d46b-437a-4d8f-97fd-ba82f792b27e","block_type":"box","text":"sponsor and/or provide liquidity support to TOB Trusts. This in turn may reduce the desirability of TOB","page_number":159,"box":{"x":116,"y":661,"width":758,"height":12}},{"id":"f5244806-78d3-4d4f-9103-abdecbedf205","block_type":"box","text":"Floaters as investments, which could impair the viability or availability of TOB Trusts.","page_number":159,"box":{"x":117,"y":676,"width":627,"height":12}},{"id":"15fc691b-5aec-41b2-8b2b-d3f7776376ab","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into TOB Trust transactions,","page_number":159,"box":{"x":117,"y":707,"width":737,"height":12}},{"id":"71cc9a49-c757-4dd5-9e42-e4c69dd6d611","block_type":"box","text":"reverse repurchase agreements and similar financing transactions (e.g., borrowed bonds)","page_number":159,"box":{"x":117,"y":723,"width":664,"height":12}},{"id":"5182f3c6-bdef-45a9-bcac-727c867d5d7e","block_type":"box","text":"notwithstanding the limitation on the issuance of senior securities in Section 18 of the Investment","page_number":159,"box":{"x":117,"y":738,"width":718,"height":12}},{"id":"7969e1f3-2dc2-491b-9016-b9a7a7fbbd7e","block_type":"box","text":"Company Act, provided that the Fund either (i) complies with the 300% asset coverage ratio with","page_number":159,"box":{"x":117,"y":754,"width":715,"height":12}},{"id":"d415487d-6c02-48db-a3a9-a416599aa20a","block_type":"box","text":"respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions","page_number":159,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"a940ba4b-ac7d-4749-ad9f-347d2ac485b8","block_type":"box","text":"as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":159,"box":{"x":116,"y":785,"width":726,"height":12}},{"id":"d9d0a334-187e-4258-97e3-aa9a34cd3f29","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":159,"box":{"x":117,"y":800,"width":404,"height":12}},{"id":"837d37ab-02bb-4043-bb1b-7c96a445e6b7","block_type":"box","text":"Developments in the TOB Trust Market.","page_number":159,"box":{"x":116,"y":831,"width":301,"height":12}},{"id":"7f5e18a1-a449-4914-b890-a9630bf7ecda","block_type":"box","text":"In response to the restrictions imposed by section 619 of the","page_number":159,"box":{"x":419,"y":831,"width":452,"height":12}},{"id":"8e2f2717-6626-4dc5-8451-a20221651647","block_type":"box","text":"Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), market participants","page_number":159,"box":{"x":117,"y":847,"width":766,"height":12}},{"id":"7c0639e1-6742-43ab-9316-a57c4afa4161","block_type":"box","text":"have developed a structure for TOB Trusts designed to ensure that no banking entity is sponsoring the","page_number":159,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"3c59f800-c3db-43f0-843f-71ebf10507b5","block_type":"box","text":"TOB Trust for purposes of the Volcker Rule. Specifically, a Fund will establish, structure and “sponsor”","page_number":159,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"b1d78189-02f8-4306-a262-ea53026aaa7f","block_type":"box","text":"II-76","page_number":159,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6fcaf54e-5504-4df1-80c5-7e042ae17b2e","block_type":"box","text":"NM1026U-6039989-159/256","page_number":159,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ee948ad0-9f45-4b29-8864-4cb7dcd16a1e","block_type":"box","text":"the TOB Trusts in which it holds TOB Residuals. In such a structure, certain responsibilities that","page_number":160,"box":{"x":116,"y":87,"width":715,"height":12}},{"id":"67e9a643-6838-4ead-afd2-14ed0c44b528","block_type":"box","text":"previously belonged to the sponsor bank will be performed by, or on behalf of, a Fund. A Fund may","page_number":160,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"8a75405c-da53-4e99-8e76-aedc2c41c357","block_type":"box","text":"utilize service providers in meeting these responsibilities. It is possible that regulators could take","page_number":160,"box":{"x":117,"y":118,"width":717,"height":12}},{"id":"62b28bc9-589e-4b4a-93c9-c20f5956de0d","block_type":"box","text":"positions that could limit the market for such structured TOB Trust transactions or a Fund’s ability to","page_number":160,"box":{"x":117,"y":134,"width":744,"height":12}},{"id":"e6760383-974b-46a1-9c9b-688ee0ee41ae","block_type":"box","text":"hold TOB Residuals. Under this TOB Trust structure, a Fund has certain additional duties and","page_number":160,"box":{"x":117,"y":149,"width":699,"height":11}},{"id":"13daa08d-725e-4a5b-93a9-76a16c943cbc","block_type":"box","text":"responsibilities, which may give rise to certain additional risks including","page_number":160,"box":{"x":117,"y":165,"width":525,"height":12}},{"id":"d034a55c-fdeb-46aa-8d3c-f83879705e7e","block_type":"box","text":",","page_number":160,"box":{"x":643,"y":173,"width":3,"height":3}},{"id":"937d8343-a0cb-473e-aee5-584ae6d6d67e","block_type":"box","text":"but not limited to, compliance,","page_number":160,"box":{"x":648,"y":165,"width":232,"height":11}},{"id":"f30441b2-ac48-48b8-aa23-dc21fe98e1f6","block_type":"box","text":"securities law and operational risks.","page_number":160,"box":{"x":116,"y":180,"width":270,"height":12}},{"id":"c83e4279-f914-4da3-8787-35f2836a4e60","block_type":"box","text":"Under this structure, service providers to a TOB Trust, such as administrators, liquidity providers,","page_number":160,"box":{"x":117,"y":208,"width":724,"height":12}},{"id":"51241e1b-fbc5-4397-852b-0a8112e01b9b","block_type":"box","text":"trustees, and remarketing agents, act at the direction of, and as agent of, a Fund as the TOB Residual","page_number":160,"box":{"x":116,"y":223,"width":764,"height":13}},{"id":"c4138c9b-0196-4368-92dc-32c56102a0c5","block_type":"box","text":"holder. Similar to the traditional tender option bond structure, a Fund deposits Municipal Bonds into the","page_number":160,"box":{"x":117,"y":239,"width":768,"height":12}},{"id":"95a8ca55-a421-4020-a8ce-1828bb723bbc","block_type":"box","text":"TOB Trust in exchange for TOB Residuals, the TOB Trust then issues and sells TOB Floaters to third","page_number":160,"box":{"x":116,"y":254,"width":757,"height":13}},{"id":"7c4c43d0-bed9-4b8d-9e6c-75bfc47074d0","block_type":"box","text":"party investors, and the proceeds of the sale of the TOB Floaters is distributed to such TOB Residual","page_number":160,"box":{"x":117,"y":270,"width":754,"height":12}},{"id":"4e408944-9e41-44ee-aff3-a17fa788115f","block_type":"box","text":"holders (","page_number":160,"box":{"x":117,"y":285,"width":64,"height":13}},{"id":"f71d55de-fd0c-426d-96bc-b63932beb40d","block_type":"box","text":"i.e.","page_number":160,"box":{"x":182,"y":286,"width":20,"height":9}},{"id":"dd7f810c-24ea-43b0-964f-581dcfb8000d","block_type":"box","text":", the Fund). Tendered TOB Floaters continue to be supported by a remarketing agent and","page_number":160,"box":{"x":205,"y":285,"width":671,"height":13}},{"id":"b236154f-1323-4419-8031-a0a233ac15d8","block_type":"box","text":"a liquidity facility. However, the remarketing agent does not purchase tendered TOB Floaters for its","page_number":160,"box":{"x":116,"y":301,"width":740,"height":12}},{"id":"bb394497-79a2-404b-b4cf-be7f8773c80a","block_type":"box","text":"own account in the event of a failed remarketing, which may increase the likelihood that a TOB Trust","page_number":160,"box":{"x":116,"y":316,"width":751,"height":13}},{"id":"c55a83c9-77b1-414c-a1a2-d0dd4e8be45e","block_type":"box","text":"will need to be collapsed and liquidated in order to purchase the tendered TOB Floaters. In the event of","page_number":160,"box":{"x":116,"y":332,"width":772,"height":12}},{"id":"ff5e3435-bf1a-49db-a805-9dfcc60c9178","block_type":"box","text":"a failed remarketing of TOB Floaters, the Liquidity Provider, at its option, may advance a loan to the","page_number":160,"box":{"x":116,"y":347,"width":745,"height":13}},{"id":"c4000d8a-2988-413e-ac27-58efad3d7859","block_type":"box","text":"TOB Trust the proceeds of which would be used by the TOB Trust to purchase the tendered TOB","page_number":160,"box":{"x":116,"y":363,"width":728,"height":12}},{"id":"0a34e598-d225-4e6b-bb85-601065735bc2","block_type":"box","text":"Floaters. The Liquidity Provider is not obligated to advance such a loan. The TOB Trust would be the","page_number":160,"box":{"x":117,"y":378,"width":753,"height":13}},{"id":"b614faad-4416-4001-857f-05e87587c4f8","block_type":"box","text":"borrower with respect to any such loan. Any loans made by a Liquidity Provider will be secured by the","page_number":160,"box":{"x":117,"y":394,"width":758,"height":12}},{"id":"ca51ddb7-4551-49ce-9169-f52ea6b19b4d","block_type":"box","text":"purchased TOB Floaters held by the TOB Trust.","page_number":160,"box":{"x":117,"y":409,"width":361,"height":13}},{"id":"7e54594d-3790-491d-8972-e5d298cd1e3a","block_type":"box","text":"Similar to the traditional structure for TOB Trusts, a Fund may hold either non-recourse TOB Residuals","page_number":160,"box":{"x":116,"y":437,"width":769,"height":12}},{"id":"38ee1686-5f92-4fcd-83c7-341b393359a3","block_type":"box","text":"or recourse TOB Residuals under this structure. In the event of a Liquidation Shortfall, there would","page_number":160,"box":{"x":116,"y":453,"width":735,"height":12}},{"id":"6b9bd856-d323-4726-add5-52174473cffa","block_type":"box","text":"generally be no contractual recourse to the Fund’s assets if the Fund holds a non-recourse TOB","page_number":160,"box":{"x":116,"y":468,"width":718,"height":12}},{"id":"4a40309e-5cc3-4ccf-9935-f4b697ab056f","block_type":"box","text":"Residual. However, as described above, a Fund would bear the risk of loss with respect to any","page_number":160,"box":{"x":117,"y":484,"width":706,"height":12}},{"id":"e70add07-12f1-4569-b44d-cccddb0523c3","block_type":"box","text":"Liquidation Shortfall if it holds a recourse TOB Residual.","page_number":160,"box":{"x":117,"y":499,"width":420,"height":12}},{"id":"0f578fdd-d8e7-4848-a4c5-25e63f020221","block_type":"box","text":"The SEC and various federal banking and housing agencies adopted credit risk retention rules for","page_number":160,"box":{"x":116,"y":527,"width":730,"height":12}},{"id":"82fde6be-8fe8-4672-8a21-82a2d6b12fe2","block_type":"box","text":"securitizations (the “Risk Retention Rules”), which took effect in December 2016. The Risk Retention","page_number":160,"box":{"x":116,"y":543,"width":753,"height":12}},{"id":"09e3bf2c-93fc-4339-95f1-286b51074968","block_type":"box","text":"Rules require the sponsor of a TOB Trust to retain at least 5% of the credit risk of the underlying assets","page_number":160,"box":{"x":117,"y":558,"width":771,"height":12}},{"id":"ddd939f8-853e-422f-975e-7237aff8d8e4","block_type":"box","text":"supporting the TOB Trust’s Municipal Bonds. The Risk Retention Rules may adversely affect the","page_number":160,"box":{"x":116,"y":574,"width":721,"height":12}},{"id":"bec9959b-e185-4e89-ac63-11a366e11703","block_type":"box","text":"Fund’s ability to engage in TOB Trust transactions or increase the costs of such transactions in certain","page_number":160,"box":{"x":117,"y":589,"width":764,"height":12}},{"id":"fa888b0c-5c01-46ca-aa49-22712dea7e4b","block_type":"box","text":"circumstances.","page_number":160,"box":{"x":116,"y":605,"width":117,"height":9}},{"id":"0dd214a3-518a-49c3-b9df-0eccbbf45742","block_type":"box","text":"TOB Trust transactions constitute an important component of the municipal bond market. Accordingly,","page_number":160,"box":{"x":116,"y":633,"width":763,"height":12}},{"id":"e2ac5d09-837b-4be1-8f1e-ced68a69f0db","block_type":"box","text":"implementation of the Volcker Rule may adversely impact the municipal market, including through","page_number":160,"box":{"x":117,"y":648,"width":729,"height":12}},{"id":"cc3c9a21-6bc4-4061-a95d-19ceca9517a8","block_type":"box","text":"reduced demand for and liquidity of municipal bonds and increased financing costs for municipal","page_number":160,"box":{"x":117,"y":664,"width":713,"height":12}},{"id":"d9b6bdc6-2d96-4d43-bb9d-7ec6d2d87614","block_type":"box","text":"issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules","page_number":160,"box":{"x":117,"y":679,"width":749,"height":12}},{"id":"3b3a3467-b9cb-422d-ac3d-ea37f017d37a","block_type":"box","text":"on the TOB market and the overall municipal market is not yet certain.","page_number":160,"box":{"x":116,"y":695,"width":520,"height":12}},{"id":"05b2c91d-a98b-4ba9-9701-de43611dc061","block_type":"box","text":"Yields.","page_number":160,"box":{"x":118,"y":723,"width":47,"height":9}},{"id":"968a0c73-8786-4d01-9552-44f89f7d19e6","block_type":"box","text":"Yields on Municipal Bonds are dependent on a variety of factors, including the general","page_number":160,"box":{"x":171,"y":723,"width":639,"height":12}},{"id":"38981348-bfb9-4a6b-978c-39bda3810a5b","block_type":"box","text":"condition of the money market and of the municipal bond market, the size of a particular offering, the","page_number":160,"box":{"x":116,"y":738,"width":746,"height":12}},{"id":"fa62ac4e-794a-4ecc-9f9d-7e63b6111619","block_type":"box","text":"financial condition of the issuer, the maturity of the obligation and the rating of the issue. The ability of","page_number":160,"box":{"x":116,"y":754,"width":754,"height":12}},{"id":"668dd0b7-cb00-4f36-a5fc-16d582f1f585","block_type":"box","text":"a Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of","page_number":160,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"cc462fad-6b3d-4157-925e-3b294221951a","block_type":"box","text":"the securities in which the Fund invests to meet their obligations for the payment of interest and","page_number":160,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"b8f83463-7c1f-4a44-a388-4330b43694b6","block_type":"box","text":"principal when due. There are variations in the risks involved in holding Municipal Bonds, both within a","page_number":160,"box":{"x":117,"y":800,"width":757,"height":12}},{"id":"b0881b40-8e36-4fe7-97e0-ae7680429c05","block_type":"box","text":"particular classification and between classifications, depending on numerous factors. Furthermore, the","page_number":160,"box":{"x":117,"y":816,"width":758,"height":12}},{"id":"275b3090-d193-4823-a2f2-696ea28e4d59","block_type":"box","text":"rights of owners of Municipal Bonds and the obligations of the issuer of such Municipal Bonds may be","page_number":160,"box":{"x":117,"y":831,"width":758,"height":12}},{"id":"d5c8ea98-ce52-4397-a59e-5ec5f4b13beb","block_type":"box","text":"subject to applicable bankruptcy, insolvency and similar laws and court decisions affecting the rights of","page_number":160,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"d7cb288a-2280-4d4f-8d6c-e79d23f3d487","block_type":"box","text":"creditors generally and to general equitable principles, which may limit the enforcement of certain","page_number":160,"box":{"x":116,"y":862,"width":727,"height":12}},{"id":"7ed732f9-7d2b-4500-9ccf-78b683a01384","block_type":"box","text":"remedies.","page_number":160,"box":{"x":117,"y":878,"width":77,"height":9}},{"id":"7af3bd8d-8236-4269-9e61-b812b7a2e390","block_type":"box","text":"II-77","page_number":160,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7c7c0219-fc26-4a3c-a2d9-59b62bcacc51","block_type":"box","text":"NM1026U-6039989-160/256","page_number":160,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8f2fc502-ce09-4a86-9eaa-e5d0a8289d95","block_type":"box","text":"Variable Rate Demand Obligations (“VRDOs”).","page_number":161,"box":{"x":118,"y":87,"width":344,"height":12}},{"id":"12b62cba-de14-478a-9c9b-fdf2ce90ef6f","block_type":"box","text":"VRDOs are tax-exempt obligations that contain a","page_number":161,"box":{"x":464,"y":87,"width":374,"height":12}},{"id":"4e729d9f-a369-4f7e-9d5a-af0172b96533","block_type":"box","text":"floating or variable interest rate adjustment formula and a right of demand on the part of the holder","page_number":161,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"37ca1912-811d-4eda-a3ed-25d0a84d6c42","block_type":"box","text":"thereof to receive payment of the unpaid principal balance plus accrued interest upon a short notice","page_number":161,"box":{"x":116,"y":118,"width":745,"height":12}},{"id":"fb56c4f9-78a8-4611-b2b7-64f4e34130ad","block_type":"box","text":"period not to exceed seven days.","page_number":161,"box":{"x":117,"y":134,"width":250,"height":12}},{"id":"aee84811-6291-4acd-8c70-88e7597d33cd","block_type":"box","text":"There is the possibility that because of default or insolvency the demand feature of VRDOs may not be","page_number":161,"box":{"x":116,"y":162,"width":768,"height":12}},{"id":"40e30867-dc63-4cab-b469-c75e47d82857","block_type":"box","text":"honored. The interest rates are adjustable at periodic intervals to some prevailing market rate for","page_number":161,"box":{"x":117,"y":177,"width":721,"height":12}},{"id":"dee515f2-01a4-42cb-8bb6-6492bc5815e0","block_type":"box","text":"similar investments, such adjustment formula being calculated to maintain the market rate of the","page_number":161,"box":{"x":116,"y":193,"width":718,"height":12}},{"id":"d0235ed3-3471-4101-a0f8-d71a6f20ecf9","block_type":"box","text":"VRDOs at approximately the par value of the VRDOs on the adjustment date. The adjustments","page_number":161,"box":{"x":116,"y":208,"width":710,"height":12}},{"id":"86310792-8bff-43a7-b2ec-0e92886a65c2","block_type":"box","text":"typically are based upon the Securities Industry and Financial Markets Association (“SIFMA”) Index.","page_number":161,"box":{"x":116,"y":224,"width":746,"height":12}},{"id":"3871979c-5f0f-4cab-adaf-e75852b28c9a","block_type":"box","text":"Because of the interest rate adjustment formula on VRDOs, VRDOs are not comparable to fixed rate","page_number":161,"box":{"x":117,"y":252,"width":751,"height":12}},{"id":"eb14ae1f-e3dd-48dc-a2da-02971e009928","block_type":"box","text":"securities. During periods of declining interest rates, a Fund’s yield on a VRDO will decrease and its","page_number":161,"box":{"x":116,"y":268,"width":746,"height":12}},{"id":"f9d1380e-85fc-457d-bbfc-ef4b421382c2","block_type":"box","text":"shareholders will forego the opportunity for capital appreciation. During periods of rising interest rates,","page_number":161,"box":{"x":116,"y":283,"width":761,"height":12}},{"id":"54777312-e7f5-4ceb-aef5-22ac841a7e61","block_type":"box","text":"however, a Fund’s yield on a VRDO will increase and the Fund’s shareholders will have a reduced risk","page_number":161,"box":{"x":117,"y":299,"width":764,"height":12}},{"id":"546cb519-daf9-4e94-9a9c-b093c274b63f","block_type":"box","text":"of capital depreciation.","page_number":161,"box":{"x":116,"y":314,"width":173,"height":12}},{"id":"e0740106-ff39-4a42-b205-5dfabc7d1be5","block_type":"box","text":"Transactions in Financial Futures Contracts on Municipal Indexes.","page_number":161,"box":{"x":118,"y":343,"width":488,"height":12}},{"id":"ccd6e05c-fd57-4bb5-bfeb-e2236c6465f6","block_type":"box","text":"The Municipal Funds and certain","page_number":161,"box":{"x":608,"y":343,"width":253,"height":12}},{"id":"a8488a13-434e-41f9-bf5a-1efa5e049064","block_type":"box","text":"other funds deal in financial futures contracts based on a long-term municipal bond index developed by","page_number":161,"box":{"x":116,"y":358,"width":770,"height":12}},{"id":"0bd837bd-5fe3-48c9-b562-1238df6c5870","block_type":"box","text":"the Chicago Board of Trade (“CBT”) and The Bond Buyer (the “Municipal Bond Index”). The Municipal","page_number":161,"box":{"x":116,"y":374,"width":761,"height":12}},{"id":"0e6900ff-04f7-4217-8800-fa3c98d2d67d","block_type":"box","text":"Bond Index is comprised of 40 long-term, actively traded tax-exempt municipal revenue and general","page_number":161,"box":{"x":117,"y":389,"width":746,"height":12}},{"id":"9451c50a-1407-4b76-aa37-447cc3acd6b6","block_type":"box","text":"obligation bonds. Each bond included in the Municipal Bond Index must be rated A or higher by","page_number":161,"box":{"x":116,"y":405,"width":712,"height":12}},{"id":"f03f3d47-65c7-4b67-ab2e-1fe8d1a55924","block_type":"box","text":"Moody’s or S&P and must have a remaining maturity of 19 years or more. Twice a month new issues","page_number":161,"box":{"x":117,"y":420,"width":754,"height":12}},{"id":"ac27092d-daf1-4086-8ab2-d870a0addaf2","block_type":"box","text":"satisfying the eligibility requirements are added to, and an equal number of old issues are deleted from,","page_number":161,"box":{"x":116,"y":436,"width":771,"height":12}},{"id":"55c65e5f-d22d-48b9-b408-7c9b021672ed","block_type":"box","text":"the Municipal Bond Index. The value of the Municipal Bond Index is computed daily according to a","page_number":161,"box":{"x":116,"y":451,"width":734,"height":12}},{"id":"b664303f-d7a7-4fc6-b4a8-eb1f515f5e60","block_type":"box","text":"formula based on the price of each bond in the Municipal Bond Index, as evaluated by six","page_number":161,"box":{"x":116,"y":467,"width":670,"height":12}},{"id":"5b942a57-5d5b-4b06-bc41-a68d8a7d8ae5","block_type":"box","text":"dealer-to-dealer brokers.","page_number":161,"box":{"x":116,"y":482,"width":189,"height":10}},{"id":"cd4f7fce-56a6-4075-b2a5-23a3e4296b99","block_type":"box","text":"The Municipal Bond Index futures contract is traded only on the CBT. Like other contract markets, the","page_number":161,"box":{"x":116,"y":511,"width":760,"height":12}},{"id":"b9e4f0ef-96fc-4d12-a916-cc243d7676fb","block_type":"box","text":"CBT assures performance under futures contracts through a clearing corporation, a nonprofit","page_number":161,"box":{"x":117,"y":526,"width":694,"height":12}},{"id":"240b0601-a3ef-46e7-8677-3659a957cb5e","block_type":"box","text":"organization managed by the exchange membership that is also responsible for handling daily","page_number":161,"box":{"x":116,"y":542,"width":704,"height":12}},{"id":"fa608018-e498-45dc-a028-b14a7df8cda5","block_type":"box","text":"accounting of deposits or withdrawals of margin.","page_number":161,"box":{"x":116,"y":557,"width":364,"height":12}},{"id":"6dca0857-4307-41d9-9d24-927e7355293e","block_type":"box","text":"The particular municipal bonds comprising the index underlying the Municipal Bond Index financial","page_number":161,"box":{"x":116,"y":585,"width":735,"height":12}},{"id":"0a474ce7-bc0b-417e-a70a-2ea806145b32","block_type":"box","text":"futures contract may vary from the bonds held by a Municipal Fund. As a result, a Municipal Fund’s","page_number":161,"box":{"x":116,"y":601,"width":741,"height":12}},{"id":"ffd38feb-6638-457a-bb11-aa09d5bc21ab","block_type":"box","text":"ability to hedge effectively all or a portion of the value of its Municipal Bonds through the use of such","page_number":161,"box":{"x":116,"y":616,"width":749,"height":12}},{"id":"e9662015-e91a-442e-a531-63b9b39bba3e","block_type":"box","text":"financial futures contracts will depend in part on the degree to which price movements in the index","page_number":161,"box":{"x":116,"y":632,"width":734,"height":12}},{"id":"ab911196-c3b5-47ef-bb8e-6b2a13804472","block_type":"box","text":"underlying the financial futures contract correlate with the price movements of the Municipal Bonds","page_number":161,"box":{"x":117,"y":647,"width":737,"height":13}},{"id":"e8acc5dc-f51a-47d2-84d1-a23b5be15539","block_type":"box","text":"held by the Fund. The correlation may be affected by disparities in the average maturity, ratings,","page_number":161,"box":{"x":117,"y":663,"width":712,"height":12}},{"id":"4cc8c40c-9fd5-4085-871d-e504e00964af","block_type":"box","text":"geographical mix or structure of a Municipal Fund’s investments as compared to those comprising the","page_number":161,"box":{"x":116,"y":678,"width":755,"height":13}},{"id":"9a7eedeb-f2ca-4c5c-b4ce-854d2e97554b","block_type":"box","text":"Municipal Bond Index and general economic or political factors. In addition, the correlation between","page_number":161,"box":{"x":117,"y":694,"width":736,"height":12}},{"id":"755cf7d8-62de-454b-a602-607a30bae4be","block_type":"box","text":"movements in the value of the Municipal Bond Index may be subject to change over time as additions","page_number":161,"box":{"x":117,"y":709,"width":753,"height":13}},{"id":"61077885-7a0f-4b48-a2a3-555a26e1b3e0","block_type":"box","text":"to and deletions from the Municipal Bond Index alter its structure. The correlation between futures","page_number":161,"box":{"x":116,"y":725,"width":725,"height":12}},{"id":"c5442b00-5eb6-45da-866c-0919d6dc2737","block_type":"box","text":"contracts on U.S. Government Securities and the Municipal Bonds held by a Municipal Fund may be","page_number":161,"box":{"x":116,"y":740,"width":745,"height":13}},{"id":"1314de4b-06ec-4e8d-85f7-77701c7d01c4","block_type":"box","text":"adversely affected by similar factors and the risk of imperfect correlation between movements in the","page_number":161,"box":{"x":116,"y":756,"width":740,"height":12}},{"id":"7b8a05b0-a771-461c-a1c6-402a9e8f6d56","block_type":"box","text":"prices of such futures contracts and the prices of Municipal Bonds held by a Municipal Fund may be","page_number":161,"box":{"x":117,"y":771,"width":740,"height":13}},{"id":"abf5e3f7-4d20-4035-9d85-c52af1cb5bf5","block_type":"box","text":"greater. Municipal Bond Index futures contracts were approved for trading in 1985. Trading in such","page_number":161,"box":{"x":116,"y":787,"width":732,"height":12}},{"id":"97a637a3-62ca-49aa-9127-96971307522d","block_type":"box","text":"futures contracts may tend to be less liquid than trading in other futures contracts. The trading of","page_number":161,"box":{"x":116,"y":802,"width":716,"height":13}},{"id":"1d06267a-c8a9-4d3d-b21b-9d3cc875f57b","block_type":"box","text":"futures contracts also is subject to certain market risks, such as inadequate trading activity, which","page_number":161,"box":{"x":116,"y":818,"width":723,"height":12}},{"id":"2807b777-4206-4186-a784-d51b45162feb","block_type":"box","text":"could at times make it difficult or impossible to liquidate existing positions.","page_number":161,"box":{"x":116,"y":833,"width":552,"height":13}},{"id":"e64edef1-14c5-46ba-b446-40fb16452c1b","block_type":"box","text":"Call Rights.","page_number":161,"box":{"x":117,"y":862,"width":83,"height":12}},{"id":"ecc9fe92-185d-4b7b-ac2c-82e4ba5269c8","block_type":"box","text":"A Fund may purchase a Municipal Bond issuer’s right to call all or a portion of such","page_number":161,"box":{"x":202,"y":862,"width":626,"height":12}},{"id":"54a213e8-be5f-4a60-91be-7bba8f22a4c8","block_type":"box","text":"Municipal Bond for mandatory tender for purchase (a “Call Right”). A holder of a Call Right may","page_number":161,"box":{"x":117,"y":877,"width":711,"height":12}},{"id":"aea1bedb-e81b-450b-93a5-dc44124c94f4","block_type":"box","text":"II-78","page_number":161,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b6c4d4fc-8b12-4aec-a23d-29115629fe0b","block_type":"box","text":"NM1026U-6039989-161/256","page_number":161,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2ff39ea3-91fd-430b-82fe-e7cbea2c2a83","block_type":"box","text":"exercise such right to require a mandatory tender for the purchase of related Municipal Bonds, subject","page_number":162,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"85dd9e29-910d-439d-b9f7-1681ff4ae9d5","block_type":"box","text":"to certain conditions. A Call Right that is not exercised prior to maturity of the related Municipal Bond","page_number":162,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"718f9f8d-78d0-4b69-beb5-62b2dcc6a5d4","block_type":"box","text":"will expire without value. The economic effect of holding both the Call Right and the related Municipal","page_number":162,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"c92cbbeb-6aa5-4318-a767-f152fde90906","block_type":"box","text":"Bond is identical to holding a Municipal Bond as a non-callable security. Certain investments in such","page_number":162,"box":{"x":117,"y":134,"width":748,"height":12}},{"id":"79df64ea-1db4-4b14-aeaf-22754b9ac92e","block_type":"box","text":"obligations may be illiquid.","page_number":162,"box":{"x":116,"y":149,"width":201,"height":12}},{"id":"01f2bb95-2b1c-4af9-ba75-358dc82024f1","block_type":"box","text":"Municipal Interest Rate Swap Transactions.","page_number":162,"box":{"x":116,"y":180,"width":323,"height":12}},{"id":"20ddc9ea-8ad0-4ed5-bd33-28a2966d4fb0","block_type":"box","text":"In order to hedge the value of a Fund against interest rate","page_number":162,"box":{"x":440,"y":180,"width":439,"height":12}},{"id":"3e226b6f-7a15-4adf-9650-ccd0e7242a3c","block_type":"box","text":"fluctuations or to enhance a Fund’s income, a Fund may enter into interest rate swap transactions such","page_number":162,"box":{"x":116,"y":196,"width":772,"height":12}},{"id":"2989fb46-c1da-46d3-8705-39a40c38155f","block_type":"box","text":"as Municipal Market Data AAA Cash Curve swaps (“MMD Swaps”) or Securities Industry and Financial","page_number":162,"box":{"x":116,"y":211,"width":769,"height":12}},{"id":"46c0742a-c8c5-4dd3-a453-9651b4324347","block_type":"box","text":"Markets Association Municipal Swap Index swaps (“SIFMA Swaps”). To the extent that a Fund enters","page_number":162,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"2010e745-4809-404b-9fd1-bc50122797a7","block_type":"box","text":"into these transactions, the Fund expects to do so primarily to preserve a return or spread on a","page_number":162,"box":{"x":117,"y":242,"width":708,"height":12}},{"id":"def5ca2d-e594-4b0e-ad35-f81fc262e46d","block_type":"box","text":"particular investment or portion of its portfolio or to protect against any increase in the price of","page_number":162,"box":{"x":117,"y":258,"width":699,"height":12}},{"id":"2de96251-92df-4205-b0b9-a3ca44e0183c","block_type":"box","text":"securities the Fund anticipates purchasing at a later date. A Fund intends to use these transactions","page_number":162,"box":{"x":116,"y":273,"width":741,"height":12}},{"id":"f9a0842a-409f-42de-9f14-e47994e09093","block_type":"box","text":"primarily as a hedge rather than as a speculative investment. However, a Fund also may invest in","page_number":162,"box":{"x":117,"y":289,"width":729,"height":12}},{"id":"feb832f7-4c13-48cc-b26e-41ce623d9fc7","block_type":"box","text":"MMD Swaps and SIFMA Swaps to enhance income or gain or to increase the Fund’s yield, for","page_number":162,"box":{"x":117,"y":304,"width":704,"height":12}},{"id":"5d683539-7f70-4977-bb83-cfcf28eba5f6","block_type":"box","text":"example, during periods of steep interest rate yield curves (","page_number":162,"box":{"x":116,"y":320,"width":441,"height":12}},{"id":"74873818-e0b1-42c5-84e7-775a90b3ec82","block_type":"box","text":"i.e.","page_number":162,"box":{"x":558,"y":320,"width":20,"height":9}},{"id":"ae44a8e4-0f20-42f4-9af1-29b41ec87b97","block_type":"box","text":", wide differences between short-term","page_number":162,"box":{"x":581,"y":320,"width":284,"height":11}},{"id":"12483d66-2963-408d-9687-cd47c04e80de","block_type":"box","text":"and long-term interest rates).","page_number":162,"box":{"x":116,"y":335,"width":221,"height":12}},{"id":"1231a066-5218-4820-b08e-76c5ee3610e1","block_type":"box","text":"A Fund may purchase and sell SIFMA Swaps in the SIFMA swap market. In a SIFMA Swap, a Fund","page_number":162,"box":{"x":116,"y":366,"width":747,"height":12}},{"id":"918f1c6d-6d9f-430b-9312-45fe98e81594","block_type":"box","text":"exchanges with another party their respective commitments to pay or receive interest (","page_number":162,"box":{"x":116,"y":382,"width":642,"height":12}},{"id":"f893484f-78e9-4f28-871a-97735c8b19d5","block_type":"box","text":"e.g.","page_number":162,"box":{"x":760,"y":384,"width":25,"height":10}},{"id":"03c051b8-f612-4b41-83d8-305ea7771068","block_type":"box","text":", an","page_number":162,"box":{"x":788,"y":384,"width":32,"height":9}},{"id":"4fd3465e-8ddd-4e95-bb78-713974e94f68","block_type":"box","text":"exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap","page_number":162,"box":{"x":116,"y":397,"width":717,"height":12}},{"id":"1d73add7-1d5e-4e56-80e1-6f4c643fc7ef","block_type":"box","text":"Index). Because the underlying index is a tax-exempt index, SIFMA Swaps may reduce cross-market","page_number":162,"box":{"x":117,"y":413,"width":755,"height":12}},{"id":"4c3c9ea1-7354-48d3-9d36-fdd879bd281a","block_type":"box","text":"risks incurred by a Fund and increase a Fund’s ability to hedge effectively. SIFMA Swaps are typically","page_number":162,"box":{"x":117,"y":428,"width":760,"height":12}},{"id":"bd85cc46-4fac-47bb-a0bd-f61412df4333","block_type":"box","text":"quoted for the entire yield curve, beginning with a seven day floating rate index out to 30 years. The","page_number":162,"box":{"x":116,"y":444,"width":745,"height":12}},{"id":"cd79bdf6-8f02-4e63-837f-97c048190423","block_type":"box","text":"duration of a SIFMA Swap is approximately equal to the duration of a fixed-rate Municipal Bond with","page_number":162,"box":{"x":116,"y":459,"width":747,"height":12}},{"id":"8a163ced-95ac-429f-bc86-5196656e66f2","block_type":"box","text":"the same attributes as the swap (","page_number":162,"box":{"x":116,"y":475,"width":247,"height":12}},{"id":"852dccfc-d7d5-454c-9554-edeaed902d9c","block_type":"box","text":"e.g.","page_number":162,"box":{"x":365,"y":477,"width":25,"height":10}},{"id":"d0ce6d48-d33e-467e-98eb-6b29ea62221c","block_type":"box","text":", coupon, maturity, call feature).","page_number":162,"box":{"x":393,"y":475,"width":240,"height":12}},{"id":"900aa9d7-8940-4f5c-9516-d2315b831ad6","block_type":"box","text":"A Fund may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap","page_number":162,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"3cf803e9-a9dc-4526-9cf2-c93f44f54bb4","block_type":"box","text":"permits a Fund to lock in a specified municipal interest rate for a portion of its portfolio to preserve a","page_number":162,"box":{"x":117,"y":521,"width":744,"height":12}},{"id":"d5cb51bc-db8a-4fea-8e1a-12c6a9c5cdb4","block_type":"box","text":"return on a particular investment or a portion of its portfolio as a duration management technique or to","page_number":162,"box":{"x":117,"y":537,"width":761,"height":12}},{"id":"e4f4d806-2d8c-4602-8de3-080042cabe37","block_type":"box","text":"protect against any increase in the price of securities to be purchased at a later date. By using an MMD","page_number":162,"box":{"x":117,"y":552,"width":771,"height":12}},{"id":"f5f9a84e-28d5-4268-bbdd-5e588572ce7c","block_type":"box","text":"Swap, a Fund can create a synthetic long or short position, allowing the Fund to select the most","page_number":162,"box":{"x":116,"y":568,"width":715,"height":12}},{"id":"1ac6c1c7-56ed-49c3-bf89-b3132d26feb7","block_type":"box","text":"attractive part of the yield curve. An MMD Swap is a contract between a Fund and an MMD Swap","page_number":162,"box":{"x":116,"y":583,"width":729,"height":12}},{"id":"1d4b0b5e-3416-4061-9193-f6760356571e","block_type":"box","text":"provider pursuant to which the parties agree to make payments to each other on a notional amount,","page_number":162,"box":{"x":117,"y":599,"width":744,"height":12}},{"id":"97498279-814b-4d13-96ae-ca7e1cba9d9e","block_type":"box","text":"contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or below a","page_number":162,"box":{"x":116,"y":614,"width":769,"height":12}},{"id":"d6650eb4-5884-45d8-ac51-f9b97c30043d","block_type":"box","text":"specified level on the expiration date of the contract. For example, if a Fund buys an MMD Swap and","page_number":162,"box":{"x":116,"y":630,"width":754,"height":12}},{"id":"26593f98-2f99-4af4-ae32-ee630927a1a0","block_type":"box","text":"the Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration","page_number":162,"box":{"x":116,"y":645,"width":763,"height":12}},{"id":"fbfe6101-0c23-405a-8847-191de0d0b5e0","block_type":"box","text":"date, the counterparty to the contract will make a payment to the Fund equal to the specified level","page_number":162,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"80656890-70f7-49b5-9a1a-d25f938f1ffc","block_type":"box","text":"minus the actual level, multiplied by the notional amount of the contract. If the Municipal Market Data","page_number":162,"box":{"x":117,"y":676,"width":746,"height":12}},{"id":"7098e108-ff46-40a5-80d7-d57c7ed09ac0","block_type":"box","text":"AAA General Obligation Scale is above the specified level on the expiration date, a Fund will make a","page_number":162,"box":{"x":116,"y":692,"width":746,"height":12}},{"id":"17388a9c-d47f-4141-8130-a3d1ae9c4c93","block_type":"box","text":"payment to the counterparty equal to the actual level minus the specified level, multiplied by the","page_number":162,"box":{"x":117,"y":707,"width":708,"height":12}},{"id":"ed1eba7b-4d4e-4886-ab5c-887fccddbc7a","block_type":"box","text":"notional amount of the contract.","page_number":162,"box":{"x":117,"y":723,"width":233,"height":9}},{"id":"1192c73d-cb51-491f-901f-94768daccee1","block_type":"box","text":"In connection with investments in SIFMA and MMD Swaps,","page_number":162,"box":{"x":117,"y":754,"width":438,"height":12}},{"id":"6efebfec-b3bc-4002-87c5-13ccfe4cbf18","block_type":"box","text":"there is a risk that municipal yields will","page_number":162,"box":{"x":561,"y":754,"width":283,"height":12}},{"id":"f28540f1-622f-4ff0-8b30-9225d821cfae","block_type":"box","text":"move in the opposite direction than anticipated by a Fund, which would cause the Fund to make","page_number":162,"box":{"x":117,"y":769,"width":711,"height":12}},{"id":"a270ecfe-0da8-4c42-9407-354f9dabdcb4","block_type":"box","text":"payments to its counterparty in the transaction that could adversely affect the Fund’s performance.","page_number":162,"box":{"x":117,"y":785,"width":729,"height":12}},{"id":"fc93cdf1-9e82-4cde-bcc7-48b3775a498c","block_type":"box","text":"Insured Municipal Bonds.","page_number":162,"box":{"x":117,"y":816,"width":186,"height":12}},{"id":"0658ad17-2de9-457f-b55e-dcff30afb125","block_type":"box","text":"Bonds purchased by a Fund may be covered by insurance that guarantees","page_number":162,"box":{"x":310,"y":816,"width":555,"height":12}},{"id":"162aed84-e8e1-4389-ba8f-a6e582c7fe5a","block_type":"box","text":"that interest payments on the bond will be made on time and the principal will be repaid when the bond","page_number":162,"box":{"x":116,"y":831,"width":768,"height":12}},{"id":"cafe1796-eb5f-495b-81f0-7e7a02312a65","block_type":"box","text":"matures. Either the issuer of the bond or the Fund purchases the insurance. Insurance is expected to","page_number":162,"box":{"x":117,"y":847,"width":755,"height":12}},{"id":"29b6614a-49fa-49d2-add6-dee80b375a16","block_type":"box","text":"protect the Fund against losses caused by a bond issuer’s failure to make interest or principal","page_number":162,"box":{"x":117,"y":862,"width":699,"height":12}},{"id":"f9f37b02-98ce-4676-84ac-37c62a503edb","block_type":"box","text":"payments. However, insurance does not protect the Fund or its shareholders against losses caused by","page_number":162,"box":{"x":117,"y":878,"width":767,"height":12}},{"id":"d37372b7-35eb-4339-8ec8-9b81810a4df6","block_type":"box","text":"II-79","page_number":162,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"70c6c241-ac5e-484a-92b6-02d4999e4241","block_type":"box","text":"NM1026U-6039989-162/256","page_number":162,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"866c8582-372a-49b5-ae3c-f4c4bf48f8f8","block_type":"box","text":"declines in a bond’s market value. Also, the Fund cannot be certain that any insurance company does","page_number":163,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"724a6353-af68-4bb8-857b-80a5b830d322","block_type":"box","text":"not make these payments. In addition, if the Fund purchases the insurance, it may pay the premiums,","page_number":163,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"626c48e9-23fc-4d1b-8f60-a70cd3bf2a09","block_type":"box","text":"which will reduce the Fund’s yield. The Fund seeks to use only insurance companies with claims","page_number":163,"box":{"x":116,"y":118,"width":721,"height":12}},{"id":"f664fe24-dde8-412e-9a8f-9939676230bc","block_type":"box","text":"paying ability, financial strength, or equivalent ratings of at least investment grade. However, if","page_number":163,"box":{"x":117,"y":134,"width":703,"height":12}},{"id":"c7fe1389-d0cf-4f19-b435-32a49d10d7de","block_type":"box","text":"insurance from insurers with these ratings is not available, the Fund may use insurance companies","page_number":163,"box":{"x":117,"y":149,"width":739,"height":12}},{"id":"bc0a8f20-1224-4c4b-b509-310355f22aae","block_type":"box","text":"with lower ratings or stop purchasing insurance or insured bonds. If a bond’s insurer fails to fulfill its","page_number":163,"box":{"x":116,"y":165,"width":742,"height":12}},{"id":"33da7f84-7c59-4d24-8880-b6a2f0391d46","block_type":"box","text":"obligations or loses its credit rating, the value of the bond could drop.","page_number":163,"box":{"x":116,"y":180,"width":517,"height":12}},{"id":"570f7aea-35ba-48e7-a265-bdec0e231563","block_type":"box","text":"Build America Bonds.","page_number":163,"box":{"x":116,"y":211,"width":159,"height":10}},{"id":"c114e216-0eb3-49f1-a5c6-f85d1b0aa1d6","block_type":"box","text":"If a Fund holds Build America Bonds, the Fund may be eligible to receive a U.S.","page_number":163,"box":{"x":276,"y":211,"width":604,"height":12}},{"id":"39426bb4-bb0c-4558-98bd-966add29fe36","block_type":"box","text":"federal income tax credit; however, the issuer of a Build America Bond may instead elect to receive a","page_number":163,"box":{"x":116,"y":227,"width":756,"height":12}},{"id":"7fe61fcd-a54a-400b-bc4f-48cd61448113","block_type":"box","text":"cash payment directly from the federal government in lieu of holders such as the fund receiving a tax","page_number":163,"box":{"x":116,"y":242,"width":752,"height":12}},{"id":"b068bc13-319f-4e1e-8ef8-51cd5b2ae05a","block_type":"box","text":"credit. The interest on Build America Bonds is taxable for U.S. federal income tax purposes. If the Fund","page_number":163,"box":{"x":116,"y":258,"width":772,"height":11}},{"id":"dd3925ce-28d9-4c95-8149-ce12e54ceebd","block_type":"box","text":"does receive tax credits from Build America Bonds or other tax credit bonds on one or more specified","page_number":163,"box":{"x":116,"y":273,"width":757,"height":12}},{"id":"85345184-a181-4578-aedc-6e9f562f758b","block_type":"box","text":"dates during the fund’s taxable year, and the Fund satisfies the minimum distribution requirement, the","page_number":163,"box":{"x":116,"y":289,"width":760,"height":12}},{"id":"ad02d923-514b-442c-98de-2d0c941cd154","block_type":"box","text":"Fund may elect for U.S. federal income tax purposes to pass through to shareholders tax credits","page_number":163,"box":{"x":117,"y":304,"width":719,"height":12}},{"id":"5fa8907d-3df3-4fb1-9e3e-c6a8fb27e5d6","block_type":"box","text":"otherwise allowable to the Fund for that year with respect to such bonds. A tax credit bond is defined in","page_number":163,"box":{"x":116,"y":320,"width":770,"height":12}},{"id":"ade72865-e150-4ef1-8f7d-424a6bfbbd0b","block_type":"box","text":"the Code as a “qualified tax credit bond” (which includes a qualified forestry conservation bond, a new","page_number":163,"box":{"x":116,"y":335,"width":761,"height":12}},{"id":"441f9584-1347-42b9-8f01-45fd00504110","block_type":"box","text":"clean renewable energy bond, a qualified energy conservation bond, or a qualified zone academy","page_number":163,"box":{"x":116,"y":351,"width":729,"height":12}},{"id":"7aaf6152-17be-4a3a-ac26-f580f360f5cc","block_type":"box","text":"bond, each of which must meet certain requirements specified in the Code), a “Build America Bond”","page_number":163,"box":{"x":117,"y":366,"width":744,"height":12}},{"id":"47d69b92-cc7e-4709-b7e4-636542201b13","block_type":"box","text":"(which includes certain qualified bonds issued before January 1, 2011) or certain other specified","page_number":163,"box":{"x":117,"y":382,"width":717,"height":12}},{"id":"1be6d06e-accb-4a79-a8e2-3b00ee29b440","block_type":"box","text":"bonds. If the Fund were to so elect, a shareholder would be required to include in income and would be","page_number":163,"box":{"x":117,"y":397,"width":771,"height":12}},{"id":"778006a9-0386-421f-a13a-7b05778a2ee2","block_type":"box","text":"entitled to claim as a tax credit an amount equal to a proportionate share of such credits, and such","page_number":163,"box":{"x":116,"y":413,"width":735,"height":12}},{"id":"d4b28aa1-61ff-46ba-a296-57173c067ad9","block_type":"box","text":"amount would be subject to withholding provisions of the Code. Certain limitations may apply on the","page_number":163,"box":{"x":116,"y":428,"width":746,"height":12}},{"id":"c2fc5107-5276-4c6c-b845-1a0fc8437baa","block_type":"box","text":"extent to which the credit may be claimed.","page_number":163,"box":{"x":116,"y":444,"width":318,"height":12}},{"id":"b79a1aa0-68c3-4ac8-9510-c3b5144ddf6d","block_type":"box","text":"Tax-Exempt Municipal Investments.","page_number":163,"box":{"x":118,"y":475,"width":263,"height":12}},{"id":"941eebaf-c374-4dbd-b50f-6b1d13f1406e","block_type":"box","text":"Certain Funds may hold tax-exempt municipal investments which","page_number":163,"box":{"x":382,"y":475,"width":494,"height":12}},{"id":"150a8cdb-3270-4a64-a27c-112c30883f8e","block_type":"box","text":"may be in the form of tender option bonds, variable rate demand obligations, participations, beneficial","page_number":163,"box":{"x":117,"y":490,"width":757,"height":12}},{"id":"536d8e36-5e38-436d-b4c9-502c7ddabc2c","block_type":"box","text":"interests in a trust, partnership interests or other forms. These investments are described in greater","page_number":163,"box":{"x":117,"y":506,"width":741,"height":12}},{"id":"21e86b66-4535-4deb-b872-fcd6ebecaed7","block_type":"box","text":"detail above in this section. Some of the structures used by certain Funds include interests in long-term","page_number":163,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"a87e5ab9-0a86-4923-baad-14634e16a18e","block_type":"box","text":"fixed-rate municipal debt obligations, held by a trustee or custodian, that are coupled with tender","page_number":163,"box":{"x":116,"y":537,"width":720,"height":12}},{"id":"b9ce098d-c56c-49c7-9f90-2ba4fc11b6b9","block_type":"box","text":"option, demand and other features when the tax-exempt municipal investments are created. Together,","page_number":163,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"84b2587e-ca63-445f-9c5f-9f930a95ac8e","block_type":"box","text":"these features entitle the holder of the interest to tender (or put) the underlying municipal debt","page_number":163,"box":{"x":116,"y":568,"width":701,"height":12}},{"id":"e1b22747-f03d-432d-9e7a-18f6046c20a0","block_type":"box","text":"obligation to a third party at periodic intervals and to receive the principal amount thereof.","page_number":163,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"a5285d13-3d29-4842-9b2d-433ba6d22588","block_type":"box","text":"In some cases, municipal debt obligations are represented by custodial receipts evidencing rights to","page_number":163,"box":{"x":117,"y":614,"width":745,"height":12}},{"id":"534a34a4-cfbb-4c47-9fc3-c71048ea46ee","block_type":"box","text":"receive specific future interest payments, principal payments, or both, on the underlying securities held","page_number":163,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"28f34546-65e4-4de1-ba8d-9f25c1e0b8f9","block_type":"box","text":"by the custodian. Under such arrangements, the holder of the custodial receipt has the option to tender","page_number":163,"box":{"x":117,"y":645,"width":769,"height":12}},{"id":"22bc0d98-0de2-4625-a5f0-db3fb7a63915","block_type":"box","text":"the underlying securities at their face value to the sponsor (","page_number":163,"box":{"x":116,"y":661,"width":440,"height":12}},{"id":"c3b4bab6-825c-4365-a904-b9831173adcd","block_type":"box","text":"e.g.","page_number":163,"box":{"x":557,"y":663,"width":26,"height":10}},{"id":"061fc924-3c8e-414f-941e-34a070cec600","block_type":"box","text":", a Fund, or a bank or broker-dealer or","page_number":163,"box":{"x":586,"y":661,"width":284,"height":11}},{"id":"08905ab6-a410-406d-b125-94693ce10412","block_type":"box","text":"other financial institution), which is paid periodic fees equal to the difference between the securities’","page_number":163,"box":{"x":116,"y":676,"width":738,"height":12}},{"id":"e5f1aa6e-db18-4c28-9681-478d0cc131f4","block_type":"box","text":"fixed coupon rate and the rate that would cause the securities, coupled with the tender option, to trade","page_number":163,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"17ae7be6-09ee-4c3d-8dab-c5254a696b59","block_type":"box","text":"at par on the date of a rate adjustment.","page_number":163,"box":{"x":116,"y":707,"width":289,"height":12}},{"id":"4e8cf867-cb37-4ee2-9fa9-26d05d57d305","block_type":"box","text":"A participation interest gives the Fund an undivided interest in a Municipal Bond in the proportion the","page_number":163,"box":{"x":116,"y":738,"width":747,"height":12}},{"id":"0285123c-395d-47bf-b829-e940abbb2d6c","block_type":"box","text":"Fund’s participation bears to the total principal amount of the Municipal Bond, and typically provides for","page_number":163,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"77077636-12f0-41b5-a28b-0a1c55375a62","block_type":"box","text":"a repurchase feature for all or any part of the full principal amount of the participation interest, plus","page_number":163,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"b87b5a04-b9d0-489e-9ed5-b8fc90b04fda","block_type":"box","text":"accrued interest. Trusts and partnerships are typically used to convert long-term fixed rate high quality","page_number":163,"box":{"x":116,"y":785,"width":759,"height":12}},{"id":"3a671816-d30e-4625-b0b3-c6e7b588352b","block_type":"box","text":"bonds of a single state or municipal issuer into variable or floating rate demand instruments.","page_number":163,"box":{"x":117,"y":800,"width":680,"height":12}},{"id":"d294ccf1-106b-4261-bceb-07c2192467b8","block_type":"box","text":"The Municipal Bond Funds may hold participation interests and custodial receipts for municipal debt","page_number":163,"box":{"x":116,"y":831,"width":746,"height":12}},{"id":"1b04c45d-4486-4a11-b75b-eda8467f37fe","block_type":"box","text":"obligations which give the holder the right to receive payment of principal subject to the conditions","page_number":163,"box":{"x":116,"y":847,"width":731,"height":12}},{"id":"d6625f1a-afe3-4739-b259-384f49cf1662","block_type":"box","text":"described above. The IRS has not ruled on whether the interest received on tax-exempt municipal","page_number":163,"box":{"x":116,"y":862,"width":732,"height":12}},{"id":"5ae01ea7-bc45-4afd-928a-2625a5783567","block_type":"box","text":"investments in the form of participation interests or custodial receipts is tax-exempt, and accordingly,","page_number":163,"box":{"x":117,"y":878,"width":751,"height":12}},{"id":"78bb5290-b0be-4e34-9548-4a74d9fb441e","block_type":"box","text":"II-80","page_number":163,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fe534c24-529a-49e7-8244-0cc86de9baf6","block_type":"box","text":"NM1026U-6039989-163/256","page_number":163,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"76cb8f5c-a732-4760-9028-541a1967315e","block_type":"box","text":"purchases of any such interests or receipts are based on the opinions of counsel to the sponsors of","page_number":164,"box":{"x":117,"y":87,"width":742,"height":12}},{"id":"38335311-2f30-4446-985e-0e93b4181783","block_type":"box","text":"such derivative securities. Neither a Fund nor its investment adviser or sub-advisers will review the","page_number":164,"box":{"x":116,"y":103,"width":738,"height":9}},{"id":"00b7a765-350e-4043-9fa2-868b44997bf8","block_type":"box","text":"proceedings related to the creation of any tax-exempt municipal investments or the basis for such","page_number":164,"box":{"x":117,"y":118,"width":728,"height":12}},{"id":"10350b8c-3b56-447a-8550-ad623422bcb4","block_type":"box","text":"opinions.","page_number":164,"box":{"x":116,"y":134,"width":72,"height":11}},{"id":"38242e2e-a675-4baa-a7b4-536ca5332345","block_type":"box","text":"Operational and Technology Risks.","page_number":164,"box":{"x":117,"y":165,"width":279,"height":12}},{"id":"16f3e07b-3c36-467d-b8e6-191ea7baa7d4","block_type":"box","text":"The Fund and the entities with which it interacts directly or","page_number":164,"box":{"x":397,"y":165,"width":442,"height":12}},{"id":"2c8de5c5-60fb-4416-b26a-420239cdc1fa","block_type":"box","text":"indirectly are susceptible to operational and technology risks, including those related to human errors,","page_number":164,"box":{"x":117,"y":180,"width":758,"height":12}},{"id":"7e7f8a18-1170-47a2-8aba-0b0ca4617d70","block_type":"box","text":"processing errors, communication errors, systems failures, cybersecurity incidents, and the use of","page_number":164,"box":{"x":117,"y":196,"width":731,"height":12}},{"id":"294ef94d-f752-4562-b096-765354a28d54","block_type":"box","text":"artificial intelligence and machine learning (“AI”), which may result in losses for the Fund and its","page_number":164,"box":{"x":116,"y":211,"width":713,"height":12}},{"id":"d4ddd4d9-0e33-455c-8e65-0db5eb0bce86","block_type":"box","text":"shareholders or impair the Fund’s operations. These entities include, but are not limited to, the Fund’s","page_number":164,"box":{"x":116,"y":227,"width":760,"height":11}},{"id":"37b2acb8-42d0-4241-aaac-28cd451da52b","block_type":"box","text":"adviser, administrator, distributor, other service providers (e.g., index and benchmark providers,","page_number":164,"box":{"x":116,"y":242,"width":716,"height":12}},{"id":"06131747-1751-4d33-9a9d-14d55a8cc9ed","block_type":"box","text":"accountants, custodians, and transfer agents), financial intermediaries, counterparties, market makers,","page_number":164,"box":{"x":116,"y":258,"width":768,"height":12}},{"id":"ac426a8e-fbd7-4808-a053-4749f170e2e3","block_type":"box","text":"Authorized Participants, listing exchanges, other financial market operators, and governmental","page_number":164,"box":{"x":116,"y":273,"width":706,"height":12}},{"id":"1eacfe6c-91b6-45bd-8819-05be80424e8b","block_type":"box","text":"authorities, as applicable. Operational and technology risks for the issuers in which the Fund invests","page_number":164,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"b3d359dc-8808-4d0e-819a-21b8bf594ae9","block_type":"box","text":"could also result in material adverse consequences for such issuers and may cause the Fund’s","page_number":164,"box":{"x":116,"y":304,"width":711,"height":12}},{"id":"8c558e79-a849-41bf-a7cc-98b3f3f74e78","block_type":"box","text":"investments in such issuers to lose value. The Fund may incur substantial costs in order to mitigate","page_number":164,"box":{"x":117,"y":320,"width":741,"height":12}},{"id":"9a93668a-8c65-42cc-a4b3-f3da2b2e5326","block_type":"box","text":"operational and technology risks.","page_number":164,"box":{"x":116,"y":335,"width":250,"height":12}},{"id":"b302c80b-5591-4567-b35f-c07c30571992","block_type":"box","text":"Cybersecurity incidents can result from deliberate attacks or unintentional events against an issuer in","page_number":164,"box":{"x":117,"y":366,"width":754,"height":12}},{"id":"89047b59-d502-4350-ae7a-241268be82af","block_type":"box","text":"which the Fund invests, the Fund or any of its service providers. They include, but are not limited to,","page_number":164,"box":{"x":116,"y":382,"width":746,"height":12}},{"id":"e64b3c04-1277-4800-a07c-a528658f91a0","block_type":"box","text":"gaining unauthorized access to systems, misappropriating assets or sensitive information, corrupting or","page_number":164,"box":{"x":116,"y":397,"width":772,"height":12}},{"id":"b7280321-4f8f-4bdd-9a09-bbb9b1e2dc35","block_type":"box","text":"destroying data, and causing operational disruption. Geopolitical tension may increase the scale and","page_number":164,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"82f7e3e3-f739-4e34-ad46-ddd75f187cc1","block_type":"box","text":"sophistication of deliberate attacks, particularly those from nation states or from entities with nation","page_number":164,"box":{"x":116,"y":428,"width":738,"height":12}},{"id":"c00c5511-794c-4a20-92ae-ea31f9e6c43c","block_type":"box","text":"state backing. Cybersecurity incidents may result in any of the following: financial losses; interference","page_number":164,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"84df0016-07f1-47c1-9ae6-9662c19849df","block_type":"box","text":"with the Fund’s ability to calculate its NAV; disclosure of confidential information; impediments to","page_number":164,"box":{"x":116,"y":459,"width":721,"height":12}},{"id":"7ab57f9e-93ca-417e-8b00-5b0d0c237ed2","block_type":"box","text":"trading; submission of erroneous trades by the Fund or erroneous subscription or redemption orders;","page_number":164,"box":{"x":116,"y":475,"width":754,"height":12}},{"id":"4e17d34c-a51d-4a91-a533-1976e1932d0a","block_type":"box","text":"the inability of the Fund or its service providers to transact business; violations of applicable privacy","page_number":164,"box":{"x":116,"y":490,"width":743,"height":12}},{"id":"0ba2bca9-698d-4819-be86-7c39e9f31b28","block_type":"box","text":"and other laws; regulatory fines; penalties; reputational damage; reimbursement or other compensation","page_number":164,"box":{"x":116,"y":506,"width":772,"height":12}},{"id":"44c0dc4e-7c0b-4e42-aae4-41fad53cf0b5","block_type":"box","text":"costs; and other legal and compliance expenses. Furthermore, cybersecurity incidents may render","page_number":164,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"d50b815a-8df3-4411-85ab-9392a20e2949","block_type":"box","text":"records of the Fund, including records relating to its assets and transactions, shareholder ownership of","page_number":164,"box":{"x":117,"y":537,"width":766,"height":12}},{"id":"41e38f9b-d1b6-44ab-8022-fe2850054592","block_type":"box","text":"Fund shares, and other data integral to the Fund’s functioning, inaccessible, inaccurate or incomplete.","page_number":164,"box":{"x":117,"y":552,"width":761,"height":12}},{"id":"cfcc9d78-831e-41c9-9333-24bc67024bec","block_type":"box","text":"Power outages, natural disasters, equipment malfunctions and processing errors that threaten","page_number":164,"box":{"x":117,"y":568,"width":702,"height":12}},{"id":"0cf58aed-2afc-432a-8b3c-751741f28bb4","block_type":"box","text":"information and technology systems relied upon by the Fund or its service providers, as well as market","page_number":164,"box":{"x":117,"y":583,"width":766,"height":12}},{"id":"ce4db54c-8d38-4262-b709-c74af65449f4","block_type":"box","text":"events that occur at a pace that overloads these systems, may also disrupt business operations or","page_number":164,"box":{"x":116,"y":599,"width":735,"height":12}},{"id":"39fd4e0e-a4de-48e2-8ce0-df01e6a275c2","block_type":"box","text":"impact critical data. Recent advances in AI technology pose risks to the Fund and its portfolio","page_number":164,"box":{"x":117,"y":614,"width":696,"height":12}},{"id":"311bd32c-69e2-4d91-8d06-97b38164ed1a","block_type":"box","text":"investments. These advancements could harm the Fund and its portfolio investments by reducing the","page_number":164,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"b1bf41a7-2280-4c0e-b4fb-da40b73535c5","block_type":"box","text":"demand for both the technology and software offerings of the Fund’s portfolio investments.","page_number":164,"box":{"x":116,"y":645,"width":677,"height":12}},{"id":"17179594-242b-4526-8318-f4dcb8b56885","block_type":"box","text":"Additionally, these advancements could significantly disrupt the Fund’s portfolio investments and","page_number":164,"box":{"x":116,"y":661,"width":716,"height":12}},{"id":"0967e17a-7865-42c3-abbd-1643f5e864fa","block_type":"box","text":"subject them to increased competition, which could have a material adverse effect on business,","page_number":164,"box":{"x":116,"y":676,"width":708,"height":12}},{"id":"d12fae9c-167f-49d0-b7ea-3dbc6ba6653f","block_type":"box","text":"financial condition, and results of operations. AI technology advancements, including efficiency","page_number":164,"box":{"x":116,"y":692,"width":703,"height":12}},{"id":"4e43c293-eba9-4209-a3f8-a05c47405bbf","block_type":"box","text":"improvements, without related increases in the adoption and development of such technologies, could","page_number":164,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"af3abc23-b179-4fe0-9b91-e626fcd3b19e","block_type":"box","text":"also negatively impact demand for, and the valuation of, digital infrastructure assets.","page_number":164,"box":{"x":116,"y":723,"width":624,"height":12}},{"id":"ccaf1188-1df9-42c9-bf18-4c9d4ea1d2fd","block_type":"box","text":"The Fund and its portfolio investments could be exposed to the risks of AI technology if third-party","page_number":164,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"7dafec9f-251d-4412-a8b2-2720b9e74653","block_type":"box","text":"service providers or any counterparties, whether or not known to the Fund, also use AI technology in","page_number":164,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"64c1ba73-dffc-4793-9738-1011695346ee","block_type":"box","text":"their business activities. The Fund and its service providers may not be in a position to control the use","page_number":164,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"9cb1e4f2-98e9-4bea-b2ff-59f4276aa5c3","block_type":"box","text":"of AI technology in third-party products or services.","page_number":164,"box":{"x":116,"y":800,"width":377,"height":12}},{"id":"6ee9480c-ad1f-404c-b551-e042ecb70b3e","block_type":"box","text":"Use of AI technology could include the input of confidential information in contravention of applicable","page_number":164,"box":{"x":117,"y":831,"width":750,"height":12}},{"id":"be255553-5fcf-4331-8855-2ec3a8ddd5d6","block_type":"box","text":"policies, contractual or other obligations or restrictions, resulting in such confidential information","page_number":164,"box":{"x":117,"y":847,"width":713,"height":12}},{"id":"9b5422ca-18ca-4fac-acc5-2c4773719f5f","block_type":"box","text":"becoming accessible by other third-party AI technology applications and users.","page_number":164,"box":{"x":117,"y":862,"width":589,"height":12}},{"id":"806b9c97-7669-447e-b3bb-7ddcb6bbb78d","block_type":"box","text":"II-81","page_number":164,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"ad189c06-c3e6-499f-aba5-89b574e1f671","block_type":"box","text":"NM1026U-6039989-164/256","page_number":164,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9ac38cda-be22-49e4-935a-04836f71557a","block_type":"box","text":"Independent of its context of use, AI technology is generally highly reliant on the collection and","page_number":165,"box":{"x":117,"y":87,"width":706,"height":12}},{"id":"768f7933-6000-4115-8ac4-4629cf475b14","block_type":"box","text":"analysis of large amounts of data, may incorporate biased or inaccurate data, and it is not possible or","page_number":165,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"07bd94f3-1359-4940-badf-37f973c463f5","block_type":"box","text":"practicable to incorporate all relevant data into the models that AI technology utilizes to operate.","page_number":165,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"5c9c4b9b-714b-4033-aa27-dc2a33655309","block_type":"box","text":"Certain data in such models will inevitably contain a degree of inaccuracy and error, or could otherwise","page_number":165,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"404c09f4-7a8c-432d-9826-50cc5798cfbe","block_type":"box","text":"be inadequate or flawed, which would be likely to degrade the effectiveness of AI technology. The","page_number":165,"box":{"x":117,"y":149,"width":729,"height":12}},{"id":"785f8378-ad40-4d3b-b520-240495bf6239","block_type":"box","text":"output or results of any such AI technologies may therefore be incomplete, erroneous, distorted or","page_number":165,"box":{"x":116,"y":165,"width":733,"height":12}},{"id":"88e416a9-996b-418c-9147-0ec4bf42a6ba","block_type":"box","text":"misleading. Further, AI tools may lack transparency as to how data is utilized and how outputs are","page_number":165,"box":{"x":117,"y":180,"width":731,"height":12}},{"id":"bd36286d-8f37-4123-9352-717c15806fd6","block_type":"box","text":"generated. AI technologies may also allow the unintended introduction of vulnerabilities into","page_number":165,"box":{"x":116,"y":196,"width":684,"height":12}},{"id":"b59681a2-fb45-4a93-893c-6104422e47b0","block_type":"box","text":"infrastructures and applications. To the extent that the Fund or its portfolio investments are exposed to","page_number":165,"box":{"x":117,"y":211,"width":764,"height":12}},{"id":"e53dc28d-1fa6-4ccc-b3c5-8941329c2fea","block_type":"box","text":"the risks of AI technology use, any such inaccuracies or errors could have adverse impacts on the","page_number":165,"box":{"x":116,"y":227,"width":732,"height":12}},{"id":"a4ee6344-7854-4036-be54-67edd3631bbb","block_type":"box","text":"Fund or its investments.","page_number":165,"box":{"x":117,"y":242,"width":182,"height":10}},{"id":"a914a80e-10e6-4826-a721-8bba689e16b7","block_type":"box","text":"Regulations related to AI technology could also impose certain obligations and costs related to","page_number":165,"box":{"x":117,"y":273,"width":705,"height":12}},{"id":"baa8b0e8-2784-40fe-bc30-33fa571090fa","block_type":"box","text":"monitoring and compliance. For example, in April 2023, the Federal Trade Commission, U.S.","page_number":165,"box":{"x":117,"y":289,"width":693,"height":12}},{"id":"5e05dd4a-8a29-4273-9274-b4afcb4e3e17","block_type":"box","text":"Department of Justice, Consumer Financial Protection Bureau, and U.S. Equal Employment","page_number":165,"box":{"x":117,"y":304,"width":686,"height":12}},{"id":"b2bf42ac-d748-492b-92f7-4ab645afdef9","block_type":"box","text":"Opportunity Commission released a joint statement on artificial intelligence demonstrating interest in","page_number":165,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"ece87413-5ed1-459a-b4b7-4f12620f1bb6","block_type":"box","text":"monitoring the development and use of automated systems and enforcement of their respective laws","page_number":165,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"de027e8c-d759-445d-8013-8f2e5d3cfe36","block_type":"box","text":"and regulations. In October 2023, an executive order established new standards for AI safety and","page_number":165,"box":{"x":116,"y":351,"width":729,"height":12}},{"id":"8e147554-02ff-46aa-8d02-ecfcfbf812e3","block_type":"box","text":"security. In addition to the U.S. regulatory framework, in 2024, the EU adopted the Artificial Intelligence","page_number":165,"box":{"x":116,"y":366,"width":769,"height":12}},{"id":"487c1243-961e-4313-92d9-b93bd8bc8120","block_type":"box","text":"Act, which applies to certain AI technology and the","page_number":165,"box":{"x":116,"y":382,"width":380,"height":12}},{"id":"bc52e9fa-57f2-4d50-baa9-61ce1063a51f","block_type":"box","text":"data used to train, test, and deploy them, which","page_number":165,"box":{"x":497,"y":382,"width":357,"height":12}},{"id":"c9db1616-5f75-45c6-bd38-0a81ee5081d5","block_type":"box","text":"may create additional compliance burdens, higher administrative costs, and significant penalties should","page_number":165,"box":{"x":117,"y":397,"width":770,"height":12}},{"id":"bbbbccd1-aefe-4195-bc6f-f37156f40f22","block_type":"box","text":"the Fund, the adviser, or the Fund’s portfolio investments fail to comply.","page_number":165,"box":{"x":116,"y":413,"width":537,"height":12}},{"id":"ff3563bc-bf6e-4e87-8a2e-f93e890f41e1","block_type":"box","text":"AI technology and its applications, including in the investment and financial sectors, continue to","page_number":165,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"2b304c70-d289-4ae2-8e66-98bcff07bc43","block_type":"box","text":"develop rapidly, and it is impossible to predict the future risks that may arise from such developments.","page_number":165,"box":{"x":116,"y":459,"width":762,"height":12}},{"id":"bcf92ff6-2e7e-4720-9328-c21d97b9d4b8","block_type":"box","text":"The full extent of current or future risks related thereto is not possible to predict, and the Fund may not","page_number":165,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"3d1a98f4-f9e1-48d4-ac71-a47f314750eb","block_type":"box","text":"be able to anticipate, prevent, mitigate, or remediate all of the potential risks, challenges, or impacts of","page_number":165,"box":{"x":117,"y":490,"width":763,"height":12}},{"id":"3b9d387f-b1cc-428f-a31d-c00d5359995f","block_type":"box","text":"such changes.","page_number":165,"box":{"x":116,"y":506,"width":113,"height":12}},{"id":"4f170182-4e8e-409d-89a4-ef6762c04347","block_type":"box","text":"While the Fund’s service providers are required to have appropriate operational, information security","page_number":165,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"3afa3d50-5d6f-489b-be2a-0d5d5ba38b68","block_type":"box","text":"and cybersecurity risk management policies and procedures, their methods of risk management may","page_number":165,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"156764bf-a3d5-4101-acc0-3fbd03b4c0cc","block_type":"box","text":"differ from those of the Fund in the setting of priorities, the personnel and resources available or the","page_number":165,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"29118582-4cdb-405d-888a-84e44168384c","block_type":"box","text":"effectiveness of relevant controls. The Fund and its adviser seek to reduce these risks through","page_number":165,"box":{"x":116,"y":583,"width":706,"height":12}},{"id":"37e4ecc2-c4d5-4575-845a-8270d196ed81","block_type":"box","text":"controls, procedures and oversight, including establishing business continuity plans and risk","page_number":165,"box":{"x":116,"y":599,"width":687,"height":12}},{"id":"b235f8b9-0e4b-4c5b-bbe5-e937cba4f223","block_type":"box","text":"management systems. However, there are inherent limitations in such plans and systems, including","page_number":165,"box":{"x":117,"y":614,"width":744,"height":12}},{"id":"679fb70f-20b8-4acd-9981-8b9f75d5d094","block_type":"box","text":"the possibility that certain risks that may affect the Fund have not been identified or may emerge in the","page_number":165,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"5efef2b6-98b1-42f1-a744-2802775505b5","block_type":"box","text":"future; that such plans and systems may not completely eliminate the occurrence or mitigate the","page_number":165,"box":{"x":116,"y":645,"width":719,"height":12}},{"id":"720f240c-d510-4c78-aca0-e1d13c61be75","block_type":"box","text":"effects of operational or information security disruptions or failures or of cybersecurity incidents; or that","page_number":165,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"cc4dc26c-2fc5-4f38-8a17-45e133160a52","block_type":"box","text":"prevention and remediation efforts will not be successful or that incidents will go undetected. The Fund","page_number":165,"box":{"x":117,"y":676,"width":760,"height":12}},{"id":"0eced1bf-c56b-48eb-ab3f-e1d466bc0762","block_type":"box","text":"cannot control the systems, information security or other cybersecurity of the issuers in which it invests","page_number":165,"box":{"x":116,"y":692,"width":762,"height":12}},{"id":"f5a22514-e7d6-40d1-8473-aab4c77e0ede","block_type":"box","text":"or its service providers, counterparties, and other third parties whose activities affect the Fund.","page_number":165,"box":{"x":116,"y":707,"width":700,"height":12}},{"id":"5e2d5fb6-bae3-4d24-a5c3-a0b137a011f3","block_type":"box","text":"Lastly, the regulatory climate governing cybersecurity and data protection is developing quickly and","page_number":165,"box":{"x":117,"y":738,"width":735,"height":12}},{"id":"75589d7e-492e-49e5-9f8f-22abb4d9cb7b","block_type":"box","text":"may vary considerably across jurisdictions. Regulators continue to develop new rules and standards","page_number":165,"box":{"x":117,"y":754,"width":742,"height":12}},{"id":"551372b2-72d1-4fa5-ae04-619fdcd6f739","block_type":"box","text":"related to cybersecurity and data protection. Compliance with evolving regulations can be demanding","page_number":165,"box":{"x":117,"y":769,"width":750,"height":12}},{"id":"2c49a192-c456-43a9-84d9-2af8bfc0129e","block_type":"box","text":"and costly, requiring substantial resources to monitor and implement required changes.","page_number":165,"box":{"x":116,"y":785,"width":647,"height":12}},{"id":"6b0566cd-08f2-4d5c-8612-39d84b7d9738","block_type":"box","text":"Participation Notes.","page_number":165,"box":{"x":116,"y":816,"width":157,"height":12}},{"id":"51a91a67-15c3-4cb6-a390-915afb008d82","block_type":"box","text":"A Fund may buy participation notes from a bank or broker-dealer (“issuer”) that","page_number":165,"box":{"x":279,"y":816,"width":586,"height":12}},{"id":"cc546df8-971f-44d8-992a-2a887868337f","block_type":"box","text":"entitle the Fund to a return measured by the change in value of an identified underlying security or","page_number":165,"box":{"x":116,"y":831,"width":733,"height":12}},{"id":"ce50fd3c-5dad-4dc7-8924-c83ab83f6507","block_type":"box","text":"basket of securities (collectively, the “underlying security”). Participation notes are typically used when","page_number":165,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"5ef7ae99-7708-44be-b16f-4e00e8b6b9dc","block_type":"box","text":"a direct investment in the underlying security is restricted due to country-specific regulations.","page_number":165,"box":{"x":116,"y":862,"width":692,"height":12}},{"id":"a34e28cc-e7a3-4637-b893-cc17a7d1c998","block_type":"box","text":"II-82","page_number":165,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"be008fff-0847-48a4-b1f4-4493e2f41571","block_type":"box","text":"NM1026U-6039989-165/256","page_number":165,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f0d4b5ff-8fca-4023-82ab-759a01418035","block_type":"box","text":"The Fund is subject to counterparty risk associated with each issuer. Investment in a participation note","page_number":166,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"d76c4ebc-1e99-4359-9fd1-e45d639a2bbd","block_type":"box","text":"is not the same as investment in the constituent shares of the company. A participation note represents","page_number":166,"box":{"x":117,"y":102,"width":771,"height":13}},{"id":"c971a5fb-e66d-445d-9292-04c1bd5a9f15","block_type":"box","text":"only an obligation of the issuer to provide the Fund the economic performance equivalent to holding","page_number":166,"box":{"x":116,"y":118,"width":744,"height":12}},{"id":"fe912488-0ac3-4bdb-83d0-5298ba0711d9","block_type":"box","text":"shares of an underlying security. A participation note does not provide any beneficial or equitable","page_number":166,"box":{"x":116,"y":134,"width":725,"height":12}},{"id":"11c1e047-1839-4880-8a9b-2d5f58d859d0","block_type":"box","text":"entitlement or interest in the relevant underlying security. In other words, shares of the underlying","page_number":166,"box":{"x":116,"y":149,"width":727,"height":12}},{"id":"04927c24-8ef5-43d0-8697-7d1f6896a78c","block_type":"box","text":"security are not in any way owned by the Fund. However, each participation note synthetically","page_number":166,"box":{"x":116,"y":165,"width":702,"height":12}},{"id":"4a26a967-ed29-4e57-bd39-f73462a0e39e","block_type":"box","text":"replicates the economic benefit of holding shares in the underlying security. Because a participation","page_number":166,"box":{"x":117,"y":180,"width":743,"height":12}},{"id":"53efc8b4-7995-4398-9c02-80ec46990d76","block_type":"box","text":"note is an obligation of the issuer, rather than a direct investment in shares of the underlying security, a","page_number":166,"box":{"x":117,"y":196,"width":770,"height":12}},{"id":"5e571279-b0bf-4d95-bfde-87068d531ed1","block_type":"box","text":"Fund may suffer losses potentially equal to the full value of the participation note if the issuer fails to","page_number":166,"box":{"x":117,"y":211,"width":745,"height":12}},{"id":"a69c1d77-e807-4b77-8ddb-cc4e224a5108","block_type":"box","text":"perform its obligations. A Fund attempts to mitigate that risk by purchasing only from issuers","page_number":166,"box":{"x":117,"y":227,"width":689,"height":12}},{"id":"ae993ef4-4b12-4fb6-b1ad-6bebd8179f74","block_type":"box","text":"determined to be creditworthy.","page_number":166,"box":{"x":116,"y":242,"width":231,"height":12}},{"id":"a93af564-dcc1-4ba3-9f9a-e35ba274cee0","block_type":"box","text":"The counterparty may, but is not required to, purchase the shares of the underlying security to hedge","page_number":166,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"862a5199-8526-46e7-b687-5b80768314b6","block_type":"box","text":"its obligation. A Fund may, but is not required to, purchase credit protection against the default of the","page_number":166,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"05b7fb01-f356-496b-95ea-e8128acc7977","block_type":"box","text":"issuer. When the participation note expires or a Fund exercises the participation note and closes its","page_number":166,"box":{"x":117,"y":304,"width":742,"height":12}},{"id":"fbac3c02-32c8-4c7c-869b-dc3ad9e908b5","block_type":"box","text":"position, the Fund receives a payment that is based upon the then-current value of the underlying","page_number":166,"box":{"x":117,"y":320,"width":728,"height":12}},{"id":"4ecc5daa-8817-4db8-b7ca-7e103765b927","block_type":"box","text":"security converted into U.S. dollars (less transaction costs). The price, performance and liquidity of a","page_number":166,"box":{"x":116,"y":335,"width":751,"height":12}},{"id":"063ead06-8b32-4024-a25e-297f57452a86","block_type":"box","text":"participation note are all linked directly to the underlying security. A Fund’s ability to redeem or","page_number":166,"box":{"x":117,"y":351,"width":704,"height":12}},{"id":"79efd5a0-1c29-441a-8c24-fbe8cfbd43ed","block_type":"box","text":"exercise a participation note generally is dependent on the liquidity in the local trading market for the","page_number":166,"box":{"x":116,"y":366,"width":750,"height":12}},{"id":"4cb75dbb-c3bc-4b25-8578-7efb605e96ba","block_type":"box","text":"security underlying the participation note.","page_number":166,"box":{"x":116,"y":382,"width":310,"height":12}},{"id":"1ae02473-4228-4cb9-ba24-785ae19fbcd7","block_type":"box","text":"Portfolio Turnover Rates.","page_number":166,"box":{"x":116,"y":413,"width":201,"height":9}},{"id":"9ff6d66d-be35-4104-9a54-6ce2dec27a7e","block_type":"box","text":"A Fund’s annual portfolio turnover rate will not be a factor preventing a sale","page_number":166,"box":{"x":318,"y":413,"width":569,"height":12}},{"id":"d535e83d-df90-4936-a57e-2cd97a7e7ea8","block_type":"box","text":"or purchase when the Manager believes investment considerations warrant such sale or purchase.","page_number":166,"box":{"x":116,"y":428,"width":738,"height":12}},{"id":"e2ba7215-615c-4aa6-96ef-432f69af045f","block_type":"box","text":"Although certain Funds will use an approach to investing that is largely a passive, indexing approach,","page_number":166,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"202cac4e-c989-47dd-83d5-9c8d67294563","block_type":"box","text":"such Funds may engage in a substantial number of portfolio transactions. With respect to these Funds,","page_number":166,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"8bbaccda-edcf-4bc0-9a5a-36fb7ee31211","block_type":"box","text":"the rate of portfolio turnover will be a limiting factor when the Manager considers whether to purchase","page_number":166,"box":{"x":116,"y":475,"width":759,"height":12}},{"id":"8a53a935-a37d-4668-ab96-e7890b0f45d6","block_type":"box","text":"or sell securities for a Fund only to the extent that the Manager will consider the impact of transaction","page_number":166,"box":{"x":116,"y":490,"width":756,"height":12}},{"id":"c76dc9bf-d53a-4812-a4fb-82180cc4d9e9","block_type":"box","text":"costs on a Fund’s tracking error. Portfolio turnover may vary greatly from year to year as well as within","page_number":166,"box":{"x":116,"y":506,"width":765,"height":12}},{"id":"0c1b7371-b216-4a46-a29a-1e2005c6b06f","block_type":"box","text":"a particular year. High portfolio turnover (","page_number":166,"box":{"x":116,"y":521,"width":305,"height":12}},{"id":"8b967677-3996-4257-9921-37b8d2db2347","block_type":"box","text":"i.e.","page_number":166,"box":{"x":422,"y":521,"width":21,"height":10}},{"id":"1e048980-c349-4f9e-a8b0-631801ecf6df","block_type":"box","text":", 100% or more) may result in increased transaction costs","page_number":166,"box":{"x":446,"y":521,"width":433,"height":12}},{"id":"6d84a7af-2b1e-41d3-9471-28cf3c6f063b","block_type":"box","text":"to a Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale","page_number":166,"box":{"x":116,"y":537,"width":759,"height":12}},{"id":"d2e7afc5-0fdf-443c-9678-ac1464173fd4","block_type":"box","text":"of the securities and reinvestment in other securities. The sale of a Fund’s securities may result in the","page_number":166,"box":{"x":116,"y":552,"width":759,"height":12}},{"id":"a8c16f05-972c-43e0-8f2a-fc1aa7fa8d0e","block_type":"box","text":"recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short","page_number":166,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"6e30c190-184c-40cd-b757-d82628ebe81e","block_type":"box","text":"term capital gain or loss. These effects of higher than normal portfolio turnover may adversely affect a","page_number":166,"box":{"x":116,"y":583,"width":761,"height":12}},{"id":"655e44af-d174-4246-9ec4-a124d8867a4d","block_type":"box","text":"Fund’s performance.","page_number":166,"box":{"x":117,"y":599,"width":158,"height":12}},{"id":"4c18f907-7f09-48ce-9d65-354eb69af335","block_type":"box","text":"Preferred Stock.","page_number":166,"box":{"x":116,"y":630,"width":129,"height":9}},{"id":"7a261463-db46-46c7-b557-3cca44708f28","block_type":"box","text":"Certain Funds may invest in preferred stocks. Preferred stock has a preference over","page_number":166,"box":{"x":246,"y":630,"width":635,"height":12}},{"id":"5141638b-7ac8-469d-8474-43dd08cd0107","block_type":"box","text":"common stock in liquidation (and generally dividends as well) but is subordinated to bond holders and","page_number":166,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"503df682-4f71-4c1d-a09f-2f99767432c2","block_type":"box","text":"other creditors in all respects. As a general rule,","page_number":166,"box":{"x":116,"y":661,"width":355,"height":12}},{"id":"4126dc8b-95bb-4465-b9c1-742eec7ba061","block_type":"box","text":"the market value of preferred stock with a fixed","page_number":166,"box":{"x":477,"y":661,"width":348,"height":12}},{"id":"7a5a0a5e-e8b1-47ab-b253-ba593839a422","block_type":"box","text":"dividend rate and no conversion element varies inversely with interest rates and perceived credit risk,","page_number":166,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"b1036c50-588c-4a0c-84bf-10a999fbce8a","block_type":"box","text":"while the market price of convertible preferred stock generally also reflects some element of","page_number":166,"box":{"x":116,"y":692,"width":682,"height":12}},{"id":"77748c20-e19c-4570-88ca-469e798e872b","block_type":"box","text":"conversion value. Because preferred stock is junior to debt securities and other obligations of the","page_number":166,"box":{"x":116,"y":707,"width":720,"height":12}},{"id":"3f512001-5bc7-4fe9-b8db-1c3962130b5e","block_type":"box","text":"issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a","page_number":166,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"326bc6c0-c7ed-48fe-819c-f09eb19f2eba","block_type":"box","text":"preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike","page_number":166,"box":{"x":117,"y":738,"width":720,"height":12}},{"id":"30f21f5e-c331-4bb5-80f0-a9d9862ad121","block_type":"box","text":"interest payments on debt securities, preferred stock dividends are payable only if declared by the","page_number":166,"box":{"x":117,"y":754,"width":726,"height":12}},{"id":"4de22264-dcfb-497d-9b4d-4765206bf59a","block_type":"box","text":"issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption","page_number":166,"box":{"x":117,"y":769,"width":743,"height":12}},{"id":"8908d861-c846-4653-b074-b6b8f73b4964","block_type":"box","text":"provisions.","page_number":166,"box":{"x":117,"y":785,"width":78,"height":12}},{"id":"57714b39-f0f2-4690-88b3-01392232931a","block_type":"box","text":"Tax-Exempt Preferred Shares.","page_number":166,"box":{"x":118,"y":816,"width":224,"height":12}},{"id":"71810855-59ea-4cbd-af68-4d429835fc3f","block_type":"box","text":"Certain Funds may invest in preferred interests of other investment","page_number":166,"box":{"x":350,"y":816,"width":497,"height":12}},{"id":"54c09607-d5fe-4d00-8658-0d5635f89861","block_type":"box","text":"funds that pay dividends that are exempt from regular U.S. federal income tax. Such funds in turn","page_number":166,"box":{"x":116,"y":831,"width":728,"height":12}},{"id":"444450f3-1876-4171-b5e4-32a6a5b2be83","block_type":"box","text":"invest in municipal bonds and other assets that pay interest or make distributions that are exempt from","page_number":166,"box":{"x":117,"y":847,"width":765,"height":12}},{"id":"0525a73a-97e3-4f37-a66f-c8caaede5bda","block_type":"box","text":"regular U.S. federal income tax, such as revenue bonds issued by state or local agencies to fund the","page_number":166,"box":{"x":117,"y":862,"width":751,"height":12}},{"id":"4faf1bf6-cd86-4b99-b3c9-8c42892882f9","block_type":"box","text":"development of low-income, multi-family housing. Investment in such tax-exempt preferred shares","page_number":166,"box":{"x":116,"y":878,"width":733,"height":12}},{"id":"b59d35d2-541b-49d1-86ca-55e043593568","block_type":"box","text":"II-83","page_number":166,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a1ded020-772a-41f8-85da-42f5bd05caa9","block_type":"box","text":"NM1026U-6039989-166/256","page_number":166,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"017df7d8-8664-42dd-a503-ea4efd7e97cd","block_type":"box","text":"involves many of the same issues as investing in other investment companies. These investments also","page_number":167,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"6f4f8469-be4d-49db-bb4d-0c973ba8eb1f","block_type":"box","text":"have additional risks, including illiquid investments risk, the absence of regulation governing","page_number":167,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"02140f8f-c92d-413b-a95f-f4279f9ac0a6","block_type":"box","text":"investment practices, capital structure and leverage, affiliated transactions and other matters, and","page_number":167,"box":{"x":117,"y":118,"width":729,"height":12}},{"id":"b21dc188-82d0-46c7-9305-6416c235963e","block_type":"box","text":"concentration of investments in particular issuers or industries. The Municipal Bond Funds will treat","page_number":167,"box":{"x":116,"y":134,"width":740,"height":11}},{"id":"64e6774b-9c4c-4741-8f32-edd0b89752ba","block_type":"box","text":"investments in tax-exempt preferred shares as investments in municipal bonds.","page_number":167,"box":{"x":117,"y":149,"width":593,"height":12}},{"id":"cccf8be7-0ecb-40a1-b746-16dea5f991eb","block_type":"box","text":"Trust Preferred Securities.","page_number":167,"box":{"x":118,"y":180,"width":193,"height":10}},{"id":"90fad628-3213-40a2-a886-412f24183823","block_type":"box","text":"Certain Funds may invest in trust preferred securities. Trust preferred","page_number":167,"box":{"x":312,"y":180,"width":525,"height":12}},{"id":"7019e643-b85b-49a7-8270-e3f0c2c3ba97","block_type":"box","text":"securities are typically issued by corporations, generally in the form of interest bearing notes with","page_number":167,"box":{"x":116,"y":196,"width":724,"height":12}},{"id":"0e4d613f-70c4-4acd-a138-c64649d4e6b6","block_type":"box","text":"preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the","page_number":167,"box":{"x":117,"y":211,"width":751,"height":12}},{"id":"fb336446-cabd-4f99-b172-6940e18cc041","block_type":"box","text":"form of beneficial interests in subordinated debentures or similarly structured securities. The trust","page_number":167,"box":{"x":116,"y":227,"width":726,"height":12}},{"id":"d9896e7b-878c-42ea-afea-1ee6305907aa","block_type":"box","text":"preferred securities market consists of both fixed and adjustable coupon rate securities that are either","page_number":167,"box":{"x":117,"y":242,"width":758,"height":12}},{"id":"9c568a53-11ce-4dd0-ad0f-d91cf3fe1926","block_type":"box","text":"perpetual in nature or have stated maturity dates.","page_number":167,"box":{"x":117,"y":258,"width":370,"height":12}},{"id":"d855a23f-dbb0-468e-b504-f621f36da89c","block_type":"box","text":"Trust preferred securities are typically junior and fully subordinated liabilities of an issuer and benefit","page_number":167,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"b39b1114-2a49-488b-9dec-714e3d032c5b","block_type":"box","text":"from a guarantee that is junior and fully subordinated to the other liabilities of the guarantor. In addition,","page_number":167,"box":{"x":116,"y":304,"width":771,"height":12}},{"id":"1c5cba5b-eb87-46a4-83ad-9c41cf51d329","block_type":"box","text":"trust preferred securities typically permit an issuer to defer the payment of income for five years or","page_number":167,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"75377cbc-c35a-420f-aa90-13245cbd9a68","block_type":"box","text":"more without triggering an event of default. Because of their subordinated position in the capital","page_number":167,"box":{"x":117,"y":335,"width":713,"height":12}},{"id":"ede8b2b4-ef24-4d64-9c2d-a01c79d326b9","block_type":"box","text":"structure of an issuer, the ability to defer payments for extended periods of time without default","page_number":167,"box":{"x":116,"y":351,"width":708,"height":12}},{"id":"7946f912-23dd-4e1f-b42f-a4554ecc7cf1","block_type":"box","text":"consequences to the issuer, and certain other features (such as restrictions on common dividend","page_number":167,"box":{"x":116,"y":366,"width":725,"height":12}},{"id":"d7a8ae3f-ddc2-4f2c-bc84-ed4e97d3b616","block_type":"box","text":"payments by the issuer or ultimate guarantor when full cumulative payments on the trust preferred","page_number":167,"box":{"x":117,"y":382,"width":733,"height":12}},{"id":"b59d4ff8-c4fd-4136-90ca-03b46a95a28d","block_type":"box","text":"securities have not been made), these trust preferred securities are often treated as close substitutes","page_number":167,"box":{"x":116,"y":397,"width":756,"height":12}},{"id":"41b8eee3-70b4-462c-bb71-dacec2e18613","block_type":"box","text":"for traditional preferred securities, both by issuers and investors.","page_number":167,"box":{"x":116,"y":413,"width":483,"height":12}},{"id":"2ce22c09-baf0-4670-a67f-653b51ef9063","block_type":"box","text":"Trust preferred securities include but are not limited to trust originated preferred securities (“TOPRS","page_number":167,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"c33af374-b639-4803-a630-2266106ab339","block_type":"box","text":"®","page_number":167,"box":{"x":857,"y":443,"width":9,"height":7}},{"id":"3be35dfd-bd44-4eaf-a7d1-92817fc13c5c","block_type":"box","text":"”);","page_number":167,"box":{"x":867,"y":444,"width":20,"height":12}},{"id":"5acf1a64-0c73-4586-9e27-01ad25c77684","block_type":"box","text":"monthly income preferred securities (“MIPS","page_number":167,"box":{"x":117,"y":459,"width":322,"height":12}},{"id":"d6682f11-34ec-4328-a70e-31bc8d09777b","block_type":"box","text":"®","page_number":167,"box":{"x":439,"y":458,"width":10,"height":7}},{"id":"fa3b1f41-0ee4-4e5c-899b-fa79ca43e0f0","block_type":"box","text":"”); quarterly income bond securities (“QUIBS","page_number":167,"box":{"x":449,"y":459,"width":330,"height":12}},{"id":"97537633-f9f8-45e4-80b5-af01e4580523","block_type":"box","text":"®","page_number":167,"box":{"x":780,"y":458,"width":9,"height":7}},{"id":"488c2a0f-5749-470d-851b-1f51c196c79a","block_type":"box","text":"” ); quarterly","page_number":167,"box":{"x":790,"y":459,"width":95,"height":12}},{"id":"83380a3c-7c44-409f-93ec-7ddfa8b70a90","block_type":"box","text":"income debt securities (“QUIDS","page_number":167,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"3a4fa41b-7e1f-4096-98e5-6e80a0d64e7d","block_type":"box","text":"®","page_number":167,"box":{"x":352,"y":474,"width":10,"height":7}},{"id":"7e5588bd-c73e-4f5f-91d0-276b1eab9bd9","block_type":"box","text":"”); quarterly income preferred securities (“QUIPS","page_number":167,"box":{"x":362,"y":475,"width":361,"height":12}},{"id":"b937d3cd-4c0c-4605-832a-c3245827d73c","block_type":"box","text":"SM","page_number":167,"box":{"x":724,"y":475,"width":16,"height":6}},{"id":"328580f3-f075-441c-8bc5-f3a51d71c190","block_type":"box","text":"”); corporate trust","page_number":167,"box":{"x":741,"y":475,"width":133,"height":12}},{"id":"7806d32c-18fe-47d9-bb5a-559d6f2c9f8c","block_type":"box","text":"securities (“CORTS","page_number":167,"box":{"x":116,"y":490,"width":145,"height":12}},{"id":"ae8800fb-102b-47d5-b465-bce117da2e73","block_type":"box","text":"®","page_number":167,"box":{"x":262,"y":489,"width":9,"height":7}},{"id":"874d8ede-b223-4f55-b467-61b63f8a7208","block_type":"box","text":"”); public income notes (“PINES","page_number":167,"box":{"x":271,"y":490,"width":235,"height":12}},{"id":"00dfc3b8-8c0f-4e74-bea8-a53ca4c0398b","block_type":"box","text":"®","page_number":167,"box":{"x":507,"y":489,"width":9,"height":7}},{"id":"5dc1118c-4607-46a3-a86c-cab74c332caa","block_type":"box","text":"”); and other trust preferred securities.","page_number":167,"box":{"x":517,"y":490,"width":287,"height":12}},{"id":"f04af40d-6eec-4edd-8a7a-0b4435c270de","block_type":"box","text":"Trust preferred securities are typically issued with a final maturity date, although some are perpetual in","page_number":167,"box":{"x":116,"y":521,"width":766,"height":12}},{"id":"36750459-dca9-46c0-a448-76b12e0fddcb","block_type":"box","text":"nature. In certain instances, a final maturity date may be extended and/or the final payment of principal","page_number":167,"box":{"x":117,"y":537,"width":767,"height":12}},{"id":"acfc94ce-8103-40ce-890a-555deff99c42","block_type":"box","text":"may be deferred at the issuer’s option for a specified time without default. No redemption can typically","page_number":167,"box":{"x":117,"y":552,"width":760,"height":12}},{"id":"b89b9f69-9b3c-4b0a-bd6e-73517d5ee9e6","block_type":"box","text":"take place unless all cumulative payment obligations have been met, although issuers may be able to","page_number":167,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"91eb7c5e-2c79-4068-8b07-3b958f3c96af","block_type":"box","text":"engage in open-market repurchases without regard to whether all payments have been paid.","page_number":167,"box":{"x":116,"y":583,"width":693,"height":12}},{"id":"ebd38a8b-727c-40c0-b69b-54da139ae4dd","block_type":"box","text":"Many trust preferred securities are issued by trusts or other special purpose entities established by","page_number":167,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"3184b661-8f79-4c84-9a96-95cbc026444a","block_type":"box","text":"operating companies and are not a direct obligation of an operating company. At the time the trust or","page_number":167,"box":{"x":116,"y":630,"width":752,"height":12}},{"id":"a566b69f-19e1-432d-b6b9-a65f78396621","block_type":"box","text":"special purpose entity sells such preferred securities to investors, it purchases debt of the operating","page_number":167,"box":{"x":116,"y":645,"width":745,"height":12}},{"id":"7f91b389-60cf-4eba-9344-994aff9b3c00","block_type":"box","text":"company (with terms comparable to those of the trust or special purpose entity securities), which","page_number":167,"box":{"x":116,"y":661,"width":717,"height":12}},{"id":"501075a5-d352-4845-bfdc-71e5a85940c6","block_type":"box","text":"enables the operating company to deduct for tax purposes the interest paid on the debt held by the","page_number":167,"box":{"x":116,"y":676,"width":734,"height":12}},{"id":"b226553d-a045-4179-a1e6-fabd7b1b85a7","block_type":"box","text":"trust or special purpose entity. The trust or special purpose entity is generally required to be treated as","page_number":167,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"a4a71c65-fb96-4720-8d9d-5781cefc0ee1","block_type":"box","text":"transparent for U.S. federal income tax purposes such that the holders of the trust preferred securities","page_number":167,"box":{"x":116,"y":707,"width":757,"height":12}},{"id":"463776a3-c3ca-4712-8860-07e8e8760114","block_type":"box","text":"are treated as owning beneficial interests in the underlying debt of the operating company. Accordingly,","page_number":167,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"bf213495-cf37-44f5-ba23-ca2c4d9d51b8","block_type":"box","text":"payments on the trust preferred securities are treated as interest rather than dividends for U.S. federal","page_number":167,"box":{"x":117,"y":738,"width":757,"height":12}},{"id":"05fac880-5c37-4cb6-91b5-b23ad440ec39","block_type":"box","text":"income tax purposes. The trust or special purpose entity in turn would be a holder of the operating","page_number":167,"box":{"x":117,"y":754,"width":727,"height":12}},{"id":"9f44d306-898c-4843-a960-baca733a9307","block_type":"box","text":"company’s debt and would have priority with respect to the operating company’s earnings and profits","page_number":167,"box":{"x":116,"y":769,"width":748,"height":12}},{"id":"bd89af5f-e0c8-415a-a594-b445fd47a4ff","block_type":"box","text":"over the operating company’s common shareholders, but would typically be subordinated to other","page_number":167,"box":{"x":116,"y":785,"width":725,"height":12}},{"id":"866f253e-d93d-4cae-8f3c-001448addf67","block_type":"box","text":"classes of the operating company’s debt. Typically a preferred share has a rating that is slightly below","page_number":167,"box":{"x":116,"y":800,"width":756,"height":12}},{"id":"0d4b60a7-edfd-4b5c-9313-aba0b0a657d4","block_type":"box","text":"that of its corresponding operating company’s senior debt securities.","page_number":167,"box":{"x":116,"y":816,"width":506,"height":12}},{"id":"32e7d484-c953-4188-9e20-47704845b77f","block_type":"box","text":"Real Estate Investment Trusts (“REITs”).","page_number":167,"box":{"x":116,"y":847,"width":324,"height":12}},{"id":"080b6a0f-cb3a-4b85-babf-94c68cc61d38","block_type":"box","text":"In pursuing its investment strategy, a Fund may invest in","page_number":167,"box":{"x":441,"y":847,"width":430,"height":12}},{"id":"0e94072b-00e1-4557-8d99-044748d038b4","block_type":"box","text":"shares of REITs. REITs possess certain risks which differ from an investment in common stocks.","page_number":167,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"e6379375-639c-47dd-9a1b-751bfbe7fbbe","block_type":"box","text":"REITs are financial vehicles that pool investor’s capital to purchase or finance real estate. REITs may","page_number":167,"box":{"x":117,"y":878,"width":756,"height":12}},{"id":"0507347e-c2da-4841-9e4b-0eba4f5745ce","block_type":"box","text":"II-84","page_number":167,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b5d1f6f1-6d1a-4150-a693-17d3e77c119a","block_type":"box","text":"NM1026U-6039989-167/256","page_number":167,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f69686b5-2d06-4a40-8fdc-42fde088b71a","block_type":"box","text":"concentrate their investments in specific geographic areas or in specific property types,","page_number":168,"box":{"x":116,"y":87,"width":652,"height":12}},{"id":"68cbc866-57ee-4ade-b287-af8519d80840","block_type":"box","text":"i.e.","page_number":168,"box":{"x":768,"y":87,"width":21,"height":10}},{"id":"e0af0e52-0053-43a1-be4b-1e210e0bcc96","block_type":"box","text":", hotels,","page_number":168,"box":{"x":792,"y":87,"width":62,"height":11}},{"id":"eac9b966-5430-4dd5-a358-b01a1d16553f","block_type":"box","text":"shopping malls, residential complexes and office buildings.","page_number":168,"box":{"x":116,"y":102,"width":441,"height":13}},{"id":"f5f6f8c2-4f39-4c0e-b438-7a45e3d62b2b","block_type":"box","text":"REITs are subject to management fees and other expenses, and so a Fund that invests in REITs will","page_number":168,"box":{"x":117,"y":134,"width":752,"height":12}},{"id":"ce6e00d8-64c7-4b8e-b6dd-3bc0099a900d","block_type":"box","text":"bear its proportionate share of the costs of the REITs’ operations. There are three general categories","page_number":168,"box":{"x":117,"y":149,"width":754,"height":12}},{"id":"bdbdb133-0265-4923-8953-a1d379d5fbf2","block_type":"box","text":"of REITs: Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs invest primarily in direct fee","page_number":168,"box":{"x":116,"y":165,"width":763,"height":12}},{"id":"3cf89e97-53df-4b45-9f89-631d8612747e","block_type":"box","text":"ownership or leasehold ownership of real property, which derive most of their income from rents.","page_number":168,"box":{"x":116,"y":180,"width":721,"height":12}},{"id":"1e731127-a901-42d8-b091-fda8bc852878","block_type":"box","text":"Mortgage REITs invest mostly in mortgages on real estate, which may secure construction,","page_number":168,"box":{"x":117,"y":196,"width":681,"height":12}},{"id":"a4db4595-5486-45e2-9aaf-7e626044ed47","block_type":"box","text":"development or long-term loans; the main source of their income is mortgage interest payments.","page_number":168,"box":{"x":116,"y":211,"width":720,"height":12}},{"id":"877761cd-19a9-40c3-a13c-15ec28ae4456","block_type":"box","text":"Hybrid REITs hold both ownership and mortgage interests in real estate.","page_number":168,"box":{"x":117,"y":227,"width":541,"height":12}},{"id":"e34842f6-8c55-4939-b69e-833b191d38bc","block_type":"box","text":"Investing in REITs involves certain unique risks in addition to those risks associated with investing in","page_number":168,"box":{"x":117,"y":258,"width":749,"height":12}},{"id":"14c3800b-435b-426c-9b13-a5e1b0d8bef7","block_type":"box","text":"the real estate industry in general. The market value of REIT shares and the ability of the REITs to","page_number":168,"box":{"x":116,"y":273,"width":735,"height":12}},{"id":"15c7c01c-ff9e-4669-b188-055304239a0f","block_type":"box","text":"distribute income may be adversely affected by several factors, including rising interest rates, changes","page_number":168,"box":{"x":116,"y":289,"width":765,"height":12}},{"id":"560f3b9f-80bd-4fb3-8ef4-179aa2f7982b","block_type":"box","text":"in the national, state and local economic climate and real estate conditions, occupancy and rental","page_number":168,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"e9140bea-e53d-4d86-8dbf-1818c8d5d947","block_type":"box","text":"rates, perceptions of prospective tenants of the safety, convenience and attractiveness of the","page_number":168,"box":{"x":117,"y":320,"width":695,"height":12}},{"id":"0eb2d972-258a-407c-8bc2-6e782aa0e503","block_type":"box","text":"properties, the ability of the owners to provide adequate management, maintenance and insurance, the","page_number":168,"box":{"x":117,"y":335,"width":770,"height":12}},{"id":"0495f141-2245-430f-befc-f55ccfa9714f","block_type":"box","text":"cost of complying with the Americans with Disabilities Act, increased competition from new properties,","page_number":168,"box":{"x":116,"y":351,"width":761,"height":12}},{"id":"30c13c29-0dd3-4566-b48e-98505317ca3f","block_type":"box","text":"the impact of present or future environmental legislation and compliance with environmental laws,","page_number":168,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"b3d5ab23-df39-40e6-a6a9-8544262db098","block_type":"box","text":"failing to maintain their exemptions from registration under the Investment Company Act, changes in","page_number":168,"box":{"x":116,"y":382,"width":749,"height":12}},{"id":"f609c9dc-bb8b-405b-96db-2dd38344b721","block_type":"box","text":"real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal","page_number":168,"box":{"x":117,"y":397,"width":733,"height":12}},{"id":"332cf29c-0e88-434f-b8bb-955b3e58edc8","block_type":"box","text":"policies, adverse changes in zoning laws and other factors beyond the control of the issuers of the","page_number":168,"box":{"x":117,"y":413,"width":733,"height":12}},{"id":"7b1b37b9-2c4f-4a3c-ac48-0e03923acbaa","block_type":"box","text":"REITs. To the extent that assets underlying a REIT are concentrated geographically, by property type,","page_number":168,"box":{"x":117,"y":428,"width":762,"height":12}},{"id":"de7656a1-fc53-41f5-b879-f4979f3fa246","block_type":"box","text":"or in certain other respects, these risks may be heightened.","page_number":168,"box":{"x":116,"y":444,"width":446,"height":12}},{"id":"a42ec805-ce76-45fa-8fc3-db76678d925d","block_type":"box","text":"In addition, distributions received by a Fund from REITs may consist of dividends, capital gains and/or","page_number":168,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"9d5a8bf5-a452-43ce-bf45-a305359843c0","block_type":"box","text":"return of capital. As REITs generally pay a higher rate of dividends (on a pre-tax basis) than operating","page_number":168,"box":{"x":117,"y":490,"width":760,"height":12}},{"id":"bcd639c9-d6cb-4a8c-8d9d-3900af5a04c8","block_type":"box","text":"companies, to the extent application of the Fund’s investment strategy results in the Fund investing in","page_number":168,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"42a14668-4b29-4608-980b-828e44be965f","block_type":"box","text":"REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely","page_number":168,"box":{"x":117,"y":521,"width":722,"height":12}},{"id":"6d65f74e-422c-47e2-8bcb-22f285db50cd","block_type":"box","text":"exceed the percentage of the Fund’s portfolio which is comprised of REIT shares. Ordinary REIT","page_number":168,"box":{"x":116,"y":537,"width":723,"height":12}},{"id":"829a349c-955b-454a-8891-8cd7d8bc7f23","block_type":"box","text":"dividends received by the Fund and distributed to the Fund’s shareholders will generally be taxable as","page_number":168,"box":{"x":116,"y":552,"width":762,"height":12}},{"id":"728948c8-508c-400d-984f-342cb66269fa","block_type":"box","text":"ordinary income and will not constitute “qualified dividend income.” However, a non-corporate taxpayer","page_number":168,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"f42ad049-142a-4e03-a165-e6c8f7c77e1d","block_type":"box","text":"who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for ordinary","page_number":168,"box":{"x":116,"y":583,"width":757,"height":12}},{"id":"5ef9d281-4a17-47a2-b584-9f7b87701399","block_type":"box","text":"REIT dividends, and a regulated investment company may report dividends as eligible for this","page_number":168,"box":{"x":117,"y":599,"width":698,"height":12}},{"id":"e030eeee-4619-4403-aff0-45269ce83cfd","block_type":"box","text":"deduction to the extent the regulated investment company’s income is derived from ordinary REIT","page_number":168,"box":{"x":116,"y":614,"width":731,"height":12}},{"id":"a4201b90-03d7-4900-81d4-89447ce53d2b","block_type":"box","text":"dividends (reduced by allocable regulated investment company expenses). A shareholder may treat","page_number":168,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"f032a3d5-16a9-4a72-aa68-d82007c6f38a","block_type":"box","text":"the dividends as such provided the regulated investment company and the shareholder satisfy","page_number":168,"box":{"x":116,"y":645,"width":704,"height":12}},{"id":"bf8d4b67-33ef-46a4-b2a1-17938458eb35","block_type":"box","text":"applicable holding period requirements.","page_number":168,"box":{"x":116,"y":661,"width":292,"height":12}},{"id":"8ce20e51-3f02-4cb2-b3ae-8372a02693f3","block_type":"box","text":"REITs (especially mortgage REITs) are also subject to interest rate risk. Rising interest rates may","page_number":168,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"fdcda80d-a4d9-4734-9ac8-886e31c414a5","block_type":"box","text":"cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the","page_number":168,"box":{"x":116,"y":707,"width":720,"height":12}},{"id":"b1c5069f-cc01-4219-8d6a-15010695cc67","block_type":"box","text":"market price of the equity securities issued by a REIT. Rising interest rates also generally increase the","page_number":168,"box":{"x":117,"y":723,"width":759,"height":12}},{"id":"23b4e0d9-95f4-446f-8efb-5b22eb6b6760","block_type":"box","text":"costs of obtaining financing, which could cause the value of a Fund’s REIT investments to decline.","page_number":168,"box":{"x":116,"y":738,"width":728,"height":12}},{"id":"e11af7ba-1025-4e19-b251-9b640ead3215","block_type":"box","text":"During periods when interest rates are declining, mortgages are often refinanced. Refinancing may","page_number":168,"box":{"x":117,"y":754,"width":733,"height":12}},{"id":"5de52692-c8d1-4bf4-9dfb-f676cfe167ac","block_type":"box","text":"reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment","page_number":168,"box":{"x":117,"y":769,"width":721,"height":12}},{"id":"dbda32ca-ac02-4405-b9e8-2498709058c0","block_type":"box","text":"under their mortgage loans and leases to generate cash to make distributions to their shareholders,","page_number":168,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"5b94b7a4-59db-4474-a195-6260fd584286","block_type":"box","text":"investments in REITs may be adversely affected by defaults on such mortgage loans or leases.","page_number":168,"box":{"x":117,"y":800,"width":706,"height":12}},{"id":"2bdcf50c-b11a-4bf7-b074-e48ab267077d","block_type":"box","text":"Investing in certain REITs, which often have small market capitalizations, may also involve the same","page_number":168,"box":{"x":117,"y":831,"width":741,"height":12}},{"id":"bd02ef1e-386b-42ca-991f-8eb21257e8e2","block_type":"box","text":"risks as investing in other small capitalization companies. REITs may have limited financial resources","page_number":168,"box":{"x":117,"y":847,"width":749,"height":12}},{"id":"ba56e24f-c505-47d0-9450-bc198e2cd94c","block_type":"box","text":"and their securities may trade less frequently and in limited volume and may be subject to more abrupt","page_number":168,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"b0617a52-bee0-4104-b86c-6ebd4b91d6f1","block_type":"box","text":"or erratic price movements than larger company securities. Historically, small capitalization stocks, such","page_number":168,"box":{"x":116,"y":878,"width":768,"height":12}},{"id":"4b62efa8-87bc-4ce7-a5d9-179f03c95192","block_type":"box","text":"II-85","page_number":168,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6be7d6c1-5223-48f0-afc4-d61470baa3f3","block_type":"box","text":"NM1026U-6039989-168/256","page_number":168,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"86d49247-63eb-4f8e-94c5-132e0c4b74da","block_type":"box","text":"as REITs, have been more volatile in price than the larger capitalization stocks such as those included","page_number":169,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"2d925321-f081-4c7b-b46e-ed1073251c6d","block_type":"box","text":"in the S&P 500 Index. The management of a REIT may be subject to conflicts of interest with respect to","page_number":169,"box":{"x":117,"y":102,"width":764,"height":13}},{"id":"47b7b9a9-3947-4f2b-93a9-03d67ccb4ee4","block_type":"box","text":"the operation of the business of the REIT and may be involved in real estate activities competitive with","page_number":169,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"61dd231a-8f09-4c90-8c9f-362689efb693","block_type":"box","text":"the REIT. REITs may own properties through joint ventures or in other circumstances in which the REIT","page_number":169,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"6b50ea4f-c2aa-4d37-b723-c0acd7c24ad7","block_type":"box","text":"may not have control over its investments. REITs may incur significant amounts of leverage.","page_number":169,"box":{"x":117,"y":149,"width":681,"height":12}},{"id":"4afc39d8-936c-4325-973e-7ab297d9d3fa","block_type":"box","text":"Market Risks/Recent Market Events.","page_number":169,"box":{"x":116,"y":180,"width":293,"height":10}},{"id":"8ab53187-53fc-48fc-8caf-863892b71b2f","block_type":"box","text":"Securities may decline in value due to factors affecting","page_number":169,"box":{"x":409,"y":180,"width":410,"height":12}},{"id":"65aaf5e4-1ea2-4587-892b-4caaf6ac04b4","block_type":"box","text":"securities markets generally or particular industries represented in the markets. The value of a security","page_number":169,"box":{"x":116,"y":196,"width":767,"height":12}},{"id":"73419ef1-4e37-476c-a850-7963fdc3002b","block_type":"box","text":"may decline due to general market conditions, economic trends or events that are not specifically","page_number":169,"box":{"x":117,"y":211,"width":725,"height":12}},{"id":"3f517063-7ad3-4fdb-beb1-e277fe2e1747","block_type":"box","text":"related to a company or to factors that affect a particular industry or industries, or factors that affect a","page_number":169,"box":{"x":117,"y":227,"width":754,"height":12}},{"id":"44b9dd56-2cec-4770-99fe-3a5003ffc90e","block_type":"box","text":"particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of","page_number":169,"box":{"x":117,"y":242,"width":748,"height":12}},{"id":"f3bfe0e6-e269-4434-b685-00b6b83b825e","block_type":"box","text":"industries, sector or asset class. The success of a Fund’s activities could be affected by interest rates,","page_number":169,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"e515a641-a9d3-48dd-b2bf-ef961cbe2c19","block_type":"box","text":"availability of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, economic","page_number":169,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"33fda580-ebd4-415e-b2ed-cdd62cfc3f72","block_type":"box","text":"sanctions, currency exchange controls, and local, regional or global events such as war, acts of","page_number":169,"box":{"x":116,"y":289,"width":714,"height":12}},{"id":"c979a07b-7bd1-4c1d-914b-145c10068bba","block_type":"box","text":"terrorism, natural and environmental disasters, the spread of infectious illness or other public health","page_number":169,"box":{"x":116,"y":304,"width":744,"height":12}},{"id":"e0818454-39bd-4c25-8902-3579462c755e","block_type":"box","text":"issues, recessions, or other events could have a significant impact on a Fund and its investments.","page_number":169,"box":{"x":117,"y":320,"width":730,"height":12}},{"id":"46cc0323-dd05-4bcf-a1e7-4c1ed34e8980","block_type":"box","text":"During a general economic downturn in the securities markets, multiple asset classes may be","page_number":169,"box":{"x":117,"y":335,"width":698,"height":12}},{"id":"87292338-0f6c-4bb2-9d19-c83d81f0ccf3","block_type":"box","text":"negatively affected. These factors may affect the level and volatility of securities prices and the liquidity","page_number":169,"box":{"x":117,"y":351,"width":768,"height":12}},{"id":"362eef0d-da0d-402b-8ece-c5482a2500e6","block_type":"box","text":"of a Fund’s investments, which could impair the Fund’s profitability or result in losses. A Fund may","page_number":169,"box":{"x":116,"y":366,"width":734,"height":12}},{"id":"acb4ed8d-210f-4061-bdfe-efdca9aadf11","block_type":"box","text":"maintain substantial trading positions that can be adversely affected by the level of volatility in the","page_number":169,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"e9cb63bb-61b0-4c92-a3f3-0a25f09090a3","block_type":"box","text":"financial markets; the larger the positions, the greater the potential for loss. Unpredictable or unstable","page_number":169,"box":{"x":116,"y":397,"width":758,"height":12}},{"id":"d9bf3788-4f45-423f-afc4-2035cf75ae26","block_type":"box","text":"market conditions may result in reduced opportunities to find suitable investments to deploy capital or","page_number":169,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"706fac6a-353d-48b4-8f2a-561c80ffb8c9","block_type":"box","text":"make it more difficult to exit and realize value","page_number":169,"box":{"x":117,"y":428,"width":339,"height":10}},{"id":"c04e131f-1fa0-40c8-b285-c2e7925c997b","block_type":"box","text":"from a Fund’s existing investments. It is important to","page_number":169,"box":{"x":456,"y":428,"width":394,"height":12}},{"id":"59c26313-108f-4708-8666-e7ae240057c3","block_type":"box","text":"understand that a Fund can incur material losses even if it reacts quickly to difficult market conditions","page_number":169,"box":{"x":117,"y":444,"width":754,"height":12}},{"id":"12150900-f944-4815-9bbb-975606ae8179","block_type":"box","text":"and there can be no assurance that a Fund will not suffer material adverse effects from broad and","page_number":169,"box":{"x":116,"y":459,"width":732,"height":10}},{"id":"20c86696-5795-4338-ab25-21c903204e0d","block_type":"box","text":"rapid changes in market conditions.","page_number":169,"box":{"x":117,"y":475,"width":268,"height":12}},{"id":"74f6e462-df8f-4be5-baa5-c706cc16bbc6","block_type":"box","text":"Periods of unusually high volatility in the financial","page_number":169,"box":{"x":117,"y":506,"width":359,"height":12}},{"id":"a49c4d74-1192-4d8d-aa3e-9663f1461ce1","block_type":"box","text":"markets and restrictive credit conditions, sometimes","page_number":169,"box":{"x":477,"y":506,"width":381,"height":11}},{"id":"131d1841-a91c-415f-98cc-6b9438e5445d","block_type":"box","text":"limited to a particular sector or a geography, can o","page_number":169,"box":{"x":117,"y":521,"width":364,"height":12}},{"id":"1dc345a7-058b-4634-aeb0-0453f64d809c","block_type":"box","text":"ccur. Some countries, including the United States,","page_number":169,"box":{"x":482,"y":521,"width":368,"height":12}},{"id":"e0432188-b98e-4692-8e5a-242b3018139d","block_type":"box","text":"have adopted and/or are considering the adoption of more","page_number":169,"box":{"x":117,"y":537,"width":422,"height":12}},{"id":"dc4e01ed-ad59-4c19-b57f-426176b4c6b2","block_type":"box","text":"protectionist trade policies, a move away from","page_number":169,"box":{"x":539,"y":537,"width":344,"height":12}},{"id":"03ebea5a-aeab-41b6-acd7-9b2f99d07fde","block_type":"box","text":"the tighter financial industry regulations that follow","page_number":169,"box":{"x":116,"y":552,"width":363,"height":12}},{"id":"6304732a-6520-41c6-a621-05ed89471d91","block_type":"box","text":"ed the financial crisis of","page_number":169,"box":{"x":480,"y":552,"width":174,"height":10}},{"id":"bded5d79-516c-436e-8fef-5b9a31dfc526","block_type":"box","text":"2008, and/or substantially","page_number":169,"box":{"x":654,"y":552,"width":192,"height":12}},{"id":"c7605aa5-8203-4c2b-b85a-eeefb281ee0e","block_type":"box","text":"reducing corporate taxes. The exact shape of these","page_number":169,"box":{"x":117,"y":568,"width":379,"height":12}},{"id":"d5e02a24-37f4-47f1-ac85-e49a57f6911c","block_type":"box","text":"policies is still being considered, but the equity and","page_number":169,"box":{"x":497,"y":568,"width":372,"height":12}},{"id":"2b8d6949-54d4-4221-a61d-06a8c6acc51d","block_type":"box","text":"debt markets may react strongly to expectations of c","page_number":169,"box":{"x":116,"y":583,"width":381,"height":12}},{"id":"a7357bf5-27ab-4072-bd0c-eb982b769e47","block_type":"box","text":"hange, which could increase volatility, especially if","page_number":169,"box":{"x":498,"y":583,"width":367,"height":12}},{"id":"401b13e3-b545-4ddf-b1c2-ab6b85615784","block_type":"box","text":"the market’s expectations are not borne out. A rise in","page_number":169,"box":{"x":116,"y":599,"width":384,"height":12}},{"id":"fc47848f-5092-4b5c-bfa8-4502f2be26bd","block_type":"box","text":"protectionist trade policies, and the possibility of","page_number":169,"box":{"x":501,"y":599,"width":357,"height":12}},{"id":"888e5ffc-a7e9-4476-8615-28220b75fb33","block_type":"box","text":"changes to some international trade agreements, coul","page_number":169,"box":{"x":116,"y":614,"width":392,"height":12}},{"id":"504dc083-c1dc-4de6-9cbc-ef1dfca93f1f","block_type":"box","text":"d affect the economies of many nations in ways","page_number":169,"box":{"x":509,"y":614,"width":350,"height":12}},{"id":"dc3278e9-fe18-4254-8dab-29f1c563a585","block_type":"box","text":"that cannot necessarily be foreseen at the present","page_number":169,"box":{"x":116,"y":630,"width":370,"height":12}},{"id":"c187221d-e38f-433a-b6fe-37449627995b","block_type":"box","text":"time. In addition, geopolitical and other risks, including","page_number":169,"box":{"x":486,"y":630,"width":398,"height":12}},{"id":"04f85da8-7699-4c29-97c7-99a0627904df","block_type":"box","text":"environmental and public health, may add to instability in world economies and markets generally.","page_number":169,"box":{"x":116,"y":645,"width":716,"height":12}},{"id":"71001a56-4bdb-46aa-b8f3-b38c41facbdb","block_type":"box","text":"Economies and financial markets throughout the world","page_number":169,"box":{"x":117,"y":661,"width":394,"height":12}},{"id":"d1b42fe0-6739-4a31-ac2a-5978075cc2a1","block_type":"box","text":"are increasingly interconnected. As a result,","page_number":169,"box":{"x":517,"y":661,"width":317,"height":12}},{"id":"962976c6-7151-4646-abed-e8a91a3b350d","block_type":"box","text":"whether or not a Fund invests in securities of issuers","page_number":169,"box":{"x":116,"y":676,"width":382,"height":10}},{"id":"b1c09f2a-5097-4f6e-a6c6-b9310b4af1db","block_type":"box","text":"located in or with significant exposure to countries","page_number":169,"box":{"x":504,"y":676,"width":361,"height":12}},{"id":"51455927-edc2-400c-936a-8f4fc12051e5","block_type":"box","text":"experiencing economic, political and/or financial di","page_number":169,"box":{"x":116,"y":692,"width":364,"height":12}},{"id":"71817749-701f-445b-91b2-3c6005789c03","block_type":"box","text":"fficulties, the value and liquidity of the Fund’s","page_number":169,"box":{"x":481,"y":692,"width":325,"height":12}},{"id":"a6854802-6539-4bdf-b022-57c4141c7ea8","block_type":"box","text":"investments may be negatively affected by such events.","page_number":169,"box":{"x":117,"y":707,"width":405,"height":12}},{"id":"d0b9d4d4-a70c-4d9c-99bb-b7be29efe191","block_type":"box","text":"Governments and regulators may take actions that affect the regulation of the Fund or the instruments","page_number":169,"box":{"x":117,"y":738,"width":749,"height":12}},{"id":"4d7ddedc-ca85-4c84-b79a-168b17dc7288","block_type":"box","text":"in which the Fund invests, or the issuers of such instruments, in ways that are unforeseeable. Future","page_number":169,"box":{"x":117,"y":754,"width":737,"height":12}},{"id":"e212553d-618d-478b-b3c6-11dc0c95a876","block_type":"box","text":"legislation or regulation or other governmental actions could limit or preclude the Fund’s abilities to","page_number":169,"box":{"x":117,"y":769,"width":722,"height":12}},{"id":"9eb83059-3acd-4cd7-ad6f-370ff73bd517","block_type":"box","text":"achieve its investment objectives or otherwise adversely impact an investment in the Fund. Political and","page_number":169,"box":{"x":116,"y":785,"width":761,"height":12}},{"id":"52286d0a-7135-4d8a-bf2c-4cdd94690c13","block_type":"box","text":"diplomatic events within the United States, including a contentious domestic political environment,","page_number":169,"box":{"x":116,"y":800,"width":718,"height":12}},{"id":"dc613e22-66ae-4da6-afda-5a2b6b216092","block_type":"box","text":"changes in political party control of one or more branches of the U.S. Government, the U.S.","page_number":169,"box":{"x":116,"y":816,"width":670,"height":12}},{"id":"78a73f04-f4a7-409e-a727-227be8cf29c4","block_type":"box","text":"Government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a","page_number":169,"box":{"x":117,"y":831,"width":765,"height":12}},{"id":"8ebedd77-4f94-4277-ace2-c3f59f191c8e","block_type":"box","text":"U.S. Government shutdown, and disagreements over, or threats not to increase, the U.S. Government’s","page_number":169,"box":{"x":117,"y":847,"width":767,"height":12}},{"id":"aa184a21-b0d9-4344-b470-05bf900b5c4e","block_type":"box","text":"borrowing limit (or “debt ceiling”), as well as political and diplomatic events abroad, may affect investor","page_number":169,"box":{"x":117,"y":862,"width":755,"height":12}},{"id":"3b4bf22b-0e46-4083-bff5-5f602b661360","block_type":"box","text":"and consumer confidence and may adversely impact financial markets and the broader economy,","page_number":169,"box":{"x":116,"y":878,"width":722,"height":12}},{"id":"f91da42c-f722-4478-8b7b-8c040b633da3","block_type":"box","text":"II-86","page_number":169,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c095a15e-6706-4ede-a816-3957fe984b14","block_type":"box","text":"NM1026U-6039989-169/256","page_number":169,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9bc4f90d-b50b-4dd3-9b7d-4c5cb4160af9","block_type":"box","text":"perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. Government debt","page_number":170,"box":{"x":117,"y":87,"width":732,"height":12}},{"id":"e5e73789-3ad7-4909-aac2-97e6545d1c04","block_type":"box","text":"obligations, or concerns about the U.S. Government’s credit quality in general, could have a substantial","page_number":170,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"c65458c5-5a7c-42fa-9af4-965b1cfcd08f","block_type":"box","text":"negative effect on the U.S. and global economies. For example, concerns about the U.S. Government’s","page_number":170,"box":{"x":117,"y":118,"width":764,"height":12}},{"id":"8ff839c8-a5e8-487c-b480-800e1ae7c35f","block_type":"box","text":"credit quality may cause increased volatility in the stock and bond markets, higher interest rates,","page_number":170,"box":{"x":116,"y":134,"width":712,"height":12}},{"id":"a27099f4-0abe-4fe1-8a9a-ba01d01c2f7e","block_type":"box","text":"reduced prices and liquidity of U.S. Treasury securities, and/or increased costs of various kinds of debt.","page_number":170,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"fae24f08-b9c1-44cc-9fbb-f20c5b980293","block_type":"box","text":"Moreover, although the U.S. Government has honored its credit obligations, there remains a possibility","page_number":170,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"fd7a30dc-71a0-4b68-a0e4-e6748fd8cb56","block_type":"box","text":"that the United States could default on its obligations. The consequences of such an unprecedented","page_number":170,"box":{"x":116,"y":180,"width":740,"height":12}},{"id":"34306099-ed56-4ad2-b01f-225f17fa689b","block_type":"box","text":"event are impossible to predict, but it is likely that a default by the United States would be highly","page_number":170,"box":{"x":116,"y":196,"width":709,"height":12}},{"id":"c4e1f356-d42b-4eb2-81a2-b8c6ca9c94f4","block_type":"box","text":"disruptive to the U.S. and global securities markets and could significantly impair the value of the Fund’s","page_number":170,"box":{"x":116,"y":211,"width":770,"height":12}},{"id":"601082c6-1806-4f78-8b48-3bb01cc4a378","block_type":"box","text":"investments.","page_number":170,"box":{"x":117,"y":227,"width":97,"height":9}},{"id":"3a587d32-cbbd-4721-9b02-959c7908948c","block_type":"box","text":"The COVID-19 pandemic resulted in significant market volatility, exchange suspensions and closures,","page_number":170,"box":{"x":116,"y":254,"width":761,"height":13}},{"id":"339f2de9-27c6-42a4-abf7-602024d8948e","block_type":"box","text":"declines in global financial markets, higher default rates, supply chain disruptions, and a substantial","page_number":170,"box":{"x":116,"y":270,"width":743,"height":12}},{"id":"f231a9ab-7235-4774-b54e-1fc861336d42","block_type":"box","text":"economic downturn in economies throughout the world. The impact of this coronavirus, and other","page_number":170,"box":{"x":116,"y":285,"width":727,"height":13}},{"id":"cc78cefb-02ad-46d3-b429-116fdc7bd017","block_type":"box","text":"epidemics and pandemics that may arise in the future, could affect the economies of many nations,","page_number":170,"box":{"x":116,"y":301,"width":741,"height":12}},{"id":"d75f6070-a920-4788-88e4-1db7d2a54c75","block_type":"box","text":"individual companies and the market in general in ways that cannot necessarily be foreseen at the","page_number":170,"box":{"x":117,"y":316,"width":733,"height":13}},{"id":"9ebeb1fd-6516-422e-9f35-249f4a029345","block_type":"box","text":"present time. These health crises may be short term or long term, and may exacerbate other pre","page_number":170,"box":{"x":117,"y":332,"width":721,"height":12}},{"id":"ebb6e11c-b355-479a-b720-471da76ce851","block_type":"box","text":"existing political, social and economic risks, disrupt normal market conditions and operations, and","page_number":170,"box":{"x":116,"y":348,"width":729,"height":12}},{"id":"712c28dd-da5c-4b04-95b1-cbaffd988878","block_type":"box","text":"negatively impact performance. In addition, the impact of infectious diseases in emerging developing or","page_number":170,"box":{"x":117,"y":363,"width":771,"height":12}},{"id":"8a4ed966-69b4-4d9c-9b5c-7cbb371f3161","block_type":"box","text":"emerging market countries may be greater due to less established health care systems.","page_number":170,"box":{"x":116,"y":379,"width":657,"height":12}},{"id":"0f6bed04-e110-4d0a-9076-8fa6d995d434","block_type":"box","text":"Legal and Regulatory Risks.","page_number":170,"box":{"x":116,"y":407,"width":208,"height":11}},{"id":"8abb11a1-9f2b-4026-aa56-0f92e20316be","block_type":"box","text":"The Manager is part of a larger firm with multiple business lines active in","page_number":170,"box":{"x":326,"y":406,"width":547,"height":12}},{"id":"63b1dde2-eff0-42f0-b097-4a147df0258a","block_type":"box","text":"multiple jurisdictions that are governed by a multitude of legal systems and regulatory regimes, some","page_number":170,"box":{"x":117,"y":422,"width":753,"height":12}},{"id":"289b8038-dd7e-4b8a-8cb7-3f5f5b613242","block_type":"box","text":"of which are new and evolving. As a result, the Funds and the Manager and its affiliates are subject to","page_number":170,"box":{"x":116,"y":437,"width":761,"height":12}},{"id":"5aa8ea19-a49c-4c6a-bf2f-1f63fd203808","block_type":"box","text":"extensive and sophisticated legal, tax and regulatory risks, including changing laws and regulations,","page_number":170,"box":{"x":116,"y":453,"width":746,"height":12}},{"id":"4ea621d9-9330-460b-a640-fba99382a2c1","block_type":"box","text":"developing interpretations of such laws and regulations, as well as existing laws, and increased","page_number":170,"box":{"x":116,"y":468,"width":712,"height":12}},{"id":"f481d98a-170d-4ad9-9210-b3c950fdea60","block_type":"box","text":"scrutiny by regulators and law enforcement authorities. Unexpected economic, political, regulatory and","page_number":170,"box":{"x":116,"y":484,"width":766,"height":12}},{"id":"191494bc-27ea-4afb-9996-744a95d0d3c3","block_type":"box","text":"diplomatic events within the United States and abroad can trigger new and complex regulations that","page_number":170,"box":{"x":116,"y":499,"width":745,"height":13}},{"id":"d0e8ab15-d945-46d5-b311-ee2a1b2341b7","block_type":"box","text":"the Manager and/or the Funds may need to comply with. The implementation of changes to comply","page_number":170,"box":{"x":116,"y":515,"width":742,"height":12}},{"id":"a7a866d4-702b-4f7a-baf7-6dd3fa7f141a","block_type":"box","text":"with current and/or new regulations applicable to the Funds and/or the Manager could have a material","page_number":170,"box":{"x":116,"y":531,"width":761,"height":12}},{"id":"537f54a0-972e-4668-b311-aad4aca3ad3f","block_type":"box","text":"adverse effect on the Funds (including by imposing material costs on the Funds, reducing profit","page_number":170,"box":{"x":116,"y":546,"width":712,"height":12}},{"id":"a1ffbd97-b044-4466-830f-36663d5ca898","block_type":"box","text":"margins, reducing investment opportunities or by otherwise restricting the Funds and/or the Manager).","page_number":170,"box":{"x":117,"y":561,"width":762,"height":13}},{"id":"73256a1f-ebe0-49fc-bef9-06ba29e21437","block_type":"box","text":"Tariff and Trade Policy Risks","page_number":170,"box":{"x":118,"y":589,"width":213,"height":12}},{"id":"f278eb1b-72fe-4a7e-9eb3-8047eb753ec6","block_type":"box","text":".","page_number":170,"box":{"x":331,"y":597,"width":9,"height":2}},{"id":"d5180bb5-d728-44b1-9e53-7a37a33c31b4","block_type":"box","text":"Some countries, including the U.S., have adopted more protectionist","page_number":170,"box":{"x":341,"y":589,"width":512,"height":12}},{"id":"1b117ae0-cc3c-412d-b9a3-0523bcda0813","block_type":"box","text":"trade policies. The U.S. Government recently altered its approach to international trade policy, resulting","page_number":170,"box":{"x":116,"y":605,"width":772,"height":12}},{"id":"945c615f-87ec-49a8-9bb1-745be21275fd","block_type":"box","text":"in significant impacts on international trade relations, certain tax and immigration policies, and other","page_number":170,"box":{"x":117,"y":620,"width":742,"height":12}},{"id":"d161b71e-108f-4018-8bc7-85d53b339d31","block_type":"box","text":"aspects of the national and international political and financial landscape. The rise in protectionist trade","page_number":170,"box":{"x":116,"y":636,"width":769,"height":12}},{"id":"99c9133b-2f27-4363-b578-708faa2d2c02","block_type":"box","text":"policies, slowing economic growth, changes to some major international trade agreements, risks","page_number":170,"box":{"x":117,"y":651,"width":718,"height":12}},{"id":"57437300-c532-405d-8973-4df6ffb4621b","block_type":"box","text":"associated with trade agreements between the U.S. and the European Union, and the risks associated","page_number":170,"box":{"x":116,"y":667,"width":761,"height":12}},{"id":"381e2d17-918c-466b-aff7-8c930c00bc91","block_type":"box","text":"with trade negotiations between the U.S. and China, could affect the economies of many nations in","page_number":170,"box":{"x":116,"y":682,"width":733,"height":12}},{"id":"af2f77db-5c33-4c4e-afa4-ce95dca844b4","block_type":"box","text":"ways that cannot necessarily be foreseen at the present time.","page_number":170,"box":{"x":116,"y":698,"width":456,"height":12}},{"id":"5175f207-19fd-4d8e-a11e-eee61f80a589","block_type":"box","text":"Global trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together","page_number":170,"box":{"x":117,"y":726,"width":754,"height":12}},{"id":"1e0d7f40-2c1d-4031-b2d5-2cb71052fc3d","block_type":"box","text":"with any future downturns in the global economy resulting therefrom, could adversely affect the","page_number":170,"box":{"x":116,"y":741,"width":705,"height":12}},{"id":"f14d8fed-7236-4bd3-8f83-05a2e126b44d","block_type":"box","text":"financial performance of a Fund and its investments. Trade policy may be an ongoing source of","page_number":170,"box":{"x":116,"y":757,"width":709,"height":12}},{"id":"9bde6548-3353-4b71-b025-f50ad14095ea","block_type":"box","text":"instability, potentially resulting in significant currency fluctuations and/or having other adverse effects","page_number":170,"box":{"x":117,"y":772,"width":745,"height":12}},{"id":"247ee8fd-e574-48f2-9608-bfa61fca9c6a","block_type":"box","text":"on international markets, international trade agreements, and/or other existing cross-border","page_number":170,"box":{"x":116,"y":788,"width":678,"height":12}},{"id":"84ee0767-36bb-4b6e-b492-cda6bf97b655","block_type":"box","text":"cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or otherwise). To the extent","page_number":170,"box":{"x":116,"y":803,"width":766,"height":12}},{"id":"8d99bad0-715c-44d7-b2e8-7decc5fce6f5","block_type":"box","text":"trade disputes escalate globally, there could be additional significant impacts on the sectors or","page_number":170,"box":{"x":116,"y":819,"width":700,"height":12}},{"id":"ac00768f-487f-47bf-a5fe-2d946a7e9c0f","block_type":"box","text":"industries in which a Fund invests and other adverse impacts on a Fund’s overall performance.","page_number":170,"box":{"x":117,"y":834,"width":709,"height":12}},{"id":"12c419d6-db1c-4e8b-9f22-0ca80c925650","block_type":"box","text":"Geographic Risks","page_number":170,"box":{"x":117,"y":862,"width":131,"height":12}},{"id":"bd23327a-0d07-4259-b681-13e2cd10d462","block_type":"box","text":". Some of the companies in which the Fund invests may be located in, or otherwise","page_number":170,"box":{"x":250,"y":862,"width":621,"height":12}},{"id":"4b181522-00e5-4359-a216-2af13ef5ffc1","block_type":"box","text":"connected to, parts of the world affected by natural disasters such as severe heat, earthquakes,","page_number":170,"box":{"x":116,"y":878,"width":717,"height":12}},{"id":"f245cb4a-fd63-474f-a5b1-e8429e5ce41c","block_type":"box","text":"II-87","page_number":170,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1914a0e3-2a64-4389-84ff-cc2c60c1d2ff","block_type":"box","text":"NM1026U-6039989-170/256","page_number":170,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b6971c7e-d3e1-47d9-a9bd-6ef345f9d07d","block_type":"box","text":"tornadoes, volcanic eruptions, wildfires, droughts, floods, hurricanes or tsunamis, and are economically","page_number":171,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"bf494fc8-6cce-4ae6-9484-2345c8a4182c","block_type":"box","text":"sensitive to environmental events. In addition, issuers may be impacted by security concerns with","page_number":171,"box":{"x":116,"y":103,"width":729,"height":12}},{"id":"7094e78b-1f3b-4154-ab86-677ce3d18d61","block_type":"box","text":"respect to a country or region, such as war and other types of conflict, terrorism, strained international","page_number":171,"box":{"x":117,"y":118,"width":760,"height":12}},{"id":"9f529ce3-f199-454c-ad97-89237b1658a7","block_type":"box","text":"relations and territorial disputes. Any of these events may adversely affect the issuers, markets and","page_number":171,"box":{"x":117,"y":134,"width":742,"height":12}},{"id":"b5921cde-aefe-4369-ac7a-364651ac0bdf","block_type":"box","text":"economies to which a Fund is exposed, which may adversely affect the value of the Fund.","page_number":171,"box":{"x":116,"y":149,"width":673,"height":12}},{"id":"1cb2b1d5-b572-40b2-b69d-5f1afe598b7f","block_type":"box","text":"Reference Rate Replacement Risk.","page_number":171,"box":{"x":116,"y":180,"width":275,"height":12}},{"id":"b7682273-e99f-47a0-bf42-68289378ed2e","block_type":"box","text":"A Fund’s investments, payment obligations and financing terms","page_number":171,"box":{"x":393,"y":180,"width":480,"height":12}},{"id":"cfafff5c-579e-44de-9665-211005d0777d","block_type":"box","text":"may be based on floating rates, such as the Secured Overnight Financing Rate (“SOFR”), Sterling","page_number":171,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"b86f0b0e-f9f8-4758-96ce-99aea556ba55","block_type":"box","text":"Overnight Interbank Average Rate (“SONIA”), and other similar types of reference rates (“Reference","page_number":171,"box":{"x":116,"y":211,"width":749,"height":12}},{"id":"50207e13-0253-4772-815c-5c90b4a0c429","block_type":"box","text":"Rates”). The elimination of a Reference Rate or any other changes or reforms to the determination or","page_number":171,"box":{"x":117,"y":227,"width":755,"height":12}},{"id":"44affe01-9c6b-4401-8980-6cb4fc965ad6","block_type":"box","text":"supervision of a Reference Rate could have an adverse impact on the market for, or value of, any","page_number":171,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"905c8140-1c87-4730-8522-d8424ad86b4c","block_type":"box","text":"instruments (including debt instruments and certain derivative instruments) or payments linked to those","page_number":171,"box":{"x":117,"y":258,"width":769,"height":12}},{"id":"b35e3696-7d52-41f3-bc88-aaa8dd22909a","block_type":"box","text":"Reference Rates. In addition, any substitute Reference Rate and any pricing adjustments imposed by","page_number":171,"box":{"x":117,"y":273,"width":758,"height":12}},{"id":"1ca6a50d-6c0b-4ba3-b0da-203bd9216959","block_type":"box","text":"a regulator or by counterparties or otherwise may adversely affect a Fund’s performance and/or net","page_number":171,"box":{"x":116,"y":289,"width":743,"height":12}},{"id":"5a5e3f78-3c2a-4c9b-a0c9-dcb79462b1f1","block_type":"box","text":"asset value.","page_number":171,"box":{"x":116,"y":304,"width":94,"height":10}},{"id":"761ac647-247a-418b-a9e2-88b4bf9cae78","block_type":"box","text":"The London Interbank Offered Rate (“LIBOR”) had historically been used extensively in the U.S. and","page_number":171,"box":{"x":116,"y":335,"width":751,"height":12}},{"id":"7cb605e5-e2dc-4635-859f-c23444599838","block_type":"box","text":"globally as a “benchmark” or “reference rate” for various commercial and financial contracts, including","page_number":171,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"861e4ae1-ed1f-4813-98ba-67bc1624d1e9","block_type":"box","text":"corporate and municipal bonds, bank loans, asset-backed and mortgage-related securities, interest","page_number":171,"box":{"x":116,"y":366,"width":741,"height":12}},{"id":"4b3f942b-86d4-40f3-9d26-9bf80fa5a4d4","block_type":"box","text":"rate swaps and other derivatives. Instruments in which a Fund may have historically paid interest at","page_number":171,"box":{"x":117,"y":382,"width":742,"height":12}},{"id":"2efdac8d-b49a-4f32-af42-054c45517173","block_type":"box","text":"floating rates based on LIBOR or may have been subject to interest caps or floors based on LIBOR.","page_number":171,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"d016e266-d398-4688-b9c1-c3c01afac8c7","block_type":"box","text":"The Funds and issuers of instruments in which a Fund invests may have also historically obtained","page_number":171,"box":{"x":116,"y":413,"width":731,"height":12}},{"id":"2677cffc-8482-44dc-bf62-dcf8e43da3c6","block_type":"box","text":"financing at floating rates based on LIBOR. In connection with the global transition away from LIBOR","page_number":171,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"bcfeb96f-10bd-43c9-9dee-e096f69262bb","block_type":"box","text":"led by regulators and market participants as a result of benchmark reforms, LIBOR was last published","page_number":171,"box":{"x":117,"y":444,"width":761,"height":12}},{"id":"851fa522-3744-431d-a9de-f2c5eb18e6a6","block_type":"box","text":"on a representative basis at the end of June 2023. Alternative Reference Rates to LIBOR have been","page_number":171,"box":{"x":116,"y":459,"width":751,"height":12}},{"id":"de1dc7c5-fe9a-4c62-bf06-264e9490ae39","block_type":"box","text":"established in most major currencies and markets in these alternative rates are continuing to develop","page_number":171,"box":{"x":116,"y":475,"width":756,"height":12}},{"id":"4a22fd05-fd3e-48de-859d-44d0ec7fe64e","block_type":"box","text":"(","page_number":171,"box":{"x":117,"y":490,"width":4,"height":12}},{"id":"757a5d69-3477-493f-b101-08ae897b33ed","block_type":"box","text":"e.g.","page_number":171,"box":{"x":122,"y":493,"width":26,"height":9}},{"id":"7c550c30-32f5-4c0b-b3fe-3fc250ae3c97","block_type":"box","text":", SOFR for USD-LIBOR and SONIA for GBP-LIBOR). While the transition from LIBOR has gone","page_number":171,"box":{"x":151,"y":490,"width":716,"height":12}},{"id":"65d72b7b-ba5b-4115-aadd-55266bc296ce","block_type":"box","text":"relatively smoothly, residual risks associated with the transition may remain that may impact markets or","page_number":171,"box":{"x":117,"y":506,"width":771,"height":12}},{"id":"8f747ee2-d34a-4b76-aa15-d10450f0f52a","block_type":"box","text":"particular investments and, as such, the full impact of the transition on the Funds or the financial","page_number":171,"box":{"x":117,"y":521,"width":718,"height":12}},{"id":"636396fa-a5a7-4f24-b144-3a6f5c5abfdf","block_type":"box","text":"instruments in which the Funds invest cannot yet be fully determined.","page_number":171,"box":{"x":117,"y":537,"width":518,"height":12}},{"id":"8a7f057b-e7db-45fe-8639-873e7d2780f8","block_type":"box","text":"SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that","page_number":171,"box":{"x":116,"y":568,"width":757,"height":12}},{"id":"931bfb24-bbee-4361-b3d2-73dc91f5a25f","block_type":"box","text":"are collateralized by U.S. Treasury securities . SOFR is calculated based on transaction-level repo","page_number":171,"box":{"x":116,"y":583,"width":736,"height":12}},{"id":"e5e8d6eb-ebfd-4348-8c4e-84a90d8aa48b","block_type":"box","text":"data collected from various sources. For each trading day, SOFR is calculated as a volume-weighted","page_number":171,"box":{"x":116,"y":599,"width":755,"height":12}},{"id":"bcb3c066-9e15-4189-a7d0-64ff319ee1cf","block_type":"box","text":"median rate derived from such data. Because SOFR is a financing rate based on overnight secured","page_number":171,"box":{"x":117,"y":614,"width":744,"height":12}},{"id":"de4d06dc-aaf4-4e6e-b82c-b44096017af5","block_type":"box","text":"funding transactions, it differs fundamentally from LIBOR. LIBOR is intended to be an unsecured rate","page_number":171,"box":{"x":116,"y":630,"width":755,"height":12}},{"id":"e7103758-7632-4630-aa7c-0eb688169bc3","block_type":"box","text":"that represents interbank funding costs for different short-term maturities or tenors. It is a forward","page_number":171,"box":{"x":116,"y":645,"width":726,"height":12}},{"id":"86ccaed2-890e-4a18-90de-56a0ff26a262","block_type":"box","text":"looking rate reflecting expectations regarding interest rates for the applicable tenor. Thus, LIBOR is","page_number":171,"box":{"x":117,"y":661,"width":734,"height":12}},{"id":"24bf0b39-d725-49b9-9747-c1d504337554","block_type":"box","text":"intended to be sensitive, in certain respects, to bank credit risk and to term interest rate risk. In","page_number":171,"box":{"x":117,"y":676,"width":700,"height":12}},{"id":"0b963d8a-ef65-435e-a893-b86334303fe7","block_type":"box","text":"contrast, SOFR is a secured overnight rate reflecting the credit of U.S. Treasury securities as","page_number":171,"box":{"x":116,"y":692,"width":691,"height":12}},{"id":"2ca9cc6e-4c38-4e58-85f8-54375bb276a2","block_type":"box","text":"collateral. Thus, it is largely insensitive to credit-risk considerations and to short-term interest rate risks.","page_number":171,"box":{"x":116,"y":707,"width":765,"height":12}},{"id":"fb7bc012-fc3f-4433-be90-72a930adc420","block_type":"box","text":"SOFR is a transaction-based rate, and it has been more volatile than other benchmark or market rates,","page_number":171,"box":{"x":116,"y":723,"width":764,"height":11}},{"id":"7dabd736-3346-4002-b25d-83375a9b669a","block_type":"box","text":"such as three-month LIBOR, during certain periods. For these reasons, among others, there is no","page_number":171,"box":{"x":116,"y":738,"width":725,"height":12}},{"id":"dc0abc22-29e2-48cb-ac39-c0de3de1574e","block_type":"box","text":"assurance that SOFR, or rates derived from SOFR, will perform in the same or similar way as LIBOR","page_number":171,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"32e3e40b-e0d0-4597-b313-5e40e6ad5d6a","block_type":"box","text":"would have performed at any time, and there is no assurance that SOFR-based rates will be a suitable","page_number":171,"box":{"x":116,"y":769,"width":762,"height":12}},{"id":"12891374-3d8e-412c-aa95-6b481bbc4f55","block_type":"box","text":"substitute for LIBOR. SOFR has a relatively limited history, having been first published in April 2018.","page_number":171,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"865ebdb6-355d-4e55-a0b2-4cfb13200339","block_type":"box","text":"The future performance of SOFR, and SOFR-based Reference Rates, cannot be predicted based on","page_number":171,"box":{"x":116,"y":800,"width":747,"height":12}},{"id":"efbc49e5-b7f6-4629-9412-9180b3d648a6","block_type":"box","text":"SOFR’s history or otherwise. Levels of SOFR in the future may bear little or no relation to historical","page_number":171,"box":{"x":116,"y":816,"width":732,"height":12}},{"id":"6521c06e-f3ed-4db5-af98-248eaf5a6aaa","block_type":"box","text":"levels of SOFR, LIBOR or other rates. There can also be no assurance that SOFR will not be","page_number":171,"box":{"x":117,"y":831,"width":695,"height":11}},{"id":"9b9aa70f-544c-4908-88d5-a7402a74bcad","block_type":"box","text":"discontinued or fundamentally altered in a manner that is materially adverse to the interests of the","page_number":171,"box":{"x":116,"y":847,"width":731,"height":12}},{"id":"7f28056c-9c18-4cd0-9d55-86d39696df84","block_type":"box","text":"Fund.","page_number":171,"box":{"x":117,"y":862,"width":46,"height":10}},{"id":"0df1a888-77f5-4e75-9a4e-f3a94ac88cf8","block_type":"box","text":"II-88","page_number":171,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9f2b6de8-85cb-46d5-a411-257ef11167b0","block_type":"box","text":"NM1026U-6039989-171/256","page_number":171,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3d2529c5-da3b-4fd6-a712-2f9d7ee3b0d9","block_type":"box","text":"In addition, interest rates or other types of rates and indices which are classified as “benchmarks” have","page_number":172,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"080ecaa4-ed81-4445-9749-3f96b9ecad3a","block_type":"box","text":"been the subject of ongoing national and international regulatory reform, including under the European","page_number":172,"box":{"x":117,"y":102,"width":765,"height":13}},{"id":"d43552b0-3c70-430f-9fa5-21051d109de9","block_type":"box","text":"Union (“EU”) regulation on indices used as benchmarks in financial instruments and financial contracts","page_number":172,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"247b917b-ebf7-4da8-a887-67870b0d331f","block_type":"box","text":"(known as the “Benchmarks Regulation”). The Benchmarks Regulation has been enacted into United","page_number":172,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"e292ce39-bb6e-46e4-82f7-307707938bf5","block_type":"box","text":"Kingdom (“UK”) law by virtue of the EU (Withdrawal) Act 2018 (as amended), subject to amendments","page_number":172,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"97fcc518-c375-4bdd-9517-f56175219727","block_type":"box","text":"made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI","page_number":172,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"3c83258e-2f8e-454c-b424-81f86d246a54","block_type":"box","text":"2019/657) and other statutory instruments. Following the implementation of these reforms, the manner","page_number":172,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"5d53a38b-7bc2-48f5-b45d-a3ecccd6a463","block_type":"box","text":"of administration of benchmarks has changed and may further change in the future, with the result that","page_number":172,"box":{"x":116,"y":196,"width":766,"height":12}},{"id":"e9627ee3-5710-4b2d-8460-a690ffb74774","block_type":"box","text":"relevant benchmarks may perform differently than in the past, the use of benchmarks that are not","page_number":172,"box":{"x":117,"y":211,"width":726,"height":12}},{"id":"1c8c557b-0c4a-4d6a-8b51-f98199c73c44","block_type":"box","text":"compliant with the new standards by certain supervised entities may be restricted, and certain","page_number":172,"box":{"x":116,"y":227,"width":702,"height":12}},{"id":"2f0d7920-b689-4167-b309-52af002944e9","block_type":"box","text":"benchmarks may be eliminated entirely. Such changes could cause increased market volatility and","page_number":172,"box":{"x":117,"y":242,"width":737,"height":12}},{"id":"fe3baea3-d14b-410b-983b-4540cbd8e2ee","block_type":"box","text":"disruptions in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally,","page_number":172,"box":{"x":116,"y":258,"width":749,"height":12}},{"id":"1c11d526-23da-4285-8d63-db4b5f6f9da2","block_type":"box","text":"there could be other consequences which cannot be predicted.","page_number":172,"box":{"x":116,"y":273,"width":472,"height":12}},{"id":"b0f30cd6-8f5a-4053-950d-e8d10b62f1c8","block_type":"box","text":"Repurchase Agreements and Purchase and Sale Contracts.","page_number":172,"box":{"x":116,"y":304,"width":479,"height":12}},{"id":"d3c2d2e1-b152-4f56-9004-345939af682d","block_type":"box","text":"Under repurchase agreements and","page_number":172,"box":{"x":597,"y":304,"width":264,"height":12}},{"id":"2ff2fa83-4195-4fb5-aaa3-578ac100ea3a","block_type":"box","text":"purchase and sale contracts, the other party agrees, upon entering into the contract with a Fund, to","page_number":172,"box":{"x":117,"y":320,"width":740,"height":12}},{"id":"a752d71f-716d-4b58-9236-d4b16a7bca6d","block_type":"box","text":"repurchase a security sold to the Fund at a mutually agreed-upon time and price in a specified","page_number":172,"box":{"x":117,"y":335,"width":703,"height":12}},{"id":"634f559a-663f-4039-a607-26539680b511","block_type":"box","text":"currency, thereby determining the yield during the term of the agreement.","page_number":172,"box":{"x":116,"y":351,"width":549,"height":12}},{"id":"d525dcf5-9eef-4f79-860b-a01af69a3a7b","block_type":"box","text":"A purchase and sale contract differs from a repurchase agreement in that the contract arrangements","page_number":172,"box":{"x":116,"y":382,"width":751,"height":12}},{"id":"54329e23-6f45-4b94-9a5d-5886fcac6151","block_type":"box","text":"stipulate that securities are owned by the Fund and the purchaser receives any interest on the security","page_number":172,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"ae208d0e-b0d9-49fb-96d9-18c4dc7a8a9c","block_type":"box","text":"paid during the period. In the case of repurchase agreements, the prices at which the trades are","page_number":172,"box":{"x":117,"y":413,"width":717,"height":12}},{"id":"23205ed8-cc04-49a7-9773-ce70eb55a122","block_type":"box","text":"conducted do not reflect accrued interest on the underlying obligation; whereas, in the case of","page_number":172,"box":{"x":116,"y":428,"width":701,"height":12}},{"id":"69d2672e-7d86-4175-8546-80b8a54fbc4f","block_type":"box","text":"purchase and sale contracts, the prices take into account accrued interest. A Fund may enter into","page_number":172,"box":{"x":117,"y":444,"width":728,"height":12}},{"id":"211613b9-3c1e-4c25-a885-a768e670f570","block_type":"box","text":"“tri-party” repurchase agreements. In “tri-party” repurchase agreements, an unaffiliated third-party","page_number":172,"box":{"x":116,"y":459,"width":729,"height":12}},{"id":"f0a40b4f-cf83-41f2-a02a-15a5b19b09fa","block_type":"box","text":"custodian maintains accounts to hold collateral for the Fund and its counterparties and, therefore, the","page_number":172,"box":{"x":116,"y":475,"width":756,"height":12}},{"id":"5847b717-de02-4bd5-84d5-9b947d7991c9","block_type":"box","text":"Fund may be subject to the credit risk of those custodians.","page_number":172,"box":{"x":117,"y":490,"width":438,"height":12}},{"id":"91d1a098-6153-44fe-8979-0cfad6c27824","block_type":"box","text":"Some repurchase agreements and purchase and sale contracts are structured to result in a fixed rate","page_number":172,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"a8d82f84-af71-4e15-884a-b908e6977dd5","block_type":"box","text":"of return insulated from market fluctuations during the term of the agreement, although such return","page_number":172,"box":{"x":116,"y":537,"width":737,"height":12}},{"id":"c200203a-53dd-49d1-a45f-5817084b7f82","block_type":"box","text":"may be affected by currency fluctuations. However, in the event of a default under a repurchase","page_number":172,"box":{"x":117,"y":552,"width":716,"height":12}},{"id":"1d0791a1-29fa-459b-8fbb-4fee11ed653b","block_type":"box","text":"agreement or under a purchase and sale contract, instead of the contractual fixed rate, the rate of","page_number":172,"box":{"x":116,"y":568,"width":730,"height":12}},{"id":"c30756d4-c0bf-4049-ae74-793117789ceb","block_type":"box","text":"return to the Fund would be dependent upon intervening fluctuations of the market values of the","page_number":172,"box":{"x":117,"y":583,"width":716,"height":12}},{"id":"23d740b2-8152-4dc7-bcdb-7a9549cd9165","block_type":"box","text":"securities underlying the contract and the accrued interest on those securities. In such event, the Fund","page_number":172,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"50899e1a-a2cf-4b45-9bac-77a366998f14","block_type":"box","text":"would have rights against the seller for breach of contract with respect to any losses arising from","page_number":172,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"ae5afb12-238e-41ed-a54a-10ddf6e969c1","block_type":"box","text":"market fluctuations following the default.","page_number":172,"box":{"x":117,"y":630,"width":303,"height":12}},{"id":"a2e8324b-8d3e-4683-aa7f-6d2463f6c06e","block_type":"box","text":"Both types of agreement usually cover short periods, such as less than one week, although they may","page_number":172,"box":{"x":117,"y":661,"width":742,"height":12}},{"id":"27b6752c-23d3-4f51-8d24-c9a178a926b2","block_type":"box","text":"have longer terms, and may be construed to be collateralized loans by the purchaser to the seller","page_number":172,"box":{"x":117,"y":676,"width":714,"height":12}},{"id":"259a1e22-5ac8-4458-9c14-b90773b6716f","block_type":"box","text":"secured by the securities transferred to the purchaser. In the case of a repurchase agreement, as a","page_number":172,"box":{"x":116,"y":692,"width":730,"height":12}},{"id":"115b0bc4-7306-437e-9478-95c6dbcd8322","block_type":"box","text":"purchaser, a Fund’s Manager or sub-adviser will monitor the creditworthiness of the seller, and a Fund","page_number":172,"box":{"x":117,"y":707,"width":750,"height":12}},{"id":"8722b2b3-5460-4215-8588-7f495a1e0b87","block_type":"box","text":"will require the seller to provide additional collateral if the market value of the securities falls below the","page_number":172,"box":{"x":116,"y":723,"width":748,"height":12}},{"id":"39b059e3-7ee7-4b31-860c-9bd6dcefd9fd","block_type":"box","text":"repurchase price at any time during the term of the repurchase agreement. The Fund does not have this","page_number":172,"box":{"x":117,"y":738,"width":764,"height":12}},{"id":"3bede579-5694-47fc-90e6-70db6ff22576","block_type":"box","text":"right to seek additional collateral as a purchaser in the case of purchase and sale contracts. The Fund’s","page_number":172,"box":{"x":117,"y":754,"width":760,"height":12}},{"id":"c894c62a-beab-4657-95cb-bfcc0d3ed81c","block_type":"box","text":"Manager or sub-adviser will mark-to-market daily the value of the securities. Securities subject to","page_number":172,"box":{"x":117,"y":769,"width":710,"height":12}},{"id":"4e80e36f-e409-418c-a07f-7ab9ef4666f6","block_type":"box","text":"repurchase agreements (other than tri-party repurchase agreements) and purchase and sale contracts","page_number":172,"box":{"x":117,"y":785,"width":752,"height":12}},{"id":"da3b6d5b-8e3f-413e-b53e-3bd84f9da493","block_type":"box","text":"will be held by the Fund’s custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry","page_number":172,"box":{"x":116,"y":800,"width":728,"height":12}},{"id":"119c7200-807b-4c09-b35b-ba59752f6cd1","block_type":"box","text":"system or by another authorized securities depository.","page_number":172,"box":{"x":116,"y":816,"width":397,"height":12}},{"id":"961bb202-012f-4540-9cd4-3827222784df","block_type":"box","text":"In the event of default by the seller under a repurchase agreement construed to be a collateralized loan,","page_number":172,"box":{"x":117,"y":847,"width":750,"height":12}},{"id":"71450dad-12b2-43cc-8273-c91b8d798133","block_type":"box","text":"the underlying securities are not owned by the Fund but only constitute collateral for the seller’s obligation","page_number":172,"box":{"x":116,"y":862,"width":763,"height":12}},{"id":"7aec27dc-e4e4-436e-a8b2-b2ee743c693b","block_type":"box","text":"to pay the repurchase price. Therefore, the Fund may suffer time delays and incur costs or possible losses","page_number":172,"box":{"x":116,"y":878,"width":770,"height":12}},{"id":"6b3578f6-44f9-4c44-8a52-1c25ea89ecab","block_type":"box","text":"II-89","page_number":172,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dd64cad2-9023-47bc-a3b3-81d2d14daca6","block_type":"box","text":"NM1026U-6039989-172/256","page_number":172,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9bd1832d-c961-4baf-abdf-736f50366421","block_type":"box","text":"in connection with disposition of the collateral. If the seller becomes insolvent and subject to liquidation or","page_number":173,"box":{"x":117,"y":87,"width":759,"height":12}},{"id":"b156357f-7c78-40aa-8754-da68cc49716b","block_type":"box","text":"reorganization under applicable bankruptcy or other laws, a Fund’s ability to dispose of the underlying","page_number":173,"box":{"x":117,"y":102,"width":733,"height":13}},{"id":"fa76014e-0120-40e9-9cdf-812b2eff983e","block_type":"box","text":"securities may be restricted. Finally, it is possible that a Fund may not be able to substantiate its interest in","page_number":173,"box":{"x":116,"y":118,"width":769,"height":12}},{"id":"51a70f61-7689-4cb6-b823-e3ef376a3537","block_type":"box","text":"the underlying securities. To minimize this risk, the securities underlying the repurchase agreement will be","page_number":173,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"08ed2b7d-bdb7-4ffa-9917-0ae2f4b2f1e3","block_type":"box","text":"held by the applicable custodian at all times in an amount at least equal to the repurchase price, including","page_number":173,"box":{"x":117,"y":149,"width":761,"height":12}},{"id":"914b77ea-f922-40dc-b304-a1435a81d3f1","block_type":"box","text":"accrued interest. If the seller fails to repurchase the securities, a Fund may suffer a loss to the extent","page_number":173,"box":{"x":116,"y":165,"width":727,"height":12}},{"id":"7acb67b2-5621-4fd3-8706-d447431d5303","block_type":"box","text":"proceeds from the sale of the underlying securities are less than the repurchase price.","page_number":173,"box":{"x":117,"y":180,"width":622,"height":12}},{"id":"6166b4fd-6dfc-4299-81d0-210f7247e605","block_type":"box","text":"In any repurchase transaction to which a Fund is a party, collateral for a repurchase agreement may","page_number":173,"box":{"x":117,"y":211,"width":747,"height":12}},{"id":"46848b1f-484c-44cb-b36c-d90b523ff162","block_type":"box","text":"include cash items and obligations issued by the U.S. Government or its agencies or instrumentalities.","page_number":173,"box":{"x":117,"y":227,"width":762,"height":12}},{"id":"83337d04-4d0d-4fa3-8dfb-814a94d0353d","block_type":"box","text":"For certain Funds, however, collateral may include instruments other than cash items and obligations","page_number":173,"box":{"x":117,"y":242,"width":755,"height":12}},{"id":"b02febe0-1664-41aa-947a-4ac65fc0fb2d","block_type":"box","text":"issued by the U.S. Government or its agencies or instrumentalities, including securities that the Fund","page_number":173,"box":{"x":117,"y":258,"width":752,"height":12}},{"id":"08ab7abd-bb32-4bf5-a033-495fc5942d5b","block_type":"box","text":"could not hold directly under its investment strategies without the repurchase obligation.","page_number":173,"box":{"x":116,"y":273,"width":657,"height":12}},{"id":"827b7c6e-e58c-49b9-95bc-49b0afdbf15b","block_type":"box","text":"The type of collateral underlying repurchase agreements may also pose certain risks for a Fund. Lower","page_number":173,"box":{"x":116,"y":304,"width":770,"height":12}},{"id":"5e2b228a-e61c-4851-9a5c-32c2bc960a15","block_type":"box","text":"quality collateral and collateral with longer maturities may be subject to greater price fluctuations than","page_number":173,"box":{"x":116,"y":320,"width":757,"height":12}},{"id":"7dececa5-392f-4f58-a6ae-ebc333b8024b","block_type":"box","text":"higher quality collateral and collateral with shorter maturities. If the repurchase agreement counterparty","page_number":173,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"62d4e386-d0fa-4c78-96fa-7ae3e5f01828","block_type":"box","text":"were to default, lower quality collateral may be more difficult to liquidate than higher quality collateral.","page_number":173,"box":{"x":116,"y":351,"width":755,"height":12}},{"id":"ced220e8-d33c-445b-9ea1-4c6916f7ede6","block_type":"box","text":"Should the counterparty default and the amount of collateral not be sufficient to cover the","page_number":173,"box":{"x":116,"y":366,"width":666,"height":12}},{"id":"97ff32a9-554d-4d80-b9fd-2ff6a449a034","block_type":"box","text":"counterparty’s repurchase obligation, a Fund would retain the status of an unsecured creditor of the","page_number":173,"box":{"x":116,"y":382,"width":744,"height":12}},{"id":"172bf789-68fb-4bec-b224-cd12b2a2f17c","block_type":"box","text":"counterparty (","page_number":173,"box":{"x":116,"y":397,"width":103,"height":12}},{"id":"f746206a-7ff2-45de-97f1-9761ce2e423c","block_type":"box","text":"i.e.","page_number":173,"box":{"x":220,"y":397,"width":20,"height":10}},{"id":"54d3a522-b19a-4ec9-b11d-b4f07e667891","block_type":"box","text":", the position the Fund would normally be in if it were to hold, pursuant to its","page_number":173,"box":{"x":244,"y":397,"width":565,"height":12}},{"id":"022feb04-cd2d-4f53-9077-7eca3cac72f9","block_type":"box","text":"investment policies, other unsecured debt securities of the defaulting counterparty) with respect to the","page_number":173,"box":{"x":117,"y":413,"width":760,"height":12}},{"id":"4f65e975-266d-4f35-9743-f218d0e496bd","block_type":"box","text":"amount of the shortfall. As an unsecured creditor, a Fund would be at risk of losing some or all of the","page_number":173,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"5769d79e-ce8a-4bf1-b09f-9202e3a58279","block_type":"box","text":"principal and income involved in the transaction.","page_number":173,"box":{"x":117,"y":444,"width":361,"height":12}},{"id":"4b1d3d7d-1cab-49da-8344-9cae47647428","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":173,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"3329a7d8-18ca-46ab-85a3-7ad750dcfa58","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many repurchase agreements","page_number":173,"box":{"x":116,"y":490,"width":771,"height":12}},{"id":"2c3585b5-bd49-4e39-9620-9667387298b9","block_type":"box","text":"and purchase and sale contracts, terms that delay or restrict the rights of counterparties, such as a","page_number":173,"box":{"x":116,"y":506,"width":738,"height":12}},{"id":"f450f633-bfa5-4c06-bb9a-df8836ea2f8a","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":173,"box":{"x":117,"y":521,"width":744,"height":12}},{"id":"4b10a012-9eb1-4513-896b-a2b864229200","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":173,"box":{"x":116,"y":537,"width":748,"height":12}},{"id":"a065c6b7-4891-49f4-9621-b920dd3f7e28","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":173,"box":{"x":116,"y":552,"width":707,"height":12}},{"id":"274feddb-cb18-416b-af5e-91ffaa974ca5","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":173,"box":{"x":117,"y":568,"width":729,"height":12}},{"id":"0fcbacbb-d39a-4585-afbe-7a8e9dc85d71","block_type":"box","text":"affect a Fund’s ability to terminate existing repurchase agreements and purchase and sale contracts or","page_number":173,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"b37907e5-aebc-4a3b-8115-e461e130f75e","block_type":"box","text":"to realize amounts to be received under such agreements. The SEC has also finalized rules that will","page_number":173,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"00dfe95c-56ef-4867-a5ff-47003d9fc93c","block_type":"box","text":"require certain transactions involving U.S. Treasuries, including repurchase agreements, to be centrally","page_number":173,"box":{"x":117,"y":614,"width":770,"height":12}},{"id":"09edab31-f9e1-4733-b245-5cee315d3a2d","block_type":"box","text":"cleared. Compliance with these rules is expected to be required by the middle of 2027. Although the","page_number":173,"box":{"x":116,"y":630,"width":747,"height":12}},{"id":"4c38dac4-5ae2-4c25-9e38-bed1720ddbe8","block_type":"box","text":"impact of these rules on the Funds is difficult to predict, they may reduce the availability or increase the","page_number":173,"box":{"x":117,"y":645,"width":770,"height":12}},{"id":"13c9936f-9923-45aa-a3e6-5630ffc8ad66","block_type":"box","text":"costs of such transactions and may adversely affect a Fund’s performance.","page_number":173,"box":{"x":116,"y":661,"width":557,"height":12}},{"id":"b7fe2ea2-3641-40bd-ae16-f431c065c648","block_type":"box","text":"Restricted Securities.","page_number":173,"box":{"x":116,"y":692,"width":171,"height":9}},{"id":"c1ecb685-f577-410c-afa1-94a6a0a7bcc7","block_type":"box","text":"A Fund may invest in or hold securities that are not registered under the","page_number":173,"box":{"x":293,"y":692,"width":533,"height":12}},{"id":"629a226e-fa28-4b3c-9850-55820d0092b9","block_type":"box","text":"Securities Act (“restricted securities”), which may include securities in private companies and Rule","page_number":173,"box":{"x":116,"y":707,"width":728,"height":12}},{"id":"ebf8584a-3985-4634-8fcd-b7dda936aa8c","block_type":"box","text":"144A Securities. Restricted securities may be sold in private placement transactions between issuers","page_number":173,"box":{"x":118,"y":723,"width":748,"height":12}},{"id":"0fc7cf53-fb40-4cc0-b69c-90fc49b432f6","block_type":"box","text":"and their purchasers, including through private negotiated transactions between the issuer and their","page_number":173,"box":{"x":116,"y":738,"width":741,"height":12}},{"id":"f06fd467-0c86-4e2b-8660-dbff174f41d0","block_type":"box","text":"purchasers, such as the Funds, and may be neither listed on an exchange nor traded in other","page_number":173,"box":{"x":117,"y":754,"width":693,"height":12}},{"id":"9de11d8f-4222-4c86-816c-a96970b1c5b3","block_type":"box","text":"established markets. In many cases, privately placed securities may not be freely transferable under","page_number":173,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"52089daa-5cff-4756-b56c-65ce33abedfe","block_type":"box","text":"the laws of the applicable jurisdiction or due to contractual restrictions on resale. Some of these","page_number":173,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"07de9383-28d8-4f3b-a2ec-d6470117e813","block_type":"box","text":"securities are new and complex, and trade only among institutions; the markets for these securities are","page_number":173,"box":{"x":116,"y":800,"width":764,"height":12}},{"id":"29c64d40-f72d-454c-b9f2-8dffad6bdb29","block_type":"box","text":"still developing and may not function as efficiently as established markets. Typically, investments in","page_number":173,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"2d929e52-c77a-41b4-a87f-bce19c17303f","block_type":"box","text":"private companies are in restricted securities that are not traded in public markets and subject to","page_number":173,"box":{"x":117,"y":831,"width":719,"height":12}},{"id":"6095bc3e-ab66-4c26-9cf2-7a6cb33abd98","block_type":"box","text":"substantial holding periods, so that a Fund may not be able to resell some of its holdings for extended","page_number":173,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"30fa63e8-9ae3-4543-b609-30cd3feabf3a","block_type":"box","text":"periods, which may be several years. There can be no assurance that a Fund will be able to realize the","page_number":173,"box":{"x":117,"y":862,"width":769,"height":12}},{"id":"7df6ff6b-b74c-4420-a19f-3ebce201f8ee","block_type":"box","text":"value of such restricted securities in a timely manner or at all. As a result of the absence of a public","page_number":173,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"3bf40efd-6f62-4cde-8f99-7f1479757831","block_type":"box","text":"II-90","page_number":173,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9a58e7af-4aed-4088-b520-49212abfdb48","block_type":"box","text":"NM1026U-6039989-173/256","page_number":173,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"621d0565-528f-4930-81c6-3f68ba211529","block_type":"box","text":"trading market and the potential bespoke nature on certain transactions, restricted securities may be","page_number":174,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"37a9fde6-032b-4f5a-b813-7102f60af8f7","block_type":"box","text":"deemed to be illiquid investments or less liquid investments and may be more difficult to value than","page_number":174,"box":{"x":116,"y":102,"width":740,"height":13}},{"id":"424be0c6-80f9-4801-92e2-0e5f946e7adb","block_type":"box","text":"publicly traded securities. To the extent that restricted securities may be resold in privately negotiated","page_number":174,"box":{"x":117,"y":118,"width":757,"height":12}},{"id":"834adafd-ae09-4236-a6ea-2e80e35e48f0","block_type":"box","text":"transactions, the prices realized from the sales, due to lack of liquidity, could be less than those","page_number":174,"box":{"x":116,"y":134,"width":713,"height":12}},{"id":"2d584643-371c-4d12-a9bf-0778cb673863","block_type":"box","text":"originally paid by the Fund or less than their fair market value. The amount of any discount may vary","page_number":174,"box":{"x":116,"y":149,"width":749,"height":12}},{"id":"c6e5dcc9-c84a-44cb-a58c-bfcee87bce0f","block_type":"box","text":"depending on the security type, the character of the issuer, which party (if any) will bear the expenses","page_number":174,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"40388f92-435e-4df0-8c4f-843fe3e1f1d6","block_type":"box","text":"of registering the restricted security, and prevailing market conditions. In addition, issuers whose","page_number":174,"box":{"x":116,"y":180,"width":720,"height":12}},{"id":"8450331c-49d9-469f-b025-b327a77702df","block_type":"box","text":"securities are not publicly traded or who are not otherwise publicly listed may not be subject to the","page_number":174,"box":{"x":116,"y":196,"width":732,"height":12}},{"id":"6d154290-1633-4180-8e0c-ee4c4f9bf4b6","block_type":"box","text":"disclosure and other investor protection requirements that may be applicable if their securities were","page_number":174,"box":{"x":116,"y":211,"width":742,"height":12}},{"id":"b5baff1a-3372-4d02-bbd0-8e285834df8c","block_type":"box","text":"publicly traded. If any privately placed securities held by a Fund are required to be registered under the","page_number":174,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"ac28214e-b265-4128-953c-3496da1a5524","block_type":"box","text":"securities laws of one or more jurisdictions before being resold, the Fund may be required to bear the","page_number":174,"box":{"x":116,"y":242,"width":757,"height":12}},{"id":"ec5350f1-8749-4ead-80df-6c88d530b348","block_type":"box","text":"expenses of registration. Where registration is required for restricted securities, a considerable time","page_number":174,"box":{"x":116,"y":258,"width":743,"height":12}},{"id":"c31e8696-c2ff-4951-870c-81883aa70dcd","block_type":"box","text":"period may elapse between the time the Fund decides to sell the security and the time it is actually","page_number":174,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"72507675-ac21-4c5a-a10e-f8ed9df14c8e","block_type":"box","text":"permitted to sell the security under an effective registration statement. If during such period, adverse","page_number":174,"box":{"x":117,"y":289,"width":749,"height":12}},{"id":"25e35e61-4b91-4c5a-98d4-6909af0e9483","block_type":"box","text":"market conditions were to develop, the Fund might obtain less favorable pricing terms than when it","page_number":174,"box":{"x":117,"y":304,"width":736,"height":12}},{"id":"3788e098-8728-4c8a-a119-fc9e09f01997","block_type":"box","text":"decided to sell the security. In addition, the Fund may be deemed to be an “underwriter” for purposes","page_number":174,"box":{"x":116,"y":320,"width":755,"height":12}},{"id":"a4f53313-178f-400a-9487-787c50342183","block_type":"box","text":"of the Securities Act when selling restricted securities. If so, the Fund may be liable to purchasers of","page_number":174,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"6dcc2d07-21b4-45c6-b53b-4884a9ba2a32","block_type":"box","text":"the restricted securities if the registration statement prepared by the issuer, or the corresponding","page_number":174,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"541fd1a3-0582-4aff-8d06-f6a29588f452","block_type":"box","text":"prospectus, is materially inaccurate or misleading. Transactions in restricted securities may entail other","page_number":174,"box":{"x":117,"y":366,"width":769,"height":12}},{"id":"8fb77f5a-89ae-4815-add3-a2574a25282b","block_type":"box","text":"transaction costs that are higher than those for transactions in unrestricted securities. Certain of the","page_number":174,"box":{"x":116,"y":382,"width":744,"height":12}},{"id":"d0d18d67-7516-4f6a-93b3-6f7822cdf297","block_type":"box","text":"Fund’s investments in private placements may consist of direct investments and may include","page_number":174,"box":{"x":117,"y":397,"width":692,"height":12}},{"id":"17c2bd50-7b3a-4f94-8b9c-3bf7138ec545","block_type":"box","text":"investments in smaller, less seasoned issuers, which may involve greater risks. Issuers of restricted","page_number":174,"box":{"x":117,"y":413,"width":744,"height":12}},{"id":"22e7213a-099f-428e-99fd-21b7c7796587","block_type":"box","text":"securities may not be subject to SEC reporting requirements, may not be required to maintain their","page_number":174,"box":{"x":116,"y":428,"width":737,"height":12}},{"id":"c1d3a10d-199f-4cb0-a428-86da3bff2189","block_type":"box","text":"accounting records in accordance with generally accepted accounting principles, and may not be","page_number":174,"box":{"x":116,"y":444,"width":724,"height":12}},{"id":"f35aedfc-1399-4b1c-9210-8008916459bf","block_type":"box","text":"required to maintain effective internal controls over financial reporting. As a result, BlackRock may not","page_number":174,"box":{"x":117,"y":459,"width":760,"height":12}},{"id":"21963fb8-b22c-4766-a747-f0c3f7b510d1","block_type":"box","text":"have timely or accurate information about the business, financial condition and results of operations of","page_number":174,"box":{"x":117,"y":475,"width":762,"height":12}},{"id":"5e5e6d33-dbac-4f90-afb1-9130ddcf8112","block_type":"box","text":"such issuers, and investments in securities of such issuers may involve a high degree of business and","page_number":174,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"e1ce711a-0af8-44ff-81a9-94eea8da93f5","block_type":"box","text":"financial risk and may result in substantial losses to the Fund. Such issuers may also have limited","page_number":174,"box":{"x":116,"y":506,"width":729,"height":12}},{"id":"cea82f2b-9178-4f05-b5ea-7e7ce1f8340e","block_type":"box","text":"product lines, markets or financial resources, or they may be dependent on a limited management","page_number":174,"box":{"x":117,"y":521,"width":731,"height":12}},{"id":"c9f13eb7-5028-4682-9c20-15b69a3847ac","block_type":"box","text":"group.","page_number":174,"box":{"x":116,"y":539,"width":52,"height":10}},{"id":"4bb9a4ab-6f62-485b-ad23-5206350a9813","block_type":"box","text":"Certain restricted securities may represent limited investment opportunities and each shareholder’s","page_number":174,"box":{"x":117,"y":568,"width":740,"height":12}},{"id":"df86aea7-08b0-4990-b52d-30106d9bdfbc","block_type":"box","text":"proportionate investment exposure to such limited investment opportunities may be reduced","page_number":174,"box":{"x":117,"y":583,"width":687,"height":12}},{"id":"93244f05-d7d8-45bc-93ec-121cbc65b5f6","block_type":"box","text":"proportionately as the Fund’s net assets grow from new or additional investments made in the Fund by","page_number":174,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"4f6be339-ac56-4843-af87-e852c7ef6027","block_type":"box","text":"other shareholders. The issuer of a private placement may later register those shares for public sale in","page_number":174,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"07057709-4a77-47df-8b4f-c5b843cec600","block_type":"box","text":"an IPO, but there is no guarantee that an IPO will ever be completed. Even after an IPO, there may be","page_number":174,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"82a5dada-803d-4229-86ba-9f5d4ab92cfd","block_type":"box","text":"a limited trading market for securities of that issuer, including any direct investment by a Fund, or the","page_number":174,"box":{"x":116,"y":645,"width":752,"height":12}},{"id":"7e281fdb-52b9-43cc-be70-204ba1be0c94","block_type":"box","text":"Fund may be subject to contractual limitations on its ability to resell its existing securities following an","page_number":174,"box":{"x":117,"y":661,"width":748,"height":12}},{"id":"bdb35a98-c4c0-430d-8b82-ba90455dc614","block_type":"box","text":"IPO. The inability of an applicable issuer of a restricted security to complete an IPO or offer other","page_number":174,"box":{"x":117,"y":676,"width":719,"height":12}},{"id":"2c50d145-3a4f-4d00-9350-e5a0151e9a96","block_type":"box","text":"liquidity opportunities to the Fund and other investors will extend the holding period of a Fund’s","page_number":174,"box":{"x":117,"y":692,"width":702,"height":12}},{"id":"9de28958-1984-427f-9255-5931168fe708","block_type":"box","text":"investments, potentially indefinitely, and may adversely affect the value of the investments. In making","page_number":174,"box":{"x":117,"y":707,"width":750,"height":12}},{"id":"705bf11e-cc10-4a6f-9482-5b9e45ef0bb3","block_type":"box","text":"investments in such securities, a Fund may obtain access to material nonpublic information, which may","page_number":174,"box":{"x":117,"y":723,"width":765,"height":12}},{"id":"12ebc280-47dd-494e-a04f-e843f0b8ba1e","block_type":"box","text":"restrict the Fund’s ability to conduct portfolio transactions in such securities. The activity of identifying,","page_number":174,"box":{"x":117,"y":738,"width":753,"height":12}},{"id":"8d09b67f-daab-49cc-8afd-76fc4a0aca09","block_type":"box","text":"completing, and realizing upon attractive investments in restricted securities is highly competitive and","page_number":174,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"4756d48d-3cd3-400a-9922-66d0d397e946","block_type":"box","text":"involves a high degree of uncertainty. A Fund will be competing for investments against other similarly","page_number":174,"box":{"x":117,"y":769,"width":756,"height":12}},{"id":"40053872-9a2e-4902-b323-4173df3dbd50","block_type":"box","text":"situated investors. It is possible that competition for appropriate investment opportunities may increase,","page_number":174,"box":{"x":116,"y":785,"width":766,"height":12}},{"id":"352126aa-33fb-4479-99ef-eeeddd16d5cf","block_type":"box","text":"thus potentially reducing the number of investment opportunities available to a Fund and adversely","page_number":174,"box":{"x":116,"y":800,"width":733,"height":12}},{"id":"34db2c20-7c0f-404b-b738-1a1f6462c239","block_type":"box","text":"affecting the terms upon which investments can be made. There is no assurance that investment","page_number":174,"box":{"x":116,"y":816,"width":719,"height":12}},{"id":"a3fd09bc-684b-4183-93aa-a1cd7d984cec","block_type":"box","text":"opportunities for restricted securities will be available at any given time or at a level desired by a Fund,","page_number":174,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"b29c96b0-75f7-4ca1-89d1-37bfe8c19ccf","block_type":"box","text":"especially as that Fund grows in size.","page_number":174,"box":{"x":116,"y":847,"width":283,"height":12}},{"id":"2a8bd2ad-9a86-4f6c-bc91-082ecc09d167","block_type":"box","text":"II-91","page_number":174,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"d529ce80-0e79-4109-992c-2c9349431bba","block_type":"box","text":"NM1026U-6039989-174/256","page_number":174,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7da7c1f1-9434-4f03-8eaa-70ee246a9e37","block_type":"box","text":"There may not be a readily available market value for a Fund’s restricted securities (in particular,","page_number":175,"box":{"x":116,"y":87,"width":722,"height":12}},{"id":"2596e141-90a0-4486-ada0-50385fbc1431","block_type":"box","text":"restricted securities issued by private companies), and thus may be considered “illiquid.” Each Fund","page_number":175,"box":{"x":117,"y":102,"width":745,"height":13}},{"id":"7a83568b-7d68-4e84-91e6-aa40be555501","block_type":"box","text":"values restricted securities in accordance with BlackRock’s valuation policies and procedures, which","page_number":175,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"61bf8f92-dc15-4dc6-a37e-0b0ea40a9c16","block_type":"box","text":"are designed to value investments such that they accurately reflect fair value. Due to the inherent","page_number":175,"box":{"x":116,"y":134,"width":727,"height":12}},{"id":"f3d74144-de2b-41e8-bb68-4943ff8b1d79","block_type":"box","text":"uncertainty and subjectivity of determining the fair value of investments that do not have a readily","page_number":175,"box":{"x":117,"y":149,"width":725,"height":12}},{"id":"571f592c-1659-44da-9039-7f9036659364","block_type":"box","text":"available market value, the fair value of a Fund’s private investments may differ significantly from the","page_number":175,"box":{"x":116,"y":165,"width":752,"height":12}},{"id":"5ea824e8-fa1f-48f5-87df-64b394e8c674","block_type":"box","text":"values that would have been used had a readily available market value existed for such investments","page_number":175,"box":{"x":116,"y":180,"width":749,"height":12}},{"id":"dfb713f6-4c3d-48ba-baeb-00146907f223","block_type":"box","text":"and may differ materially from the amounts the Fund may realize on any dispositions of such","page_number":175,"box":{"x":116,"y":196,"width":692,"height":12}},{"id":"b12dfe7a-286f-4d09-aecb-406a63389dc5","block_type":"box","text":"investments. Differences in the value of the Fund’s private investments could result in the Fund’s","page_number":175,"box":{"x":117,"y":211,"width":722,"height":12}},{"id":"367910ea-e4fa-40c0-a032-146b4659fb6c","block_type":"box","text":"shareholder transactions being effected at a NAV that does not accurately reflect the underlying value","page_number":175,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"230ab2a3-b32f-4010-9e3d-85303adb9ff9","block_type":"box","text":"of the Fund’s portfolio, potentially resulting in the dilution of shareholder interests and increasing","page_number":175,"box":{"x":116,"y":242,"width":718,"height":12}},{"id":"36f2b041-1289-4ac0-b546-c4e1f2b55858","block_type":"box","text":"opportunities for shareholder arbitrage. The values used by the Fund to price its restricted securities","page_number":175,"box":{"x":116,"y":258,"width":747,"height":12}},{"id":"78dce304-3936-438e-9293-acc240379140","block_type":"box","text":"may also differ from those used by other investment companies and investors to price the same","page_number":175,"box":{"x":117,"y":273,"width":715,"height":12}},{"id":"bb812df3-5146-485c-9769-796aa140a8db","block_type":"box","text":"restricted securities. In addition, the impact of changes in the market environment and other events on","page_number":175,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"8a321990-3211-4bb5-9885-5d8ce7e27937","block_type":"box","text":"the fair values of a Fund’s investments that have no readily available market values may differ from the","page_number":175,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"4dcc1865-0986-4709-a1e1-260c220d1f42","block_type":"box","text":"impact of such changes on the readily available market values for the Fund’s other investments. A","page_number":175,"box":{"x":117,"y":320,"width":732,"height":12}},{"id":"f5a46b3c-9d90-4897-a9b6-1a5b7a201097","block_type":"box","text":"Fund’s NAV could be adversely affected if the Fund’s determinations regarding the fair value of the","page_number":175,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"2ed64094-81ba-4af5-8c91-bfee0d99d32f","block_type":"box","text":"Fund’s investments were materially higher than the investment’s actual market or fair value or the","page_number":175,"box":{"x":117,"y":351,"width":728,"height":12}},{"id":"3c6dde12-04aa-4ff7-8fff-34488c06390e","block_type":"box","text":"values that the Fund ultimately realizes upon the disposal of such investments.","page_number":175,"box":{"x":116,"y":366,"width":590,"height":12}},{"id":"e2e28738-c611-4ff8-836f-d49b9f5515d9","block_type":"box","text":"See also risks discussed under “Illiquid Investments.”","page_number":175,"box":{"x":116,"y":394,"width":400,"height":12}},{"id":"60e3af06-307c-45cb-a2f5-19933f01f787","block_type":"box","text":"Reverse Repurchase Agreements.","page_number":175,"box":{"x":116,"y":422,"width":271,"height":12}},{"id":"83297f2a-593f-4b17-a6b4-d0f43ac288d3","block_type":"box","text":"A Fund may enter into reverse repurchase agreements with the","page_number":175,"box":{"x":389,"y":422,"width":481,"height":12}},{"id":"a403b64e-f1e6-40ee-8497-5322220f796c","block_type":"box","text":"same parties with whom it may enter into repurchase agreements. Under a reverse repurchase","page_number":175,"box":{"x":116,"y":438,"width":711,"height":11}},{"id":"9dddfb4b-79d6-4a1c-ac8e-a324ede4f10f","block_type":"box","text":"agreement, a Fund sells securities to another party and agrees to repurchase them at a particular date","page_number":175,"box":{"x":116,"y":453,"width":766,"height":12}},{"id":"c8c34b2a-b50a-4dc8-aa82-cd6a86d47637","block_type":"box","text":"and price. A Fund may enter into a reverse repurchase agreement when it is anticipated that the","page_number":175,"box":{"x":116,"y":469,"width":719,"height":11}},{"id":"ec3d3612-a9ec-46c6-bb10-9af425667615","block_type":"box","text":"interest income to be earned from the investment of the proceeds of the transaction is greater than the","page_number":175,"box":{"x":117,"y":484,"width":765,"height":12}},{"id":"58473a58-8900-4eea-96c3-6d7987f0072e","block_type":"box","text":"interest expense of the transaction.","page_number":175,"box":{"x":117,"y":499,"width":265,"height":12}},{"id":"4c37fd94-92a5-4e2d-a4c1-8e6c346be817","block_type":"box","text":"The use of reverse repurchase agreements may be regarded as leveraging and, therefore, speculative.","page_number":175,"box":{"x":116,"y":527,"width":772,"height":12}},{"id":"6eca5b71-dc54-4a66-b6e0-ad20bcaaf5a9","block_type":"box","text":"Furthermore, reverse repurchase agreements involve the risks that (i) the interest income earned in the","page_number":175,"box":{"x":117,"y":543,"width":771,"height":12}},{"id":"53c36518-391b-48a6-9100-79056d768549","block_type":"box","text":"investment of the proceeds will be less than the interest expense, (ii) the market value of the securities","page_number":175,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"ccb0f213-75b8-490b-a521-b66efe840fd9","block_type":"box","text":"retained in lieu of sale by a Fund may decline below","page_number":175,"box":{"x":117,"y":574,"width":390,"height":12}},{"id":"46aacd66-ef0d-4d03-a3eb-fcfb6f297152","block_type":"box","text":"the price of the securities the Fund has sold but is","page_number":175,"box":{"x":507,"y":574,"width":375,"height":12}},{"id":"5c516ed7-ffee-49c1-bf73-3775ec8144b2","block_type":"box","text":"obligated to repurchase, (iii) the market value of the securities sold will decline below the price at which","page_number":175,"box":{"x":116,"y":589,"width":770,"height":12}},{"id":"86799b5c-cf80-46d2-a8a8-2e1cf6fba58c","block_type":"box","text":"the Fund is required to repurchase them and (iv) the securities will not be returned to the Fund.","page_number":175,"box":{"x":116,"y":605,"width":710,"height":12}},{"id":"28e7c569-85aa-414f-b6a4-14a204546a76","block_type":"box","text":"In addition, if the buyer of securities under a reverse repurchase agreement files for bankruptcy or","page_number":175,"box":{"x":117,"y":633,"width":731,"height":12}},{"id":"026afc05-bed4-412b-a224-27d955f9c905","block_type":"box","text":"becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine","page_number":175,"box":{"x":117,"y":648,"width":765,"height":12}},{"id":"d7b09592-fc3f-4a02-953d-b7458ee76391","block_type":"box","text":"whether to enforce a Fund’s obligations to repurchase the securities and the Fund’s use of the","page_number":175,"box":{"x":116,"y":664,"width":699,"height":12}},{"id":"8cb3dffa-1e86-4483-9b36-c42ef275f73a","block_type":"box","text":"proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.","page_number":175,"box":{"x":117,"y":679,"width":737,"height":12}},{"id":"46d80d68-1779-4460-a235-6c96fbbd5fd7","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into reverse repurchase","page_number":175,"box":{"x":117,"y":707,"width":705,"height":12}},{"id":"d6207f30-51cd-4098-b199-d695eb94bf44","block_type":"box","text":"agreements and similar financing transactions (e.g., recourse and non-recourse tender option bonds,","page_number":175,"box":{"x":116,"y":723,"width":749,"height":12}},{"id":"c4767e65-0c61-445c-b9fc-7f517b326c29","block_type":"box","text":"borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the","page_number":175,"box":{"x":117,"y":738,"width":762,"height":12}},{"id":"73ac1efe-fd5e-4e99-949a-7b560c9569e8","block_type":"box","text":"Investment Company Act, provided that the Fund either (i) complies with the 300% asset coverage","page_number":175,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"2d52a1a4-ae2d-40b8-800f-559ca876c690","block_type":"box","text":"ratio with respect to all such transactions and any","page_number":175,"box":{"x":117,"y":769,"width":366,"height":12}},{"id":"db86d36d-620d-4183-a1a7-8617c0655ad7","block_type":"box","text":"other borrowings in the aggregate, or (ii) treats all","page_number":175,"box":{"x":489,"y":769,"width":366,"height":12}},{"id":"91bc310f-9f32-45e1-97cd-a2fded2e211a","block_type":"box","text":"such transactions as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of","page_number":175,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"d0df425d-57bb-4486-8eb8-9d305f34c9f8","block_type":"box","text":"Derivatives — Rule 18f-4 under the Investment Company Act” above. The SEC has also finalized rules","page_number":175,"box":{"x":117,"y":800,"width":762,"height":12}},{"id":"b69573fc-c941-45c4-a3a3-e8259ff06a53","block_type":"box","text":"that will require certain transactions involving U.S. Treasuries, including reverse repurchase","page_number":175,"box":{"x":116,"y":816,"width":680,"height":12}},{"id":"a0f0781e-33bb-4bcf-ab86-a32a3303ec0e","block_type":"box","text":"agreements, to be centrally cleared. Compliance with these rules is expected to be required by the","page_number":175,"box":{"x":116,"y":831,"width":736,"height":12}},{"id":"70f94300-ba96-4d88-97fc-ca75a9ed8136","block_type":"box","text":"middle of 2027. Although the impact of these rules on the Funds is difficult to predict, they may reduce","page_number":175,"box":{"x":117,"y":847,"width":762,"height":12}},{"id":"4d420d6f-20f8-4d2e-842b-b90423f1f182","block_type":"box","text":"the availability or increase the costs of such transactions and may adversely affect a Fund’s","page_number":175,"box":{"x":116,"y":862,"width":686,"height":12}},{"id":"8633d61b-c7f3-413e-95fc-d2299a7de3b8","block_type":"box","text":"performance.","page_number":175,"box":{"x":117,"y":878,"width":103,"height":12}},{"id":"b6ffb103-32b6-47d7-83c1-3951b91cffc5","block_type":"box","text":"II-92","page_number":175,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"87a4f3b1-8952-4d0c-bd9f-9d5c5e02a72e","block_type":"box","text":"NM1026U-6039989-175/256","page_number":175,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"350840a1-d4fe-40e1-9dfd-369d115a5224","block_type":"box","text":"Additionally, regulations adopted by global prudential regulators require certain bank-regulated","page_number":176,"box":{"x":116,"y":87,"width":707,"height":12}},{"id":"86b3b673-292e-4881-8758-2ef8487102cb","block_type":"box","text":"counterparties and certain of their affiliates to include in certain financial contracts, including many","page_number":176,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"66b8efa3-6f10-4d90-a1d8-da7afb9ef2d0","block_type":"box","text":"reverse repurchase agreements, terms that delay or restrict the rights of counterparties, such as a","page_number":176,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"177e7780-459a-408b-ab21-7ddbacf9d8bf","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":176,"box":{"x":117,"y":134,"width":744,"height":12}},{"id":"41e34bf1-0064-4e08-a758-ef98eef8f5c5","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":176,"box":{"x":116,"y":149,"width":748,"height":12}},{"id":"8f51900e-84c4-4fde-bc4a-26c15240ec47","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":176,"box":{"x":116,"y":165,"width":707,"height":12}},{"id":"ba937055-0842-464c-8ab8-c4e1e034e897","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":176,"box":{"x":117,"y":180,"width":729,"height":12}},{"id":"96658844-400d-4dad-96d0-096e76bc005a","block_type":"box","text":"affect a Fund’s ability to terminate existing reverse repurchase agreements or to realize amounts to be","page_number":176,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"520b5866-89a9-45d4-a79d-d8fe17f07584","block_type":"box","text":"received under such agreements.","page_number":176,"box":{"x":117,"y":211,"width":253,"height":12}},{"id":"4859bb5d-2f8d-49f0-b7b5-db69d46b082c","block_type":"box","text":"Rights Offerings and Warrants to Purchase.","page_number":176,"box":{"x":116,"y":242,"width":349,"height":12}},{"id":"0dcd3c59-1256-4f53-b560-3ce8bbfa0dd4","block_type":"box","text":"Certain Funds may participate in rights offerings and","page_number":176,"box":{"x":466,"y":242,"width":399,"height":12}},{"id":"672cc2b4-b75a-4aa0-a99f-7c4ceb786d72","block_type":"box","text":"may purchase warrants, which are privileges issued by corporations enabling the owners to subscribe","page_number":176,"box":{"x":117,"y":258,"width":759,"height":12}},{"id":"286254cd-b7e4-48fc-a90a-a12d8b744d42","block_type":"box","text":"to and purchase a specified number of shares of the corporation at a specified price during a specified","page_number":176,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"22a26992-a18a-416c-96cf-25bb7c6cd080","block_type":"box","text":"period of time. Subscription rights normally have a short life span to expiration. The purchase of rights","page_number":176,"box":{"x":117,"y":289,"width":759,"height":12}},{"id":"97fdfddc-fcf5-46ec-95c4-ecca60174b1f","block_type":"box","text":"or warrants involves the risk that a Fund could lose the purchase value of a right or warrant if the right","page_number":176,"box":{"x":116,"y":304,"width":760,"height":12}},{"id":"ebcc14db-3ed3-4ed2-850f-b2cc21cde71d","block_type":"box","text":"to subscribe to additional shares is not exercised prior to the rights’ and warrants’ expiration. Also, the","page_number":176,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"c62220e9-db9c-46f3-a527-f06e0c94203c","block_type":"box","text":"purchase of rights and/or warrants involves the risk that the effective price paid for the right and/or","page_number":176,"box":{"x":117,"y":335,"width":732,"height":12}},{"id":"c6f027bc-f916-401b-87c5-ee05901326d0","block_type":"box","text":"warrant added to the subscription price of the related security may exceed the value of the subscribed","page_number":176,"box":{"x":116,"y":351,"width":762,"height":12}},{"id":"34379ebb-0a43-4243-8b98-12a5adb75e08","block_type":"box","text":"security’s market price such as when there is no movement in the level of the underlying security.","page_number":176,"box":{"x":116,"y":366,"width":728,"height":12}},{"id":"2a9d954a-91d1-42f0-9c36-6ea1154a7e4d","block_type":"box","text":"Buying a warrant does not make the Fund a shareholder of the underlying stock. The warrant holder","page_number":176,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"62112be2-6d37-4c62-9f94-43f26fb08633","block_type":"box","text":"has no voting or dividend rights with respect to the underlying stock. A warrant does not carry any right","page_number":176,"box":{"x":117,"y":397,"width":766,"height":12}},{"id":"88393ffa-f980-4a1e-a83e-25bcf76725d1","block_type":"box","text":"to assets of the issuer, and for this reason investments in warrants may be more speculative than other","page_number":176,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"c30634ce-1c0f-4ba8-a6d3-0df75fa2cc41","block_type":"box","text":"equity-based investments.","page_number":176,"box":{"x":116,"y":428,"width":200,"height":12}},{"id":"4601f749-bcb3-4047-92c3-1e8f0475996e","block_type":"box","text":"Rule 144A Securities.","page_number":176,"box":{"x":116,"y":459,"width":170,"height":10}},{"id":"fefed537-927d-41dc-9c98-da1e9a67d45b","block_type":"box","text":"A Fund may purchase securities that can be offered and sold only to “qualified","page_number":176,"box":{"x":287,"y":459,"width":590,"height":12}},{"id":"976bac96-b955-49da-b04a-ee20e55ddeb5","block_type":"box","text":"institutional buyers” pursuant to Rule 144A under the Securities Act. See “Restricted Securities” above.","page_number":176,"box":{"x":117,"y":475,"width":769,"height":12}},{"id":"ef7eae1c-466a-4a08-ac48-224483fda373","block_type":"box","text":"Securities Lending.","page_number":176,"box":{"x":117,"y":506,"width":153,"height":12}},{"id":"ce566f7a-ad5a-4c88-838c-53b1fb0ef377","block_type":"box","text":"Each Fund may lend portfolio securities to certain borrowers that BlackRock","page_number":176,"box":{"x":271,"y":506,"width":575,"height":12}},{"id":"b06c12cd-a7d3-4f04-9871-c853fa011ae8","block_type":"box","text":"determines to be creditworthy, including borrowers affiliated with BlackRock. The borrowers provide","page_number":176,"box":{"x":116,"y":521,"width":744,"height":12}},{"id":"e0f4ff7c-4721-4a43-be42-00a4652f0ffd","block_type":"box","text":"collateral that is maintained in an amount at least","page_number":176,"box":{"x":116,"y":537,"width":369,"height":9}},{"id":"825063e9-a88a-47ce-88e8-a1990c69d112","block_type":"box","text":"equal to the current market value of the securities","page_number":176,"box":{"x":486,"y":537,"width":373,"height":12}},{"id":"410844e5-f78c-4f79-9238-720a19c63a4e","block_type":"box","text":"loaned. No securities loan shall be made on behalf of a Fund if, as a result, the aggregate value of all","page_number":176,"box":{"x":117,"y":552,"width":755,"height":12}},{"id":"f2908406-022d-483a-9d44-128dda04faa4","block_type":"box","text":"securities loans of the particular Fund exceeds one-third of the value of such Fund’s total assets","page_number":176,"box":{"x":116,"y":568,"width":718,"height":12}},{"id":"6ce14335-cf98-4a0b-81a7-3441d3790e3d","block_type":"box","text":"(including the value of the collateral received). A Fund may terminate a loan at any time and obtain the","page_number":176,"box":{"x":117,"y":583,"width":765,"height":12}},{"id":"6b4aecaa-9698-4252-97f8-0f4467133d51","block_type":"box","text":"return of the securities loaned. Each Fund receives, by way of substitute payment, the value of any","page_number":176,"box":{"x":117,"y":599,"width":738,"height":12}},{"id":"a7f2ba77-e102-4dde-a092-8035c6b0baed","block_type":"box","text":"interest or cash or non-cash distributions paid on the loaned securities that it would have otherwise","page_number":176,"box":{"x":117,"y":614,"width":738,"height":12}},{"id":"d84913d6-68c7-4baa-9b41-debf9f7def3e","block_type":"box","text":"received if the securities were not on loan.","page_number":176,"box":{"x":117,"y":630,"width":318,"height":9}},{"id":"05c39e57-f372-4efc-a957-c95b0be7d3d1","block_type":"box","text":"With respect to loans that are collateralized by cash, the borrower may be entitled to receive a fee","page_number":176,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"548e1bbd-abe2-42d4-8404-a44348f354e3","block_type":"box","text":"based on the amount of cash collateral. The Funds are compensated by any positive difference","page_number":176,"box":{"x":117,"y":676,"width":707,"height":12}},{"id":"af47ebf5-665b-45c5-8496-d8ed899845aa","block_type":"box","text":"between the amount earned on the reinvestment of cash collateral and the fee paid to the borrower. In","page_number":176,"box":{"x":117,"y":692,"width":758,"height":12}},{"id":"ebf7167d-1977-4a25-94e9-971a7d09d307","block_type":"box","text":"the case of collateral other than cash, a Fund is compensated by a fee paid by the borrower equal to a","page_number":176,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"a352ff9c-2d9f-4af8-ab30-6fa4ed16647b","block_type":"box","text":"percentage of the market value of the loaned securities. Any cash collateral received by the Fund for","page_number":176,"box":{"x":117,"y":723,"width":746,"height":12}},{"id":"8fdcd375-0b92-4f37-b892-d016fe023c8a","block_type":"box","text":"such loans, and uninvested cash, may be reinvested in certain short-term instruments either directly on","page_number":176,"box":{"x":116,"y":738,"width":764,"height":12}},{"id":"1fb9fbb9-959f-450a-a32f-ced96e9a5518","block_type":"box","text":"behalf of the Fund or through one or more joint accounts or money market funds, including those","page_number":176,"box":{"x":117,"y":754,"width":717,"height":12}},{"id":"aa0832c9-bdb2-4d39-9b65-300d621adfdf","block_type":"box","text":"affiliated with BlackRock; such investments are subject to investment risk.","page_number":176,"box":{"x":116,"y":769,"width":546,"height":12}},{"id":"e2333bae-42d7-4602-baad-a7f08472b48c","block_type":"box","text":"Securities lending involves exposure to certain risks, including operational risk (","page_number":176,"box":{"x":116,"y":800,"width":589,"height":12}},{"id":"9483a5a0-759a-4fcc-8010-fb656578c967","block_type":"box","text":"i.e.","page_number":176,"box":{"x":706,"y":800,"width":21,"height":10}},{"id":"1a384b18-18c8-4bbd-a7fb-5357fb41b5aa","block_type":"box","text":", the risk of losses","page_number":176,"box":{"x":730,"y":800,"width":132,"height":11}},{"id":"cdbbec89-a208-4fc3-9e1d-4e2e1cb1999f","block_type":"box","text":"resulting from problems in the settlement and accounting process), “gap” risk (","page_number":176,"box":{"x":117,"y":816,"width":580,"height":12}},{"id":"4c44f7d7-3ce0-4bd0-9fcc-18d95c68d2e1","block_type":"box","text":"i.e.","page_number":176,"box":{"x":698,"y":816,"width":21,"height":9}},{"id":"dd60cf70-ac3f-45eb-9d76-aac836749a2b","block_type":"box","text":", the risk of a","page_number":176,"box":{"x":722,"y":816,"width":94,"height":11}},{"id":"14b9c5bc-b7c6-41b5-b619-77151b42fc69","block_type":"box","text":"mismatch between the return on cash collateral reinvestments and the fees each Fund has agreed to","page_number":176,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"b0af8b30-9d51-4214-a570-8216215d7242","block_type":"box","text":"pay a borrower), foreign exchange risk (","page_number":176,"box":{"x":117,"y":847,"width":296,"height":12}},{"id":"1aee3f9e-7fa7-4853-a3de-e52dd02c1f32","block_type":"box","text":"i.e.","page_number":176,"box":{"x":414,"y":847,"width":20,"height":9}},{"id":"8e7d1efb-acba-46b3-b550-12b40a7e69f9","block_type":"box","text":", the risk of a shortfall at default when a cash collateral","page_number":176,"box":{"x":437,"y":847,"width":409,"height":11}},{"id":"05e368b9-086b-45c1-a02f-4bc39461197c","block_type":"box","text":"investment is denominated in a currency other than the currency of the assets being loaned due to","page_number":176,"box":{"x":117,"y":862,"width":735,"height":12}},{"id":"0bb5e0b4-9a26-4f71-9253-0a8f4bd09f7c","block_type":"box","text":"movements in foreign exchange rates), and credit, legal, counterparty and market risks (including the","page_number":176,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"8fecc7cc-915a-43f3-b016-911a2ba0ff64","block_type":"box","text":"II-93","page_number":176,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8d9e0964-4687-47d2-8142-0390f2bd7bae","block_type":"box","text":"NM1026U-6039989-176/256","page_number":176,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cf91ece1-e873-438a-8841-af5cdba21b84","block_type":"box","text":"risk that market events, including but not limited to corporate actions, could lead a Fund to lend","page_number":177,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"b08445b3-8abb-47e8-a1dd-add08dfd468f","block_type":"box","text":"securities that are trading at a premium due to increased demand, or to recall loaned securities or to","page_number":177,"box":{"x":116,"y":103,"width":748,"height":12}},{"id":"919a39f9-0213-43ba-a4c2-f7b696d92a5f","block_type":"box","text":"lend less or not at all, which could lead to reduced securities lending revenue). If a Fund were to lend","page_number":177,"box":{"x":117,"y":118,"width":754,"height":12}},{"id":"84c8efe8-62fd-42a0-b070-d75895234e49","block_type":"box","text":"out securities that are subject to a corporate action and commit to the borrower a particular election as","page_number":177,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"8dcc5d0f-91bb-45b9-a317-bdb962abddc9","block_type":"box","text":"determined by the Fund’s investment adviser, the benefit the Fund would receive in respect of","page_number":177,"box":{"x":116,"y":149,"width":702,"height":12}},{"id":"8076ae8d-6569-498f-bc85-bd451bd31183","block_type":"box","text":"committing to such election may or may not be less than the benefit the Fund would have received","page_number":177,"box":{"x":116,"y":165,"width":736,"height":12}},{"id":"ecadd351-1183-457d-a661-986f6212ac13","block_type":"box","text":"from making a different election in such corporate action. If a securities lending counterparty were to","page_number":177,"box":{"x":116,"y":180,"width":748,"height":12}},{"id":"80dcc4c5-3df1-4a2a-a87a-80183b33f136","block_type":"box","text":"default, a Fund would be subject to the risk of a possible delay in receiving collateral or in recovering","page_number":177,"box":{"x":116,"y":196,"width":751,"height":12}},{"id":"9134f75a-6855-47b6-9f28-60f038f2f75f","block_type":"box","text":"the loaned securities, or to a possible loss of rights in the collateral. In the event a borrower does not","page_number":177,"box":{"x":116,"y":211,"width":751,"height":12}},{"id":"b5d33b3a-4cb7-4947-95b3-c98e2cf48e59","block_type":"box","text":"return a Fund’s securities as agreed, the Fund’s ability to participate in a corporate action event may","page_number":177,"box":{"x":117,"y":227,"width":748,"height":12}},{"id":"0b8cacf9-5a6a-48fd-80d5-d234ae7217ca","block_type":"box","text":"be impacted, or the Fund may experience losses if the proceeds received from liquidating the collateral","page_number":177,"box":{"x":117,"y":242,"width":769,"height":12}},{"id":"64615772-cb81-4e00-88eb-54f7e562401a","block_type":"box","text":"do not at least equal the value of the loaned security at the time the collateral is liquidated, plus the","page_number":177,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"e9dba210-b474-4726-9d4d-eb0db8e94928","block_type":"box","text":"transaction costs incurred in purchasing replacement securities. This latter event could trigger adverse","page_number":177,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"507312f1-8e31-4b70-ad63-7a993eff48c2","block_type":"box","text":"tax consequences for a Fund. A Fund could lose money if its short-term investment of the collateral","page_number":177,"box":{"x":116,"y":289,"width":742,"height":12}},{"id":"f3b01c50-a123-4abe-8989-b5c1025c9851","block_type":"box","text":"declines in value over the period of the loan. Substitute payments received by a Fund representing","page_number":177,"box":{"x":116,"y":304,"width":737,"height":12}},{"id":"b0fdc4f5-eee3-47f8-818e-33cdd65d3bcc","block_type":"box","text":"dividends paid on securities loaned out by the Fund will not be considered qualified dividend income,","page_number":177,"box":{"x":116,"y":320,"width":752,"height":12}},{"id":"4ec8a5bd-9323-4369-89fd-6bf6171ee783","block_type":"box","text":"and distributions by the Fund of such substitute payments will not constitute qualified dividend income.","page_number":177,"box":{"x":116,"y":335,"width":765,"height":12}},{"id":"da4de940-2de7-417e-a681-bb17bf86d9d2","block_type":"box","text":"Additionally, substitute payments received by a Fund representing qualified REIT dividends paid on","page_number":177,"box":{"x":116,"y":351,"width":741,"height":12}},{"id":"6e8f2572-fd92-4e50-86c5-6106f2fc9cc5","block_type":"box","text":"REIT securities loaned out by the Fund will not be considered qualified REIT dividends, and","page_number":177,"box":{"x":117,"y":366,"width":684,"height":12}},{"id":"b31fa29c-1b92-4c5d-a2c3-d79526bb9c6b","block_type":"box","text":"distributions by the Fund of such substitute payments will not be eligible for a 20% deduction currently","page_number":177,"box":{"x":116,"y":382,"width":761,"height":12}},{"id":"1fd9a31c-e655-4b17-9221-8fd0e010fe72","block_type":"box","text":"available for ordinary REIT dividends paid to non-corporate shareholders provided certain other","page_number":177,"box":{"x":116,"y":397,"width":713,"height":12}},{"id":"3f9f5e7f-75ab-4f3e-af90-a8541fd9b0fa","block_type":"box","text":"requirements are satisfied. The securities lending agent will take into account the tax effects on","page_number":177,"box":{"x":117,"y":413,"width":710,"height":12}},{"id":"86620569-5f55-4aad-a814-b9f9f8eab9f2","block_type":"box","text":"shareholders caused by these differences in connection with a Fund’s securities lending program.","page_number":177,"box":{"x":116,"y":428,"width":730,"height":12}},{"id":"da9725d4-55a1-49d2-a656-f7ceb1216c83","block_type":"box","text":"Substitute payments received on tax-exempt securities loaned out will not be tax-exempt income.","page_number":177,"box":{"x":116,"y":444,"width":727,"height":12}},{"id":"b6331426-af56-4618-b0ba-c5f9cdf5c733","block_type":"box","text":"There could also be changes in the status of issuers under applicable laws and regulations, including","page_number":177,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"1f56ad1f-8b56-4b21-9d6d-c0d1bf024a2b","block_type":"box","text":"tax regulations, that may impact the regulatory or tax treatment of loaned securities and could, for","page_number":177,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"1b9fa902-8c13-40c1-9c05-cbc67a4eeb37","block_type":"box","text":"example, result in a delay in the payment of dividend equivalent payments owed to a Fund (as","page_number":177,"box":{"x":116,"y":490,"width":704,"height":12}},{"id":"81e5b933-bbb4-4f85-bfce-21c48f0bf089","block_type":"box","text":"permitted by applicable law).","page_number":177,"box":{"x":117,"y":506,"width":217,"height":12}},{"id":"a98ec2ee-6da8-437d-ba03-3e02d3580094","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":177,"box":{"x":117,"y":537,"width":761,"height":12}},{"id":"d065a397-96d7-4a11-bf17-5db76162d02d","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many securities lending","page_number":177,"box":{"x":116,"y":552,"width":723,"height":12}},{"id":"215d20bc-ebb9-41dd-949f-db8620146c96","block_type":"box","text":"agreements, terms that delay or restrict the rights of counterparties, such as the Fund, to terminate","page_number":177,"box":{"x":116,"y":568,"width":739,"height":12}},{"id":"feaca0aa-d984-4f4d-b070-18d654fa488a","block_type":"box","text":"such agreements, foreclose upon collateral, exercise other default rights or restrict transfers of credit","page_number":177,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"24cd7c55-62a3-4e80-9c00-f13be76ca4ae","block_type":"box","text":"support in the event that the counterparty and/or its affiliates are subject to certain types of resolution","page_number":177,"box":{"x":116,"y":599,"width":754,"height":12}},{"id":"63d7874d-c269-4295-98f9-811b4874a914","block_type":"box","text":"or insolvency proceedings. It is possible that these requirements, as well as potential additional","page_number":177,"box":{"x":116,"y":614,"width":711,"height":12}},{"id":"b6481d85-f958-46f7-a2ad-9d881c6e3f92","block_type":"box","text":"government regulation and other developments in the market, could adversely affect the Fund’s ability","page_number":177,"box":{"x":116,"y":630,"width":762,"height":12}},{"id":"203b1d60-397a-49ba-a500-ab40d0eb151e","block_type":"box","text":"to terminate existing securities lending agreements or to realize amounts to be received under such","page_number":177,"box":{"x":116,"y":645,"width":744,"height":12}},{"id":"c7c7fe08-678f-4ed1-89c8-72ec1790e500","block_type":"box","text":"agreements. Prudential regulation may also favor lenders that can provide additional protections, such","page_number":177,"box":{"x":116,"y":661,"width":758,"height":12}},{"id":"ebb36dcc-387e-4005-9bbf-3657722c444e","block_type":"box","text":"as liens that are exercisable upon lender default, to bank borrowers. Certain Funds expect to provide","page_number":177,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"13feda9f-64a2-459c-9ebf-58b5008a35ce","block_type":"box","text":"additional protections to bank borrowers, where permitted pursuant to a Fund’s investment policies and","page_number":177,"box":{"x":116,"y":692,"width":765,"height":12}},{"id":"9ff0417a-eab3-478d-86e6-e74b4c85c6f1","block_type":"box","text":"if BlackRock believes doing so is in the best interest of the Fund.","page_number":177,"box":{"x":117,"y":707,"width":478,"height":12}},{"id":"f48258a9-a54e-4aeb-8a43-798d3da1686f","block_type":"box","text":"The SEC has adopted a rule that will require reporting and public disclosure of securities loan","page_number":177,"box":{"x":116,"y":738,"width":693,"height":12}},{"id":"217af452-1295-477e-a2e5-7508fa8211d4","block_type":"box","text":"transaction","page_number":177,"box":{"x":116,"y":754,"width":81,"height":9}},{"id":"2e6cc28a-fb51-4320-a37d-89017810ca23","block_type":"box","text":"information (not including party names); this may include, but is not limited to, information","page_number":177,"box":{"x":204,"y":754,"width":661,"height":12}},{"id":"f56773ab-9951-4aec-a058-463ebeda43bd","block_type":"box","text":"about securities","page_number":177,"box":{"x":116,"y":769,"width":117,"height":10}},{"id":"c4577703-dc2a-44ed-bc7c-ce3e09f28cc7","block_type":"box","text":"loans entered into in connection with short sales. Compliance with this rule is expected","page_number":177,"box":{"x":239,"y":769,"width":643,"height":12}},{"id":"c40fe8d3-776a-448a-a193-9144e2b33978","block_type":"box","text":"to be required in late 2028, although in response to the outcome of a legal challenge against the rule,","page_number":177,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"4629672b-deab-4ec9-b74c-1dc7c118e3e0","block_type":"box","text":"the SEC may amend the rule and/or delay the current expected compliance date.","page_number":177,"box":{"x":116,"y":800,"width":602,"height":12}},{"id":"563a09a9-9817-4b7d-af08-634bc1122826","block_type":"box","text":"Short Sales.","page_number":177,"box":{"x":117,"y":831,"width":95,"height":10}},{"id":"daf2ff64-6b4a-48d5-8c05-ecd4b838fae5","block_type":"box","text":"Certain Funds may make short sales of securities, either as a hedge against potential","page_number":177,"box":{"x":213,"y":831,"width":645,"height":12}},{"id":"f2758862-5523-4d1e-a56c-860e528d556b","block_type":"box","text":"declines in value of a portfolio security or to realize appreciation when a security that the Fund does","page_number":177,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"78b7fa97-d7df-4227-a4a0-821401cb3ae1","block_type":"box","text":"not own declines in value. Certain Funds have a fundamental investment restriction prohibiting short","page_number":177,"box":{"x":117,"y":862,"width":747,"height":12}},{"id":"5a2e6de7-ac1f-47b2-816f-bd378dfa2acf","block_type":"box","text":"sales of securities unless they are “against-the-box.” In a short sale “against-the-box,” at the time of the","page_number":177,"box":{"x":116,"y":878,"width":771,"height":12}},{"id":"3aeecfe9-e7b8-457c-8046-6ada08187090","block_type":"box","text":"II-94","page_number":177,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"aee67d0e-1579-4e75-9092-34ba41040730","block_type":"box","text":"NM1026U-6039989-177/256","page_number":177,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6b39f9b6-f559-472c-91df-22b5a1867bb1","block_type":"box","text":"sale, the Fund owns or has the immediate and unconditional right to acquire the identical security at no","page_number":178,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"408dd4d0-0eb4-4b7c-b73e-023c5290dce6","block_type":"box","text":"additional cost. When a Fund makes a short sale, it borrows the security sold short and delivers it to","page_number":178,"box":{"x":116,"y":103,"width":746,"height":12}},{"id":"54409fc5-7dbf-4dc9-b884-f2f6fe9cf361","block_type":"box","text":"the broker-dealer through which it made the short sale. A Fund may have to pay a fee to borrow","page_number":178,"box":{"x":116,"y":118,"width":717,"height":12}},{"id":"e84a1044-d22e-4622-9e09-b7c449cc2e2f","block_type":"box","text":"particular securities and is often obligated to turn over any payments received on such borrowed","page_number":178,"box":{"x":117,"y":134,"width":719,"height":12}},{"id":"50c20fc1-10d5-4221-9406-6d4429b8b467","block_type":"box","text":"securities to the lender of the securities.","page_number":178,"box":{"x":116,"y":149,"width":301,"height":10}},{"id":"37df1863-61c9-46d4-94ca-66d079c6f903","block_type":"box","text":"A Fund secures its obligation to replace the borrowed security by depositing collateral with the broker","page_number":178,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"78af3aef-0edb-42d7-8edf-7d237ed54ab3","block_type":"box","text":"dealer, usually in cash, U.S. Government Securities or other liquid securities similar to those borrowed.","page_number":178,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"6d2677ce-0af0-4bf0-95a5-166e92601e6b","block_type":"box","text":"With respect to uncovered short positions, a Fund is required to deposit similar collateral with its","page_number":178,"box":{"x":116,"y":211,"width":717,"height":12}},{"id":"b48d302b-4353-4758-acf9-a11a48acdffe","block_type":"box","text":"custodian, if necessary, to the extent that the value of both collateral deposits in the aggregate is at all","page_number":178,"box":{"x":116,"y":227,"width":763,"height":12}},{"id":"2ca0150e-8581-43c8-ade7-f701e5c15513","block_type":"box","text":"times equal to at least 100% of the current market value of the security sold short. Depending on","page_number":178,"box":{"x":116,"y":242,"width":722,"height":12}},{"id":"88522e16-cd3c-458a-9aff-85059f62e85c","block_type":"box","text":"arrangements made with the broker-dealer from which the Fund borrowed the security, regarding","page_number":178,"box":{"x":116,"y":258,"width":726,"height":12}},{"id":"653660b2-0040-4c8e-8ee6-bfc9e082c3e8","block_type":"box","text":"payment received by the Fund on such security, a Fund may not receive any payments (including","page_number":178,"box":{"x":117,"y":273,"width":728,"height":12}},{"id":"eac2763c-ad9e-4974-a573-17e5b06c0494","block_type":"box","text":"interest) on its collateral deposited with such broker-dealer.","page_number":178,"box":{"x":117,"y":289,"width":443,"height":12}},{"id":"eca55253-2ba2-4c5d-bc1e-5b547e84ca7f","block_type":"box","text":"Because making short sales in securities that it does not own exposes a Fund to the risks associated","page_number":178,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"9fdcbede-b544-44be-b72b-804c2f51e63b","block_type":"box","text":"with those securities, such short sales involve speculative exposure risk. A Fund will incur a loss as a","page_number":178,"box":{"x":116,"y":335,"width":755,"height":12}},{"id":"8e2bd14a-fa8f-486b-938b-30c186ecc0c5","block_type":"box","text":"result of a short sale if the price of the security increases between the date of the short sale and the","page_number":178,"box":{"x":117,"y":351,"width":743,"height":12}},{"id":"289b0b7b-0ec5-43ad-a15e-c04fd308525b","block_type":"box","text":"date on which the Fund replaces the borrowed security. As a result, if a Fund makes short sales in","page_number":178,"box":{"x":116,"y":366,"width":735,"height":12}},{"id":"a87c13da-2b7f-45e3-9c42-8a6ef7d8f244","block_type":"box","text":"securities that increase in value, it will likely underperform similar mutual funds that do not make short","page_number":178,"box":{"x":116,"y":382,"width":759,"height":12}},{"id":"5b2262d0-feb6-413e-96e3-b4b10a3ed470","block_type":"box","text":"sales in securities. A Fund will realize a gain on a short sale if the security declines in price between","page_number":178,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"6de49a16-4cdd-438f-b0fb-383ebfccd539","block_type":"box","text":"those dates. There can be no assurance that a Fund will be able to close out a short sale position at","page_number":178,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"5952138b-44b7-4a21-969d-6d26b56eda3e","block_type":"box","text":"any particular time or at an acceptable price. Although a Fund’s gain is limited to the price at which it","page_number":178,"box":{"x":116,"y":428,"width":750,"height":12}},{"id":"72aa4001-0c26-48d2-b3e0-8fad2b4d03bb","block_type":"box","text":"sold the security short, its potential loss is limited only by the maximum attainable price of the security,","page_number":178,"box":{"x":116,"y":444,"width":764,"height":12}},{"id":"1ab2b6a0-e496-4989-99ee-1de80326adcc","block_type":"box","text":"less the price at which the security was sold and may, theoretically, be unlimited.","page_number":178,"box":{"x":117,"y":459,"width":603,"height":12}},{"id":"843a8616-2674-4f8e-9eca-65b82acbe056","block_type":"box","text":"A Fund may also make short sales “against the box” without being subject to such limitations.","page_number":178,"box":{"x":116,"y":490,"width":698,"height":12}},{"id":"7f2ccd7c-2a8e-4aed-af59-44a50069c636","block_type":"box","text":"A Fund must comply with Rule 18f-4 under the Investment Company Act with respect to its short sale","page_number":178,"box":{"x":116,"y":521,"width":756,"height":12}},{"id":"0907a6e0-fd4a-4072-b285-358f28a96669","block_type":"box","text":"borrowings, which are considered Derivatives Transactions under the Rule. See “— Derivatives —","page_number":178,"box":{"x":117,"y":537,"width":734,"height":12}},{"id":"ed1c67da-121b-48aa-924d-0bd81a00eda8","block_type":"box","text":"Regulation of Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":178,"box":{"x":117,"y":552,"width":624,"height":12}},{"id":"1ee305e6-635b-4b14-846c-3a73f2e95c50","block_type":"box","text":"Short sales are also subject to certain SEC regulations and certain European Union and United","page_number":178,"box":{"x":116,"y":583,"width":712,"height":12}},{"id":"cb1dc487-4a48-4d41-b0dc-4f3bc7adf3bf","block_type":"box","text":"Kingdom regulations (under which there are restrictions on net short sales in certain securities). If the","page_number":178,"box":{"x":117,"y":599,"width":755,"height":12}},{"id":"08b4ceac-1f1c-4318-94cf-c0aff4bd6ea6","block_type":"box","text":"SEC or regulatory authorities in other jurisdictions were to adopt additional restrictions regarding short","page_number":178,"box":{"x":116,"y":614,"width":761,"height":12}},{"id":"4582a0d7-5890-4394-9eb7-cff573d9671d","block_type":"box","text":"sales, they could restrict a Fund’s ability to engage in short sales in certain circumstances, and the","page_number":178,"box":{"x":116,"y":630,"width":736,"height":12}},{"id":"cc668b90-17af-4d69-af99-239bd723d156","block_type":"box","text":"Fund may be unable to execute its investment strategy as a result. In response to market events, the","page_number":178,"box":{"x":117,"y":645,"width":753,"height":12}},{"id":"b142c396-3961-47c1-898b-501c45754f0d","block_type":"box","text":"SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted)","page_number":178,"box":{"x":116,"y":661,"width":742,"height":12}},{"id":"599667eb-ea6a-4dca-8faf-86b0f8feaa34","block_type":"box","text":"bans or other restrictions on short sales of certain securities or on derivatives and other hedging","page_number":178,"box":{"x":117,"y":676,"width":711,"height":12}},{"id":"17822b4d-e82d-48ef-ab09-95e6fe286908","block_type":"box","text":"instruments used to achieve a similar economic effect. Such bans or other restrictions may make it","page_number":178,"box":{"x":117,"y":692,"width":731,"height":12}},{"id":"14056eaa-6ba4-45e4-afa6-4db010116507","block_type":"box","text":"impossible for a Fund to execute certain investment strategies and may have a material adverse effect","page_number":178,"box":{"x":117,"y":707,"width":760,"height":12}},{"id":"77a9d0db-9b9c-4ef1-9022-84c263964c83","block_type":"box","text":"on the Fund’s ability to generate returns.","page_number":178,"box":{"x":116,"y":723,"width":299,"height":12}},{"id":"96454b6b-b2ae-4f38-89bb-d37c35f7c25c","block_type":"box","text":"Special Purpose Acquisition Companies.","page_number":178,"box":{"x":117,"y":754,"width":325,"height":12}},{"id":"d5abf711-378e-4137-950d-119a31fce032","block_type":"box","text":"A Fund may invest in stock, warrants, rights and other","page_number":178,"box":{"x":448,"y":754,"width":402,"height":12}},{"id":"5268b5a6-241a-4dfe-801a-cab5e9bb094c","block_type":"box","text":"interests issued by special purpose acquisition companies (“SPACs”) or similar special purpose entities","page_number":178,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"a977899e-eaba-429f-946a-3ca146e68976","block_type":"box","text":"that pool funds to seek potential acquisition opportunities, including the “founder’s” shares and","page_number":178,"box":{"x":116,"y":785,"width":698,"height":12}},{"id":"cda60077-cb3f-4d65-9e31-4db9dd887d61","block_type":"box","text":"warrants described below. A SPAC is a publicly traded company that raises investment capital via an","page_number":178,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"8c3de9a5-c522-42d9-8a30-745892749ba4","block_type":"box","text":"IPO for the purpose of identifying and acquiring one or more operating businesses or assets. In","page_number":178,"box":{"x":117,"y":816,"width":705,"height":12}},{"id":"638ec882-844e-414f-99f7-2e20d8c039b4","block_type":"box","text":"connection with forming a SPAC, the SPAC’s sponsors acquire “founder’s” shares, generally for","page_number":178,"box":{"x":116,"y":831,"width":716,"height":12}},{"id":"62d2b523-ba27-41d0-905a-5db16845866c","block_type":"box","text":"nominal consideration, and warrants that will result in the sponsors owning a specified percentage","page_number":178,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"67d2ecac-921c-4331-a0f3-35f3b40e237b","block_type":"box","text":"(typically 20%) of the SPAC’s outstanding common stock upon completion of the IPO. At the time a","page_number":178,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"390f4da9-996b-490a-889e-020c4f8aa38b","block_type":"box","text":"SPAC conducts an IPO, it has selected a management team but has not yet identified a specific","page_number":178,"box":{"x":116,"y":878,"width":718,"height":12}},{"id":"e79d01fb-6a9d-432f-b730-425f03ba8dd1","block_type":"box","text":"II-95","page_number":178,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ed12505c-e377-491e-9dc7-0d02165c7328","block_type":"box","text":"NM1026U-6039989-178/256","page_number":178,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"853f9881-4926-44ee-8d38-fbbe24d2730c","block_type":"box","text":"acquisition opportunity. Unless and until an acquisition is completed, a SPAC generally invests its","page_number":179,"box":{"x":116,"y":87,"width":728,"height":12}},{"id":"beef072d-fa2f-4475-b838-1f8cd0a9219c","block_type":"box","text":"assets in U.S. Government securities, money market securities and cash. If an acquisition that meets","page_number":179,"box":{"x":116,"y":102,"width":756,"height":13}},{"id":"bc35c814-e1bf-434e-8fd9-2b04df62a44e","block_type":"box","text":"the requirements for the SPAC is not completed within a pre-established period of time, the invested","page_number":179,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"2f57074b-5bcc-4968-a234-11718ceb64ad","block_type":"box","text":"funds are returned to the SPAC’s public shareholders, the warrants expire, and the “founder’s” shares","page_number":179,"box":{"x":116,"y":134,"width":761,"height":11}},{"id":"13703dff-b690-4d7e-9631-382a84167e65","block_type":"box","text":"and such warrants become worthless. Because SPACs and similar entities are in essence “blank","page_number":179,"box":{"x":116,"y":149,"width":725,"height":10}},{"id":"4ff91dcf-8c19-4dc9-8550-1f87a2d86b07","block_type":"box","text":"check” companies without operating histories or ongoing business operations (other than identifying","page_number":179,"box":{"x":116,"y":165,"width":745,"height":12}},{"id":"9ca2efa8-4afd-410f-90fb-b6cf51049eab","block_type":"box","text":"and pursuing acquisitions), the potential for the long-term capital appreciation of their securities is","page_number":179,"box":{"x":116,"y":180,"width":728,"height":12}},{"id":"07aa9183-bc34-4bcf-a4fa-b933103122d8","block_type":"box","text":"particularly dependent on the ability of the SPAC’s management to identify and complete a profitable","page_number":179,"box":{"x":117,"y":196,"width":751,"height":12}},{"id":"7e9ea2ae-ceb9-43ef-a2f1-93e8f694ed6c","block_type":"box","text":"acquisition. There is no guarantee that the SPACs in which a Fund invests will complete an acquisition","page_number":179,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"d5fa8fbf-64d5-4944-87f6-d46841b40f3d","block_type":"box","text":"or that any acquisitions completed by the SPACs in which the Fund invests will be profitable. Some","page_number":179,"box":{"x":116,"y":227,"width":740,"height":12}},{"id":"3bc77c03-9f1e-4d3e-a450-6cbe9a6b156f","block_type":"box","text":"SPACs may pursue acquisitions only within certain industries or regions, which may ultimately lead to","page_number":179,"box":{"x":116,"y":242,"width":758,"height":12}},{"id":"abf823da-0071-4e88-93bb-a57384960039","block_type":"box","text":"an increase in the volatility of their prices following the acquisition. In addition, some of these securities","page_number":179,"box":{"x":116,"y":258,"width":768,"height":12}},{"id":"69643caa-c357-4a46-bff7-b40104c5204e","block_type":"box","text":"may be considered illiquid and/or subject to restrictions on resale.","page_number":179,"box":{"x":117,"y":273,"width":491,"height":12}},{"id":"d6f83cb2-7e4e-4f1c-a3b9-e9fb0aa5c335","block_type":"box","text":"Standby Commitment Agreements.","page_number":179,"box":{"x":117,"y":301,"width":278,"height":12}},{"id":"3dfa4cd3-d770-41aa-97c3-8fdee9d9af05","block_type":"box","text":"Standby commitment agreements commit a Fund, for a stated","page_number":179,"box":{"x":396,"y":301,"width":471,"height":12}},{"id":"354aff42-f192-4f13-98f3-a8ba510c6667","block_type":"box","text":"period of time, to purchase a stated amount of securities that may be issued and sold to that Fund at","page_number":179,"box":{"x":117,"y":316,"width":750,"height":13}},{"id":"68a2c574-cfe9-4841-be81-58adcdd30058","block_type":"box","text":"the option of the issuer. The price of the security is fixed at the time of the commitment. At the time of","page_number":179,"box":{"x":116,"y":332,"width":756,"height":12}},{"id":"8dfde8df-15cd-4dfc-9c4e-183f8c61ab4d","block_type":"box","text":"entering into the agreement, a Fund is paid a commitment fee, regardless of whether or not the","page_number":179,"box":{"x":116,"y":347,"width":711,"height":13}},{"id":"2e79d659-c4e5-4c52-ae5a-7928d2ca040d","block_type":"box","text":"security is ultimately issued. A Fund will enter into such agreements for the purpose of investing in the","page_number":179,"box":{"x":116,"y":363,"width":762,"height":12}},{"id":"973783c0-2ca6-4aea-b649-687e9a63c12a","block_type":"box","text":"security underlying the commitment at a price that is considered advantageous to the Fund.","page_number":179,"box":{"x":116,"y":379,"width":685,"height":12}},{"id":"fa1e3496-766a-4fe4-b236-ca82281da1d2","block_type":"box","text":"There can be no assurance that the securities subject to a standby commitment will be issued, and the","page_number":179,"box":{"x":116,"y":407,"width":767,"height":11}},{"id":"aa070f6a-d460-45df-b6b0-b4e5556252ab","block_type":"box","text":"value of the security, if issued, on the delivery date may be more or less than its purchase price. Since","page_number":179,"box":{"x":116,"y":422,"width":764,"height":12}},{"id":"2ea049b7-877f-46d4-a174-8bcbdf56e8a8","block_type":"box","text":"the issuance of the security underlying the commitment is at the option of the issuer, the Fund may","page_number":179,"box":{"x":116,"y":437,"width":738,"height":12}},{"id":"516fe0e5-3bb4-427c-8f70-9fcfc6c74d79","block_type":"box","text":"bear the risk of a decline in the value of such security and may not benefit from an appreciation in the","page_number":179,"box":{"x":117,"y":453,"width":756,"height":12}},{"id":"e83ad525-1272-48b7-869c-6eda7ae1f6e1","block_type":"box","text":"value of the security during the commitment period.","page_number":179,"box":{"x":116,"y":468,"width":386,"height":12}},{"id":"967611cd-556c-4e1f-8e05-ad854f946790","block_type":"box","text":"The purchase of a security pursuant to a standby commitment agreement and the related commitment","page_number":179,"box":{"x":116,"y":496,"width":756,"height":12}},{"id":"d48697db-18bf-4b29-a5e7-9f3865d569ff","block_type":"box","text":"fee will be recorded on the date on which the security can reasonably be expected to be issued, and the","page_number":179,"box":{"x":116,"y":512,"width":769,"height":12}},{"id":"2a0f8e1a-91f4-4f06-a43b-97cea9408c66","block_type":"box","text":"value of the security thereafter will be reflected in the calculation of a Fund’s NAV. The cost basis of the","page_number":179,"box":{"x":116,"y":527,"width":765,"height":12}},{"id":"3d303c93-cb73-46df-90e3-a98bcdc3dd0a","block_type":"box","text":"security will be adjusted by the amount of the commitment fee. In the event the security is not issued,","page_number":179,"box":{"x":116,"y":543,"width":748,"height":12}},{"id":"1267b4b9-8b30-44ad-ad66-66e156c3de88","block_type":"box","text":"the commitment fee will be recorded as income on the expiration date of the standby commitment.","page_number":179,"box":{"x":116,"y":558,"width":727,"height":12}},{"id":"6f3be447-67f4-4f3c-b799-2a254f286c87","block_type":"box","text":"Standby commitments will only be entered into with dealers, banks and broker-dealers which, in the","page_number":179,"box":{"x":116,"y":586,"width":744,"height":12}},{"id":"018b510d-a225-441e-8b8f-cddf632364ea","block_type":"box","text":"Manager’s or sub-adviser’s opinion, present minimal credit risks. A Fund will acquire standby","page_number":179,"box":{"x":117,"y":602,"width":693,"height":12}},{"id":"75413e6a-6bce-45f3-8e4e-d443954959ad","block_type":"box","text":"commitments solely to facilitate portfolio liquidity and not to exercise its rights thereunder for trading","page_number":179,"box":{"x":116,"y":617,"width":744,"height":12}},{"id":"453aa29e-32c0-46d5-a5ca-04df252db2aa","block_type":"box","text":"purposes. Standby commitments will be valued at zero in determining NAV. Accordingly, where a Fund","page_number":179,"box":{"x":117,"y":633,"width":769,"height":12}},{"id":"4a8eae89-813c-4fed-9638-240edb999e74","block_type":"box","text":"pays directly or indirectly for a standby commitment, its cost will be reflected as an unrealized loss for","page_number":179,"box":{"x":117,"y":648,"width":756,"height":12}},{"id":"cc8f412a-ea1e-44e5-9b76-d83941f40df0","block_type":"box","text":"the period during which the commitment is held by such Fund and will be reflected as a realized gain or","page_number":179,"box":{"x":116,"y":664,"width":767,"height":12}},{"id":"902034e1-42f9-44f2-a974-302d2f672eb2","block_type":"box","text":"loss when the commitment is exercised or expires.","page_number":179,"box":{"x":117,"y":679,"width":373,"height":12}},{"id":"547106bb-1a79-4a24-b4db-def1aa8dd6a7","block_type":"box","text":"Stripped Securities.","page_number":179,"box":{"x":117,"y":707,"width":156,"height":12}},{"id":"d2a64783-2df1-4b27-9c1f-dd1ef9bc0ff2","block_type":"box","text":"Stripped securities are created when the issuer separates the interest and","page_number":179,"box":{"x":279,"y":707,"width":549,"height":12}},{"id":"e334a1cc-24a4-485c-8e49-ec5f247653f3","block_type":"box","text":"principal components of an instrument and sells them as separate securities. In general, one security is","page_number":179,"box":{"x":117,"y":723,"width":765,"height":12}},{"id":"1258d869-7c92-47e8-ba59-b22ea4e54dbd","block_type":"box","text":"entitled to receive the interest payments on the underlying assets (the interest only or “IO” security)","page_number":179,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"b309fa9f-5679-441f-8eaa-f1daed7e1316","block_type":"box","text":"and the other to receive the principal payments (the principal only or “PO” security). Some stripped","page_number":179,"box":{"x":116,"y":754,"width":731,"height":12}},{"id":"dcee95cb-21df-4f8e-b22b-77e29702fa98","block_type":"box","text":"securities may receive a combination of interest and principal payments. The yields to maturity on IOs","page_number":179,"box":{"x":116,"y":769,"width":755,"height":12}},{"id":"f62f071f-2974-49ae-b016-bf9d290119b6","block_type":"box","text":"and POs are sensitive to the expected or anticipated rate of principal payments (including","page_number":179,"box":{"x":116,"y":785,"width":663,"height":12}},{"id":"1a399aed-0f2e-445d-8530-31d271408d14","block_type":"box","text":"prepayments) on the related underlying assets, and principal payments may have a material effect on","page_number":179,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"ccea2497-5021-4372-8262-5670b863755b","block_type":"box","text":"yield to maturity. If the underlying assets experience greater than anticipated prepayments of principal,","page_number":179,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"91c67882-f030-4bd6-bb90-a89b966eb4c2","block_type":"box","text":"a Fund may not fully recoup its initial investment in IOs. Conversely, if the underlying assets","page_number":179,"box":{"x":116,"y":831,"width":686,"height":12}},{"id":"eebc13f9-186e-4c51-87c1-9095a5a224c9","block_type":"box","text":"experience less than anticipated prepayments of principal, the yield on POs could be adversely","page_number":179,"box":{"x":116,"y":847,"width":711,"height":12}},{"id":"838fb1a6-8542-4ca9-820b-595f8ee9e046","block_type":"box","text":"affected. Stripped securities may be highly sensitive to changes in interest rates and rates of","page_number":179,"box":{"x":116,"y":862,"width":691,"height":12}},{"id":"59c1471c-16be-4de2-b950-e5c7c57630ff","block_type":"box","text":"prepayment.","page_number":179,"box":{"x":117,"y":878,"width":97,"height":12}},{"id":"6904539e-4a81-41ed-beb2-be1fc92edc54","block_type":"box","text":"II-96","page_number":179,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dab80f60-9e61-42d6-95f1-dc680782ef55","block_type":"box","text":"NM1026U-6039989-179/256","page_number":179,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6049825a-d8d3-4457-96f4-0abdc28b8ee3","block_type":"box","text":"Structured Notes.","page_number":180,"box":{"x":117,"y":87,"width":139,"height":10}},{"id":"03fe8651-4d80-4179-9843-36e7e658b48d","block_type":"box","text":"Structured notes and other related instruments purchased by a Fund are generally","page_number":180,"box":{"x":257,"y":87,"width":621,"height":12}},{"id":"83d53d32-ba42-402c-a8d0-426a60af3725","block_type":"box","text":"privately negotiated debt obligations where the principal and/or interest is determined by reference to","page_number":180,"box":{"x":117,"y":102,"width":753,"height":13}},{"id":"ec3df693-4a08-4831-a82e-861ab031bcfa","block_type":"box","text":"the performance of a specific asset, benchmark asset, market or interest rate (“reference measure”).","page_number":180,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"765da600-10b9-46ae-955f-05b7b9a413fe","block_type":"box","text":"Issuers of structured notes generally include corporations and banks. The interest rate or the principal","page_number":180,"box":{"x":117,"y":134,"width":760,"height":12}},{"id":"41076c01-c4bb-4800-9b16-93a33f950eba","block_type":"box","text":"amount payable upon maturity or redemption may increase or decrease, depending upon changes in","page_number":180,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"dd9b6dac-259c-488a-8e6a-38a427977230","block_type":"box","text":"the value of the reference measure. The terms of a structured note may provide that, in certain","page_number":180,"box":{"x":116,"y":165,"width":708,"height":12}},{"id":"59bd6563-6581-4fd2-92f5-38b9e3539884","block_type":"box","text":"circumstances, no principal is due at maturity and, therefore, may result in a loss of invested capital by","page_number":180,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"57bdf49a-429d-4051-9462-f5e507b572a3","block_type":"box","text":"a Fund. The interest and/or principal payments that may be made on a structured product may vary","page_number":180,"box":{"x":116,"y":196,"width":743,"height":12}},{"id":"ad3f2601-124d-472c-b009-66eae7b796c9","block_type":"box","text":"widely, depending on a variety of factors, including the volatility of the reference measure.","page_number":180,"box":{"x":116,"y":211,"width":671,"height":12}},{"id":"d4f1a69a-95c3-437f-8f16-68be52fcb0d7","block_type":"box","text":"Structured notes may be positively or negatively indexed, so the appreciation of the reference measure","page_number":180,"box":{"x":116,"y":242,"width":770,"height":12}},{"id":"979a90ce-5e22-474c-9089-2e1a43a1976f","block_type":"box","text":"may produce an increase or a decrease in the interest rate or the value of the principal at maturity. The","page_number":180,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"a682a20f-4f13-46ef-9b94-15382f9ec363","block_type":"box","text":"rate of return on structured notes may be determined by applying a multiplier to the performance or","page_number":180,"box":{"x":117,"y":273,"width":739,"height":12}},{"id":"2a28f4f2-973e-43f2-bc88-9922999540c6","block_type":"box","text":"differential performance of reference measures. Application of a multiplier involves leverage that will","page_number":180,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"d5923b4c-315d-483c-9ca6-622121968ea8","block_type":"box","text":"serve to magnify the potential for gain and the risk of loss.","page_number":180,"box":{"x":116,"y":304,"width":435,"height":12}},{"id":"60a4cf7e-14d2-4feb-af3f-362f01ffa73a","block_type":"box","text":"The purchase of structured notes exposes a Fund to the credit risk of the issuer of the structured","page_number":180,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"27810a5a-9ea3-400c-b658-5f4fc2c5c376","block_type":"box","text":"product. Structured notes may also be more volatile, less liquid, and more difficult to price accurately","page_number":180,"box":{"x":117,"y":351,"width":750,"height":12}},{"id":"e4e7aca8-5449-4f1a-a0bf-f0496b915503","block_type":"box","text":"than less complex securities and instruments or more traditional debt securities. The secondary market","page_number":180,"box":{"x":116,"y":366,"width":770,"height":12}},{"id":"999bff2f-36b2-4a0b-a920-d60c1991e682","block_type":"box","text":"for structured notes could be illiquid making them difficult to sell when the Fund determines to sell","page_number":180,"box":{"x":116,"y":382,"width":729,"height":12}},{"id":"4549cbee-07b2-4705-8ca7-9f6ed5d99323","block_type":"box","text":"them. The possible lack of a liquid secondary market for structured notes and the resulting inability of","page_number":180,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"9b2285c0-4ca1-4b0b-9e28-f9e3097fdc4e","block_type":"box","text":"the Fund to sell a structured note could expose the Fund to losses and could make structured notes","page_number":180,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"1e1f8db2-08d8-4729-9aac-e732a3facf0c","block_type":"box","text":"more difficult for the Fund to value accurately.","page_number":180,"box":{"x":117,"y":428,"width":344,"height":12}},{"id":"051285e9-2388-4cab-9981-5574516c8303","block_type":"box","text":"Taxability Risk.","page_number":180,"box":{"x":118,"y":459,"width":119,"height":12}},{"id":"4177366e-5ead-42d8-972f-cf3aa658b4b3","block_type":"box","text":"Certain of the Funds intend to minimize the payment of taxable income to","page_number":180,"box":{"x":238,"y":459,"width":555,"height":12}},{"id":"9aea02f3-e6a3-4369-9d4f-3fa9af1456bc","block_type":"box","text":"shareholders by investing in tax-exempt or municipal securities in reliance at the time of purchase on","page_number":180,"box":{"x":116,"y":475,"width":753,"height":12}},{"id":"117fb198-67e3-40f8-b7c3-f30783c76f79","block_type":"box","text":"an opinion of bond counsel to the issuer and, in the case of derivative securities, sponsors’ counsel,","page_number":180,"box":{"x":116,"y":490,"width":745,"height":12}},{"id":"f20c6e07-bba7-4d52-abd4-a9197df6ac21","block_type":"box","text":"that the interest paid on those securities will be excludable from gross income for U.S. federal income","page_number":180,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"f2774665-da4b-482c-b602-3ce487008d61","block_type":"box","text":"tax purposes. Such securities, however, may be determined to pay, or have paid, taxable income","page_number":180,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"105c2441-20f8-40b9-a16d-d361b3607214","block_type":"box","text":"subsequent to the Fund’s acquisition of the securities. In that event, the IRS may demand that the","page_number":180,"box":{"x":116,"y":537,"width":731,"height":12}},{"id":"d5c16d2d-df82-44be-897c-3bb4d9c07464","block_type":"box","text":"Fund pay U.S. federal income taxes on the affected interest income, and, if the Fund agrees to do so,","page_number":180,"box":{"x":117,"y":552,"width":758,"height":12}},{"id":"eaf8d374-565d-4628-b9d7-f264821d9d06","block_type":"box","text":"the Fund’s yield could be adversely affected. In addition, the treatment of dividends previously paid or","page_number":180,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"68832cce-0b56-413c-a80b-d719e771824d","block_type":"box","text":"to be paid by the Fund as “exempt interest dividends” could be adversely affected, subjecting the","page_number":180,"box":{"x":116,"y":583,"width":724,"height":12}},{"id":"cf2c0251-02bf-4770-bdb1-d186071ff67d","block_type":"box","text":"Fund’s shareholders to increased U.S. federal income tax liabilities. If the interest paid on any","page_number":180,"box":{"x":117,"y":599,"width":699,"height":12}},{"id":"3f34c515-a92e-4283-95fa-595cef36ea2e","block_type":"box","text":"tax-exempt or municipal security held by the Fund is subsequently determined to be taxable, the Fund","page_number":180,"box":{"x":116,"y":614,"width":762,"height":12}},{"id":"50cf5e42-5e98-4880-b0a0-eb732da6b319","block_type":"box","text":"intends to dispose of that security as soon as reasonably practicable. In addition, future laws,","page_number":180,"box":{"x":117,"y":630,"width":695,"height":12}},{"id":"73ad2820-a785-4bd1-af7f-39b576fe15ae","block_type":"box","text":"regulations, rulings or court decisions may cause interest on municipal securities to be subject, directly","page_number":180,"box":{"x":117,"y":645,"width":765,"height":12}},{"id":"fd954f57-f9d3-4db2-85ca-bf6a4e8252d6","block_type":"box","text":"or indirectly, to U.S. federal income taxation or interest on state municipal securities to be subject to","page_number":180,"box":{"x":116,"y":661,"width":739,"height":12}},{"id":"f2df3463-a949-48eb-bd9e-5e62a6f35ff2","block_type":"box","text":"state or local income taxation, or the value of state municipal securities to be subject to state or local","page_number":180,"box":{"x":116,"y":676,"width":745,"height":12}},{"id":"6ae230c6-5793-40a0-85ef-5d274ca89526","block_type":"box","text":"intangible personal property tax, or may otherwise prevent the Fund from realizing the full current","page_number":180,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"2b1d5d0e-b2d9-4c10-8b50-639a60000c8b","block_type":"box","text":"benefit of the tax-exempt status of such securities. Any such change could also affect the market price","page_number":180,"box":{"x":117,"y":707,"width":758,"height":12}},{"id":"1262c4bd-6ba0-4d5f-b732-b4192f84be10","block_type":"box","text":"of such securities, and thus the value of an investment in the Fund.","page_number":180,"box":{"x":116,"y":723,"width":497,"height":11}},{"id":"c85dbe1b-7970-441b-9d9e-4e7d1cc87849","block_type":"box","text":"Temporary Defensive Measures.","page_number":180,"box":{"x":118,"y":754,"width":255,"height":12}},{"id":"c3d85f84-9f60-4f21-bfac-a4e3e9a6ba67","block_type":"box","text":"As a temporary defensive measure, including to respond to adverse","page_number":180,"box":{"x":379,"y":754,"width":503,"height":12}},{"id":"0d89eee0-f390-42ac-aa81-388d44fdf2a2","block_type":"box","text":"market, economic, political or other conditions, a Fund may depart from its principal investment","page_number":180,"box":{"x":117,"y":769,"width":704,"height":12}},{"id":"ffbca9cc-a564-4f6e-9a30-1e751805253d","block_type":"box","text":"strategies and may invest without limitation in cash, high quality money market instruments, or other","page_number":180,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"d5b39feb-9227-465f-abca-681269f050d9","block_type":"box","text":"short term investments. Certain Funds may also invest in cash and other such instruments pending","page_number":180,"box":{"x":116,"y":800,"width":735,"height":12}},{"id":"9a8727fe-b4d0-4c48-a28c-e11ebdae8bf9","block_type":"box","text":"investment or to meet anticipated redemption requests. High quality money market instruments include","page_number":180,"box":{"x":117,"y":816,"width":763,"height":12}},{"id":"8e80dbc5-a787-4975-9c00-14e92eb1aca8","block_type":"box","text":"U.S. Government obligations, U.S. Government agency obligations, dollar denominated obligations of","page_number":180,"box":{"x":117,"y":831,"width":758,"height":12}},{"id":"e4733752-cc51-401b-9204-ea8a44f06b3d","block_type":"box","text":"foreign issuers, bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate","page_number":180,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"435cf271-ff15-4c42-a4f8-7edb073432b2","block_type":"box","text":"obligations, commercial paper, repurchase agreements and obligations of supranational organizations.","page_number":180,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"f63ca03f-27d7-47af-9f9e-ae274bb35352","block_type":"box","text":"Generally, such obligations will mature within one year from the date of settlement but may mature","page_number":180,"box":{"x":117,"y":878,"width":735,"height":12}},{"id":"00beb227-0044-4de5-921c-e734839065df","block_type":"box","text":"II-97","page_number":180,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5bdbfaa9-fb96-41c0-8ea8-6786e692f4a2","block_type":"box","text":"NM1026U-6039989-180/256","page_number":180,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d28ccdc6-f6c9-47ef-888e-7ec0656c706d","block_type":"box","text":"within two years from the date of settlement. Temporary defensive measures may affect a Fund’s","page_number":181,"box":{"x":116,"y":87,"width":727,"height":12}},{"id":"0e67f0bd-d15f-4f10-8850-394e173a2846","block_type":"box","text":"ability to achieve its investment objective.","page_number":181,"box":{"x":116,"y":103,"width":312,"height":12}},{"id":"ee88a6ab-b86d-4563-a97a-f45e614cb39d","block_type":"box","text":"U.S. Government Obligations.","page_number":181,"box":{"x":117,"y":134,"width":236,"height":12}},{"id":"2cffcab9-3f8c-4417-bc6a-06ee11db3454","block_type":"box","text":"A Fund may purchase obligations issued or guaranteed by the U.S.","page_number":181,"box":{"x":354,"y":134,"width":510,"height":12}},{"id":"e1af8d63-7d6a-4c1d-938e-f04fb2228de9","block_type":"box","text":"Government and U.S. Government agencies and instrumentalities. Obligations of certain agencies and","page_number":181,"box":{"x":117,"y":149,"width":767,"height":12}},{"id":"5a92eecb-e1bf-4b4e-a5c2-b563087bb5aa","block_type":"box","text":"instrumentalities of the U.S. Government are supported by the full faith and credit of the U.S. Treasury.","page_number":181,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"dbcb6b94-fd11-4607-abc6-8e6d60d70f10","block_type":"box","text":"Others are supported by the right of the issuer to borrow from the U.S. Treasury; and still others are","page_number":181,"box":{"x":116,"y":180,"width":745,"height":12}},{"id":"cd9d91c8-4ac5-4b71-a428-63ef1bb902cf","block_type":"box","text":"supported only by the credit of the agency or instrumentality issuing the obligation. No assurance can","page_number":181,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"07d43b73-5d41-4631-bfb9-7edc46cac2a0","block_type":"box","text":"be given that the U.S. Government will provide financial support to U.S. Government-sponsored","page_number":181,"box":{"x":117,"y":211,"width":715,"height":12}},{"id":"660d97c2-5404-4a7d-9c65-9d98652a13a6","block_type":"box","text":"instrumentalities if it is not obligated to do so by law. Certain U.S. Treasury and agency securities may","page_number":181,"box":{"x":117,"y":227,"width":762,"height":12}},{"id":"063adf1f-a9b2-4ee6-baa1-5eb581daea44","block_type":"box","text":"be held by trusts that issue participation certificates (such as Treasury income growth receipts and","page_number":181,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"a5d5bbbf-e6a5-4675-a1cf-b96cbe864818","block_type":"box","text":"certificates of accrual on Treasury certificates). These certificates, as well as Treasury receipts and","page_number":181,"box":{"x":116,"y":258,"width":740,"height":12}},{"id":"240c948b-1c99-485d-a19a-f2aa391db6bd","block_type":"box","text":"other stripped securities, represent beneficial ownership interests in either future interest payments or","page_number":181,"box":{"x":116,"y":273,"width":759,"height":12}},{"id":"6851c4c6-c518-4ae3-8828-34bd3f82f012","block_type":"box","text":"the future principal payments on U.S. Government obligations. These instruments are issued at a","page_number":181,"box":{"x":116,"y":289,"width":727,"height":12}},{"id":"0aaf1de8-6bab-44a7-b929-7b7d59a86f83","block_type":"box","text":"discount to their “face value” and may (particularly in the case of stripped mortgage-backed securities)","page_number":181,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"12d11b3b-5e60-4de4-91ca-f5fa7fb80202","block_type":"box","text":"exhibit greater price volatility than ordinary debt securities because of the manner in which their","page_number":181,"box":{"x":116,"y":320,"width":713,"height":12}},{"id":"09106dc3-db35-44a1-9d67-29ea8e3c73b9","block_type":"box","text":"principal and interest are returned to investors.","page_number":181,"box":{"x":117,"y":335,"width":351,"height":12}},{"id":"d736c4ff-8df0-46a9-bc0e-3f66fa657144","block_type":"box","text":"Examples of the types of U.S. Government obligations that may be held by the Funds include U.S.","page_number":181,"box":{"x":117,"y":366,"width":734,"height":12}},{"id":"ad66226b-61a1-4f34-bc87-0907ec4bb513","block_type":"box","text":"Treasury Bills, Treasury Notes and Treasury Bonds and the obligations of the Federal Housing","page_number":181,"box":{"x":116,"y":382,"width":708,"height":12}},{"id":"8308bba9-e4c7-43a8-88d3-90e0f465be88","block_type":"box","text":"Administration, Farmers Home Administration, Export-Import Bank of the United States, Small","page_number":181,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"e5b3ad42-9c6f-403e-9441-8b489485c94e","block_type":"box","text":"Business Administration, Ginnie Mae, Fannie Mae, Federal Financing Bank, General Services","page_number":181,"box":{"x":117,"y":413,"width":702,"height":12}},{"id":"cd161575-d41d-4693-9f20-55af7ee89ac4","block_type":"box","text":"Administration, Student Loan Marketing Association, Central Bank for Cooperatives, Federal Home","page_number":181,"box":{"x":116,"y":428,"width":741,"height":12}},{"id":"fcd2e38c-7ef4-44ad-b46c-acc0c4194b4e","block_type":"box","text":"Loan Banks, Freddie Mac, Federal Intermediate Credit Banks, Federal Land Banks, Farm Credit Banks","page_number":181,"box":{"x":117,"y":444,"width":771,"height":11}},{"id":"8763a410-e6fd-4529-8e4e-167845eaba26","block_type":"box","text":"System, Maritime Administration, Tennessee Valley Authority and Washington D.C. Armory Board. The","page_number":181,"box":{"x":116,"y":459,"width":772,"height":12}},{"id":"0c564509-6be9-466c-8d33-3a8dfd23aadd","block_type":"box","text":"Funds may also invest in mortgage-related securities issued or guaranteed by U.S. Government","page_number":181,"box":{"x":117,"y":475,"width":717,"height":12}},{"id":"caaa0aef-544d-4aa0-8ce3-e3744d2cb7ae","block_type":"box","text":"agencies and instrumentalities, including such instruments as obligations of Ginnie Mae, Fannie Mae","page_number":181,"box":{"x":116,"y":490,"width":754,"height":12}},{"id":"02e06f4b-930f-4dce-8709-bb34bcc5d134","block_type":"box","text":"and Freddie Mac.","page_number":181,"box":{"x":116,"y":506,"width":135,"height":9}},{"id":"063339e0-fb53-4ef1-8d2e-cd05431e22aa","block_type":"box","text":"U.S. Treasury Obligations.","page_number":181,"box":{"x":117,"y":537,"width":194,"height":12}},{"id":"c9dee795-577a-4fbc-9506-0ca436ddf802","block_type":"box","text":"Treasury obligations may differ in their interest rates, maturities, times of","page_number":181,"box":{"x":313,"y":537,"width":548,"height":12}},{"id":"b334778c-c224-4855-a715-c5489e0f34e5","block_type":"box","text":"issuance and other characteristics. Obligations of U.S. Government agencies and authorities are","page_number":181,"box":{"x":117,"y":552,"width":721,"height":12}},{"id":"c576f24a-bf43-4161-ba9d-ee97146be215","block_type":"box","text":"supported by varying degrees of credit but generally are not backed by the full faith and credit of the","page_number":181,"box":{"x":116,"y":568,"width":747,"height":12}},{"id":"face1640-4c63-406c-8175-44d54f44fd79","block_type":"box","text":"U.S. Government. No assurance can be given that the U.S. Government will provide financial support","page_number":181,"box":{"x":117,"y":583,"width":758,"height":12}},{"id":"ae4b1a85-3fff-4210-b6ac-2607c9e1618a","block_type":"box","text":"to its agencies and authorities if it is not obligated by law to do so.","page_number":181,"box":{"x":116,"y":599,"width":493,"height":12}},{"id":"3ccdd93f-0fc0-4954-8fe7-e65772bed52e","block_type":"box","text":"U.S. Treasury Rolls.","page_number":181,"box":{"x":117,"y":630,"width":153,"height":12}},{"id":"161e028d-2e09-4ec2-933d-2cc23c974a32","block_type":"box","text":"Certain Funds may invest in U.S. Treasury","page_number":181,"box":{"x":271,"y":630,"width":320,"height":12}},{"id":"620211e6-5139-4ef9-9c1a-750aae9b428e","block_type":"box","text":"rolls. In a U.S. Treasury roll transaction,","page_number":181,"box":{"x":592,"y":630,"width":292,"height":12}},{"id":"83457239-4eaf-4562-a898-43f8e82ffc94","block_type":"box","text":"the Fund sells a treasury security to a counterpa","page_number":181,"box":{"x":116,"y":645,"width":350,"height":12}},{"id":"21a7faab-1b87-4a36-921a-bb440ce4b840","block_type":"box","text":"rty with a simultaneous agreement to repurchase the","page_number":181,"box":{"x":468,"y":645,"width":387,"height":12}},{"id":"7e8228bd-0b51-40bf-af3a-5fc4790a3bb9","block_type":"box","text":"same security at an agreed upon price and future settl","page_number":181,"box":{"x":116,"y":661,"width":392,"height":12}},{"id":"ecbcd4a8-85dc-42b8-b456-5d42788fb23d","block_type":"box","text":"ement date. U.S. Treasury roll transactions may","page_number":181,"box":{"x":510,"y":661,"width":348,"height":12}},{"id":"b1e7432f-8eb1-4a47-a31c-c734b81b3530","block_type":"box","text":"incrementally adjust the average maturity of a Fund’","page_number":181,"box":{"x":117,"y":676,"width":376,"height":12}},{"id":"b70f57db-1c5d-4ea0-803c-2832a95fd62f","block_type":"box","text":"s portfolio and increase the interest yield on the","page_number":181,"box":{"x":494,"y":676,"width":343,"height":12}},{"id":"f4ba5b60-4dd8-4a2b-b0f0-545d977c988a","block_type":"box","text":"Fund’s portfolio by extending the average maturity of the portfolio in a normal yield curve environment.","page_number":181,"box":{"x":117,"y":692,"width":740,"height":12}},{"id":"40a65c33-dc70-473a-bf9f-01f03c64cafa","block_type":"box","text":"During the period before the settlement","page_number":181,"box":{"x":117,"y":707,"width":284,"height":12}},{"id":"a76df110-6962-4ec5-97df-deb136971781","block_type":"box","text":"date of a U.S. Treasury roll, a","page_number":181,"box":{"x":406,"y":707,"width":214,"height":12}},{"id":"c2e736ea-346a-422f-8910-a765542b98ec","block_type":"box","text":"Fund continues to earn interest on","page_number":181,"box":{"x":626,"y":707,"width":248,"height":10}},{"id":"50bd25ac-36d2-432b-82bc-a7eccf57117e","block_type":"box","text":"the securities it is selling; however, it does not earn in","page_number":181,"box":{"x":116,"y":723,"width":387,"height":12}},{"id":"28d79acd-0127-42d7-81e5-f8cab5dc0f22","block_type":"box","text":"terest on the securities it is purchasing until after the","page_number":181,"box":{"x":504,"y":723,"width":378,"height":12}},{"id":"de67b958-21bd-4e7d-a89a-3b90a88ad7eb","block_type":"box","text":"settlement date. A Fund could suffer an opportunity loss","page_number":181,"box":{"x":116,"y":738,"width":406,"height":12}},{"id":"5e0e907f-73b0-4b08-8b9c-d40f6efa1861","block_type":"box","text":"if the counterparty to the U.S. Treasury roll","page_number":181,"box":{"x":528,"y":738,"width":308,"height":12}},{"id":"3c4e5bd9-167d-440c-a738-90c83566127d","block_type":"box","text":"transaction failed to perform its obligations on the settlement date.","page_number":181,"box":{"x":116,"y":754,"width":478,"height":12}},{"id":"330e1a90-b1c7-426f-b324-f2a71e9b97e5","block_type":"box","text":"The market value of the securities that a Fund is required to purchase may decline below the agreed","page_number":181,"box":{"x":116,"y":785,"width":745,"height":12}},{"id":"25218793-d798-4e97-9364-a118866184a0","block_type":"box","text":"upon purchase price of those securities. U.S. Treasury rolls are speculative techniques that can be","page_number":181,"box":{"x":117,"y":800,"width":732,"height":12}},{"id":"0223cb4f-17db-48b0-9249-4fb2211e01e6","block_type":"box","text":"deemed to involve leverage. There is no assurance that U.S. Treasury rolls can be successfully","page_number":181,"box":{"x":116,"y":816,"width":709,"height":12}},{"id":"a525f12e-8872-41e8-8c56-259e35c56372","block_type":"box","text":"employed.","page_number":181,"box":{"x":116,"y":831,"width":82,"height":12}},{"id":"d78a78a4-3ab6-4610-85fa-e8fc97f6d38b","block_type":"box","text":"Utility Industries.","page_number":181,"box":{"x":117,"y":862,"width":140,"height":12}},{"id":"62d880ee-e5fb-40ba-90f6-a18a67e49350","block_type":"box","text":"Risks that are intrinsic to the utility industries include difficulty in obtaining an","page_number":181,"box":{"x":259,"y":862,"width":572,"height":12}},{"id":"d624be9a-ce86-4581-aee1-55d5b55a4aa0","block_type":"box","text":"adequate return on invested capital, difficulty in financing large construction programs during an","page_number":181,"box":{"x":116,"y":878,"width":715,"height":12}},{"id":"c9c622e9-67bf-477b-b22b-430a48b80630","block_type":"box","text":"II-98","page_number":181,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5add56eb-9910-40ae-9c49-701dc6260df4","block_type":"box","text":"NM1026U-6039989-181/256","page_number":181,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"90d624d7-f14d-4dd2-99ac-1f8539b310fa","block_type":"box","text":"inflationary period, restrictions on operations and increased cost and delays attributable to","page_number":182,"box":{"x":117,"y":87,"width":672,"height":12}},{"id":"426ab3f8-5bda-46ed-ae58-4692c5363af5","block_type":"box","text":"environmental considerations and regulation, difficulty in raising capital in adequate amounts on","page_number":182,"box":{"x":116,"y":102,"width":715,"height":13}},{"id":"a70993ec-99db-467d-9131-e39d3dbe50bb","block_type":"box","text":"reasonable terms in periods of high inflation and unsettled capital markets, technological innovations","page_number":182,"box":{"x":117,"y":118,"width":750,"height":12}},{"id":"6649a115-5240-4af4-8d05-f6126748c0c5","block_type":"box","text":"that may render existing plants, equipment or products obsolete, the potential impact of natural or","page_number":182,"box":{"x":116,"y":134,"width":729,"height":12}},{"id":"d5d7a260-2e11-4633-b9db-6df80aa67531","block_type":"box","text":"man-made disasters, increased costs and reduced availability of certain types of fuel, occasional","page_number":182,"box":{"x":117,"y":149,"width":721,"height":12}},{"id":"04ce45fd-31f7-4e67-bb8a-68e09cf01723","block_type":"box","text":"reduced availability and high costs of natural gas for resale, the effects of energy conservation, the","page_number":182,"box":{"x":117,"y":165,"width":736,"height":12}},{"id":"4873b11d-96ca-4139-bb37-1adb10970ac7","block_type":"box","text":"effects of a national energy policy and lengthy delays and greatly increased costs and other problems","page_number":182,"box":{"x":116,"y":180,"width":759,"height":12}},{"id":"bd027c9c-4ff5-4e1e-90fd-9b8ca9124a89","block_type":"box","text":"associated with the design, construction, licensing, regulation and operation of nuclear facilities for","page_number":182,"box":{"x":116,"y":196,"width":735,"height":12}},{"id":"fff9c4d8-9d44-4bb0-9421-88a066e5a7f0","block_type":"box","text":"electric generation, including, among other considerations, the problems associated with the use of","page_number":182,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"0e6f6f7d-a3dd-4608-ae4f-aa443a03374b","block_type":"box","text":"radioactive materials and the disposal of radioactive wastes. There are substantial differences among","page_number":182,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"fe39fce7-5677-4c88-a477-47c69f1f32ca","block_type":"box","text":"the regulatory practices and policies of various jurisdictions, and any given regulatory agency may","page_number":182,"box":{"x":116,"y":242,"width":732,"height":12}},{"id":"5da53025-0af8-4b93-8941-0ca9939a6e01","block_type":"box","text":"make major shifts in policy from time to time. There is no assurance that regulatory authorities will, in","page_number":182,"box":{"x":117,"y":258,"width":752,"height":12}},{"id":"33805588-1624-4aa9-b906-1d83b2104501","block_type":"box","text":"the future, grant rate increases or that such increases will be adequate to permit the payment of","page_number":182,"box":{"x":116,"y":273,"width":716,"height":12}},{"id":"82659be8-4921-450f-ad18-f031ee161a44","block_type":"box","text":"dividends on common stocks issued by a utility company. Additionally, existing and possible future","page_number":182,"box":{"x":116,"y":289,"width":735,"height":12}},{"id":"c523ffe0-2424-4eee-a9be-f2c31fbc5e18","block_type":"box","text":"regulatory legislation may make it even more difficult for utilities to obtain adequate relief. Certain of the","page_number":182,"box":{"x":117,"y":304,"width":771,"height":12}},{"id":"c6d6ff0b-c5dc-48a2-bdff-ebb15ea69477","block_type":"box","text":"issuers of securities held in the Fund’s portfolio may own or operate nuclear generating facilities.","page_number":182,"box":{"x":117,"y":320,"width":720,"height":12}},{"id":"a4230491-b6c1-4bbc-add8-5d84cf8fc681","block_type":"box","text":"Governmental authorities may from time to time review existing policies and impose additional","page_number":182,"box":{"x":117,"y":335,"width":702,"height":12}},{"id":"b3d997e7-e542-41c0-af25-66e0457f8277","block_type":"box","text":"requirements governing the licensing, construction and operation of nuclear power plants. Prolonged","page_number":182,"box":{"x":117,"y":351,"width":751,"height":12}},{"id":"f6fca517-c870-4c5e-ba74-781f566e8c73","block_type":"box","text":"changes in climatic conditions can also have a significant impact on both the revenues of an electric","page_number":182,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"07eea06b-b67d-41c2-b3c9-4a3442971020","block_type":"box","text":"and gas utility as well as the expenses of a utility, particularly a hydro-based electric utility.","page_number":182,"box":{"x":116,"y":382,"width":675,"height":12}},{"id":"aee0bdcc-30bf-4137-92d8-cb809a4bbc07","block_type":"box","text":"Companies in the utilities sector may be adversely affected by changes in exchange rates, domestic","page_number":182,"box":{"x":117,"y":413,"width":747,"height":12}},{"id":"f92a9fc3-85a5-41fd-a3d5-85295c5b0ded","block_type":"box","text":"and international competition, and governmental limitations on rates charged to customers. The value","page_number":182,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"3859569c-3822-4cbc-a627-905de4ac9f16","block_type":"box","text":"of regulated utility debt securities and, to a lesser extent, equity securities, tends to have an inverse","page_number":182,"box":{"x":116,"y":444,"width":743,"height":12}},{"id":"cb599539-723c-4679-901a-5b2492c0e38b","block_type":"box","text":"relationship to the movement of interest rates and therefore may lead to volatility in performance.","page_number":182,"box":{"x":117,"y":459,"width":723,"height":12}},{"id":"04983045-32b8-421e-9da4-888a21a4566e","block_type":"box","text":"Utility companies in the United States and in foreign countries are generally subject to regulation. In the","page_number":182,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"a5309b72-9844-4ded-af56-3a94a139f703","block_type":"box","text":"United States, most utility companies are regulated by state and/or federal authorities. Such regulation","page_number":182,"box":{"x":117,"y":506,"width":764,"height":12}},{"id":"8266e537-da41-40e6-90ab-48867f3bf4cd","block_type":"box","text":"is intended to ensure appropriate standards of service and adequate capacity to meet public demand.","page_number":182,"box":{"x":117,"y":521,"width":759,"height":12}},{"id":"e13e1559-a3b5-4c45-90a5-653f07bd2a9f","block_type":"box","text":"Generally, prices are also regulated in the United States and in foreign countries with the intention of","page_number":182,"box":{"x":117,"y":537,"width":750,"height":12}},{"id":"94c17297-7ee9-42ef-acdf-7b7587d08406","block_type":"box","text":"protecting the public while ensuring that the rate of return earned by utility companies is sufficient to","page_number":182,"box":{"x":117,"y":552,"width":744,"height":12}},{"id":"475129c2-efa6-41f4-8bdf-a22742846d34","block_type":"box","text":"allow them to attract capital in order to grow and continue to provide appropriate services. There can","page_number":182,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"dfa0667f-c264-4ac7-a330-dcb8e25b1234","block_type":"box","text":"be no assurance that such pricing policies or rates of return will continue in the future.","page_number":182,"box":{"x":117,"y":583,"width":640,"height":12}},{"id":"47f5fa33-eff4-45ab-9779-6e4504abc40d","block_type":"box","text":"The nature of regulation of the utility industries continues to evolve both in the United States and in","page_number":182,"box":{"x":116,"y":614,"width":738,"height":12}},{"id":"e370323b-fc57-47bb-9a18-2c808c619c78","block_type":"box","text":"foreign countries. In recent years, changes in regulation in the United States increasingly have allowed","page_number":182,"box":{"x":116,"y":630,"width":767,"height":12}},{"id":"7a1485b9-f3db-4147-8d36-cff578aa5bf2","block_type":"box","text":"utility companies to provide services and products outside their traditional geographic areas and lines","page_number":182,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"d4de5b65-50e5-416b-90b7-5fbd8752e9ba","block_type":"box","text":"of business, creating new areas of competition within the industries. In some instances, utility","page_number":182,"box":{"x":116,"y":661,"width":691,"height":12}},{"id":"0a9342e7-bfa5-48e2-ab77-0323b3699d4a","block_type":"box","text":"companies are operating on an unregulated basis. Because of trends toward deregulation and the","page_number":182,"box":{"x":116,"y":676,"width":727,"height":12}},{"id":"aef2cf6d-de12-41bc-9460-2898c38a362d","block_type":"box","text":"evolution of independent power producers as well as new entrants to the field of telecommunications,","page_number":182,"box":{"x":116,"y":692,"width":750,"height":12}},{"id":"a6828e88-dd78-4395-879d-3b8cff15c8ff","block_type":"box","text":"non-regulated providers of utility services have become a significant part of their respective industries.","page_number":182,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"849e7240-bae6-4bfa-8ae1-a9a053200f7b","block_type":"box","text":"The Manager believes that the emergence of competition and deregulation will result in certain utility","page_number":182,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"badb1de2-bad5-4785-88bf-15d40f8a1969","block_type":"box","text":"companies being able to earn more than their traditional regulated rates of return, while others may be","page_number":182,"box":{"x":116,"y":738,"width":759,"height":12}},{"id":"3273adda-243a-4dfa-bf14-6b899003ac2e","block_type":"box","text":"forced to defend their core business from increased competition and may be less profitable. Reduced","page_number":182,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"d39f26c3-0b60-463e-a998-291375cedfe9","block_type":"box","text":"profitability, as well as new uses of funds (such as for expansion, operations or stock buybacks) could","page_number":182,"box":{"x":117,"y":769,"width":754,"height":12}},{"id":"98dc452d-d15d-4c25-ae18-dcbcaf1f8572","block_type":"box","text":"result in cuts in dividend payout rates. As deregulation allows utility companies to diversify outside of","page_number":182,"box":{"x":117,"y":785,"width":746,"height":12}},{"id":"223c010a-21a4-4efb-9e90-821496396939","block_type":"box","text":"their original geographic regions and their traditional lines of business, utilities companies may engage","page_number":182,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"c424dc96-71cc-4099-b4b3-9f4b1c302fbf","block_type":"box","text":"in riskier ventures. Therefore, deregulation may eliminate restrictions on the maximum level of profits of","page_number":182,"box":{"x":117,"y":816,"width":767,"height":12}},{"id":"181fae60-2d12-4bc8-a95d-2f5534f56eb5","block_type":"box","text":"certain utility companies, but may also subject these companies to greater risk of loss. The Manager","page_number":182,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"72d638ff-e53c-4481-ae6f-ed665de508cc","block_type":"box","text":"seeks to take advantage of favorable investment opportunities that may arise from these structural","page_number":182,"box":{"x":116,"y":847,"width":735,"height":12}},{"id":"c5dcf82b-4839-4117-8391-7ea8c64219c5","block_type":"box","text":"changes. Of course, there can be no assurance that favorable developments will occur in the future.","page_number":182,"box":{"x":116,"y":862,"width":747,"height":12}},{"id":"ab74eb24-1bb4-486f-8f70-684efc55fffc","block_type":"box","text":"II-99","page_number":182,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6c5ea19b-c578-4b59-99e9-e02952ef90d9","block_type":"box","text":"NM1026U-6039989-182/256","page_number":182,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8f0e026d-22fc-44f2-8084-9cde34d7707c","block_type":"box","text":"Foreign utility companies are also subject to regulation, although such regulations may or may not be","page_number":183,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"ac462009-d51b-45e5-bcd1-4a884b8e3c4b","block_type":"box","text":"comparable to those in the United States. Foreign utility companies may be more heavily regulated by","page_number":183,"box":{"x":116,"y":102,"width":761,"height":13}},{"id":"067ce033-97d8-477e-b0f2-e89bc778d615","block_type":"box","text":"their respective governments than utilities in the United States and, as in the United States, generally","page_number":183,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"f243458a-c592-4d50-9918-8db92f92134d","block_type":"box","text":"are required to seek government approval for rate increases. In addition, many foreign utilities use","page_number":183,"box":{"x":116,"y":134,"width":733,"height":12}},{"id":"023f0896-184a-4064-bcfb-09db4e31940f","block_type":"box","text":"fuels that may cause more pollution than those used in the United States, which may require such","page_number":183,"box":{"x":116,"y":149,"width":731,"height":12}},{"id":"45b8a4f7-98c8-45f1-9fa5-9557b97721bd","block_type":"box","text":"utilities to invest in pollution control equipment to meet any proposed pollution restrictions. Foreign","page_number":183,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"d3d4d60e-eb34-4225-a0b2-1e717cff5106","block_type":"box","text":"regulatory systems vary from country to country and may evolve in ways different from regulation in the","page_number":183,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"7fda04b6-3825-44ed-8132-909b204be80e","block_type":"box","text":"United States.","page_number":183,"box":{"x":117,"y":196,"width":109,"height":9}},{"id":"4fba36f4-57f9-4258-99dc-d28c00f98b4c","block_type":"box","text":"A Fund’s investment policies are designed to enable it to capitalize on evolving investment opportunities","page_number":183,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"887a21e8-6992-4058-98b1-0e32b1f56841","block_type":"box","text":"throughout the world. For example, the rapid growth of certain foreign economies will necessitate","page_number":183,"box":{"x":116,"y":242,"width":717,"height":12}},{"id":"590e42f7-8f46-4eca-af14-611d5a413566","block_type":"box","text":"expansion of capacity in the utility industries in those countries. Although many foreign utility companies","page_number":183,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"3c860882-7ddf-45c2-a988-a3aa5bc2507f","block_type":"box","text":"currently are government-owned, thereby limiting current investment opportunities for a Fund, the","page_number":183,"box":{"x":116,"y":273,"width":720,"height":12}},{"id":"e4ef7e61-ba2c-4c25-95a3-1abcafd27e2a","block_type":"box","text":"Manager believes that, in order to attract significant capital for growth, foreign governments are likely to","page_number":183,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"40ced92a-612d-4672-90e2-9e9fd80252fb","block_type":"box","text":"seek global investors through the privatization of their utility industries. Privatization, which refers to the","page_number":183,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"708eb1f7-de4b-41b1-8547-b139eb6ed17b","block_type":"box","text":"trend toward investor ownership of assets rather than government ownership, is expected to occur in","page_number":183,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"90ecbeb2-0d97-455c-8341-d609578d50d8","block_type":"box","text":"newer, faster-growing economies and in mature economies. Of course, there is no assurance that such","page_number":183,"box":{"x":117,"y":335,"width":763,"height":12}},{"id":"0e5fa836-a179-4838-ae9c-b6643a2044d7","block_type":"box","text":"favorable developments will occur or that investment opportunities in foreign markets will increase.","page_number":183,"box":{"x":116,"y":351,"width":728,"height":12}},{"id":"9cf13f1f-fcc9-4168-bfd3-cad6d9961b86","block_type":"box","text":"The revenues of domestic and foreign utility companies generally reflect the economic growth and","page_number":183,"box":{"x":116,"y":382,"width":732,"height":12}},{"id":"1251e32e-25e2-45b6-85df-fb1f3bcea29c","block_type":"box","text":"development in the geographic areas in which they do business. The Manager will take into account","page_number":183,"box":{"x":116,"y":397,"width":747,"height":12}},{"id":"3feaa69a-9039-4c7f-94de-1574b8a87803","block_type":"box","text":"anticipated economic growth rates and other economic developments when selecting securities of","page_number":183,"box":{"x":116,"y":413,"width":732,"height":12}},{"id":"2b2ca137-3bd8-433a-818c-249f61b8dcfc","block_type":"box","text":"utility companies.","page_number":183,"box":{"x":117,"y":428,"width":132,"height":12}},{"id":"a43d4f61-b381-4632-80f6-d73318a41b9f","block_type":"box","text":"Electric.","page_number":183,"box":{"x":116,"y":459,"width":58,"height":10}},{"id":"c78e785f-a22b-476f-aa40-1a2c402e2756","block_type":"box","text":"The electric utility industry consists of companies that are engaged principally in the","page_number":183,"box":{"x":176,"y":459,"width":630,"height":12}},{"id":"377ec7e8-0d52-4c5f-acd9-4b4d4e3388d2","block_type":"box","text":"generation, transmission and sale of electric energy, although many also provide other energy-related","page_number":183,"box":{"x":116,"y":475,"width":760,"height":12}},{"id":"8699d2ea-4ce9-41be-94b6-6fca00da14c1","block_type":"box","text":"services. In the past, electric utility companies, in general, have been favorably affected by lower fuel","page_number":183,"box":{"x":116,"y":490,"width":754,"height":12}},{"id":"6d12ce1f-22d1-4157-9514-396ce447df3c","block_type":"box","text":"and financing costs and the full or near completion of major construction programs. In addition, many","page_number":183,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"b9b09abe-b0eb-49d7-af50-2bff3f703e3d","block_type":"box","text":"of these companies have generated cash flows in excess of current operating expenses and","page_number":183,"box":{"x":116,"y":521,"width":690,"height":12}},{"id":"790b4c1d-8180-4f91-8017-c89cab493c3d","block_type":"box","text":"construction expenditures, permitting some degree of diversification into unregulated businesses.","page_number":183,"box":{"x":116,"y":537,"width":727,"height":12}},{"id":"b2406880-95a3-4615-a02c-6253fa26fe88","block_type":"box","text":"Some electric utilities have also taken advantage of the right to sell power outside of their traditional","page_number":183,"box":{"x":116,"y":552,"width":744,"height":12}},{"id":"ebe6c46c-0d8f-40ac-a753-89241f96b0e4","block_type":"box","text":"geographic areas. Electric utility companies have historically been subject to the risks associated with","page_number":183,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"8780e907-d7d7-4634-8832-73637f07e8e8","block_type":"box","text":"increases in fuel and other operating costs, high interest costs on borrowings needed for capital","page_number":183,"box":{"x":117,"y":583,"width":714,"height":12}},{"id":"140dd0e5-24dc-412d-b81b-ed2ab873b02d","block_type":"box","text":"construction programs, costs associated with compliance with environmental and safety regulations","page_number":183,"box":{"x":116,"y":599,"width":744,"height":12}},{"id":"700604ff-aa40-453c-aacc-cd71fc5399f3","block_type":"box","text":"and changes in the regulatory climate. As interest rates declined, many utilities refinanced high cost","page_number":183,"box":{"x":116,"y":614,"width":744,"height":12}},{"id":"fe832f50-19bf-4c57-bd4a-76057a448cbd","block_type":"box","text":"debt and in doing so improved their fixed charges coverage. Regulators, however, lowered allowed","page_number":183,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"e11b01fa-ade7-49a8-83c8-fc6e3b2ff914","block_type":"box","text":"rates of return as interest rates declined and thereby caused the benefits of the rate declines to be","page_number":183,"box":{"x":117,"y":645,"width":734,"height":12}},{"id":"74d32e9d-3b38-46ed-a7d6-9260fc7db5f5","block_type":"box","text":"shared wholly or in part with customers. In a period of rising interest rates, the allowed rates of return","page_number":183,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"2acbc0fb-125a-4727-9c76-2c1c5bb243f0","block_type":"box","text":"may not keep pace with the utilities’ increased costs. The construction and operation of nuclear power","page_number":183,"box":{"x":117,"y":676,"width":756,"height":12}},{"id":"fffe0eac-bcc3-4778-bd04-142d4ea89395","block_type":"box","text":"facilities are subject to strict scrutiny by, and evolving regulations of, the Nuclear Regulatory","page_number":183,"box":{"x":116,"y":692,"width":682,"height":12}},{"id":"6b6a6821-07e7-42fa-8520-d08272f3054d","block_type":"box","text":"Commission and state agencies which have comparable jurisdiction. Strict scrutiny might result in","page_number":183,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"5ed0a8e0-e20a-4779-957d-cbf9b3c2b48e","block_type":"box","text":"higher operating costs and higher capital expenditures, with the risk that the regulators may disallow","page_number":183,"box":{"x":117,"y":723,"width":743,"height":12}},{"id":"4846e4be-0d41-4813-af0c-d6d49bd4cc6b","block_type":"box","text":"inclusion of these costs in rate authorizations or the risk that a company may not be permitted to","page_number":183,"box":{"x":117,"y":738,"width":713,"height":12}},{"id":"8e1d51f8-fa85-4fb0-9903-1a39ecf54c41","block_type":"box","text":"operate or complete construction of a facility. In addition, operators of nuclear power plants may be","page_number":183,"box":{"x":116,"y":754,"width":735,"height":12}},{"id":"90e5ead5-f38d-450a-b9df-100248e90aaa","block_type":"box","text":"subject to significant costs for disposal of nuclear fuel and for decommissioning such plants.","page_number":183,"box":{"x":116,"y":769,"width":681,"height":12}},{"id":"76954d54-2be3-49f8-8aa7-05acfe8ae770","block_type":"box","text":"The rating agencies look closely at the business profile of utilities. Ratings for companies are expected","page_number":183,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"a93c9ceb-6314-47ce-aa84-7d67b9cc6be2","block_type":"box","text":"to be impacted to a greater extent in the future by the division of their asset base. Electric utility","page_number":183,"box":{"x":116,"y":816,"width":706,"height":12}},{"id":"3d1a459b-fb52-4d61-a2bb-68d59cca69a4","block_type":"box","text":"companies that focus more on the generation of electricity may be assigned less favorable ratings as","page_number":183,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"5e03ba00-c7bf-42e8-be04-b46b82a3b244","block_type":"box","text":"this business is expected to be competitive and the least regulated. On the other hand, companies that","page_number":183,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"7aff4b33-d45f-4b2e-bc0d-3016c6304f97","block_type":"box","text":"focus on transmission and distribution, which is expected to be the least competitive and the more","page_number":183,"box":{"x":116,"y":862,"width":732,"height":12}},{"id":"577c2a4d-546b-4b88-a58c-0a4cc1726e1b","block_type":"box","text":"regulated part of the business, may see higher ratings given the greater predictability of cash flow.","page_number":183,"box":{"x":117,"y":878,"width":732,"height":12}},{"id":"0e495184-1f85-432f-8c48-ae83290e1cd0","block_type":"box","text":"II-100","page_number":183,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"78e54db5-27f9-4491-970b-b31b609426e2","block_type":"box","text":"NM1026U-6039989-183/256","page_number":183,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1e88b40c-0886-410d-b8bc-d17842471217","block_type":"box","text":"A number of states are considering or have enacted deregulation proposals. The introduction of","page_number":184,"box":{"x":116,"y":87,"width":715,"height":12}},{"id":"28e30286-a750-4004-80f6-6c7e67dba975","block_type":"box","text":"competition into the industry as a result of such deregulation has at times resulted in lower revenue,","page_number":184,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"ef52a69c-db51-4b92-ac7f-633a11bd673b","block_type":"box","text":"lower credit ratings, increased default risk, and lower electric utility security prices. Such increased","page_number":184,"box":{"x":117,"y":118,"width":734,"height":12}},{"id":"abf32436-6ed9-46c5-bf24-3c816b30b0b0","block_type":"box","text":"competition may also cause long-term contracts, which electric utilities previously entered into to buy","page_number":184,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"957a798f-2b13-4960-b8a4-47d48726a703","block_type":"box","text":"power, to become “stranded assets” which have no economic value. Any loss associated with such","page_number":184,"box":{"x":117,"y":149,"width":739,"height":12}},{"id":"30434ec7-228d-4903-b858-39d8cb9b47a7","block_type":"box","text":"contracts must be absorbed by ratepayers and investors. In addition, some electric utilities have","page_number":184,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"fe677934-bbdd-4d28-a3b1-862c3d9f2186","block_type":"box","text":"acquired electric utilities overseas to diversify, enhance earnings and gain experience in operating in a","page_number":184,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"ec14f0d5-a0e7-4a47-9122-4f50e565d425","block_type":"box","text":"deregulated environment. In some instances, such acquisitions have involved significant borrowings,","page_number":184,"box":{"x":116,"y":196,"width":752,"height":12}},{"id":"ca9b8649-21ed-4f4c-b8d3-fec7cb065a15","block_type":"box","text":"which have burdened the acquirer’s balance sheet. There is no assurance that current deregulation","page_number":184,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"0becb425-c0f3-4957-9d8c-7a11c7841499","block_type":"box","text":"proposals will be adopted. However, deregulation in any form could significantly impact the electric","page_number":184,"box":{"x":117,"y":227,"width":736,"height":12}},{"id":"d0a730fe-fc51-4853-8734-e202e6c0638e","block_type":"box","text":"utilities industry.","page_number":184,"box":{"x":117,"y":242,"width":123,"height":12}},{"id":"6adece16-0019-4991-8d17-72d80b75703d","block_type":"box","text":"Telecommunications.","page_number":184,"box":{"x":118,"y":273,"width":155,"height":10}},{"id":"5416eb07-99e5-42d4-a126-3e1a74226a97","block_type":"box","text":"The telecommunications industry today includes both traditional telephone","page_number":184,"box":{"x":275,"y":273,"width":561,"height":12}},{"id":"1dcf401a-04bc-4590-b096-0080dcee20d1","block_type":"box","text":"companies, with a history of broad market coverage and highly regulated businesses, and cable","page_number":184,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"beb4562c-753a-44dd-9904-bb8cf0eea353","block_type":"box","text":"companies, which began as small, lightly regulated businesses focused on limited markets. Today","page_number":184,"box":{"x":116,"y":304,"width":733,"height":12}},{"id":"be60ff1f-a0dd-4d53-87ba-0a14c2751207","block_type":"box","text":"these two historically different businesses are converging in an industry that is trending toward larger,","page_number":184,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"670fd055-f080-4ed0-8a04-e374018c4bfc","block_type":"box","text":"competitive national and international markets with an emphasis on deregulation. Companies that","page_number":184,"box":{"x":116,"y":335,"width":729,"height":12}},{"id":"6e94e0a7-086c-4c61-8615-64e7b094e096","block_type":"box","text":"distribute telephone services and provide access to the telephone networks still comprise the greatest","page_number":184,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"6ca4b074-d116-423c-8d87-6c1a1d0032fe","block_type":"box","text":"portion of this segment, but non-regulated activities such as wireless telephone services, paging, data","page_number":184,"box":{"x":117,"y":366,"width":759,"height":12}},{"id":"69d3365e-0741-4695-a737-74ca36d26ceb","block_type":"box","text":"transmission and processing, equipment retailing, computer software and hardware and internet","page_number":184,"box":{"x":116,"y":382,"width":718,"height":12}},{"id":"82ee0e6a-76d2-4ac6-a670-d1ab03e6b722","block_type":"box","text":"services are becoming increasingly significant components as well. In particular, wireless and internet","page_number":184,"box":{"x":116,"y":397,"width":759,"height":12}},{"id":"f795b111-9456-4853-8137-afa491a85c4b","block_type":"box","text":"telephone services continue to gain market share at the expense of traditional telephone companies.","page_number":184,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"0ccbc571-5b98-4a7f-94d4-fe177bf56d32","block_type":"box","text":"The presence of unregulated companies in this industry and the entry of traditional telephone","page_number":184,"box":{"x":116,"y":428,"width":696,"height":12}},{"id":"9c8022c3-8460-47c8-b209-3536dd9bddb9","block_type":"box","text":"companies into unregulated or less regulated businesses provide significant investment opportunities","page_number":184,"box":{"x":116,"y":444,"width":755,"height":12}},{"id":"f0bd72d4-5f00-4c26-9100-516ff7974cf8","block_type":"box","text":"with companies that may increase their earnings at faster rates than had been allowed in traditional","page_number":184,"box":{"x":116,"y":459,"width":742,"height":12}},{"id":"d3c92b81-dfe6-434f-b5e3-a29b40e3d286","block_type":"box","text":"regulated businesses. Still, increasing competition, technological innovations and other structural","page_number":184,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"0ba8bb20-e8c7-48ef-837b-a52ef343401f","block_type":"box","text":"changes could adversely affect the profitability of such utilities and the growth rate of their dividends.","page_number":184,"box":{"x":116,"y":490,"width":750,"height":12}},{"id":"dd0d9696-3fb0-4885-a487-63d3f3073a4f","block_type":"box","text":"Given mergers and proposed legislation and enforcement changes, it is likely that both traditional","page_number":184,"box":{"x":117,"y":506,"width":725,"height":12}},{"id":"a6910ed4-9f8e-4ac7-8afa-318dcab5b0fb","block_type":"box","text":"telephone companies and cable companies will continue to provide an expanding range of utility","page_number":184,"box":{"x":116,"y":521,"width":718,"height":12}},{"id":"d59f9f51-5ff4-4e1e-a146-f1981be187bb","block_type":"box","text":"services to both residential, corporate and governmental customers.","page_number":184,"box":{"x":116,"y":537,"width":511,"height":12}},{"id":"45492a19-f99b-4a10-93f4-95cb15660dcf","block_type":"box","text":"Gas.","page_number":184,"box":{"x":117,"y":568,"width":33,"height":9}},{"id":"6fc23f2a-8877-4474-9bbb-5d2d1c7417ae","block_type":"box","text":"Gas transmission companies and gas distribution companies are undergoing significant changes.","page_number":184,"box":{"x":151,"y":568,"width":733,"height":12}},{"id":"212957c7-fb44-44a7-bdac-62a040b6dba3","block_type":"box","text":"In the United States, interstate transmission companies are regulated by the Federal Energy","page_number":184,"box":{"x":117,"y":583,"width":689,"height":12}},{"id":"9f6b91c9-8d32-4a04-8a31-79a9a55dbc1d","block_type":"box","text":"Regulatory Commission, which is reducing its regulation of the industry. Many companies have","page_number":184,"box":{"x":117,"y":599,"width":709,"height":12}},{"id":"bfdd42a3-332e-42d1-8d19-74ea1201f6bc","block_type":"box","text":"diversified into oil and gas exploration and development, making returns more sensitive to energy","page_number":184,"box":{"x":116,"y":614,"width":728,"height":12}},{"id":"69ada875-210b-4038-88b6-8133943bfb5b","block_type":"box","text":"prices. In the recent decade, gas utility companies have been adversely affected by disruptions in the","page_number":184,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"e45f615a-6748-4fc4-ac5d-de42bfa654ee","block_type":"box","text":"oil industry and have also been affected by increased concentration and competition. In the opinion of","page_number":184,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"20882e40-a6c2-43c6-a2f1-5e48d0a492e2","block_type":"box","text":"the Manager, however, environmental considerations could improve the gas industry outlook in the","page_number":184,"box":{"x":116,"y":661,"width":733,"height":12}},{"id":"19a7301f-1938-41e7-9a06-cfb9cf79eb0a","block_type":"box","text":"future. For example, natural gas is the cleanest of the hydrocarbon fuels, and this may result in","page_number":184,"box":{"x":116,"y":676,"width":703,"height":12}},{"id":"8e8fa913-0bd0-4205-ae94-5d546faab0fc","block_type":"box","text":"incremental shifts in fuel consumption toward natural gas and away from oil and coal, even for","page_number":184,"box":{"x":117,"y":692,"width":698,"height":12}},{"id":"9aeb1168-286c-4ecf-9dfc-a077a84739cf","block_type":"box","text":"electricity generation. However, technological or regulatory changes within the industry may delay or","page_number":184,"box":{"x":116,"y":707,"width":745,"height":12}},{"id":"e86ee5f6-ca45-4c0d-820c-9768e1104176","block_type":"box","text":"prevent this result.","page_number":184,"box":{"x":117,"y":723,"width":135,"height":12}},{"id":"a313c4c0-be8d-46dd-8499-191fe0f22ad4","block_type":"box","text":"Water.","page_number":184,"box":{"x":118,"y":754,"width":46,"height":9}},{"id":"6f2a0a16-4320-484f-915b-a08f73c5ca9c","block_type":"box","text":"Water supply utilities are companies that collect, purify, distribute and sell water. In the United","page_number":184,"box":{"x":170,"y":754,"width":695,"height":12}},{"id":"e089115a-9828-4312-b7e2-d9b7d091030f","block_type":"box","text":"States and around the world the industry is highly fragmented because most of the supplies are owned","page_number":184,"box":{"x":116,"y":769,"width":762,"height":12}},{"id":"d7d0103e-27c1-411b-a81c-cc8fd11670ed","block_type":"box","text":"by local authorities. Companies in this industry are generally mature and are experiencing little or no","page_number":184,"box":{"x":117,"y":785,"width":743,"height":12}},{"id":"e5d43475-29cb-44b9-98c4-a30878b0a6e6","block_type":"box","text":"per capita volume growth. In the opinion of the Manager, there may be opportunities for certain","page_number":184,"box":{"x":117,"y":800,"width":702,"height":12}},{"id":"e515740b-e0a3-47bf-9809-aecf096bb14d","block_type":"box","text":"companies to acquire other water utility companies and for foreign acquisition of domestic companies.","page_number":184,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"1a39ae13-96be-4982-946b-afb7d88a16db","block_type":"box","text":"The Manager believes that favorable investment opportunities may result from consolidation of this","page_number":184,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"92034bd8-e80c-47c2-aa34-2dd447c94660","block_type":"box","text":"segment. As with other utilities, however, increased regulation, increased costs and potential","page_number":184,"box":{"x":116,"y":847,"width":693,"height":12}},{"id":"bf801cd0-845f-4cbf-a869-2b0273997350","block_type":"box","text":"disruptions in supply may adversely affect investments in water supply utilities.","page_number":184,"box":{"x":116,"y":862,"width":588,"height":12}},{"id":"9c499310-20a5-4bda-8aaf-0b658cf36444","block_type":"box","text":"II-101","page_number":184,"box":{"x":480,"y":909,"width":38,"height":9}},{"id":"5663d623-d09c-4ed6-a0d8-a15ccaad3b1e","block_type":"box","text":"NM1026U-6039989-184/256","page_number":184,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"956af8e5-0d78-4de2-959d-8c2b2c32ce4e","block_type":"box","text":"Utility Industries Generally.","page_number":185,"box":{"x":117,"y":87,"width":197,"height":12}},{"id":"04821f29-5446-4eec-8674-27e4f05ba37a","block_type":"box","text":"There can be no assurance that the positive developments noted above,","page_number":185,"box":{"x":316,"y":87,"width":548,"height":12}},{"id":"cf7c6eb4-1a9e-43f0-a7e5-1aa1ea580618","block_type":"box","text":"including those relating to privatization and changing regulation, will occur or that risk factors other than","page_number":185,"box":{"x":117,"y":102,"width":771,"height":13}},{"id":"c65845ef-f0a3-4cfc-bd26-11d49d46ab0b","block_type":"box","text":"those noted above will not develop in the future.","page_number":185,"box":{"x":116,"y":118,"width":361,"height":12}},{"id":"1a5ac91e-901b-4c46-a985-39d990436454","block_type":"box","text":"When-Issued Securities, Delayed Delivery Securities and Forward Commitments.","page_number":185,"box":{"x":118,"y":149,"width":643,"height":12}},{"id":"316d1591-fd4b-4ce9-a0d7-f1bfe6ed30b1","block_type":"box","text":"A Fund may","page_number":185,"box":{"x":762,"y":149,"width":100,"height":12}},{"id":"621e568a-60c6-4924-8e34-ef4efe7e4ec9","block_type":"box","text":"purchase or sell securities that it is entitled to receive on a when-issued basis. A Fund may also","page_number":185,"box":{"x":117,"y":165,"width":713,"height":12}},{"id":"6e35c43b-7f9c-4014-b0f6-f01ef85df9ce","block_type":"box","text":"purchase or sell securities on a delayed delivery basis or through a forward commitment (including on","page_number":185,"box":{"x":117,"y":180,"width":758,"height":12}},{"id":"6033400c-4c83-4514-8ed5-0ff93af4f68f","block_type":"box","text":"a TBA (to be announced) basis). These transactions involve the purchase or sale of securities by a","page_number":185,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"66656ee4-af64-4f8d-a680-49b6d133ea22","block_type":"box","text":"Fund at an established price with payment and delivery taking place in the future. The Fund enters into","page_number":185,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"f823f741-8d80-4457-bfac-9c914a6a3dae","block_type":"box","text":"these transactions to obtain what is considered an advantageous price to the Fund at the time of","page_number":185,"box":{"x":116,"y":227,"width":721,"height":12}},{"id":"28128d0e-adbd-4efd-8c0a-d036f7d233e0","block_type":"box","text":"entering into the transaction.","page_number":185,"box":{"x":116,"y":242,"width":217,"height":12}},{"id":"7f1d2404-f2d2-43c5-b72d-07c274fdc17c","block_type":"box","text":"Pursuant to recommendations of the Treasury Market Practices Group, which is sponsored by the","page_number":185,"box":{"x":117,"y":273,"width":731,"height":12}},{"id":"a5f5d49e-3410-4e5f-95bf-1b1589c74e8d","block_type":"box","text":"Federal Reserve Bank of New York, a Fund or its counterparty generally will be required to post","page_number":185,"box":{"x":117,"y":289,"width":714,"height":12}},{"id":"ffa97bf2-8dc1-4558-9679-a05769d95ee3","block_type":"box","text":"collateral when entering into certain forward-settling transactions, including without limitation TBA","page_number":185,"box":{"x":116,"y":304,"width":726,"height":12}},{"id":"88f03c30-94fb-43bd-8ae3-69d0fed503fe","block_type":"box","text":"transactions. FINRA rules have also been implemented that include mandatory margin requirements","page_number":185,"box":{"x":116,"y":320,"width":750,"height":12}},{"id":"1f9c22b7-60aa-4117-b8c4-0fec6cc6424e","block_type":"box","text":"for the TBA market with limited exceptions. The collateralization of TBA trades is intended to mitigate","page_number":185,"box":{"x":116,"y":335,"width":754,"height":12}},{"id":"9da282b9-7ad3-41dd-86ba-99d2e7f82a47","block_type":"box","text":"counterparty credit risk between trade and settlement, but could increase the cost of TBA transactions","page_number":185,"box":{"x":116,"y":351,"width":763,"height":12}},{"id":"52f1dce4-f55e-45f6-9139-529150fd88a8","block_type":"box","text":"and impose added operational complexity.","page_number":185,"box":{"x":116,"y":366,"width":320,"height":12}},{"id":"00d83908-3b43-4f14-8b44-a263b98e45ce","block_type":"box","text":"There can be no assurance that a security purchased on a when-issued basis will be issued or that a","page_number":185,"box":{"x":116,"y":397,"width":754,"height":12}},{"id":"823982b1-ea0a-4848-9d50-fd256d0b08f2","block_type":"box","text":"security purchased or sold on a delayed delivery basis or through a forward commitment will be","page_number":185,"box":{"x":116,"y":413,"width":713,"height":12}},{"id":"eb4a8aa9-7ca2-4798-b148-5b8ebd747a80","block_type":"box","text":"delivered. Also, the value of securities in these transactions on the delivery date may be more or less","page_number":185,"box":{"x":116,"y":428,"width":755,"height":12}},{"id":"94a6e42b-9d67-4e13-9869-3d1d04121903","block_type":"box","text":"than the price paid by the Fund to purchase the securities. The Fund will lose money if the value of the","page_number":185,"box":{"x":116,"y":444,"width":766,"height":12}},{"id":"b08e82e9-8daf-460c-aaee-f2fcad9788cd","block_type":"box","text":"security in such a transaction declines below the purchase price and will not benefit if the value of the","page_number":185,"box":{"x":116,"y":459,"width":757,"height":12}},{"id":"90fd0083-eaac-444a-bea0-ec4eb54e8be7","block_type":"box","text":"security appreciates above the sale price during the commitment period.","page_number":185,"box":{"x":116,"y":475,"width":542,"height":12}},{"id":"5493900e-6880-4b26-a6b6-6bb820cb2be2","block_type":"box","text":"If deemed advisable as a matter of investment strategy, a Fund may dispose of or renegotiate a","page_number":185,"box":{"x":117,"y":506,"width":715,"height":12}},{"id":"675dd08c-fd24-4fea-b879-3894b0ef7a9f","block_type":"box","text":"commitment after it has been entered into, and may sell securities it has committed to purchase before","page_number":185,"box":{"x":116,"y":521,"width":767,"height":12}},{"id":"dc196341-4fe7-4c57-bc60-9d4a58596a7e","block_type":"box","text":"those securities are delivered to the Fund on the settlement date. In these cases the Fund may realize","page_number":185,"box":{"x":116,"y":537,"width":764,"height":12}},{"id":"74e9e291-b011-464f-8b9f-bd8c8d6a1d4b","block_type":"box","text":"a taxable capital gain or loss.","page_number":185,"box":{"x":116,"y":552,"width":221,"height":12}},{"id":"cc39c774-1fbd-4c27-8125-8051498391ab","block_type":"box","text":"When a Fund engages in when-issued, TBA or forward commitment transactions, it relies on the other","page_number":185,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"c2b6ab78-19cb-476e-9583-088d49588263","block_type":"box","text":"party to consummate the trade. Failure of such party to do so may result in the Fund’s incurring a loss","page_number":185,"box":{"x":117,"y":599,"width":760,"height":12}},{"id":"004c18c6-8f72-49cc-a8a6-8d82f6ce6dbb","block_type":"box","text":"or missing an opportunity to obtain a price considered to be advantageous.","page_number":185,"box":{"x":116,"y":614,"width":561,"height":12}},{"id":"e5dcf59d-3d31-46b5-b3b0-1734627f230a","block_type":"box","text":"The market value of the securities underlying a commitment to purchase securities, and any","page_number":185,"box":{"x":116,"y":645,"width":688,"height":12}},{"id":"4bcd422b-bd71-41d0-a542-2cd868e459c7","block_type":"box","text":"subsequent fluctuations in their market value, is taken into account when determining the market value","page_number":185,"box":{"x":116,"y":661,"width":762,"height":12}},{"id":"2ce3b4c5-9da4-4781-ace8-ad0b2f1aaa0c","block_type":"box","text":"of a Fund starting on the day the Fund agrees to purchase the securities. The Fund does not earn","page_number":185,"box":{"x":116,"y":676,"width":726,"height":12}},{"id":"68388724-cb5d-4f05-bbb1-3cf4381a2a43","block_type":"box","text":"interest on the securities it has committed to purchase until they are paid for and delivered on the","page_number":185,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"913be679-a333-4272-81df-7c3b6b470998","block_type":"box","text":"settlement date.","page_number":185,"box":{"x":116,"y":707,"width":118,"height":10}},{"id":"a5e8999b-863d-4df3-a0ae-6a580ea1b859","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":185,"box":{"x":117,"y":738,"width":740,"height":12}},{"id":"9485ab45-5f0d-4712-a1c0-5c7d9b4b7d0a","block_type":"box","text":"settling securities (e.g., firm and standby commitments, including TBA commitments, and dollar rolls)","page_number":185,"box":{"x":116,"y":754,"width":747,"height":12}},{"id":"bf43f3cc-a62f-42cc-a579-d7bd3a8e96e9","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":185,"box":{"x":116,"y":769,"width":746,"height":12}},{"id":"ff884643-2895-4b52-a566-ca8989112e4a","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the Fund intends to physically","page_number":185,"box":{"x":116,"y":785,"width":745,"height":12}},{"id":"caf486de-d0fb-4f3c-a78d-5efa62447743","block_type":"box","text":"settle the transaction and the transaction will settle within 35 days of its trade date (the “Delayed","page_number":185,"box":{"x":116,"y":800,"width":719,"height":12}},{"id":"6da6268e-a2d4-4e8e-b6a2-2fe7e42f6c93","block_type":"box","text":"Settlement Securities Provision”). If a when-issued, forward-settling or non-standard settlement cycle","page_number":185,"box":{"x":116,"y":816,"width":749,"height":12}},{"id":"870b9385-74c8-4978-8db9-abf7edd110f3","block_type":"box","text":"security does not satisfy the Delayed-Settlement Securities Provision, then it is treated as a Derivatives","page_number":185,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"b5c336f0-188e-4533-a8ff-8a95b6ae6e85","block_type":"box","text":"Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives — Rule 18f-4 under the","page_number":185,"box":{"x":116,"y":847,"width":770,"height":12}},{"id":"8a2743a0-ab4f-4290-a25b-02807f2cf9f0","block_type":"box","text":"Investment Company Act” above.","page_number":185,"box":{"x":117,"y":862,"width":252,"height":12}},{"id":"74b29236-30ff-40ef-930d-214f3eac8358","block_type":"box","text":"II-102","page_number":185,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"0d5dc8de-df36-4176-b5cf-a34938aa81aa","block_type":"box","text":"NM1026U-6039989-185/256","page_number":185,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7ac66400-b66f-409e-8e6e-c8a8579d2f7a","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":186,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"7d8ad08c-22da-4d3c-858d-782d23d8d51b","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many agreements with","page_number":186,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"26125622-b004-4a23-8135-5acb82c6d6d9","block_type":"box","text":"respect to when-issued, TBA and forward commitment transactions, terms that delay or restrict the","page_number":186,"box":{"x":117,"y":118,"width":736,"height":12}},{"id":"2078a901-f497-4593-a237-2123cf7008c2","block_type":"box","text":"rights of counterparties, such as a Fund, to terminate such agreements, foreclose upon collateral,","page_number":186,"box":{"x":117,"y":134,"width":728,"height":12}},{"id":"4dfdfcf6-8941-47b9-b78c-3b2ce26b0279","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the counterparty and/","page_number":186,"box":{"x":116,"y":149,"width":766,"height":12}},{"id":"da54ed9c-3f39-4ea7-9f60-8e4c59732c94","block_type":"box","text":"or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible that","page_number":186,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"ba4751a6-859c-45b2-903c-c443b63f23dd","block_type":"box","text":"these requirements, as well as potential additional government regulation and other developments in","page_number":186,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"afb30f3e-0b8d-4f36-bf6d-525dc750cdab","block_type":"box","text":"the market, could adversely affect a Fund’s ability to terminate existing agreements with respect to","page_number":186,"box":{"x":116,"y":196,"width":735,"height":12}},{"id":"9e80fb5a-8ac8-4fb5-8699-c74d14e52ba5","block_type":"box","text":"these transactions or to realize amounts to be received under such agreements.","page_number":186,"box":{"x":116,"y":211,"width":600,"height":12}},{"id":"a1be096b-2ddc-407b-b5b1-69bb91143c2c","block_type":"box","text":"Yields and Ratings.","page_number":186,"box":{"x":118,"y":242,"width":152,"height":12}},{"id":"05217ce5-363b-4d65-a816-93ed65484045","block_type":"box","text":"The yields on certain obligations are dependent on a variety of factors, including","page_number":186,"box":{"x":271,"y":242,"width":604,"height":12}},{"id":"7c6881d7-5e96-42e8-b156-e232be8c489c","block_type":"box","text":"general market conditions, conditions in the particular market for the obligation, the financial condition","page_number":186,"box":{"x":116,"y":258,"width":759,"height":12}},{"id":"85aee786-8960-47f1-b9ef-9c0b96541f72","block_type":"box","text":"of the issuer, the size of the offering, the maturity of the obligation and the ratings of the issue. The","page_number":186,"box":{"x":116,"y":273,"width":738,"height":12}},{"id":"5a7de4ce-006a-428e-bd82-72d940d18a2f","block_type":"box","text":"ratings of Moody’s, Fitch and S&P represent their respective opinions as to the quality of the","page_number":186,"box":{"x":117,"y":289,"width":688,"height":12}},{"id":"883ffa0f-b5fb-4b86-b731-138891dab3a7","block_type":"box","text":"obligations they undertake to rate. Ratings, however, are general and are not absolute standards of","page_number":186,"box":{"x":116,"y":304,"width":743,"height":12}},{"id":"db4d2d00-0d6d-4254-a183-c11095566743","block_type":"box","text":"quality. Consequently, obligations with the same rating, maturity and interest rate may have different","page_number":186,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"505c9067-13fb-466b-9fb8-644a1a11942e","block_type":"box","text":"market prices. Subsequent to its purchase by a Fund, a rated security may cease to be rated. A Fund’s","page_number":186,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"6a7830cd-807c-463d-83cd-0ff7a579925d","block_type":"box","text":"Manager or sub-adviser will consider such an event in determining whether the Fund should continue","page_number":186,"box":{"x":117,"y":351,"width":755,"height":12}},{"id":"59403e2a-7de7-4a07-aabd-2d39cad70a63","block_type":"box","text":"to hold the security.","page_number":186,"box":{"x":116,"y":366,"width":150,"height":12}},{"id":"4db28d21-a730-48fa-aa3e-880ebcbcd448","block_type":"box","text":"Zero Coupon Securities.","page_number":186,"box":{"x":116,"y":397,"width":193,"height":12}},{"id":"dc488823-1da1-489f-9411-e19195fd7b6a","block_type":"box","text":"Zero coupon securities are securities that are sold at a discount to par value","page_number":186,"box":{"x":310,"y":397,"width":575,"height":12}},{"id":"e9221c7e-ecc9-4a40-86a1-564b4dce3c56","block_type":"box","text":"and do not pay interest during the life of the security. The discount approximates the total amount of","page_number":186,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"85181acb-e8a0-433d-915d-fc678b810efe","block_type":"box","text":"interest the security will accrue and compound over the period until maturity at a rate of interest","page_number":186,"box":{"x":117,"y":428,"width":711,"height":12}},{"id":"32f22a5e-8ab6-44d0-87cf-e6188f9a813b","block_type":"box","text":"reflecting the market rate of the security at the time of issuance. Upon maturity, the holder of a zero","page_number":186,"box":{"x":117,"y":444,"width":741,"height":12}},{"id":"e01321de-fe57-4a3f-beeb-11e44c087e2b","block_type":"box","text":"coupon security is entitled to receive the par value of the security.","page_number":186,"box":{"x":116,"y":459,"width":492,"height":12}},{"id":"4ed8d11d-f54c-4710-b316-e27de241a7a6","block_type":"box","text":"While interest payments are not made on such securities, holders of such securities are deemed to","page_number":186,"box":{"x":116,"y":490,"width":740,"height":12}},{"id":"e71d17e1-8d36-431b-adf9-7b4fc766383b","block_type":"box","text":"have received income (“phantom income”) annually, notwithstanding that cash may not be received","page_number":186,"box":{"x":117,"y":506,"width":742,"height":12}},{"id":"d5513b9e-bac9-407e-8381-3c58e721ef20","block_type":"box","text":"currently. The effect of owning instruments that do not make current interest payments is that a fixed","page_number":186,"box":{"x":116,"y":521,"width":751,"height":12}},{"id":"b6fe4df2-6790-4d7e-98f0-57edf99d8b28","block_type":"box","text":"yield is earned not only on the original investment but also, in effect, on all discount accretion during","page_number":186,"box":{"x":116,"y":537,"width":746,"height":12}},{"id":"b6669f76-9e9c-4b38-ad85-19a4a587f5c5","block_type":"box","text":"the life of the obligations. This implicit reinvestment of earnings at a fixed rate eliminates the risk of","page_number":186,"box":{"x":116,"y":552,"width":737,"height":12}},{"id":"b707974b-54c2-44ca-b763-9bbce8733471","block_type":"box","text":"being unable to invest distributions at a rate as high as the implicit yield on the zero coupon bond, but","page_number":186,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"04100878-475c-4c78-9f93-6218ca589151","block_type":"box","text":"at the same time eliminates the holder’s ability to reinvest at higher rates in the future. For this reason,","page_number":186,"box":{"x":116,"y":583,"width":764,"height":12}},{"id":"4790919e-9782-41d5-b840-b89b1f0fce1e","block_type":"box","text":"some of these securities may be subject to substantially greater price fluctuations during periods of","page_number":186,"box":{"x":116,"y":599,"width":739,"height":12}},{"id":"0c70deea-9db5-4bad-acc9-85e60531aee2","block_type":"box","text":"changing market interest rates than are comparable securities that pay interest currently. Longer term","page_number":186,"box":{"x":116,"y":614,"width":760,"height":12}},{"id":"2c5318d7-86b3-436c-b7f8-ef656a6ac671","block_type":"box","text":"zero coupon bonds are more exposed to interest rate risk than shorter term zero coupon bonds. These","page_number":186,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"35e654da-aed2-4701-a911-3f45b3f09595","block_type":"box","text":"investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a","page_number":186,"box":{"x":117,"y":645,"width":749,"height":12}},{"id":"b0ff6e07-b1f5-4118-a6e0-f3824bec3ffa","block_type":"box","text":"higher rate of return to attract investors who are willing to defer receipt of cash.","page_number":186,"box":{"x":117,"y":661,"width":583,"height":12}},{"id":"b4807391-6a15-409e-8934-62b61063e6f1","block_type":"box","text":"A Fund accrues income with respect to these securities for U.S. federal income tax and accounting","page_number":186,"box":{"x":116,"y":692,"width":733,"height":12}},{"id":"567c2326-0643-4d10-b7f5-88b7e69bdc53","block_type":"box","text":"purposes prior to the receipt of cash payments. Zero coupon securities may be subject to greater","page_number":186,"box":{"x":117,"y":707,"width":720,"height":12}},{"id":"725009e3-9fc8-4a8b-9da2-991ba164d234","block_type":"box","text":"fluctuation in value and less liquidity in the event of adverse market conditions than comparably rated","page_number":186,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"63af95e2-0a54-4414-8027-58fa06cc997a","block_type":"box","text":"securities that pay cash interest at regular intervals.","page_number":186,"box":{"x":116,"y":738,"width":382,"height":12}},{"id":"6c034941-65f7-45c5-97d0-7103e61a078f","block_type":"box","text":"Further, to maintain its qualification for pass-through treatment under the U.S. federal tax laws, a Fund","page_number":186,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"e60e5769-69fa-4f59-904a-11a5a3e971cc","block_type":"box","text":"is required to distribute income to its shareholders and, consequently, may have to dispose of other,","page_number":186,"box":{"x":117,"y":785,"width":740,"height":12}},{"id":"36c519ec-f9a5-4577-b386-0d6c03163707","block_type":"box","text":"more liquid portfolio securities under disadvantageous circumstances or may have to leverage itself by","page_number":186,"box":{"x":117,"y":800,"width":760,"height":12}},{"id":"2c5e88ba-0ed9-414b-ad2a-8fd371ffc4d0","block_type":"box","text":"borrowing in order to generate the cash to satisfy these distributions. The required distributions may","page_number":186,"box":{"x":117,"y":816,"width":740,"height":12}},{"id":"4fedfb1a-4ee5-4628-9420-7edadeca2ff1","block_type":"box","text":"result in an increase in a Fund’s exposure to zero coupon securities.","page_number":186,"box":{"x":117,"y":831,"width":511,"height":12}},{"id":"2dd73280-aa1f-48a3-b59f-1ce343384dcd","block_type":"box","text":"In addition to the above-described risks, there are certain other risks related to investing in zero","page_number":186,"box":{"x":117,"y":862,"width":712,"height":12}},{"id":"31d1582a-e6db-4c4b-8ac9-1eec85a1b067","block_type":"box","text":"coupon securities. During a period of severe market conditions, the market for such securities may","page_number":186,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"93428ae9-e9c7-427b-be0b-84610dad4878","block_type":"box","text":"II-103","page_number":186,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"bb787123-f4a8-49c3-a108-640a93c1a97a","block_type":"box","text":"NM1026U-6039989-186/256","page_number":186,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"20ce2630-5077-49f9-aee8-c4a271604ea9","block_type":"box","text":"become even less liquid. In addition, as these securities do not pay cash interest, a Fund’s investment","page_number":187,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"334a9778-fef0-4443-a196-f607c51eb7ee","block_type":"box","text":"exposure to these securities and their risks, including credit risk, will increase during the time these","page_number":187,"box":{"x":116,"y":103,"width":739,"height":12}},{"id":"a0e1724b-5b5a-4724-950f-e856d82f6d2c","block_type":"box","text":"securities are held in the Fund’s portfolio.","page_number":187,"box":{"x":116,"y":118,"width":311,"height":12}},{"id":"8f7c7478-62dd-47ce-8e50-1e058ce04462","block_type":"box","text":"Suitability. (All Funds)","page_number":187,"box":{"x":117,"y":149,"width":181,"height":12}},{"id":"aed24d1a-2665-42e2-886e-5bef270f4bf6","block_type":"box","text":"The economic benefit of an investment in any Fund depends upon many factors beyond the control of","page_number":187,"box":{"x":116,"y":172,"width":760,"height":12}},{"id":"a55a9efd-85ae-454d-9284-be32160b0034","block_type":"box","text":"the Fund, the Manager and its affiliates. Each Fund should be considered a vehicle for diversification","page_number":187,"box":{"x":116,"y":188,"width":753,"height":12}},{"id":"21acceb8-1283-4c79-bb49-e610c4e29737","block_type":"box","text":"and not as a balanced investment program. The suitability for any particular investor of a purchase of","page_number":187,"box":{"x":116,"y":203,"width":755,"height":12}},{"id":"9a83a168-749a-4765-b0da-25cd944aabe8","block_type":"box","text":"shares in a Fund will depend upon, among other things, such investor’s investment objectives and","page_number":187,"box":{"x":116,"y":219,"width":733,"height":12}},{"id":"8e2c4429-bdce-41d7-850b-3fa780abbd3a","block_type":"box","text":"such investor’s ability to accept the risks associated with investing in securities, including the risk of","page_number":187,"box":{"x":116,"y":234,"width":741,"height":12}},{"id":"ef7b9a2a-3288-4c91-84e4-6303dd4bdae2","block_type":"box","text":"loss of principal.","page_number":187,"box":{"x":117,"y":250,"width":124,"height":12}},{"id":"76b66fb7-82b8-4592-8906-02e660959e03","block_type":"box","text":"Investment Restrictions. (All Funds)","page_number":187,"box":{"x":116,"y":281,"width":293,"height":12}},{"id":"0352d45f-76eb-4061-85fc-4a2142ca7105","block_type":"box","text":"See “Investment Restrictions” or “Investment Policies,” as applicable in each Fund’s SAI for the","page_number":187,"box":{"x":116,"y":304,"width":712,"height":12}},{"id":"953d74d8-d1dd-4b0a-92c9-d0543881aba8","block_type":"box","text":"specific fundamental and non-fundamental investment restrictions adopted by each Fund. In addition to","page_number":187,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"e245612e-34dc-40b1-ad04-a6f2a11dae32","block_type":"box","text":"those investment restrictions, each Fund is also subject to the restrictions discussed below.","page_number":187,"box":{"x":116,"y":335,"width":683,"height":12}},{"id":"30d60a3a-ac51-4c7d-876e-ea5fabe8c9cc","block_type":"box","text":"Each Fund’s investments will be limited in order to","page_number":187,"box":{"x":117,"y":366,"width":376,"height":10}},{"id":"6d5c8411-5e39-41ae-b022-df73d60d299d","block_type":"box","text":"allow the Fund to qualify as a “regulated investment","page_number":187,"box":{"x":494,"y":366,"width":389,"height":12}},{"id":"b220a313-5c7a-4353-9db6-ded73433cc30","block_type":"box","text":"company” for purposes of the Code. See “Dividends and Taxes — Taxes” or “Taxes.” To qualify,","page_number":187,"box":{"x":116,"y":382,"width":721,"height":12}},{"id":"4ab192a3-889b-4f25-8c1d-46ecd58e55a1","block_type":"box","text":"among other requirements, each Fund will limit its investments so that, at the close of each quarter of","page_number":187,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"f4bac506-5329-4bf0-bc33-de2a5a2d48b8","block_type":"box","text":"the taxable year, (i) at least 50% of the market value of each Fund’s assets is represented by cash,","page_number":187,"box":{"x":116,"y":413,"width":741,"height":12}},{"id":"bf7df9d1-2726-4273-81f0-5d666c3b86da","block_type":"box","text":"securities of other regulated investment companies, U.S. Government Securities and other securities,","page_number":187,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"693c2045-a0be-400e-895c-c737e43f7418","block_type":"box","text":"with such other securities limited, in respect of any one issuer, to an amount not greater in value than","page_number":187,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"9a01e9fc-b50d-4a2c-bcc2-56a8f9a717f5","block_type":"box","text":"5% of the Fund’s assets and not greater than 10% of the outstanding voting securities of such issuer","page_number":187,"box":{"x":116,"y":459,"width":751,"height":12}},{"id":"400147b3-d3aa-40d9-9ee0-4b63bac85e78","block_type":"box","text":"and (ii) not more than 25% of the value of its assets is invested in the securities (other than U.S.","page_number":187,"box":{"x":116,"y":475,"width":718,"height":12}},{"id":"5392188b-c514-471b-978f-529563af9dea","block_type":"box","text":"Government Securities or securities of other regulated investment companies) of any one issuer, any","page_number":187,"box":{"x":117,"y":490,"width":754,"height":12}},{"id":"c9f115d1-30d6-4957-9b92-070c5ea3b140","block_type":"box","text":"two or more issuers that the Fund controls and that are determined to be engaged in the same or","page_number":187,"box":{"x":116,"y":506,"width":726,"height":12}},{"id":"04cee1c1-f79e-4bd9-90ec-fa7cd575d214","block_type":"box","text":"similar trades or businesses or related trades or businesses or in the securities of one or more qualified","page_number":187,"box":{"x":116,"y":521,"width":772,"height":12}},{"id":"0f65b93c-cf27-40c6-b7f5-1e76879ddb24","block_type":"box","text":"publicly traded partnerships (","page_number":187,"box":{"x":117,"y":537,"width":214,"height":12}},{"id":"4dcc8418-3ea8-424c-8e88-f9d726dec37b","block_type":"box","text":"i.e.","page_number":187,"box":{"x":332,"y":537,"width":21,"height":9}},{"id":"2b6e0463-5e08-45d7-8e90-213f905f72b8","block_type":"box","text":", partnerships that are traded on an established securities market or","page_number":187,"box":{"x":356,"y":537,"width":507,"height":12}},{"id":"dad2d6a6-204e-43fb-9d91-3ea4ff9789fc","block_type":"box","text":"tradable on a secondary market, other than partnerships that derive 90% of their income from interest,","page_number":187,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"f3527daf-b6ad-4a2e-aa42-0d9f5408bfbe","block_type":"box","text":"dividends, capital gains and other traditionally permitted mutual fund income). For purposes of this","page_number":187,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"6764fa7a-6448-4b3e-a564-43c9d1b3fb99","block_type":"box","text":"restriction, the Municipal Funds generally will regard each state and each of its political subdivisions,","page_number":187,"box":{"x":117,"y":583,"width":749,"height":12}},{"id":"32303d27-e2e7-4891-9525-c6c05a6ccadd","block_type":"box","text":"agencies or instrumentalities and each multi-state agency of which the state is a member as a","page_number":187,"box":{"x":116,"y":599,"width":703,"height":12}},{"id":"2aed070e-523e-4c27-8c1e-e8838c711e67","block_type":"box","text":"separate issuer. Each public authority that issues securities on behalf of a private entity generally will","page_number":187,"box":{"x":116,"y":614,"width":754,"height":12}},{"id":"abae4b14-1fcd-4704-8e6b-7312549da5d6","block_type":"box","text":"also be regarded as a separate issuer, except that if the security is backed only by the assets and","page_number":187,"box":{"x":116,"y":630,"width":731,"height":12}},{"id":"8b6317b9-1e29-44df-b64d-c0feb5af66d3","block_type":"box","text":"revenues of a non-government entity, then the entity with the ultimate responsibility for the payment of","page_number":187,"box":{"x":117,"y":645,"width":762,"height":12}},{"id":"dd4d372b-e732-49e8-9aa6-4d8d68bd4301","block_type":"box","text":"interest and principal may be regarded as the sole issuer.","page_number":187,"box":{"x":117,"y":661,"width":425,"height":12}},{"id":"369767be-95ce-4081-a7b3-f5a79babad11","block_type":"box","text":"Foreign government securities (unlike U.S. Government Securities) are not exempt from the 5%, 10%","page_number":187,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"8e5be4be-2018-4d24-be52-d67d19f0315e","block_type":"box","text":"and 25% diversification requirements of the Code discussed above and the securities of each foreign","page_number":187,"box":{"x":116,"y":707,"width":749,"height":12}},{"id":"79d8b124-90dd-4d50-9040-8b5ad6ed7bd9","block_type":"box","text":"government issuer are considered to be obligations of a single issuer. These tax-related limitations","page_number":187,"box":{"x":116,"y":723,"width":732,"height":12}},{"id":"e32fdbb9-af14-489c-9a58-c56b243c12db","block_type":"box","text":"may be changed by the Directors of a Fund to the extent necessary to comply with changes to the U.S.","page_number":187,"box":{"x":117,"y":738,"width":763,"height":12}},{"id":"56ac2311-ad92-4985-a04c-cf256ede7138","block_type":"box","text":"federal tax requirements. A Fund that is “diversified” under the Investment Company Act must satisfy","page_number":187,"box":{"x":116,"y":754,"width":748,"height":12}},{"id":"cac28ef1-63a3-44c9-9bb9-d7e32f33dd94","block_type":"box","text":"the foregoing 5% and 10% requirements with respect to 75% of its total assets.","page_number":187,"box":{"x":116,"y":769,"width":586,"height":12}},{"id":"1ad6b1b1-babb-4542-8851-4f4f04eb9d2e","block_type":"box","text":"II-104","page_number":187,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"75665447-eaf6-46c5-a783-c43e44dc60eb","block_type":"box","text":"NM1026U-6039989-187/256","page_number":187,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a5eeaa7f-a11e-45d4-8d97-8883d3f6ee76","block_type":"box","text":"APPENDIX A","page_number":188,"box":{"x":448,"y":87,"width":108,"height":9}},{"id":"a91b7e21-8fee-44ac-b601-5cef752d6123","block_type":"box","text":"Description of Bond Ratings","page_number":188,"box":{"x":387,"y":117,"width":231,"height":12}},{"id":"86786441-5e53-4ee5-ac35-52123c0bc55b","block_type":"box","text":"A rating is generally assigned to a fixed-income security at the time of issuance by a credit rating","page_number":188,"box":{"x":116,"y":154,"width":722,"height":12}},{"id":"c49d3f1e-8090-4f72-a702-02b3b6ab5ce4","block_type":"box","text":"agency designated as a nationally recognized statistical rating organization (“NRSRO”) by the","page_number":188,"box":{"x":116,"y":170,"width":700,"height":12}},{"id":"af386b9d-d605-4198-94fa-7eb6e30641d8","block_type":"box","text":"Securities and Exchange Commission (“SEC”). While NRSROs may from time to time revise such","page_number":188,"box":{"x":116,"y":185,"width":731,"height":12}},{"id":"943c65e0-2f97-4b21-b248-6964b8faf06d","block_type":"box","text":"ratings, they undertake no obligation to do so, and the ratings given to securities at issuance do not","page_number":188,"box":{"x":117,"y":201,"width":741,"height":12}},{"id":"1b16c3f2-6ed5-45f5-b413-a2692120aee2","block_type":"box","text":"necessarily represent ratings which would be given to these securities on a particular subsequent date.","page_number":188,"box":{"x":117,"y":216,"width":769,"height":12}},{"id":"465ef980-da63-415a-81f6-ea92c5158d59","block_type":"box","text":"NRSROs may rate specific investments (e.g., bonds), issuers (e.g., corporations, governments and","page_number":188,"box":{"x":117,"y":246,"width":740,"height":12}},{"id":"9c62c3cb-5cf9-40d7-b4ef-2f3024dc5bcd","block_type":"box","text":"financial institutions) and/or programs (e.g., commercial paper programs). However, certain types of","page_number":188,"box":{"x":116,"y":261,"width":747,"height":13}},{"id":"564b6982-018c-40d9-a8a2-32d9e31b0af3","block_type":"box","text":"investments may not be rated by NRSROs, such as certain government/sovereign obligations, US","page_number":188,"box":{"x":117,"y":277,"width":732,"height":12}},{"id":"23966b4a-6d2e-4495-81bd-c466324fccb1","block_type":"box","text":"agency securities, commercial paper, time deposits at financial institutions, and derivative instruments","page_number":188,"box":{"x":116,"y":292,"width":761,"height":13}},{"id":"af2ef009-155c-44e9-9e4f-828847eab01b","block_type":"box","text":"such as credit default swaps. For these types of investments, as well as US Treasury securities (some","page_number":188,"box":{"x":116,"y":308,"width":764,"height":12}},{"id":"4b7015c3-1574-4649-aa4a-8648b68cb691","block_type":"box","text":"of which are not rated), where an NRSRO has not rated the specific investment but has rated the","page_number":188,"box":{"x":116,"y":323,"width":725,"height":13}},{"id":"335427ee-c4b2-4779-96c0-f1228f6e1bf0","block_type":"box","text":"investment’s issuer, program, financial institution or underlying reference asset, BlackRock Advisors,","page_number":188,"box":{"x":117,"y":339,"width":751,"height":12}},{"id":"df8dc7d9-060d-416f-bc19-8bd32975afd8","block_type":"box","text":"LLC, BlackRock Fund Advisors or their respective affiliates (“BlackRock”) may consider the investment","page_number":188,"box":{"x":117,"y":355,"width":766,"height":12}},{"id":"957594a8-c14c-46ef-b16e-63b67c4fd35c","block_type":"box","text":"to have the same NRSRO rating as its issuer, program, financial institution or underlying reference","page_number":188,"box":{"x":116,"y":370,"width":736,"height":12}},{"id":"a91e5600-fd85-42ff-b09d-301c50cae787","block_type":"box","text":"asset, as applicable. In the case of municipal securities, where one NRSRO provides multiple ratings","page_number":188,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"30d3dd81-c71a-47e1-a9bf-84603707d16e","block_type":"box","text":"for the same security (e.g., “underlying,” “insured” and/or “enhanced” ratings), BlackRock may consider","page_number":188,"box":{"x":116,"y":401,"width":770,"height":12}},{"id":"a66ab653-de8b-4ace-a287-f9f5fe0df1c8","block_type":"box","text":"the security to have the highest of the multiple ratings.","page_number":188,"box":{"x":116,"y":417,"width":407,"height":12}},{"id":"f1fb8aae-6a90-40f3-82d3-06f2a577f4b0","block_type":"box","text":"New issue securities (regardless of type) may not be rated by an NRSRO at the time of their initial","page_number":188,"box":{"x":117,"y":446,"width":732,"height":13}},{"id":"6e6c5cba-0a09-4757-9120-9a9efdde5e69","block_type":"box","text":"offering. Preliminary prospectuses or term sheets for new issue securities may include an expected","page_number":188,"box":{"x":116,"y":462,"width":742,"height":12}},{"id":"03cb1bfc-de98-420e-993b-181c05a195b2","block_type":"box","text":"rating for the security (as determined by the underwriter and/or issuer) or an NRSRO rating for the","page_number":188,"box":{"x":117,"y":477,"width":733,"height":13}},{"id":"818c7002-6bb6-4c01-bb50-0cf84379bf8e","block_type":"box","text":"issuer of the security. If applicable, when deciding whether to purchase a new issue security that has","page_number":188,"box":{"x":117,"y":493,"width":752,"height":12}},{"id":"f035ec54-c0e0-4899-ad04-f73c321d328b","block_type":"box","text":"not yet been rated by an NRSRO, BlackRock may attribute an expected rating to the security based","page_number":188,"box":{"x":117,"y":508,"width":745,"height":13}},{"id":"3cfe438b-250a-4c08-92bf-075dce5851e5","block_type":"box","text":"on: (i) the expected rating of the security set forth in the preliminary prospectus or term sheet for the","page_number":188,"box":{"x":116,"y":524,"width":747,"height":12}},{"id":"2b3c6150-f70f-4bc2-bf33-a9934a9773b7","block_type":"box","text":"security; (ii) the NRSRO’s rating for the issuer of the security set forth in the preliminary prospectus or","page_number":188,"box":{"x":116,"y":539,"width":760,"height":13}},{"id":"d9f64207-d9dd-47ed-b61e-9877bca2d95d","block_type":"box","text":"term sheet for the security; or (iii) with respect to asset-backed securities, the rating of a prior issuance","page_number":188,"box":{"x":116,"y":555,"width":767,"height":12}},{"id":"028f4fa1-6652-4f61-8700-bd741e3665ed","block_type":"box","text":"having a similar structure or the same sponsor.","page_number":188,"box":{"x":117,"y":571,"width":353,"height":12}},{"id":"98378d5a-c6a2-41d4-ae1a-a52779ff738a","block_type":"box","text":"Where the investment objective of a fund is to track the performance of an index that includes credit","page_number":188,"box":{"x":116,"y":600,"width":746,"height":12}},{"id":"a4febdb9-e2e1-485c-9fad-dda8e1fc341a","block_type":"box","text":"ratings eligibility criteria as part of its index methodology, the fund may purchase any security within the","page_number":188,"box":{"x":117,"y":616,"width":771,"height":12}},{"id":"31107166-36ae-4678-a164-80d2a7348700","block_type":"box","text":"index, such security having been determined by the index provider as meeting its credit ratings","page_number":188,"box":{"x":117,"y":632,"width":707,"height":11}},{"id":"b9b360dc-a51f-4709-8b2d-8a839eef0c51","block_type":"box","text":"eligibility criteria. The credit ratings practices of an index provider may differ from BlackRock’s","page_number":188,"box":{"x":116,"y":647,"width":701,"height":12}},{"id":"af3642cd-f2b0-488f-aa0f-05ef22bfe4ff","block_type":"box","text":"practices, as described above. Further, the fund may invest, directly or indirectly, in securities that are","page_number":188,"box":{"x":117,"y":662,"width":754,"height":12}},{"id":"0860474f-ae00-4fa4-bff1-240a683af8b5","block_type":"box","text":"not rated by a rating agency or securities with a credit rating that differs from the credit rating specified","page_number":188,"box":{"x":117,"y":678,"width":757,"height":12}},{"id":"6288ed16-e811-4f87-ab1a-93fad1454e52","block_type":"box","text":"in its index methodology in various circumstances, including where a security is downgraded but not","page_number":188,"box":{"x":117,"y":694,"width":741,"height":11}},{"id":"fc25549d-f146-4403-891e-576617220a2c","block_type":"box","text":"yet removed from an index, following the removal of a security from an index prior to its sale by the","page_number":188,"box":{"x":116,"y":709,"width":733,"height":12}},{"id":"3291ab95-d6df-4f1f-b277-65cd8ec5d31a","block_type":"box","text":"fund or as a result of a corporate action or restructuring affecting an issuer of a security held by the","page_number":188,"box":{"x":116,"y":724,"width":734,"height":13}},{"id":"6b97b150-61cf-4cb2-a7dd-ffa41b709b03","block_type":"box","text":"fund.","page_number":188,"box":{"x":116,"y":740,"width":36,"height":9}},{"id":"033dd666-891a-4964-88b6-0a3a3241fbaf","block_type":"box","text":"Fixed-income securities which are unrated may expose the investor to risks with respect to capacity to","page_number":188,"box":{"x":117,"y":770,"width":757,"height":12}},{"id":"8b69f041-6afc-4b5d-99f6-9f1b931c6590","block_type":"box","text":"pay interest or repay principal which are similar to the risks of lower-rated speculative bonds (although","page_number":188,"box":{"x":117,"y":785,"width":756,"height":12}},{"id":"b6925714-e9ac-4d7b-9f73-aac82b284b1c","block_type":"box","text":"BlackRock may deem such unrated securities to be of higher quality). Evaluation of these securities is","page_number":188,"box":{"x":117,"y":801,"width":755,"height":12}},{"id":"5163fd11-f8ce-4592-8ae6-53c7dd291d56","block_type":"box","text":"dependent on BlackRock’s judgment, analysis and experience in the evaluation of such securities.","page_number":188,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"f4ecd30c-6ae4-47ea-bca4-1539c88f0844","block_type":"box","text":"Investors should note that the assignment of a rating to a security by an NRSRO may not reflect the","page_number":188,"box":{"x":117,"y":846,"width":745,"height":12}},{"id":"5e483d92-e083-4b99-81ad-8e53c18ceb11","block_type":"box","text":"effect of recent developments on the issuer’s ability to make interest and principal payments or on the","page_number":188,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"3580537a-967a-4be9-8d18-b9d65707463d","block_type":"box","text":"likelihood of default.","page_number":188,"box":{"x":117,"y":877,"width":152,"height":10}},{"id":"cad1201e-c75c-46e1-b029-b4a7bb4658c9","block_type":"box","text":"A-1","page_number":188,"box":{"x":486,"y":909,"width":24,"height":9}},{"id":"244a9fbd-9200-4aa8-afab-6d9e0330fdb8","block_type":"box","text":"NM1026U-6039989-188/256","page_number":188,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"269154e6-b172-49c0-b6b1-ca9cf36c1986","block_type":"box","text":"Securities deemed to be high yield are rated below Baa3 by Moody’s and below BBB- by S&P Global","page_number":189,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"90f9f757-db9c-4091-847d-5cacb6cdb5e6","block_type":"box","text":"Ratings and Fitch. Other terms used to describe such securities include “lower rated bonds,” “non","page_number":189,"box":{"x":117,"y":102,"width":728,"height":13}},{"id":"f5bfd0ce-6e10-4c8e-bafd-5fac9f9bd420","block_type":"box","text":"investment grade bonds,” “below investment grade bonds,” and “junk bonds.”","page_number":189,"box":{"x":117,"y":118,"width":577,"height":12}},{"id":"83e1496b-2adb-4f71-9e66-c8ed58fb4c9c","block_type":"box","text":"The descriptions below relate to general long-term and short-term obligations of an issuer.","page_number":189,"box":{"x":116,"y":148,"width":674,"height":12}},{"id":"d084c5c0-9db2-4c47-bbbe-226bcea6b28e","block_type":"box","text":"A Description of Moody’s Investors Service, Inc.’s (“Moody’s”) Global Rating Scales","page_number":189,"box":{"x":116,"y":177,"width":677,"height":12}},{"id":"ed4db5e8-836a-40ed-ab39-89e160af2ac2","block_type":"box","text":"Credit ratings are assigned on Moody’s global long-term and short-term rating scales and are forward","page_number":189,"box":{"x":117,"y":207,"width":757,"height":12}},{"id":"7fa76a7d-fd5c-4f49-8d09-8c906b1b650d","block_type":"box","text":"looking opinions of the relative credit risks of financial obligations issued by non-financial corporates,","page_number":189,"box":{"x":117,"y":222,"width":750,"height":13}},{"id":"69c510ce-051f-4fc2-b9f7-9ee418788720","block_type":"box","text":"financial institutions, structured finance vehicles, project finance vehicles, and public sector entities.","page_number":189,"box":{"x":116,"y":238,"width":742,"height":12}},{"id":"67782970-03d9-4fcf-8933-5698953c534f","block_type":"box","text":"Moody’s defines credit risk as the risk that an entity may not meet its contractual financial obligations","page_number":189,"box":{"x":117,"y":253,"width":751,"height":13}},{"id":"310511c7-ecbc-4339-ae43-e38fa9e29b91","block_type":"box","text":"as they come due and any estimated financial loss in the event of default or impairment. The","page_number":189,"box":{"x":116,"y":269,"width":692,"height":12}},{"id":"d267806d-b16e-4bd0-bb69-ab20a852abd0","block_type":"box","text":"contractual financial obligations addressed by Moody’s ratings are those that call for, without regard to","page_number":189,"box":{"x":116,"y":284,"width":763,"height":13}},{"id":"b996fd01-56e4-4674-bd3e-8b6e7dac8971","block_type":"box","text":"enforceability, the payment of an ascertainable amount, which may vary based upon standard sources","page_number":189,"box":{"x":116,"y":300,"width":765,"height":12}},{"id":"2273c498-4e62-4c3f-8501-0597145838db","block_type":"box","text":"of variation (e.g., floating interest rates), by an ascertainable date. Moody’s rating addresses the","page_number":189,"box":{"x":116,"y":315,"width":719,"height":13}},{"id":"bed93cad-a40e-41bf-8c14-91c89e3e1cbd","block_type":"box","text":"issuer’s ability to obtain cash sufficient to service the obligation, and its willingness to pay. Moody’s","page_number":189,"box":{"x":117,"y":331,"width":738,"height":12}},{"id":"42bf0e03-0be2-4e95-97fd-f3b0e521b4cb","block_type":"box","text":"ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g.,","page_number":189,"box":{"x":117,"y":346,"width":765,"height":13}},{"id":"aff6d17d-630f-43de-a434-9f88fa5c764c","block_type":"box","text":"equity indexed), absent an express statement to the contrary in a press release accompanying an","page_number":189,"box":{"x":116,"y":362,"width":731,"height":12}},{"id":"91f04cdc-94a1-411d-94fa-cb68d3fa92aa","block_type":"box","text":"initial rating. Long-term ratings are assigned to issuers or obligations with an original maturity of eleven","page_number":189,"box":{"x":117,"y":377,"width":767,"height":13}},{"id":"fd9c2a1c-d2aa-4bb6-aa7d-22fa524b33ca","block_type":"box","text":"months or more and reflect both on the likelihood of a default or impairment on contractual financial","page_number":189,"box":{"x":117,"y":393,"width":741,"height":12}},{"id":"22a6d494-26e2-4085-a715-4bf4663df30f","block_type":"box","text":"obligations and the expected financial loss suffered in the event of default or impairment. Short-term","page_number":189,"box":{"x":116,"y":409,"width":747,"height":12}},{"id":"1d95d700-57dc-438b-ac45-1afd847a632c","block_type":"box","text":"ratings are assigned for obligations with an original maturity of thirteen months or less and reflect both","page_number":189,"box":{"x":117,"y":424,"width":760,"height":12}},{"id":"c25be5b1-a08a-4fcd-b24b-a1ddd5555584","block_type":"box","text":"on the likelihood of a default or impairment on contractual financial obligations and the expected","page_number":189,"box":{"x":116,"y":440,"width":717,"height":12}},{"id":"04a8772b-7c81-460c-b8ab-0849d0022a8a","block_type":"box","text":"financial loss suffered in the event of default or impairment. Moody’s issues ratings at the issuer level","page_number":189,"box":{"x":116,"y":455,"width":755,"height":12}},{"id":"0baed4d2-a2cb-49a5-a219-92e6fd0ef79c","block_type":"box","text":"and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made","page_number":189,"box":{"x":116,"y":471,"width":761,"height":12}},{"id":"f961a7e8-a859-4c7d-ad4e-2fab1d17caec","block_type":"box","text":"publicly available although private and unpublished ratings may also be assigned.","page_number":189,"box":{"x":117,"y":486,"width":610,"height":12}},{"id":"a1999205-7d48-43f3-b2e1-1133701c7fa8","block_type":"box","text":"Moody’s differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial","page_number":189,"box":{"x":117,"y":516,"width":763,"height":12}},{"id":"577f09de-ee17-4781-89f5-9aa4f6bc36df","block_type":"box","text":"corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to","page_number":189,"box":{"x":116,"y":531,"width":769,"height":12}},{"id":"e437122f-1dc1-499b-a39a-1745bc57fd70","block_type":"box","text":"all structured finance ratings. The addition of (sf) to structured finance ratings should eliminate any","page_number":189,"box":{"x":116,"y":547,"width":735,"height":12}},{"id":"a3d682e8-a31b-4ae1-8057-b494c216144c","block_type":"box","text":"presumption that such ratings and fundamental ratings at the same letter grade level will behave the","page_number":189,"box":{"x":117,"y":562,"width":747,"height":12}},{"id":"51cec4f3-c63b-47dc-97a4-db06e48715ea","block_type":"box","text":"same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated","page_number":189,"box":{"x":116,"y":578,"width":751,"height":12}},{"id":"f3f73dd7-59b4-46d4-8ec6-fa6031ba70d9","block_type":"box","text":"structured finance and fundamental securities may have different risk characteristics. Through its","page_number":189,"box":{"x":116,"y":593,"width":724,"height":12}},{"id":"4b37fa24-b7b6-45df-93fa-fa641d9d89f7","block_type":"box","text":"current methodologies, however, Moody’s aspires to achieve broad expected equivalence in structured","page_number":189,"box":{"x":116,"y":609,"width":769,"height":12}},{"id":"93e53402-1e0b-413f-b4eb-2651c6613b52","block_type":"box","text":"finance and fundamental rating performance when measured over a long period of time.","page_number":189,"box":{"x":116,"y":624,"width":658,"height":12}},{"id":"66ffdc21-1a6c-45ad-9acc-681f111bc499","block_type":"box","text":"Description of Moody’s Global Long-Term Rating Scale","page_number":189,"box":{"x":117,"y":654,"width":445,"height":12}},{"id":"3282e7e0-64c0-4fb2-977b-4aac8b488096","block_type":"box","text":"Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level","page_number":189,"box":{"x":116,"y":684,"width":756,"height":12}},{"id":"08d1b1b5-befc-4f2e-92e5-7b2a9c53599a","block_type":"box","text":"of credit risk.","page_number":189,"box":{"x":226,"y":699,"width":93,"height":10}},{"id":"85962c72-a23f-4438-8cf7-c12df817905e","block_type":"box","text":"Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit","page_number":189,"box":{"x":116,"y":722,"width":747,"height":12}},{"id":"5c1771d7-b2a0-413f-9bdb-905da05f6ac5","block_type":"box","text":"risk.","page_number":189,"box":{"x":226,"y":738,"width":28,"height":9}},{"id":"4f727de2-4fbe-46a1-99f9-5c3156cb9934","block_type":"box","text":"A Obligations rated A are judged to be upper-medium grade and are subject to low credit","page_number":189,"box":{"x":116,"y":761,"width":754,"height":12}},{"id":"b7c11624-cb8d-4a3f-bbdf-7bc3ea748603","block_type":"box","text":"risk.","page_number":189,"box":{"x":226,"y":777,"width":28,"height":9}},{"id":"e762fa23-54be-4b57-ab09-3de68ee5951b","block_type":"box","text":"Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit","page_number":189,"box":{"x":117,"y":800,"width":741,"height":12}},{"id":"b8409f71-6956-43dd-9c15-bbbdc4c00812","block_type":"box","text":"risk and as such may possess certain speculative characteristics.","page_number":189,"box":{"x":226,"y":815,"width":483,"height":12}},{"id":"c6f14650-4913-4572-8bcf-272865247372","block_type":"box","text":"Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit","page_number":189,"box":{"x":117,"y":839,"width":750,"height":12}},{"id":"cc49c80d-741f-4f1e-8c59-d4a85c88ff77","block_type":"box","text":"risk.","page_number":189,"box":{"x":226,"y":854,"width":35,"height":10}},{"id":"c1911157-40dc-4783-9224-57d3a22dcdf2","block_type":"box","text":"B Obligations rated B are considered speculative and are subject to high credit risk.","page_number":189,"box":{"x":117,"y":877,"width":717,"height":12}},{"id":"308b5503-f18f-48c6-957a-46f286d31ef9","block_type":"box","text":"A-2","page_number":189,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"40e105f9-cc3a-4dff-8771-cc19001c2d74","block_type":"box","text":"NM1026U-6039989-189/256","page_number":189,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"68527138-3c32-4ef8-9bbe-3c5ca836e32a","block_type":"box","text":"Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to","page_number":190,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"83da8839-9373-4410-994b-4f619f894903","block_type":"box","text":"very high credit risk.","page_number":190,"box":{"x":225,"y":103,"width":154,"height":12}},{"id":"5ea25471-aa18-4b11-8dc8-e158cbdd11e6","block_type":"box","text":"Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with","page_number":190,"box":{"x":117,"y":126,"width":753,"height":12}},{"id":"37ce73b8-9304-473b-b1b6-db35b0db879b","block_type":"box","text":"some prospect of recovery of principal and interest.","page_number":190,"box":{"x":226,"y":141,"width":386,"height":12}},{"id":"99742242-f64a-445b-b56f-8624efdadfa7","block_type":"box","text":"C Obligations rated C are the lowest rated and are typically in default, with little prospect","page_number":190,"box":{"x":117,"y":165,"width":752,"height":12}},{"id":"5c651f86-1f64-401e-a124-d8f28dbf900e","block_type":"box","text":"for recovery of principal or interest.","page_number":190,"box":{"x":225,"y":180,"width":264,"height":12}},{"id":"d7d00d52-100e-47be-b59e-8d669f15a1cc","block_type":"box","text":"Note:","page_number":190,"box":{"x":117,"y":210,"width":39,"height":9}},{"id":"a331834e-a68e-4c4c-a869-f8132dfcc701","block_type":"box","text":"Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa","page_number":190,"box":{"x":156,"y":210,"width":706,"height":12}},{"id":"2b6b56e1-c008-417e-ab87-fec29e52275c","block_type":"box","text":"through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating","page_number":190,"box":{"x":116,"y":225,"width":745,"height":12}},{"id":"f0b6c184-bc90-4f7a-8cea-2b1bda88de7d","block_type":"box","text":"category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the","page_number":190,"box":{"x":116,"y":241,"width":741,"height":12}},{"id":"9bf1b287-a070-46b7-91c5-e208227846ea","block_type":"box","text":"lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of","page_number":190,"box":{"x":117,"y":256,"width":751,"height":12}},{"id":"1a29e709-12e7-4789-9482-f1baff77bcf4","block_type":"box","text":"hybrid securities issued by banks, insurers, finance companies, and securities firms.","page_number":190,"box":{"x":117,"y":272,"width":628,"height":12}},{"id":"66bf2721-facc-47d6-8eae-0e05409cd456","block_type":"box","text":"By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal","page_number":190,"box":{"x":117,"y":301,"width":737,"height":12}},{"id":"8dfb680e-c1bd-4c10-83ef-82c7f5e1c605","block_type":"box","text":"payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may","page_number":190,"box":{"x":117,"y":317,"width":765,"height":12}},{"id":"34a1adcf-8b1c-4439-a416-5cf02a6dabdd","block_type":"box","text":"also be subject to contractually allowable write-downs of principal that could result in impairment.","page_number":190,"box":{"x":116,"y":332,"width":724,"height":12}},{"id":"3e349254-cf86-4327-9057-278713d1c525","block_type":"box","text":"Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an","page_number":190,"box":{"x":116,"y":348,"width":744,"height":12}},{"id":"557bf99d-7a87-404c-84a4-052f5d1bb66a","block_type":"box","text":"expression of the relative credit risk associated with that security.","page_number":190,"box":{"x":116,"y":363,"width":488,"height":12}},{"id":"002cc3d0-20b1-41a9-8315-7d655c855ec5","block_type":"box","text":"Description of Moody’s Global Short-Term Rating Scale","page_number":190,"box":{"x":117,"y":393,"width":448,"height":12}},{"id":"75556306-cd66-4053-8bc0-90ad36e6ccb5","block_type":"box","text":"P-1 Ratings of Prime-1 reflect a superior ability to repay short-term obligations.","page_number":190,"box":{"x":117,"y":422,"width":667,"height":13}},{"id":"f267ac9f-2b3d-48ce-a988-47caaf4cd14b","block_type":"box","text":"P-2 Ratings of Prime-2 reflect a strong ability to repay short-term obligations.","page_number":190,"box":{"x":117,"y":446,"width":653,"height":12}},{"id":"de1005b4-da4e-441b-89f5-327c7c321815","block_type":"box","text":"P-3 Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.","page_number":190,"box":{"x":117,"y":469,"width":697,"height":12}},{"id":"07483cfc-bf0e-4989-b791-b5fac7d76d0f","block_type":"box","text":"NP Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime","page_number":190,"box":{"x":117,"y":492,"width":741,"height":12}},{"id":"708c8561-78cb-4017-81a1-5b99d0a5ddc5","block_type":"box","text":"rating categories.","page_number":190,"box":{"x":226,"y":508,"width":133,"height":12}},{"id":"85d612fb-9218-45eb-94f6-fd7d1fdfc068","block_type":"box","text":"Description of Moody’s U.S. Municipal Short-Term Debt and Demand Obligation Ratings","page_number":190,"box":{"x":117,"y":537,"width":707,"height":12}},{"id":"023ced4e-bd48-4dbe-ab62-4aa0ba2d81d6","block_type":"box","text":"Moody’s uses the global short-term Prime rating scale for commercial paper issued by U.S.","page_number":190,"box":{"x":117,"y":567,"width":681,"height":12}},{"id":"2ba7a453-689c-4ab0-81fc-db4d4a72fd18","block_type":"box","text":"municipalities and nonprofits. These commercial paper programs may be backed by external letters of","page_number":190,"box":{"x":117,"y":582,"width":761,"height":12}},{"id":"59e25353-74cd-4ccb-ae3c-0cd10f9877f8","block_type":"box","text":"credit or liquidity facilities, or by an issuer’s self-liquidity.","page_number":190,"box":{"x":116,"y":598,"width":420,"height":12}},{"id":"d9cc553e-dfdf-450d-bd8a-c451a171c31d","block_type":"box","text":"For other short-term municipal obligations, Moody’s uses one of two other short-term rating scales, the","page_number":190,"box":{"x":117,"y":627,"width":765,"height":13}},{"id":"d7bd5c89-e26c-4ed7-9eca-7b39a00a8c43","block_type":"box","text":"Municipal Investment Grade (“MIG”) and Variable Municipal Investment Grade (“VMIG”) scales","page_number":190,"box":{"x":117,"y":643,"width":708,"height":12}},{"id":"5c9a918d-9c00-4202-88d9-7e18da550e62","block_type":"box","text":"discussed below.","page_number":190,"box":{"x":116,"y":659,"width":132,"height":9}},{"id":"c98ff863-65c1-4252-a4ad-42358e0a8a0f","block_type":"box","text":"MIG Ratings","page_number":190,"box":{"x":117,"y":688,"width":96,"height":12}},{"id":"2f64f912-2ad4-4e8c-8849-c45699e7792b","block_type":"box","text":"Moody’s uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain","page_number":190,"box":{"x":117,"y":718,"width":738,"height":12}},{"id":"ead8a493-e48b-4e33-9275-3eeeffbce91c","block_type":"box","text":"other short-term obligations, which typically mature in three years or less. Under certain circumstances,","page_number":190,"box":{"x":116,"y":733,"width":766,"height":12}},{"id":"5cab5a46-eed2-4b7d-9bbd-53459b21da73","block_type":"box","text":"Moody’s uses the MIG scale for bond anticipation notes with maturities of up to five years.","page_number":190,"box":{"x":117,"y":749,"width":665,"height":12}},{"id":"9abb3797-afa3-42de-98a9-36bb1ea9555d","block_type":"box","text":"MIG Scale","page_number":190,"box":{"x":117,"y":778,"width":77,"height":10}},{"id":"5728294a-cd5f-4ddf-95f3-fa3d9e468da3","block_type":"box","text":"MIG 1 This designation denotes superior credit quality. Excellent protection is afforded by","page_number":190,"box":{"x":117,"y":808,"width":722,"height":12}},{"id":"79eff1ee-088a-4f1a-bf92-d5008ea33cc2","block_type":"box","text":"established cash flows, highly reliable liquidity support, or demonstrated broad-based","page_number":190,"box":{"x":226,"y":823,"width":631,"height":12}},{"id":"267390d3-1797-4141-9e95-f4859f426eac","block_type":"box","text":"access to the market for refinancing.","page_number":190,"box":{"x":226,"y":839,"width":275,"height":12}},{"id":"c394e166-c2bd-442c-9543-b3350e1d6da6","block_type":"box","text":"MIG 2 This designation denotes strong credit quality. Margins of protection are ample, although","page_number":190,"box":{"x":117,"y":862,"width":771,"height":12}},{"id":"6cbc57a9-0b83-4c46-b8e4-0beb334feff6","block_type":"box","text":"not as large as in the preceding group.","page_number":190,"box":{"x":226,"y":878,"width":291,"height":12}},{"id":"49eb3b89-7d2d-4a89-9bad-745feedb8034","block_type":"box","text":"A-3","page_number":190,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"c8635f98-280c-4765-8908-0c8e4729a10b","block_type":"box","text":"NM1026U-6039989-190/256","page_number":190,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1912b1de-0105-48c9-b638-a0117d41d9cb","block_type":"box","text":"MIG 3 This designation denotes acceptable credit quality. Liquidity and cash-flow protection","page_number":191,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"ede107f5-13ce-4526-8e69-dd999e92e817","block_type":"box","text":"may be narrow, and market access for refinancing is likely to be less well-established.","page_number":191,"box":{"x":226,"y":102,"width":642,"height":13}},{"id":"4e22bd1f-4940-414a-a5af-a9fbf96c029b","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Debt instruments in this","page_number":191,"box":{"x":116,"y":126,"width":723,"height":12}},{"id":"d53393a0-6010-4d12-b8b0-b3bced3cb1db","block_type":"box","text":"category may lack sufficient margins of protection.","page_number":191,"box":{"x":226,"y":141,"width":377,"height":12}},{"id":"a340f908-5774-4c40-812b-34cfe490533c","block_type":"box","text":"VMIG Ratings","page_number":191,"box":{"x":116,"y":168,"width":114,"height":12}},{"id":"a7ed4a15-6d21-4003-9417-a9284846e075","block_type":"box","text":"In the case of variable rate demand obligations (“VRDOs”), a two-component rating is assigned. The","page_number":191,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"029b0640-0ad7-4d31-844d-cd7adce3c600","block_type":"box","text":"components are a long-term rating and a short-term payment obligation rating. The long-term rating","page_number":191,"box":{"x":116,"y":211,"width":744,"height":12}},{"id":"dbfcf29c-4c53-4bbc-b289-3af48bb15c25","block_type":"box","text":"addresses the issuer’s ability to meet scheduled principal and interest payments. The short-term","page_number":191,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"e12ef7fe-8dfb-4df5-ae8e-a97267a471b0","block_type":"box","text":"payment obligation rating addresses the ability of the issuer or the liquidity provider to meet any","page_number":191,"box":{"x":117,"y":242,"width":713,"height":12}},{"id":"4210b800-30d4-438d-a9d1-4f2916cba8e2","block_type":"box","text":"purchase-price payment obligation resulting from optional tenders (“on demand”) and/or mandatory","page_number":191,"box":{"x":117,"y":258,"width":740,"height":12}},{"id":"fc6c5f76-1e30-47f7-965d-1826dfaa8374","block_type":"box","text":"tenders of the VRDO. The short-term demand obligation rating uses the VMIG scale. VMIG ratings with","page_number":191,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"bb3fdf94-4208-4196-9095-c04d9d834446","block_type":"box","text":"liquidity support use as an input the short-term Counterparty Risk Assessment of the support provider,","page_number":191,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"31612739-e336-4cbb-b293-565ae6ad50d8","block_type":"box","text":"or the long-term rating of the underlying obligor in the absence of third party liquidity support.","page_number":191,"box":{"x":116,"y":304,"width":693,"height":12}},{"id":"73c231e5-1d85-4cfa-bd84-c662c3504357","block_type":"box","text":"Transitions of VMIG ratings of demand obligations with conditional liquidity support differ from","page_number":191,"box":{"x":116,"y":320,"width":699,"height":12}},{"id":"6b95227d-a2e9-4cd2-95e6-f344ea85d7aa","block_type":"box","text":"transitions on the Prime scale to reflect the risk that external liquidity support will terminate if the","page_number":191,"box":{"x":116,"y":335,"width":717,"height":12}},{"id":"77b06db0-8a11-4c62-a232-3aaca9ac44a7","block_type":"box","text":"issuer’s long-term rating drops below investment grade.","page_number":191,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"dc4f5575-4b32-43eb-9231-0fbaee6091ec","block_type":"box","text":"Moody’s typically assigns the VMIG short-term demand obligation rating if the frequency of the demand","page_number":191,"box":{"x":117,"y":378,"width":771,"height":12}},{"id":"86ce166c-b169-41b7-a66e-76da6ae62eac","block_type":"box","text":"feature is less than every three years. If the frequency of the demand feature is less than three years","page_number":191,"box":{"x":116,"y":393,"width":753,"height":12}},{"id":"3a15de3c-2e09-4269-9428-cb8729e4d829","block_type":"box","text":"but the purchase price is payable only with remarketing proceeds, the short-term demand obligation","page_number":191,"box":{"x":117,"y":409,"width":745,"height":12}},{"id":"f9a6d1eb-5201-49c4-a6ae-1b34c3ed2ea1","block_type":"box","text":"rating is “NR”.","page_number":191,"box":{"x":117,"y":424,"width":107,"height":12}},{"id":"8db467e7-ffff-49df-b231-df4d73dabfb7","block_type":"box","text":"Industrial development bonds in the US where the obligor is a corporate may carry a VMIG rating that","page_number":191,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"c7f6edf4-3109-443a-93e8-704754a94b8d","block_type":"box","text":"reflects Moody’s view of the relative likelihood of default and loss. In these cases, liquidity assessment","page_number":191,"box":{"x":117,"y":467,"width":763,"height":12}},{"id":"faeae276-810d-48e0-9ba9-60530e299dd9","block_type":"box","text":"is based on the liquidity of the corporate obligor.","page_number":191,"box":{"x":117,"y":482,"width":361,"height":12}},{"id":"e1e34be5-6676-44bc-b975-d95293575a49","block_type":"box","text":"VMIG Scale","page_number":191,"box":{"x":116,"y":509,"width":94,"height":10}},{"id":"95d60940-f538-47d5-969a-c3081e63489e","block_type":"box","text":"VMIG 1 This designation denotes superior credit quality. Excellent protection is afforded by the","page_number":191,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"63eb3f8d-0ebf-4d95-b2b0-acc9ee13db39","block_type":"box","text":"superior short-term credit strength of the liquidity provider and structural and legal","page_number":191,"box":{"x":226,"y":552,"width":610,"height":12}},{"id":"065ba325-cc87-4513-bb5e-879a1abe0f51","block_type":"box","text":"protections.","page_number":191,"box":{"x":226,"y":568,"width":91,"height":12}},{"id":"13b84a73-8ccb-410f-89a4-71b09823e27d","block_type":"box","text":"VMIG 2 This designation denotes strong credit quality. Good protection is afforded by the strong","page_number":191,"box":{"x":116,"y":591,"width":766,"height":12}},{"id":"17dea837-e4d3-4e85-9c47-800f4e8d73b1","block_type":"box","text":"short-term credit strength of the liquidity provider and structural and legal protections.","page_number":191,"box":{"x":226,"y":606,"width":636,"height":12}},{"id":"b2f40f6f-9852-4d5f-87e5-7ffa446e5ae4","block_type":"box","text":"VMIG 3 This designation denotes acceptable credit quality. Adequate protection is afforded by","page_number":191,"box":{"x":116,"y":630,"width":752,"height":12}},{"id":"9a844318-f2ad-4cf4-9295-dc4879b6250c","block_type":"box","text":"the satisfactory short-term credit strength of the liquidity provider and structural and","page_number":191,"box":{"x":225,"y":645,"width":624,"height":12}},{"id":"af6e2d28-d550-4a06-a592-2fb4c253f7af","block_type":"box","text":"legal protections.","page_number":191,"box":{"x":226,"y":661,"width":125,"height":12}},{"id":"3efb9664-1d65-4032-8c47-64e71e298434","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Demand features rated in this","page_number":191,"box":{"x":116,"y":684,"width":762,"height":12}},{"id":"c334004b-9deb-42b6-a273-e3a59f1ec959","block_type":"box","text":"category may be supported by a liquidity provider that does not have a sufficiently","page_number":191,"box":{"x":226,"y":699,"width":606,"height":13}},{"id":"b2bf56a3-bc66-4615-a718-7c5bf18e4b60","block_type":"box","text":"strong short-term rating or may lack the structural or legal protections.","page_number":191,"box":{"x":226,"y":715,"width":517,"height":12}},{"id":"2fb411a9-b1e9-406d-a795-f6082592d231","block_type":"box","text":"Description of S&P Global Ratings (“S&P”), a Division of S&P Global Inc., Issue Credit Ratings","page_number":191,"box":{"x":117,"y":742,"width":753,"height":12}},{"id":"5c8756c7-1a70-4a50-9d77-b4cfd1511a1e","block_type":"box","text":"An S&P issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with","page_number":191,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"110ec772-c5af-4841-a993-7cc426a8b14f","block_type":"box","text":"respect to a specific financial obligation, a specific class of financial obligations, or a specific financial","page_number":191,"box":{"x":117,"y":785,"width":748,"height":12}},{"id":"1d4df6d3-beaa-4d10-b805-6a543da44421","block_type":"box","text":"program (including ratings on medium-term note programs and commercial paper programs). It takes","page_number":191,"box":{"x":117,"y":800,"width":750,"height":12}},{"id":"e62de998-7c49-4045-9635-605c4df61592","block_type":"box","text":"into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement","page_number":191,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"8ecda059-9319-4d81-bf9b-72c195aa68eb","block_type":"box","text":"on the obligation and takes into account the currency in which the obligation is denominated. The","page_number":191,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"52443606-767f-4ac7-81ed-37393fc55228","block_type":"box","text":"opinion reflects S&P’s view of the obligor’s capacity and willingness to meet its financial commitments","page_number":191,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"abd35c3d-1fa9-4939-b200-0c3913ab5b1f","block_type":"box","text":"as they come due, and this opinion may assess terms, such as collateral security and subordination,","page_number":191,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"67357082-59df-41d7-9b84-844d6c27d9a4","block_type":"box","text":"which could affect ultimate payment in the event of default.","page_number":191,"box":{"x":116,"y":878,"width":441,"height":12}},{"id":"1ac6b5b1-1dad-46f5-b64e-f9cfd43652de","block_type":"box","text":"A-4","page_number":191,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"4c4ad2ab-ebd8-45de-a947-a079aa874ad2","block_type":"box","text":"NM1026U-6039989-191/256","page_number":191,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"34f3446b-426b-4467-8fff-3d462da1a804","block_type":"box","text":"Issue credit ratings can be either long-term or short-term. Short-term issue credit ratings are generally","page_number":192,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"47cc5462-ecdf-4c8e-ba73-f909ebd51cf1","block_type":"box","text":"assigned to those obligations considered short-term in the relevant market, typically with an original","page_number":192,"box":{"x":116,"y":103,"width":743,"height":12}},{"id":"84168b47-3cc5-413d-97e9-0b64944b2533","block_type":"box","text":"maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the","page_number":192,"box":{"x":117,"y":118,"width":708,"height":12}},{"id":"7f52e015-6639-4e68-a7d1-94d52ec2f5a3","block_type":"box","text":"creditworthiness of an obligor with respect to put features on long-term obligations. S&P would typically","page_number":192,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"af838384-33b0-494d-b895-0b83da05f5f9","block_type":"box","text":"assign a long-term issue credit rating to an obligation with an original maturity of greater than 365 days.","page_number":192,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"4d0b4558-cbf8-43ed-97a7-f2cfac385592","block_type":"box","text":"However, the ratings S&P assigns to certain instruments may diverge from these guidelines based on","page_number":192,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"600d4181-5bca-462c-89d3-6af3851a636f","block_type":"box","text":"market practices.","page_number":192,"box":{"x":117,"y":180,"width":132,"height":12}},{"id":"3b1e1c3e-746b-478e-95ee-2a1f7b8a3b64","block_type":"box","text":"Issue credit ratings are based, in varying degrees, on S&P’s analysis of the following considerations:","page_number":192,"box":{"x":117,"y":208,"width":750,"height":12}},{"id":"73f20106-0aa1-478b-8dd3-9d5dafea393a","block_type":"box","text":"• The likelihood of payment — the capacity and willingness of the obligor to meet its financial","page_number":192,"box":{"x":117,"y":237,"width":714,"height":12}},{"id":"d8f0787e-c8ba-4c9c-8852-a617bf70d5e9","block_type":"box","text":"commitments on an obligation in accordance with the terms of the obligation;","page_number":192,"box":{"x":150,"y":252,"width":575,"height":12}},{"id":"899f7779-4e41-4aed-b6df-32e616b61a31","block_type":"box","text":"• The nature and provisions of the financial obligation, and the promise S&P imputes; and","page_number":192,"box":{"x":117,"y":274,"width":691,"height":12}},{"id":"f21da945-6f9f-480f-b86d-dc59c9ce5dc1","block_type":"box","text":"• The protection afforded by, and relative position of, the financial obligation in the event of a","page_number":192,"box":{"x":117,"y":296,"width":712,"height":12}},{"id":"95f77944-4531-4296-8b79-ad18ed87a0f8","block_type":"box","text":"bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws","page_number":192,"box":{"x":150,"y":312,"width":704,"height":12}},{"id":"d33bafbf-73bb-43a2-ada7-1963b7a513b2","block_type":"box","text":"affecting creditors’ rights.","page_number":192,"box":{"x":150,"y":327,"width":191,"height":12}},{"id":"6a30f68e-2d42-47eb-80c3-34a6217f1161","block_type":"box","text":"An issue rating is an assessment of default risk but may incorporate an assessment of relative seniority","page_number":192,"box":{"x":116,"y":355,"width":772,"height":13}},{"id":"b480b616-630e-4c90-92af-63b41157e2ec","block_type":"box","text":"or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior","page_number":192,"box":{"x":116,"y":371,"width":728,"height":12}},{"id":"15924329-cf8c-4dc5-ab2d-4bd0c9b4acf5","block_type":"box","text":"obligations, to reflect lower priority in bankruptcy, as noted above. (Such differentiation may apply","page_number":192,"box":{"x":116,"y":386,"width":729,"height":13}},{"id":"bda9c59d-4bb2-426d-a2c9-69a1b9f183c3","block_type":"box","text":"when an entity has both senior and subordinated obligations, secured and unsecured obligations, or","page_number":192,"box":{"x":116,"y":402,"width":747,"height":12}},{"id":"01caae72-58bf-4932-972a-6bd77ac58448","block_type":"box","text":"operating company and holding company obligations.)","page_number":192,"box":{"x":116,"y":417,"width":407,"height":13}},{"id":"582285d3-1fcf-4682-bbe4-c385475f1cda","block_type":"box","text":"Long-Term Issue Credit Ratings*","page_number":192,"box":{"x":117,"y":446,"width":265,"height":12}},{"id":"87359e93-478d-49e6-adeb-702122d24503","block_type":"box","text":"AAA An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity","page_number":192,"box":{"x":116,"y":474,"width":770,"height":12}},{"id":"948e756a-9888-49d9-968f-773dc4377d6e","block_type":"box","text":"to meet its financial commitments on the obligation is extremely strong.","page_number":192,"box":{"x":225,"y":490,"width":533,"height":12}},{"id":"a64a56c7-1f35-47e1-929f-2e1b113d7973","block_type":"box","text":"AA An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree.","page_number":192,"box":{"x":116,"y":513,"width":768,"height":12}},{"id":"3885bf7f-c5c1-4dd7-bf43-a72e47809f34","block_type":"box","text":"The obligor’s capacity to meet its financial commitments on the obligation is very strong.","page_number":192,"box":{"x":225,"y":528,"width":659,"height":13}},{"id":"7cbbdb6f-14af-4d91-91c8-7f010cdddab1","block_type":"box","text":"A An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes","page_number":192,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"4435d5a5-b2f8-4167-bd9f-6f55ea3f47e6","block_type":"box","text":"in circumstances and economic conditions than obligations in higher-rated categories.","page_number":192,"box":{"x":226,"y":567,"width":642,"height":12}},{"id":"4c0970ff-57f7-484e-a0d9-9a5729239b26","block_type":"box","text":"However, the obligor’s capacity to meet its financial commitments on the obligation is","page_number":192,"box":{"x":226,"y":583,"width":635,"height":12}},{"id":"690fcbeb-8c86-4bbd-a826-e81124675d63","block_type":"box","text":"still strong.","page_number":192,"box":{"x":226,"y":598,"width":84,"height":12}},{"id":"81cb05f6-a87f-4364-8b7d-732c36352f31","block_type":"box","text":"BBB An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse","page_number":192,"box":{"x":117,"y":621,"width":749,"height":13}},{"id":"22323b60-c2cd-4f44-8d49-a0637565f886","block_type":"box","text":"economic conditions or changing circumstances are more likely to weaken the obligor’s","page_number":192,"box":{"x":226,"y":637,"width":652,"height":12}},{"id":"9db42eb0-5322-45e0-8d13-9a571e419813","block_type":"box","text":"capacity to meet its financial commitments on the obligation.","page_number":192,"box":{"x":226,"y":652,"width":452,"height":13}},{"id":"cdf81aff-1090-452a-b344-8f1770cd4d93","block_type":"box","text":"BB, B,","page_number":192,"box":{"x":117,"y":676,"width":45,"height":11}},{"id":"df1020e3-d6d0-445d-a01f-7ab5bd8e8d6a","block_type":"box","text":"CCC, CC,","page_number":192,"box":{"x":117,"y":691,"width":72,"height":11}},{"id":"90108516-2ab8-476c-bf78-9160ce68572d","block_type":"box","text":"and C","page_number":192,"box":{"x":116,"y":707,"width":44,"height":9}},{"id":"d2566c92-65e2-406a-af03-ba55c1defe87","block_type":"box","text":"Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant","page_number":192,"box":{"x":226,"y":676,"width":602,"height":12}},{"id":"c018a5cd-44f3-4161-b8ab-214670712627","block_type":"box","text":"speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the","page_number":192,"box":{"x":226,"y":691,"width":624,"height":12}},{"id":"6e77895b-1f24-4d4c-8197-b1590399d4e9","block_type":"box","text":"highest. While such obligations will likely have some quality and protective","page_number":192,"box":{"x":226,"y":707,"width":550,"height":12}},{"id":"3da2c97b-3e4e-410b-b70c-7f6d98cdaa67","block_type":"box","text":"characteristics, these may be outweighed by large uncertainties or major exposure to","page_number":192,"box":{"x":226,"y":722,"width":631,"height":12}},{"id":"f2fca9f2-30ca-48bd-9e97-e81ad74212fa","block_type":"box","text":"adverse conditions.","page_number":192,"box":{"x":226,"y":738,"width":143,"height":9}},{"id":"72f953e3-ab7e-4ccd-a8e1-53e4e0cb24dd","block_type":"box","text":"BB An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues.","page_number":192,"box":{"x":117,"y":761,"width":758,"height":12}},{"id":"58aa267d-dd63-4160-b824-e9fb0649e23f","block_type":"box","text":"However, it faces major ongoing uncertainties or exposure to adverse business,","page_number":192,"box":{"x":226,"y":776,"width":591,"height":13}},{"id":"f3ffc2d9-1c47-4220-8c8d-b6deb22f7026","block_type":"box","text":"financial, or economic conditions that could lead to the obligor’s inadequate capacity to","page_number":192,"box":{"x":225,"y":792,"width":644,"height":12}},{"id":"d2fe7b9b-bf4f-4994-8247-b48aeb694853","block_type":"box","text":"meet its financial commitments on the obligation.","page_number":192,"box":{"x":226,"y":807,"width":361,"height":13}},{"id":"aca133c9-dc15-4534-87ca-ae654b630727","block_type":"box","text":"B An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but","page_number":192,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"b5a0ea43-1da7-4b31-b4b0-1144ffe3050f","block_type":"box","text":"the obligor currently has the capacity to meet its financial commitments on the","page_number":192,"box":{"x":225,"y":846,"width":584,"height":12}},{"id":"ca5cbbaf-c2b0-4830-b73c-63ab3a09f23b","block_type":"box","text":"obligation. Adverse business, financial, or economic conditions will likely impair the","page_number":192,"box":{"x":226,"y":862,"width":619,"height":12}},{"id":"8febd970-d8cf-4b7f-8397-3979f40e8f75","block_type":"box","text":"obligor’s capacity or willingness to meet its financial commitments on the obligation.","page_number":192,"box":{"x":226,"y":877,"width":625,"height":12}},{"id":"b6d8e9d6-5dd7-435f-9bbf-6b34d9a41139","block_type":"box","text":"A-5","page_number":192,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"0f280630-abca-4d13-83c2-a767a4611743","block_type":"box","text":"NM1026U-6039989-192/256","page_number":192,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"26c84a01-35b9-4633-b044-c7a8a6f05fdb","block_type":"box","text":"CCC An obligation rated ‘CCC’ is currently vulnerable to nonpayment and is dependent upon","page_number":193,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"4b187fc7-62ae-42fd-ab0b-22e89eeb81a9","block_type":"box","text":"favorable business, financial, and economic conditions for the obligor to meet its","page_number":193,"box":{"x":225,"y":102,"width":601,"height":13}},{"id":"53736c30-1242-41e1-a627-bb19951276b1","block_type":"box","text":"financial commitments on the obligation. In the event of adverse business, financial, or","page_number":193,"box":{"x":225,"y":118,"width":647,"height":12}},{"id":"b779aefc-df04-40bc-a791-a6966891e424","block_type":"box","text":"economic conditions, the obligor is not likely to have the capacity to meet its financial","page_number":193,"box":{"x":226,"y":134,"width":634,"height":12}},{"id":"3e8faf91-830f-4d27-8339-482c27a752ef","block_type":"box","text":"commitments on the obligation.","page_number":193,"box":{"x":226,"y":149,"width":237,"height":12}},{"id":"ae603a58-d799-4bbe-b6a0-fd3b8ad127df","block_type":"box","text":"CC An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is","page_number":193,"box":{"x":117,"y":172,"width":761,"height":12}},{"id":"8b8e1c0a-cd13-43a1-8515-0fca0a8852a7","block_type":"box","text":"used when a default has not yet occurred but S&P expects default to be a virtual","page_number":193,"box":{"x":226,"y":188,"width":602,"height":12}},{"id":"80ee395a-3620-4301-9564-89fb4a350b9a","block_type":"box","text":"certainty, regardless of the anticipated time to default.","page_number":193,"box":{"x":226,"y":203,"width":404,"height":12}},{"id":"65b151e6-7a05-4e0b-b945-de238faf8c1d","block_type":"box","text":"C An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is","page_number":193,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"ab051453-c8c3-4fbf-b06b-a74a342655c1","block_type":"box","text":"expected to have lower relative seniority or lower ultimate recovery compared with","page_number":193,"box":{"x":226,"y":242,"width":615,"height":12}},{"id":"70877ec8-3373-41cf-94aa-5f89332748f7","block_type":"box","text":"obligations that are rated higher.","page_number":193,"box":{"x":226,"y":258,"width":245,"height":12}},{"id":"95cbd87e-021c-464c-b6f1-d2eebe1eca74","block_type":"box","text":"D An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid","page_number":193,"box":{"x":117,"y":281,"width":751,"height":12}},{"id":"71f7ef5b-0f26-4ca3-9aa3-41b2f344a1a2","block_type":"box","text":"capital instruments, the ‘D’ rating category is used when payments on an obligation are","page_number":193,"box":{"x":226,"y":296,"width":650,"height":12}},{"id":"4b554bd5-73a0-40bf-83cf-213d11e521cd","block_type":"box","text":"not made on the date due, unless S&P believes that such payments will be made within","page_number":193,"box":{"x":226,"y":312,"width":655,"height":12}},{"id":"e845d21a-53ca-4596-ac81-1c49c9f2383b","block_type":"box","text":"five business days in the absence of a stated grace period or within the earlier of the","page_number":193,"box":{"x":225,"y":327,"width":632,"height":12}},{"id":"28156595-b10d-4e5a-b71a-d94b0da959e5","block_type":"box","text":"stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing","page_number":193,"box":{"x":226,"y":343,"width":647,"height":12}},{"id":"bf1884b6-e38a-457b-bffb-bf41220bb83d","block_type":"box","text":"of a bankruptcy petition or the taking of similar action and where default on an obligation","page_number":193,"box":{"x":226,"y":358,"width":659,"height":12}},{"id":"8d150a15-84ad-4bc6-99bf-838c2721e52d","block_type":"box","text":"is a virtual certainty, for example due to automatic stay provisions. A rating on an","page_number":193,"box":{"x":226,"y":374,"width":605,"height":12}},{"id":"af98fff7-8b5c-49b1-b604-3d92ed195482","block_type":"box","text":"obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":193,"box":{"x":226,"y":389,"width":555,"height":12}},{"id":"306d8d6a-c004-4a1a-b37a-4cd315d8c8b4","block_type":"box","text":"* Ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing","page_number":193,"box":{"x":143,"y":420,"width":705,"height":9}},{"id":"d1b2ab70-fbda-40e3-bccd-dc4edf7dc557","block_type":"box","text":"within the rating categories.","page_number":193,"box":{"x":170,"y":433,"width":162,"height":9}},{"id":"7d3c4029-05a2-4353-9c33-58485b735a58","block_type":"box","text":"Short-Term Issue Credit Ratings","page_number":193,"box":{"x":116,"y":462,"width":263,"height":12}},{"id":"5a201f4b-0c5e-4141-8a25-6a04c3064c44","block_type":"box","text":"A-1 A short-term obligation rated ‘A-1’ is rated in the highest category by S&P. The obligor’s","page_number":193,"box":{"x":116,"y":493,"width":765,"height":12}},{"id":"91fd8337-c4cd-4c56-bb54-1a7847644f23","block_type":"box","text":"capacity to meet its financial commitments on the obligation is strong. Within this","page_number":193,"box":{"x":226,"y":508,"width":603,"height":12}},{"id":"f74d7cff-b2a7-4046-9f12-0c8c48d3b182","block_type":"box","text":"category, certain obligations are designated with a plus sign (+). This indicates that the","page_number":193,"box":{"x":226,"y":524,"width":648,"height":12}},{"id":"f654ccc3-6b32-42eb-b53e-fcdcd8e730af","block_type":"box","text":"obligor’s capacity to meet its financial commitments on these obligations is extremely","page_number":193,"box":{"x":226,"y":539,"width":635,"height":12}},{"id":"664f9039-b9bf-43eb-8660-36efd061740f","block_type":"box","text":"strong.","page_number":193,"box":{"x":226,"y":555,"width":55,"height":12}},{"id":"152d8d85-e77a-4088-82f2-079dd74cf094","block_type":"box","text":"A-2 A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects","page_number":193,"box":{"x":116,"y":578,"width":760,"height":12}},{"id":"935fde45-5e07-4e53-9579-4b33648b2d0e","block_type":"box","text":"of changes in circumstances and economic conditions than obligations in higher rating","page_number":193,"box":{"x":226,"y":593,"width":644,"height":13}},{"id":"52dafc90-a8d7-4d8b-bda5-3708e7f6aca4","block_type":"box","text":"categories. However, the obligor’s capacity to meet its financial commitments on the","page_number":193,"box":{"x":226,"y":609,"width":629,"height":12}},{"id":"bb2ef9fa-20ef-41ba-ab03-39c1996da843","block_type":"box","text":"obligation is satisfactory.","page_number":193,"box":{"x":226,"y":624,"width":187,"height":13}},{"id":"5db81f17-28f3-486a-9b37-058cecafdeaf","block_type":"box","text":"A-3 A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However,","page_number":193,"box":{"x":116,"y":648,"width":750,"height":12}},{"id":"5f8db482-8b0e-461b-bb4b-54f275549139","block_type":"box","text":"adverse economic conditions or changing circumstances are more likely to weaken an","page_number":193,"box":{"x":226,"y":663,"width":639,"height":12}},{"id":"84a61b37-d12f-4951-bed1-af680a888e55","block_type":"box","text":"obligor’s capacity to meet its financial commitments on the obligation.","page_number":193,"box":{"x":226,"y":679,"width":513,"height":12}},{"id":"75a04964-0bec-42e8-8403-07b884be9ab2","block_type":"box","text":"B A short-term obligation rated ‘B’ is regarded as vulnerable and has significant","page_number":193,"box":{"x":117,"y":702,"width":681,"height":12}},{"id":"05e2bfca-8a0a-4960-9030-fcac16bf4744","block_type":"box","text":"speculative characteristics. The obligor currently has the capacity to meet its financial","page_number":193,"box":{"x":226,"y":717,"width":632,"height":13}},{"id":"522c2ec2-555c-4706-92af-a8654fbce721","block_type":"box","text":"commitments; however, it faces major ongoing uncertainties that could lead to the","page_number":193,"box":{"x":226,"y":733,"width":607,"height":12}},{"id":"d23ff494-d8ad-4304-8aa2-e197118538cf","block_type":"box","text":"obligor’s inadequate capacity to meet its financial commitments.","page_number":193,"box":{"x":226,"y":748,"width":473,"height":13}},{"id":"333724bc-2b95-473d-bf95-447a003938f9","block_type":"box","text":"C A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent","page_number":193,"box":{"x":117,"y":772,"width":763,"height":12}},{"id":"3ab321ac-14f7-4eb3-b736-4f33552a91be","block_type":"box","text":"upon favorable business, financial, and economic conditions for the obligor to meet its","page_number":193,"box":{"x":226,"y":787,"width":636,"height":12}},{"id":"5d10581e-23a4-4282-9033-a20cb91c314b","block_type":"box","text":"financial commitments on the obligation.","page_number":193,"box":{"x":225,"y":803,"width":298,"height":12}},{"id":"10388d92-da33-4791-9a5b-5f60843afc35","block_type":"box","text":"A-6","page_number":193,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"c646551f-262a-4021-96d9-f31eb1556a33","block_type":"box","text":"NM1026U-6039989-193/256","page_number":193,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"14a0d90c-fb56-4520-ba1f-4e933c0262fd","block_type":"box","text":"D A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For","page_number":194,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"2df6f6f5-4eb1-4929-8e3b-2925c5c40633","block_type":"box","text":"non-hybrid capital instruments, the ‘D’ rating category is used when payments on an","page_number":194,"box":{"x":226,"y":102,"width":629,"height":13}},{"id":"87b59d0b-00aa-4281-9ef1-50805afdccf0","block_type":"box","text":"obligation are not made on the date due, unless S&P believes that such payments will","page_number":194,"box":{"x":226,"y":118,"width":643,"height":12}},{"id":"87954f6f-1c7e-4bf1-aac4-4cbfda9f98bc","block_type":"box","text":"be made within any stated grace period. However, any stated grace period longer than","page_number":194,"box":{"x":226,"y":134,"width":648,"height":12}},{"id":"5160a219-1169-4152-9c45-958c84364d68","block_type":"box","text":"five business days will be treated as five business days. The ‘D’ rating also will be used","page_number":194,"box":{"x":225,"y":149,"width":653,"height":12}},{"id":"4431689d-cb72-44ab-903c-d4e60217e769","block_type":"box","text":"upon the filing of a bankruptcy petition or the taking of a similar action and where default","page_number":194,"box":{"x":226,"y":165,"width":659,"height":12}},{"id":"4064ddc7-7f98-47d4-b19d-b73574ab72b1","block_type":"box","text":"on an obligation is a virtual certainty, for example due to automatic stay provisions. A","page_number":194,"box":{"x":226,"y":180,"width":635,"height":12}},{"id":"2894199d-4623-4640-b1e4-5cd191bcf746","block_type":"box","text":"rating on an obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":194,"box":{"x":226,"y":196,"width":648,"height":12}},{"id":"8c9e8311-9ae5-452b-9f26-a13b68646f66","block_type":"box","text":"Description of S&P’s Municipal Short-Term Note Ratings","page_number":194,"box":{"x":117,"y":223,"width":456,"height":12}},{"id":"92eb6d22-4f88-4024-8cc9-bb3f1091e356","block_type":"box","text":"An S&P U.S. municipal note rating reflects S&P’s opinion about the liquidity factors and market access","page_number":194,"box":{"x":116,"y":250,"width":766,"height":12}},{"id":"0deb4064-521f-410d-b996-422c4f51d67f","block_type":"box","text":"risks unique to the notes. Notes due in three years or less will likely receive a note rating. Notes with","page_number":194,"box":{"x":117,"y":265,"width":748,"height":12}},{"id":"7f56f965-3420-4245-bb36-9e80dd147f92","block_type":"box","text":"an original maturity of more than three years will most likely receive a long-term debt rating. In","page_number":194,"box":{"x":116,"y":281,"width":703,"height":12}},{"id":"53a4ed21-b9a5-46fc-bfa6-bc2cc6c8df7e","block_type":"box","text":"determining which type of rating, if any, to assign, S&P’s analysis will review the following","page_number":194,"box":{"x":116,"y":296,"width":668,"height":12}},{"id":"10707d80-5c86-4ef2-8742-9c3b883bfa9c","block_type":"box","text":"considerations:","page_number":194,"box":{"x":116,"y":312,"width":118,"height":9}},{"id":"af6d119d-b079-457a-8820-11cd3090dba5","block_type":"box","text":"• Amortization schedule — the larger the final maturity relative to other maturities, the more likely it","page_number":194,"box":{"x":125,"y":339,"width":750,"height":12}},{"id":"50cf8bf7-16ad-4714-a855-7cf18bb6ce01","block_type":"box","text":"will be treated as a note; and","page_number":194,"box":{"x":149,"y":355,"width":220,"height":11}},{"id":"51e67406-79c8-4496-a0e5-f957f8f047f6","block_type":"box","text":"• Source of payment — the more dependent the issue is on the market for its refinancing, the more","page_number":194,"box":{"x":125,"y":376,"width":753,"height":12}},{"id":"0c79cf3e-2f74-46bb-8614-93ae13119e0c","block_type":"box","text":"likely it will be treated as a note.","page_number":194,"box":{"x":150,"y":391,"width":242,"height":12}},{"id":"0109fead-cd59-4c27-bb3c-c64a33bb280d","block_type":"box","text":"S&P’s municipal short-term note rating symbols are as follows:","page_number":194,"box":{"x":116,"y":418,"width":470,"height":12}},{"id":"71b0ea3f-d5b3-48f7-bcbb-6e773a1251bd","block_type":"box","text":"SP-1 Strong capacity to pay principal and interest. An issue determined to possess a very","page_number":194,"box":{"x":116,"y":444,"width":739,"height":12}},{"id":"39bf1db1-ccc8-4bd7-8c3f-f23e1b0b0ce6","block_type":"box","text":"strong capacity to pay debt service is given a plus (+) designation.","page_number":194,"box":{"x":226,"y":458,"width":496,"height":12}},{"id":"067a9339-ab42-458b-a494-62ded67d1cc1","block_type":"box","text":"SP-2 Satisfactory capacity to pay principal and interest, with some vulnerability to adverse","page_number":194,"box":{"x":116,"y":480,"width":741,"height":12}},{"id":"bf6c2ad2-f3ea-4f39-ad0f-4f95720cd1fe","block_type":"box","text":"financial and economic changes over the term of the notes.","page_number":194,"box":{"x":225,"y":494,"width":446,"height":12}},{"id":"bf89ba03-d7fb-4328-b186-486a2b210529","block_type":"box","text":"SP-3 Speculative capacity to pay principal and interest.","page_number":194,"box":{"x":116,"y":515,"width":482,"height":12}},{"id":"ec8a4cd9-2bfb-4ac1-9d4d-143ab58311d4","block_type":"box","text":"D ‘D’ is assigned upon failure to pay the note when due, completion of a distressed debt","page_number":194,"box":{"x":117,"y":537,"width":750,"height":12}},{"id":"336df59d-cb7b-46e4-b1ce-bb1c64bd2180","block_type":"box","text":"restructuring, or the filing of a bankruptcy petition or the taking of similar action and","page_number":194,"box":{"x":226,"y":551,"width":620,"height":12}},{"id":"08547d83-b92a-4ef4-ba84-670365b397d9","block_type":"box","text":"where default on an obligation is a virtual certainty, for example due to automatic stay","page_number":194,"box":{"x":225,"y":565,"width":640,"height":12}},{"id":"e33331ec-0060-4dc1-9a62-f951fa80f312","block_type":"box","text":"provisions.","page_number":194,"box":{"x":226,"y":579,"width":84,"height":12}},{"id":"a93fbff5-aade-42a4-b0a1-59e02338995a","block_type":"box","text":"Description of Fitch Ratings’ (“Fitch”) Credit Ratings Scales","page_number":194,"box":{"x":117,"y":606,"width":483,"height":12}},{"id":"da863961-0176-4731-af2e-828f8bb3778f","block_type":"box","text":"Fitch publishes credit ratings that are forward-looking opinions on the relative ability of an entity or","page_number":194,"box":{"x":117,"y":633,"width":730,"height":12}},{"id":"e722eb4f-7b67-4072-bdd3-54b247b5651f","block_type":"box","text":"obligation to meet financial commitments. Issuer default ratings (IDRs) are assigned to corporations,","page_number":194,"box":{"x":116,"y":649,"width":749,"height":12}},{"id":"4f1b7680-e15e-4f7f-88b2-dd945fda4bd9","block_type":"box","text":"sovereign entities, financial institutions such as banks, leasing companies and insurers, and public","page_number":194,"box":{"x":116,"y":664,"width":730,"height":12}},{"id":"2857ef2f-6ae5-4a26-ac68-391eb3fbdf96","block_type":"box","text":"finance entities (local and regional governments). Issue level ratings are also assigned, often include","page_number":194,"box":{"x":116,"y":680,"width":747,"height":12}},{"id":"eef7aee9-cb23-4e65-b9df-baefd5b42a13","block_type":"box","text":"an expectation of recovery and may be notched above or below the issuer level rating. Issue ratings","page_number":194,"box":{"x":116,"y":695,"width":741,"height":12}},{"id":"4f511cfe-d98d-4145-a575-3dc3d721fe2d","block_type":"box","text":"are assigned to secured and unsecured debt securities, loans, preferred stock and other instruments,","page_number":194,"box":{"x":116,"y":711,"width":751,"height":12}},{"id":"9781a450-44bd-439c-8a41-d99b52382dcd","block_type":"box","text":"Structured finance ratings are issue ratings to securities backed by receivables or other financial","page_number":194,"box":{"x":116,"y":726,"width":713,"height":12}},{"id":"fbbe963f-6580-4b1b-8843-4d5f49e00ab9","block_type":"box","text":"assets that consider the obligations’ relative vulnerability to default.","page_number":194,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"f157ec56-8e76-4b6c-b34a-ce06763abf55","block_type":"box","text":"Fitch’s credit ratings relating to issuers are an opinion on the relative ability of an entity to meet","page_number":194,"box":{"x":117,"y":769,"width":702,"height":12}},{"id":"5f4a131c-69da-42aa-b696-f94abfd920ba","block_type":"box","text":"financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims","page_number":194,"box":{"x":116,"y":784,"width":756,"height":12}},{"id":"3cde6b99-6101-4eb8-8108-a2bfedc25b65","block_type":"box","text":"or counterparty obligations. Credit ratings relating to securities and obligations of an issuer can include","page_number":194,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"a3320c4a-4e07-4ed7-81d3-26749a5e3e05","block_type":"box","text":"a recovery expectation. Credit ratings are used by investors as indications of the likelihood of receiving","page_number":194,"box":{"x":116,"y":815,"width":761,"height":12}},{"id":"229f5241-e7e2-494d-8d2f-b486b32d50ef","block_type":"box","text":"the money owed to them in accordance with the terms on which they invested. The agency’s credit","page_number":194,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"9043df71-8bee-4528-9532-455b3f6fa92f","block_type":"box","text":"ratings cover the global spectrum of corporate, sovereign financial, bank, insurance, and public finance","page_number":194,"box":{"x":117,"y":846,"width":768,"height":12}},{"id":"373c665f-fcab-43b7-86b4-18eeaa077a60","block_type":"box","text":"entities (including supranational and sub-national entities) and the securities or other obligations they","page_number":194,"box":{"x":116,"y":862,"width":754,"height":12}},{"id":"715cc6f4-e00b-4d9e-a48d-032566a8eee1","block_type":"box","text":"issue, as well as structured finance securities backed by receivables or other financial assets.","page_number":194,"box":{"x":117,"y":877,"width":698,"height":12}},{"id":"d52c1cb5-58d7-4bd8-82d1-f82b9e9efe99","block_type":"box","text":"A-7","page_number":194,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"a49fc58a-ac41-4933-9c12-b81e5baea9b7","block_type":"box","text":"NM1026U-6039989-194/256","page_number":194,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ce9a475d-bc78-49af-9100-0d0d1b29900c","block_type":"box","text":"The terms “investment grade” and “speculative grade” have established themselves over time as","page_number":195,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"69c58eb2-dbc9-4212-88e2-cea30a92e6b0","block_type":"box","text":"shorthand to describe the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative","page_number":195,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"afe35922-5e2c-4a4e-a225-1774f713c739","block_type":"box","text":"grade). The terms investment grade and speculative grade are market conventions and do not imply","page_number":195,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"041e4525-0bb8-4a43-807e-fe801eba51fc","block_type":"box","text":"any recommendation or endorsement of a specific security for investment purposes. Investment grade","page_number":195,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"7bf9e8bb-81d5-4fe5-9197-ec43a0aeddd9","block_type":"box","text":"categories indicate relatively low to moderate credit risk, while ratings in the speculative categories","page_number":195,"box":{"x":116,"y":149,"width":737,"height":12}},{"id":"218c4d5b-7ab5-4931-b793-f8cab8968b53","block_type":"box","text":"either signal a higher level of credit risk or that a default has already occurred.","page_number":195,"box":{"x":116,"y":165,"width":584,"height":12}},{"id":"787129c9-1848-4160-8597-ed2c0c70cf6e","block_type":"box","text":"Fitch may also include issues relating to a rated issuer that are not and have not been rated on its web","page_number":195,"box":{"x":117,"y":196,"width":765,"height":12}},{"id":"8682b5da-9a8f-4c36-a7b6-ed2e63bcd851","block_type":"box","text":"page. Such issues are also denoted as ‘NR’.","page_number":195,"box":{"x":117,"y":211,"width":335,"height":12}},{"id":"124684b0-8b1d-41f8-a6d5-c210000e5338","block_type":"box","text":"Credit ratings express risk in relative rank order, which is to say they are ordinal measures of credit risk","page_number":195,"box":{"x":117,"y":242,"width":770,"height":12}},{"id":"df15b497-4b97-491b-b26f-020ff0cd114e","block_type":"box","text":"and are not predictive of a specific frequency of default or loss.","page_number":195,"box":{"x":116,"y":258,"width":471,"height":12}},{"id":"14426ff5-5ef2-4290-acdc-8f45dbd8a731","block_type":"box","text":"Fitch’s credit ratings do not directly address any risk other than credit risk. In particular, ratings do not","page_number":195,"box":{"x":117,"y":289,"width":756,"height":12}},{"id":"87398721-ec32-4a5a-8a0c-de0bd7fbac2b","block_type":"box","text":"deal with the risk of a market value loss on a rated security due to changes in interest rates, liquidity","page_number":195,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"643fbf6d-2cef-4884-ba47-088847f17d6b","block_type":"box","text":"and other market considerations. However, in terms of payment obligation on the rated liability, market","page_number":195,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"3250605c-2c5c-4bc5-b633-35fa46d7a404","block_type":"box","text":"risk may be considered to the extent that it influences the ability of an issuer to pay upon a","page_number":195,"box":{"x":117,"y":335,"width":674,"height":12}},{"id":"36697eec-ef24-4199-9c73-aab8b33fa6af","block_type":"box","text":"commitment.","page_number":195,"box":{"x":116,"y":351,"width":101,"height":9}},{"id":"69fdd2de-3c9c-4b15-bcc0-f0a456c50570","block_type":"box","text":"Ratings nonetheless do not reflect market risk to the extent that they influence the size or other","page_number":195,"box":{"x":117,"y":382,"width":709,"height":12}},{"id":"35aaab91-ffab-4508-964c-5893a35b29b1","block_type":"box","text":"conditionality of the obligation to pay upon a commitment (for example, in the case of index-linked","page_number":195,"box":{"x":116,"y":397,"width":731,"height":12}},{"id":"f7ba4bbe-410b-47d6-be45-7ec06666cc7c","block_type":"box","text":"bonds).","page_number":195,"box":{"x":117,"y":413,"width":59,"height":12}},{"id":"4c68ed76-75a1-4cba-a492-013a8481bddf","block_type":"box","text":"In the default components of ratings assigned to individual obligations or instruments, the agency","page_number":195,"box":{"x":117,"y":444,"width":725,"height":12}},{"id":"d7a4a1de-4ce5-4582-8ce2-982817576472","block_type":"box","text":"typically rates to the likelihood of non-payment or default in accordance with the terms of that","page_number":195,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"63b5d75b-52c6-4505-9c5d-89613ba46165","block_type":"box","text":"instrument’s documentation. In limited cases, Fitch may include additional considerations (","page_number":195,"box":{"x":117,"y":475,"width":670,"height":12}},{"id":"f33e215a-4b99-45f9-ad98-5f1e96e6f7f4","block_type":"box","text":"i.e.","page_number":195,"box":{"x":788,"y":475,"width":20,"height":9}},{"id":"65147479-cee7-4fc8-999e-7ebd875b1d13","block_type":"box","text":"rate to a","page_number":195,"box":{"x":810,"y":475,"width":71,"height":9}},{"id":"819b868c-7fe2-4577-bdc9-432d4d854c67","block_type":"box","text":"higher or lower standard than that implied in the obligation’s documentation).","page_number":195,"box":{"x":117,"y":490,"width":573,"height":12}},{"id":"85dc9a5c-b932-4ea9-85d5-3bbf0c6ba05c","block_type":"box","text":"The primary credit rating scales can be used to provide a rating of privately issued obligations or","page_number":195,"box":{"x":116,"y":521,"width":719,"height":12}},{"id":"b2862700-c6b0-4192-83f1-8dc264ce632e","block_type":"box","text":"certain note issuance programs or for private ratings. In this case the rating is not published, but only","page_number":195,"box":{"x":116,"y":537,"width":753,"height":12}},{"id":"979410e8-5978-435e-99ea-e3ab72c469a2","block_type":"box","text":"provided to the issuer or its agents in the form of a rating letter.","page_number":195,"box":{"x":117,"y":552,"width":472,"height":12}},{"id":"2cf175c7-a2c3-4787-8f88-b4e4154732ff","block_type":"box","text":"The primary credit rating scales may also be used to provide ratings for a more narrow scope,","page_number":195,"box":{"x":116,"y":583,"width":702,"height":12}},{"id":"7e3dc1dd-1f6e-41d7-b736-a92d44c5cf39","block_type":"box","text":"including interest strips and return of principal or in other forms of opinions such as credit opinions or","page_number":195,"box":{"x":117,"y":599,"width":751,"height":12}},{"id":"c6dada73-e90a-4934-90bf-e3bb7f3b02fb","block_type":"box","text":"rating assessment services. Credit opinions are either a notch- or category-specific view using the","page_number":195,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"6cec24ff-d9d7-4c14-b45c-0396f9076250","block_type":"box","text":"primary rating scale and omit one or more characteristics of a full rating or meet them to a different","page_number":195,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"456cfeee-23c5-4e63-ade9-f1b970ee8587","block_type":"box","text":"standard. Credit opinions will be indicated using a lower case letter symbol combined with either an ‘*’","page_number":195,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"8cc0cda8-bae9-4370-9eb4-da09d717b062","block_type":"box","text":"(e.g. ‘bbb+*’) or (cat) suffix to denote the opinion status. Credit opinions will be point-in-time typically","page_number":195,"box":{"x":117,"y":661,"width":743,"height":12}},{"id":"864271c9-0a20-45f0-98aa-7f661f98e717","block_type":"box","text":"but may be monitored if the analytical group believes information will be sufficiently available. Rating","page_number":195,"box":{"x":117,"y":676,"width":742,"height":12}},{"id":"2349245c-f7d1-4d69-965c-b67cd7d25a47","block_type":"box","text":"assessment services are a notch-specific view using the primary rating scale of how an existing or","page_number":195,"box":{"x":116,"y":692,"width":729,"height":12}},{"id":"60e5300d-ef0e-408f-b994-0a5b0cc0f82a","block_type":"box","text":"potential rating may be changed by a given set of hypothetical circumstances. While credit opinions","page_number":195,"box":{"x":117,"y":707,"width":736,"height":12}},{"id":"f4436fdb-d7ff-41bc-a414-3fac641093a2","block_type":"box","text":"and rating assessment services are point-in-time and are not monitored, they may have a directional","page_number":195,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"56e9ae1b-967f-4e1e-a222-fa0d26dbd2f3","block_type":"box","text":"watch or outlook assigned, which can signify the trajectory of the credit profile.","page_number":195,"box":{"x":116,"y":738,"width":579,"height":12}},{"id":"c24ed806-b85a-47be-a042-5a0da8ba46d3","block_type":"box","text":"Description of Fitch’s Long-Term Corporate Finance Obligations Rating Scales","page_number":195,"box":{"x":117,"y":769,"width":629,"height":12}},{"id":"68ef0b42-7076-4dda-8af9-79569c2d6f24","block_type":"box","text":"Ratings of individual securities or financial obligations of a corporate issuer address relative","page_number":195,"box":{"x":117,"y":800,"width":677,"height":12}},{"id":"ef9f4d2a-d60b-4135-8bce-d33a872d1c68","block_type":"box","text":"vulnerability to default on an ordinal scale. In addition, for financial obligations in corporate finance, a","page_number":195,"box":{"x":116,"y":816,"width":746,"height":12}},{"id":"bd61472c-15fd-495f-95aa-6118c8482912","block_type":"box","text":"measure of recovery given default on that liability is also included in the rating assessment. This","page_number":195,"box":{"x":117,"y":831,"width":716,"height":12}},{"id":"cddde31b-742a-4acd-9c91-3716613e8ef8","block_type":"box","text":"notably applies to covered bonds ratings, which incorporate both an indication of the probability of","page_number":195,"box":{"x":117,"y":847,"width":729,"height":12}},{"id":"fee43f77-ba87-4820-a0bc-dc0af7383a58","block_type":"box","text":"default and of the recovery given a default of this debt instrument. On the contrary, Ratings of","page_number":195,"box":{"x":116,"y":862,"width":699,"height":12}},{"id":"54e43ff2-9de9-4de4-92f3-ec37dbe6e157","block_type":"box","text":"debtor-in-possession (“DIP”) obligations incorporate the expectation of full repayment.","page_number":195,"box":{"x":116,"y":878,"width":642,"height":12}},{"id":"3e52b2f1-aec2-4cd7-9138-b58037d50fd4","block_type":"box","text":"A-8","page_number":195,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"9b27e457-0a35-4aa7-a49e-f427e3517ca3","block_type":"box","text":"NM1026U-6039989-195/256","page_number":195,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ca13222a-8ff7-42bb-a223-90f2d2f86f80","block_type":"box","text":"The relationship between the issuer scale and obligation scale assumes a generic historical average","page_number":196,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"211f4c0e-3a84-4ee6-8f3a-cbbb67093988","block_type":"box","text":"recovery. Individual obligations can be assigned ratings higher, lower, or the same as that entity’s","page_number":196,"box":{"x":117,"y":103,"width":728,"height":12}},{"id":"5eb5031b-a7cc-4ab1-a964-1943738459bc","block_type":"box","text":"issuer rating or issuer default rating (“IDR”), based on their relative ranking, relative vulnerability to","page_number":196,"box":{"x":117,"y":118,"width":733,"height":12}},{"id":"30ac7dda-bc13-44a2-83f7-5cb6fa0a8394","block_type":"box","text":"default or based on explicit Recovery Ratings.","page_number":196,"box":{"x":116,"y":134,"width":347,"height":12}},{"id":"71cef925-da4c-4495-b5fc-d4533583039f","block_type":"box","text":"As a result, individual obligations of entities, such as corporations, are assigned ratings higher, lower,","page_number":196,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"6d45f912-b015-4401-9a5d-68b457179f63","block_type":"box","text":"or the same as that entity’s issuer rating or IDR, except DIP obligation ratings that are not based off an","page_number":196,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"ba3e592f-b541-45a2-8b30-bcf10fd702d0","block_type":"box","text":"IDR. At the lower end of the ratings scale, Fitch publishes explicit Recovery Ratings in many cases to","page_number":196,"box":{"x":117,"y":196,"width":756,"height":12}},{"id":"33367402-e9b9-4f90-a642-def9778772ef","block_type":"box","text":"complement issuer and obligation ratings.","page_number":196,"box":{"x":116,"y":211,"width":315,"height":12}},{"id":"46c23b63-bbe7-4f1e-8d20-a1b8c9ef9070","block_type":"box","text":"Fitch long-term obligations rating scales are as follows:","page_number":196,"box":{"x":117,"y":242,"width":412,"height":12}},{"id":"feba48df-78ca-4d04-8286-ea96642ac522","block_type":"box","text":"AAA Highest Credit Quality. ‘AAA’ ratings denote the lowest expectation of default risk. They","page_number":196,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"ab97007e-f15b-4411-95fc-aa3c22359449","block_type":"box","text":"are assigned only in cases of exceptionally strong capacity for payment of financial","page_number":196,"box":{"x":226,"y":288,"width":619,"height":12}},{"id":"e9c5cd1a-906e-4d3a-b8ec-667accda1f34","block_type":"box","text":"commitments. This capacity is highly unlikely to be adversely affected by foreseeable","page_number":196,"box":{"x":226,"y":302,"width":636,"height":13}},{"id":"872fdb0b-b5e4-4295-b354-e7597b3c12ef","block_type":"box","text":"events.","page_number":196,"box":{"x":226,"y":318,"width":58,"height":9}},{"id":"72d00f33-f861-4e61-bbd8-34755f2fd47e","block_type":"box","text":"AA Very High Credit Quality. ‘AA’ ratings denote expectations of very low default risk. They","page_number":196,"box":{"x":116,"y":340,"width":762,"height":13}},{"id":"36908419-fb10-46e9-baf9-fa80e3f19b1a","block_type":"box","text":"indicate very strong capacity for payment of financial commitments. This capacity is not","page_number":196,"box":{"x":226,"y":355,"width":652,"height":13}},{"id":"adf69573-fdcb-491e-be96-78d0888670f8","block_type":"box","text":"significantly vulnerable to foreseeable events.","page_number":196,"box":{"x":226,"y":370,"width":343,"height":12}},{"id":"f79fb259-4a14-4c37-a8b5-017634a11596","block_type":"box","text":"A High Credit Quality. ‘A’ ratings denote expectations of low default risk. The capacity for","page_number":196,"box":{"x":116,"y":393,"width":757,"height":12}},{"id":"b72e7ccc-c6be-4dfa-8b05-71132a01e726","block_type":"box","text":"payment of financial commitments is considered strong. 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The modifiers “+” or “-” may be appended to a rating","page_number":197,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"fadbff3e-bb1f-440b-88f8-e31516380158","block_type":"box","text":"to denote relative status within major rating categories.","page_number":197,"box":{"x":116,"y":103,"width":411,"height":12}},{"id":"74088add-856e-4c39-a3a0-f54a0d33bdda","block_type":"box","text":"For example, the rating category ‘AA’ has three notch-specific rating levels (‘AA+’; ‘AA’; ‘AA–’; each a","page_number":197,"box":{"x":117,"y":134,"width":755,"height":12}},{"id":"9fbb512e-3032-449a-9496-fba945b254b4","block_type":"box","text":"rating level). Such suffixes are not added to ‘AAA’ ratings and ratings below the ‘CCC’ category. 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Indicates the strongest intrinsic capacity for timely","page_number":197,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"66baa4ff-d8cf-4ecb-b29a-d146ba8086d7","block_type":"box","text":"payment of financial commitments; may have an added “+” to denote any exceptionally","page_number":197,"box":{"x":226,"y":382,"width":650,"height":12}},{"id":"9d525644-fc09-49f5-8977-fa10c5f12b7f","block_type":"box","text":"strong credit feature.","page_number":197,"box":{"x":226,"y":397,"width":158,"height":12}},{"id":"cefd0dbf-7946-4400-8805-9ce2e724f15c","block_type":"box","text":"F2 Good Short-Term Credit Quality. Good intrinsic capacity for timely payment of financial","page_number":197,"box":{"x":117,"y":420,"width":757,"height":12}},{"id":"4cb7c436-5261-4a2c-9936-703c0a325abb","block_type":"box","text":"commitments.","page_number":197,"box":{"x":226,"y":436,"width":109,"height":9}},{"id":"e35b9864-e800-4350-b1ca-09881c6e5850","block_type":"box","text":"F3 Fair Short-Term Credit Quality. The intrinsic capacity for timely payment of financial","page_number":197,"box":{"x":117,"y":459,"width":732,"height":12}},{"id":"95b0ca1a-bd39-454e-b2e9-efcd35916f90","block_type":"box","text":"commitments is adequate.","page_number":197,"box":{"x":226,"y":475,"width":200,"height":12}},{"id":"e55aa437-ccbe-4d2a-89f0-3076f4a1027c","block_type":"box","text":"B Speculative Short-Term Credit Quality. 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We are committed to building strong relationships through","page_number":204,"box":{"x":117,"y":288,"width":736,"height":12}},{"id":"71abed34-dd53-4a89-b1bf-bda9a460abee","block_type":"box","text":"constructive, ongoing dialogue with the boards and executive management of the companies in which","page_number":204,"box":{"x":116,"y":303,"width":760,"height":12}},{"id":"ea2df7b3-eec9-47ff-99f1-920881defd35","block_type":"box","text":"our clients are invested.","page_number":204,"box":{"x":116,"y":319,"width":182,"height":9}},{"id":"ed6078c5-8df2-45a7-ae41-56b915a1d387","block_type":"box","text":"About BlackRock Active Investment Stewardship","page_number":204,"box":{"x":303,"y":357,"width":398,"height":12}},{"id":"27b283b1-9719-4e87-b21e-f75b67806d0c","block_type":"box","text":"BlackRock Active Investment Stewardship (BAIS) is a specialist team within the Portfolio Management","page_number":204,"box":{"x":117,"y":388,"width":764,"height":12}},{"id":"db8cdd47-6008-4c23-b840-65b305507e73","block_type":"box","text":"Group and manages BlackRock’s stewardship engagement and voting on behalf of clients invested in","page_number":204,"box":{"x":117,"y":403,"width":758,"height":12}},{"id":"1f9719de-a19a-47f5-aaf4-77277d6308d2","block_type":"box","text":"active strategies globally. BAIS is also responsible for engagement with issuers in index fixed income","page_number":204,"box":{"x":116,"y":419,"width":755,"height":12}},{"id":"591ad0f7-3830-4f5b-82ce-6f885bf8869c","block_type":"box","text":"strategies, where appropriate. Our activities are informed by these Global Engagement and Voting","page_number":204,"box":{"x":116,"y":434,"width":735,"height":12}},{"id":"8ea5db47-2bbb-4817-8fb9-92b0fe15b3bc","block_type":"box","text":"Guidelines (the “Guidelines”) and insights from active investment analysts and portfolio managers, with","page_number":204,"box":{"x":117,"y":450,"width":768,"height":12}},{"id":"823f0140-bbc0-480a-b2a5-ad9b6060840e","block_type":"box","text":"whom we work closely in engaging companies and voting at shareholder meetings.","page_number":204,"box":{"x":116,"y":465,"width":622,"height":12}},{"id":"75f09e00-a69d-4e37-b754-d474ab9c2ea3","block_type":"box","text":"Engagement with public companies is the foundation of our approach to stewardship within","page_number":204,"box":{"x":117,"y":496,"width":680,"height":12}},{"id":"1bd5608d-addc-4f73-a5ba-2493fb72e96f","block_type":"box","text":"fundamental active investing.","page_number":204,"box":{"x":116,"y":511,"width":215,"height":12}},{"id":"895b689c-94de-4594-84bc-bc57bfe64c65","block_type":"box","text":"3","page_number":204,"box":{"x":333,"y":511,"width":5,"height":6}},{"id":"32a20900-7d44-42a4-b0cd-8328138e6968","block_type":"box","text":"Through direct dialogue with company leadership, we seek to","page_number":204,"box":{"x":339,"y":511,"width":466,"height":12}},{"id":"e9a2e068-a37c-4080-bfe9-c869a511e11d","block_type":"box","text":"understand their businesses and how they manage risks and opportunities to deliver durable, risk","page_number":204,"box":{"x":117,"y":527,"width":727,"height":12}},{"id":"a4727da0-b37c-472b-9e58-8d4ceb4a5459","block_type":"box","text":"adjusted financial returns. Portfolio managers and stewardship specialists may engage jointly or","page_number":204,"box":{"x":116,"y":542,"width":716,"height":12}},{"id":"b49b301b-3900-48f2-b125-1ae184fff5fb","block_type":"box","text":"independently on material corporate governance matters. Our discussions focus on topics relevant to a","page_number":204,"box":{"x":117,"y":558,"width":769,"height":12}},{"id":"47bda9e6-72d2-4acf-9d34-8edc495f10eb","block_type":"box","text":"company’s success over time, including governance and leadership, corporate strategy, capital","page_number":204,"box":{"x":116,"y":573,"width":711,"height":12}},{"id":"7533bec2-03cd-4ce2-8e88-00b9f8131741","block_type":"box","text":"structure and financial performance, operations and material sustainability-related risks, as well as","page_number":204,"box":{"x":116,"y":589,"width":734,"height":12}},{"id":"f4440647-5fa0-42ae-a4a6-ce1202b4e42b","block_type":"box","text":"macro-economic, geopolitical and sector dynamics. We aim to be constructive investors and are","page_number":204,"box":{"x":117,"y":604,"width":717,"height":12}},{"id":"edd0284f-ab93-42bf-9b2b-50c88e010e90","block_type":"box","text":"generally supportive of management teams that have a track record of financial value creation. We aim","page_number":204,"box":{"x":116,"y":620,"width":770,"height":12}},{"id":"306840d0-84eb-412f-a148-e818e14dc122","block_type":"box","text":"to build and maintain strong relationships with company leadership based on open dialogue and","page_number":204,"box":{"x":116,"y":635,"width":717,"height":12}},{"id":"cbef2687-047c-4bdf-ad9e-0eb28312c94f","block_type":"box","text":"mutual respect.","page_number":204,"box":{"x":117,"y":651,"width":118,"height":12}},{"id":"02ecf012-9784-4df1-97fb-d8923b9c847e","block_type":"box","text":"Different active equity strategies may implement these voting guidelines differently, as a result of the","page_number":204,"box":{"x":117,"y":681,"width":744,"height":12}},{"id":"23cbc3a4-4b24-4b7c-aca1-d90928160d0f","block_type":"box","text":"latitude each portfolio manager has to make independent voting decisions on their holdings. For","page_number":204,"box":{"x":117,"y":697,"width":711,"height":12}},{"id":"c4273138-a52c-49b2-9f59-897f8a5c25e0","block_type":"box","text":"example, BAIS will generally vote the holdings in Systematic Active Equity portfolios in accordance","page_number":204,"box":{"x":116,"y":712,"width":732,"height":12}},{"id":"fd563c13-7cd3-4784-8cba-cbe45fca5530","block_type":"box","text":"with these guidelines. We provide voting recommendations to fundamental equity portfolio managers,","page_number":204,"box":{"x":116,"y":728,"width":751,"height":12}},{"id":"33576273-28f6-4232-bc56-05e872ec0cfc","block_type":"box","text":"who may determine to vote differently based on each portfolio’s investment objectives and strategy.","page_number":204,"box":{"x":116,"y":743,"width":737,"height":12}},{"id":"98517038-2e2e-4914-bb58-8e8298d32a1d","block_type":"box","text":"These guidelines discuss BAIS’ views on corporate governance topics on which we may engage with","page_number":204,"box":{"x":116,"y":774,"width":749,"height":12}},{"id":"b5ca2fb5-8d7d-455d-b088-855437f90e9d","block_type":"box","text":"management teams and board directors","page_number":204,"box":{"x":117,"y":790,"width":297,"height":12}},{"id":"99d77320-3611-4c19-b6d3-030ba35445ee","block_type":"box","text":"4","page_number":204,"box":{"x":414,"y":790,"width":6,"height":6}},{"id":"7349a257-f64f-4d45-8992-2fd380d338bd","block_type":"box","text":"and on matters that routinely come to a shareholder vote. We","page_number":204,"box":{"x":424,"y":790,"width":456,"height":12}},{"id":"d3a143db-3c20-4dc9-82ff-d62d9c8a0cac","block_type":"box","text":"3","page_number":204,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"d12f01bf-3840-41fa-87a4-9c343c44a794","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":204,"box":{"x":170,"y":815,"width":660,"height":9}},{"id":"2fdf2059-f7b3-487a-bab4-9d705cb6a46d","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":204,"box":{"x":170,"y":828,"width":695,"height":9}},{"id":"2cfe6f13-56c8-419a-aea2-2296f7d8fed3","block_type":"box","text":"We comply fully with these requirements and do not engage with portfolio companies for the purpose, or with the effect,","page_number":204,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"9652bf53-cfd3-4258-8f92-c4e367c1fcfc","block_type":"box","text":"of changing or influencing control of the company.","page_number":204,"box":{"x":170,"y":853,"width":295,"height":10}},{"id":"a137ffc8-2566-42bf-bb5a-faaaa855617b","block_type":"box","text":"4","page_number":204,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"eb72e716-cfa6-4b40-9f94-faf5fe92e686","block_type":"box","text":"References to the board, board directors or non-executive directors should be understood to include supervisory boards","page_number":204,"box":{"x":171,"y":866,"width":710,"height":10}},{"id":"a7c5e563-33e2-4014-9f5a-37245e8e5d34","block_type":"box","text":"and their members, where relevant.","page_number":204,"box":{"x":170,"y":879,"width":210,"height":9}},{"id":"a6bb982f-38bc-463d-a1ef-77a297391d6c","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":204,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"6078f3c8-3930-4691-92be-b32db73eeeb3","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":204,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"29164715-60db-4095-8b00-755cab648f2f","block_type":"box","text":"4","page_number":204,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"1dcd8904-d40e-467a-ae0c-bcbf037ad818","block_type":"box","text":"NM1026U-6039989-204/256","page_number":204,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9799773f-56c8-4b1d-9ebf-54037ae1b843","block_type":"box","text":"recognize that accepted corporate governance norms can differ across markets, and believe these","page_number":205,"box":{"x":117,"y":87,"width":736,"height":12}},{"id":"062d4325-3b7d-428e-8138-57f92df402cb","block_type":"box","text":"guidelines represent globally applicable elements of governance that support a company’s ability to","page_number":205,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"305ed777-bf35-4d2a-bc28-4bcae973546a","block_type":"box","text":"manage material risks and opportunities and deliver financial returns to investors. Generally, we","page_number":205,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"2855bfd8-8978-4c43-b020-b6b6908150a6","block_type":"box","text":"believe companies should observe accepted corporate governance norms within their local markets or,","page_number":205,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"a7fc82df-43c3-4ec2-a36d-f334e4a64774","block_type":"box","text":"particularly in markets without well-established norms, aspire to widely recognized international best","page_number":205,"box":{"x":117,"y":149,"width":746,"height":12}},{"id":"9d7eb82e-c904-40ab-be4d-7e8ce07e0c4b","block_type":"box","text":"practices. As one of many minority shareholders, BlackRock cannot – and does not try to – direct a","page_number":205,"box":{"x":117,"y":165,"width":739,"height":12}},{"id":"5d2794c0-97f6-42c3-a2ca-9967a6c7ad22","block_type":"box","text":"company’s strategy or its implementation. We look to companies to provide disclosures that explain","page_number":205,"box":{"x":116,"y":180,"width":743,"height":12}},{"id":"8a0f1d56-9189-406d-ad91-3ea2364ed7dc","block_type":"box","text":"how their approach to corporate governance best aligns with the financial interests of their investors.","page_number":205,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"91f40e3d-ba50-452e-b877-19db0752cf5e","block_type":"box","text":"Our approach to stewardship within active equities","page_number":205,"box":{"x":296,"y":234,"width":412,"height":12}},{"id":"ab01799d-dae4-4340-a0d0-805cd4662eb5","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of","page_number":205,"box":{"x":116,"y":265,"width":713,"height":12}},{"id":"05da0e55-dc1f-4a3f-869b-c4405fb12b8b","block_type":"box","text":"corporate governance. The voting rights attached to clients’ holdings are an important mechanism for","page_number":205,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"781844e3-7dba-49ef-a488-66651188d96c","block_type":"box","text":"investors to express support for, or concern about, a company’s performance. As a fiduciary,","page_number":205,"box":{"x":117,"y":296,"width":692,"height":12}},{"id":"8a8c4405-c957-4481-8457-e713e9171680","block_type":"box","text":"BlackRock is legally required to make proxy voting determinations, on behalf of clients who have","page_number":205,"box":{"x":117,"y":312,"width":720,"height":12}},{"id":"6cfadd84-b26b-4d21-b911-b9a09258ccd7","block_type":"box","text":"delegated voting authority to us, in a manner consistent with BlackRock’s contractual arrangements","page_number":205,"box":{"x":116,"y":327,"width":743,"height":12}},{"id":"09ef96ce-7946-43e2-b811-bef6ac78be1b","block_type":"box","text":"with clients and funds.","page_number":205,"box":{"x":116,"y":343,"width":170,"height":9}},{"id":"63aa9129-6f63-406b-a0bc-b547ae206fe6","block_type":"box","text":"In general, we tend to support the recommendations of the board of directors and management. As","page_number":205,"box":{"x":117,"y":374,"width":740,"height":12}},{"id":"e6f8727e-e0cd-4286-be1b-521a31e0c07a","block_type":"box","text":"indicated below, we may vote against management recommendations when we have concerns about","page_number":205,"box":{"x":117,"y":389,"width":755,"height":12}},{"id":"0b544c01-63fe-4cd8-aea6-61fab59b5dd7","block_type":"box","text":"how companies are serving the financial interests of our clients as their shareholders. BAIS takes a","page_number":205,"box":{"x":117,"y":405,"width":740,"height":12}},{"id":"f5317e46-41d0-4165-af4a-b6d22c1887a1","block_type":"box","text":"globally consistent approach to voting but considers the different corporate governance regulations and","page_number":205,"box":{"x":116,"y":420,"width":772,"height":12}},{"id":"d2b93316-080a-4e10-8bfe-d6d56f0b5853","block_type":"box","text":"norms across markets. Votes are determined on a case-by-case basis, in the context of a company’s","page_number":205,"box":{"x":117,"y":436,"width":753,"height":12}},{"id":"ad86f317-5a56-4231-9e1a-e054dbe3c329","block_type":"box","text":"situation and the investment mandate we have from clients. Please see page 19 for more information","page_number":205,"box":{"x":116,"y":451,"width":756,"height":12}},{"id":"b070d717-81c6-402c-859c-52e23f1f9f7d","block_type":"box","text":"about how we fulfill and oversee our investment stewardship responsibilities for BlackRock’s non-index","page_number":205,"box":{"x":116,"y":467,"width":768,"height":12}},{"id":"eb87a9e9-8adf-4765-bff6-4d49b354ec99","block_type":"box","text":"equity strategies.","page_number":205,"box":{"x":116,"y":482,"width":125,"height":12}},{"id":"1231a8ad-f3fe-4304-a3cb-11cef3ca5593","block_type":"box","text":"5","page_number":205,"box":{"x":243,"y":483,"width":6,"height":6}},{"id":"442e3315-c7a1-4631-8bf8-2b64bc29fe1a","block_type":"box","text":"Our approach to stewardship within fixed income","page_number":205,"box":{"x":303,"y":521,"width":399,"height":12}},{"id":"9d0149f1-c31a-474b-a4cf-5225d29da85c","block_type":"box","text":"Although fixed income investors do not have the right to vote at shareholder meetings, issuer","page_number":205,"box":{"x":116,"y":552,"width":695,"height":12}},{"id":"43d30d7c-ec94-451c-bcdd-3341295f4b7b","block_type":"box","text":"engagement is a component of fixed income investment strategies at BlackRock, particularly for those","page_number":205,"box":{"x":116,"y":568,"width":762,"height":12}},{"id":"485fb220-10c9-4dd8-a511-80677583dd52","block_type":"box","text":"with sustainability objectives in addition to financial objectives. Most corporate governance-related","page_number":205,"box":{"x":116,"y":583,"width":732,"height":12}},{"id":"8633337c-4247-4c3e-b90e-a0458fb3686d","block_type":"box","text":"fixed income engagements are undertaken in conjunction with the active investment stewardship team,","page_number":205,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"31a3e00f-85e6-49aa-9a01-4d7357f83c95","block_type":"box","text":"and often active equity investors. In addition to the topics listed below, engagement with fixed income","page_number":205,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"b8af1077-bcb7-4b90-8160-acfb750a7a52","block_type":"box","text":"investment teams may help inform an issuer’s approach to structuring specialist issuances and the","page_number":205,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"0b60affd-6778-478f-904b-543a963c525a","block_type":"box","text":"standard terms and information in bond documentation.","page_number":205,"box":{"x":116,"y":645,"width":417,"height":10}},{"id":"0f1e6746-1e56-476a-85eb-1a159ee84212","block_type":"box","text":"5","page_number":205,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"a770ed94-4719-48a9-ad03-23069db9151f","block_type":"box","text":"Non-index equity strategies include active equity holdings in BlackRock’s fundamental equity, systematic equity and","page_number":205,"box":{"x":171,"y":854,"width":685,"height":9}},{"id":"b7d4deb9-7ec3-48b1-a6e1-4f3722fc7332","block_type":"box","text":"multi-asset solutions strategies, as well as holdings in BlackRock’s index and active fixed income strategies, to the","page_number":205,"box":{"x":170,"y":867,"width":678,"height":9}},{"id":"eebd5f6f-ed49-45f4-b66b-cc6c4002f3e5","block_type":"box","text":"extent those strategies hold voting securities or conduct issuer engagements.","page_number":205,"box":{"x":170,"y":880,"width":458,"height":9}},{"id":"5cf13ff2-b650-411b-99e5-a94802d7e34f","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":205,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"6aed6dfd-751f-4c31-95da-32eec5849eb1","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":205,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"1860acd9-76ab-4f20-bba3-019955054803","block_type":"box","text":"5","page_number":205,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"ab7d35e4-bbcd-45f8-b1a0-e39ff5c5fa73","block_type":"box","text":"NM1026U-6039989-205/256","page_number":205,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"09483b56-ff0d-43b8-8d15-e1e25432ec66","block_type":"box","text":"Boards of Directors","page_number":206,"box":{"x":422,"y":113,"width":161,"height":9}},{"id":"4a009626-2bef-4281-8404-58071d6acac3","block_type":"box","text":"Roles and responsibilities","page_number":206,"box":{"x":117,"y":146,"width":212,"height":11}},{"id":"b63c6698-4315-424c-ae89-662c0a853c06","block_type":"box","text":"There is widespread consensus that the foundation of good corporate governance is an effective board","page_number":206,"box":{"x":116,"y":178,"width":770,"height":12}},{"id":"12c744e8-809f-4155-8582-22664e3bf5b1","block_type":"box","text":"of directors that is able to advise and supervise management in an independent and objective","page_number":206,"box":{"x":116,"y":194,"width":700,"height":12}},{"id":"23448eec-fee9-4813-a04b-4261ef4af39c","block_type":"box","text":"manner.","page_number":206,"box":{"x":117,"y":212,"width":59,"height":7}},{"id":"34f523dd-ce39-4ca7-80cd-c0b255dfd0a5","block_type":"box","text":"6","page_number":206,"box":{"x":178,"y":209,"width":5,"height":6}},{"id":"a3962390-82a3-445a-b444-b5642d48097d","block_type":"box","text":"We look to the board of directors (hereafter the “board”) to have an oversight role in the establishment","page_number":206,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"63d67410-6a23-4998-9b6a-e1667c77506f","block_type":"box","text":"and realization of a company’s strategy, purpose and culture. These constructs are interdependent","page_number":206,"box":{"x":116,"y":257,"width":738,"height":12}},{"id":"a46af95d-4ed1-4f6b-91bf-30129724aed0","block_type":"box","text":"and, when aligned, can better position a company to be resilient in the face of a changing business","page_number":206,"box":{"x":116,"y":273,"width":739,"height":12}},{"id":"7a16a4b9-c27f-4524-b27a-2ff0aeb5951c","block_type":"box","text":"environment, help reduce the risks of corporate or employee misconduct, and attract and retain the","page_number":206,"box":{"x":116,"y":288,"width":740,"height":12}},{"id":"c0c79c6c-6ded-4e15-b40c-9b46154a88ae","block_type":"box","text":"caliber of workers necessary to deliver financial performance over time.","page_number":206,"box":{"x":116,"y":304,"width":535,"height":12}},{"id":"f1ff1edc-b437-4ea1-bb55-37e70016bf82","block_type":"box","text":"In overseeing the management of the company, the board ensures the necessary resources, policies","page_number":206,"box":{"x":117,"y":337,"width":754,"height":12}},{"id":"9f87d11d-1089-4990-bbb0-d7a48bf2e205","block_type":"box","text":"and procedures are in place to help management meet its strategic objectives within an agreed risk","page_number":206,"box":{"x":116,"y":352,"width":742,"height":12}},{"id":"aa4ca9ab-a498-4274-a8ed-aa286a0c8d1d","block_type":"box","text":"tolerance.","page_number":206,"box":{"x":116,"y":368,"width":78,"height":9}},{"id":"cc4eba1b-7399-43a1-9cc1-d4e47d418622","block_type":"box","text":"One of the most important responsibilities of the board is to appoint, and remove as necessary, the","page_number":206,"box":{"x":116,"y":400,"width":739,"height":12}},{"id":"4a8b52e0-92aa-40eb-8085-2c4c06898bf3","block_type":"box","text":"chief executive officer (“CEO”). In addition, the board plays a meaningful role in monitoring the","page_number":206,"box":{"x":116,"y":416,"width":704,"height":12}},{"id":"6dec4d6f-b036-4a9d-a85a-dd4db355da77","block_type":"box","text":"performance of the CEO and other key executives, determining executive compensation, ensuring a","page_number":206,"box":{"x":117,"y":431,"width":747,"height":12}},{"id":"5247ed52-74ec-4d28-b243-c5060d50148a","block_type":"box","text":"rigorous audit, overseeing strategy execution and risk management and engaging with shareholders,","page_number":206,"box":{"x":117,"y":447,"width":753,"height":12}},{"id":"1d078e8b-8497-4754-9047-3110997feec1","block_type":"box","text":"and other stakeholders, as necessary.","page_number":206,"box":{"x":116,"y":462,"width":289,"height":12}},{"id":"80e874f7-cf10-4d19-8658-716eb74500c5","block_type":"box","text":"Composition and effectiveness","page_number":206,"box":{"x":116,"y":495,"width":253,"height":12}},{"id":"dea3c3af-ddac-4de6-9aaa-641302339ffe","block_type":"box","text":"Appointment process","page_number":206,"box":{"x":116,"y":528,"width":177,"height":12}},{"id":"de1139c9-3762-4daf-9461-c6e7ba71c676","block_type":"box","text":"A formal and transparent process for identifying and appointing director candidates is critical to","page_number":206,"box":{"x":116,"y":560,"width":708,"height":12}},{"id":"40386344-8dd4-4560-b711-6955ee8d5339","block_type":"box","text":"ensuring the board is composed of directors with the appropriate mix of skills and experience.","page_number":206,"box":{"x":116,"y":576,"width":700,"height":12}},{"id":"21d257a1-5313-4ab5-8c1b-d80b27f7eb49","block_type":"box","text":"Generally, the board or a sub-committee determines the general criteria given the company’s","page_number":206,"box":{"x":117,"y":591,"width":695,"height":12}},{"id":"933191b3-6dbb-4a1b-91a0-ba3bf0703f0e","block_type":"box","text":"circumstances (e.g., sector, maturity, geographic footprint) and any additional criteria for a specific role","page_number":206,"box":{"x":116,"y":607,"width":767,"height":12}},{"id":"a8fca4e6-a5aa-467b-ad8d-696c33bd88c5","block_type":"box","text":"being filled (e.g., financial expertise, industry track record). To inform the process, we encourage","page_number":206,"box":{"x":117,"y":622,"width":721,"height":12}},{"id":"9a2e286f-87b3-48ad-89d4-cb40ee69ebf0","block_type":"box","text":"companies to review the skills and experience of incumbent directors to identify any gaps and whether","page_number":206,"box":{"x":116,"y":638,"width":764,"height":12}},{"id":"08692b48-40a4-4271-9ad7-745a1a8dc4bc","block_type":"box","text":"the skills and experience of a director candidate would be additive. We welcome disclosures that","page_number":206,"box":{"x":116,"y":653,"width":722,"height":12}},{"id":"9e5868ff-2682-4e27-9ada-730bf3ead919","block_type":"box","text":"explain how the board considered different skills and experience to ensure that the directors","page_number":206,"box":{"x":116,"y":669,"width":682,"height":12}},{"id":"68393532-1e8a-4e50-ba56-389ceb3eb760","block_type":"box","text":"collectively can be effective in fulfilling their responsibilities. We assess a company’s board","page_number":206,"box":{"x":116,"y":684,"width":672,"height":12}},{"id":"7e8e7601-18fa-4a96-9d10-34d2540b123e","block_type":"box","text":"composition against that of its peer group and local market requirements.","page_number":206,"box":{"x":116,"y":700,"width":542,"height":12}},{"id":"f9818c58-2466-453e-bb18-eb4eacb97ac9","block_type":"box","text":"Shareholders periodically vote to elect directors to serve on the board. We do not prescribe any","page_number":206,"box":{"x":116,"y":733,"width":709,"height":12}},{"id":"25a1f863-b17e-42f8-a4f8-d8b16e70db21","block_type":"box","text":"particular board composition in our engagements or voting but seek to understand how well placed a","page_number":206,"box":{"x":117,"y":748,"width":746,"height":12}},{"id":"b9295464-ec20-44b6-950b-c3a006bfe02c","block_type":"box","text":"board is to act in investors’ interests. We may vote against the election of the most senior independent","page_number":206,"box":{"x":117,"y":764,"width":760,"height":12}},{"id":"0f37eb45-87d0-4dc4-8ce8-c770e8f85735","block_type":"box","text":"director, or the chair of the relevant committee, where a company has not demonstrated it has an","page_number":206,"box":{"x":116,"y":779,"width":720,"height":12}},{"id":"b261bda6-7251-4338-89c8-e964413f4eb5","block_type":"box","text":"appointment process that results in a high functioning board with the appropriate complement of skills","page_number":206,"box":{"x":116,"y":795,"width":753,"height":12}},{"id":"ae3eb685-684e-4e5c-9215-cfe035969af8","block_type":"box","text":"and experience amongst the directors to support strong financial performance over time. We may vote","page_number":206,"box":{"x":116,"y":810,"width":759,"height":12}},{"id":"187a50d3-c324-4e1a-9b5c-5dcab1bf0c1a","block_type":"box","text":"against newly nominated directors who do not seem to have the appropriate skills or experience to","page_number":206,"box":{"x":116,"y":826,"width":736,"height":12}},{"id":"f132e382-439b-4277-98e3-f85362ebb0a9","block_type":"box","text":"contribute to the board’s effectiveness.","page_number":206,"box":{"x":116,"y":841,"width":293,"height":10}},{"id":"4e85c128-86a8-42fa-b9c6-02047e475d5d","block_type":"box","text":"6","page_number":206,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"f6a7f59b-684f-4993-91a8-2caa3a70d0ff","block_type":"box","text":"See the Corporate Governance Codes of Germany, Japan, and the UK, as well as the corporate governance principles","page_number":206,"box":{"x":170,"y":866,"width":706,"height":10}},{"id":"b6efb6ba-2361-44ab-8898-b7ade989118e","block_type":"box","text":"of the US Business Roundtable as examples.","page_number":206,"box":{"x":170,"y":879,"width":268,"height":10}},{"id":"ca4ee5a2-46d4-40b9-9314-05d1ca150aaf","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":206,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"e1fac1cc-dc1e-4612-a918-ee6cffbde6a2","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":206,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"9ceac0ab-8db5-4c01-a527-0b02c9cd01f4","block_type":"box","text":"6","page_number":206,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"1aa67d23-4a9d-40e3-a49a-e4da0804f84c","block_type":"box","text":"NM1026U-6039989-206/256","page_number":206,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"95655fe9-b84e-446a-bdea-2eda6247f2b4","block_type":"box","text":"Independence","page_number":207,"box":{"x":116,"y":87,"width":118,"height":12}},{"id":"2102a1f7-0b98-4be3-b901-a6c4ba0b412f","block_type":"box","text":"Director independence from management, significant shareholders or other stakeholders (e.g.,","page_number":207,"box":{"x":117,"y":116,"width":706,"height":12}},{"id":"a83d630f-dc1f-4ccb-aada-a537080d3f72","block_type":"box","text":"government or employees) is of paramount importance to the protection of the interests of minority","page_number":207,"box":{"x":116,"y":132,"width":736,"height":12}},{"id":"c89965bc-d41b-4cf2-b130-67d94502a231","block_type":"box","text":"shareholders such as BlackRock’s clients. We consider it good practice for at least half the directors to","page_number":207,"box":{"x":116,"y":147,"width":766,"height":12}},{"id":"c14139f0-ff60-4cdb-ac6f-891494606b26","block_type":"box","text":"be independent and free from conflicts of interest or undue influence.","page_number":207,"box":{"x":117,"y":163,"width":510,"height":12}},{"id":"0593f27b-d26e-40a2-b47a-7098e968040d","block_type":"box","text":"7","page_number":207,"box":{"x":629,"y":163,"width":5,"height":6}},{"id":"0592d1b5-b995-49a9-8266-dc5a39f3de6d","block_type":"box","text":"This also helps to ensure that","page_number":207,"box":{"x":635,"y":163,"width":229,"height":12}},{"id":"a91c2623-b510-4459-a09a-02d57ce809f5","block_type":"box","text":"board committees are composed of a sufficient number of independent directors. Companies domiciled","page_number":207,"box":{"x":117,"y":178,"width":770,"height":12}},{"id":"bcd12dae-b3ef-4558-841d-1f8faf100f9c","block_type":"box","text":"in markets with a higher threshold for board independence should meet those local requirements.","page_number":207,"box":{"x":117,"y":194,"width":727,"height":12}},{"id":"27a9713b-b4ff-4ca8-8251-5b184d1a4406","block_type":"box","text":"We may vote against the election of non-independent directors if the board does not have a sufficient","page_number":207,"box":{"x":116,"y":223,"width":756,"height":12}},{"id":"8d75b581-1035-4843-b449-48aefef4e8ba","block_type":"box","text":"balance of independence. We may also vote against the election of the chair of the committee","page_number":207,"box":{"x":117,"y":239,"width":701,"height":12}},{"id":"077ba047-2e5c-45b7-9674-07c83c1142ae","block_type":"box","text":"responsible for board composition if this is a perennial issue.","page_number":207,"box":{"x":117,"y":254,"width":453,"height":12}},{"id":"96af6181-92d3-4d3c-b86a-909d27bda3d1","block_type":"box","text":"Independent board leadership","page_number":207,"box":{"x":116,"y":283,"width":245,"height":12}},{"id":"c12c69f6-d26c-4f65-adf0-5a171464f80f","block_type":"box","text":"Practices across markets differ, as do board structures, but we observe two main approaches to","page_number":207,"box":{"x":117,"y":312,"width":718,"height":12}},{"id":"7b99e24a-897a-47de-a808-2632c583f7cf","block_type":"box","text":"independent board leadership. One is a non-executive, independent chair of the board who is","page_number":207,"box":{"x":117,"y":327,"width":697,"height":12}},{"id":"043dcf55-3087-48de-b8dc-4d2481c14c4d","block_type":"box","text":"responsible for leading the board in the effective exercise of its duties. The other is a lead or senior","page_number":207,"box":{"x":117,"y":342,"width":738,"height":12}},{"id":"5e85b810-e970-4f41-b428-f7be16995fb5","block_type":"box","text":"independent director, who is responsible for coordinating with the other non-executive directors and","page_number":207,"box":{"x":117,"y":357,"width":742,"height":12}},{"id":"c7e8a703-a984-4f7d-b9c2-4d9d26387acd","block_type":"box","text":"working closely with the executive chair on the board agenda and other board procedures. In this case,","page_number":207,"box":{"x":116,"y":372,"width":770,"height":11}},{"id":"952895c6-976b-4f80-af34-d2c75caaf692","block_type":"box","text":"the executive chair and the lead independent director work together to ensure the board is effectively","page_number":207,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"e3f6a26d-33bf-4295-be32-4a870479378e","block_type":"box","text":"fulfilling its responsibilities. In our view, the independent leader of the board, and/or the chair of a","page_number":207,"box":{"x":116,"y":401,"width":723,"height":12}},{"id":"3c1c385e-401b-463d-9303-89658e21d238","block_type":"box","text":"relevant committee, should be available to investors to discuss governance matters such as CEO","page_number":207,"box":{"x":117,"y":416,"width":727,"height":12}},{"id":"e1fd200b-7773-4f03-89aa-6a3022dd895b","block_type":"box","text":"succession, executive pay, and board performance. We look to boards to explain their board","page_number":207,"box":{"x":116,"y":431,"width":691,"height":12}},{"id":"cc085d7c-95bf-4079-b467-22b7b05ff2e6","block_type":"box","text":"leadership model and how it serves the interests of shareholders.","page_number":207,"box":{"x":117,"y":446,"width":489,"height":12}},{"id":"9e1d16d1-2015-4dc3-8e97-5a445896eda6","block_type":"box","text":"We may vote against the election of the chair of the committee responsible for board composition if","page_number":207,"box":{"x":116,"y":475,"width":740,"height":12}},{"id":"3c8cca3d-7074-4063-81de-550fe3000435","block_type":"box","text":"there is not an identified independent leader of the board with clear responsibilities for board","page_number":207,"box":{"x":116,"y":490,"width":689,"height":12}},{"id":"e3724d29-bf27-440c-9dbc-45ea6be64886","block_type":"box","text":"performance. We may vote against the most senior independent director if the board has a policy of","page_number":207,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"08b6d383-36b9-4e84-8c0a-712e6e16144b","block_type":"box","text":"not engaging with shareholders.","page_number":207,"box":{"x":117,"y":522,"width":242,"height":12}},{"id":"e3897a08-af7a-4f3e-8619-44dd49f40006","block_type":"box","text":"Tenure and succession","page_number":207,"box":{"x":118,"y":551,"width":189,"height":9}},{"id":"615cd845-4b70-46bb-b5b0-9868beebb816","block_type":"box","text":"In our view, it is good practice for boards to establish the length of time a director would normally be","page_number":207,"box":{"x":117,"y":580,"width":745,"height":12}},{"id":"466f17be-7b37-4ab4-9c5f-d5ab36fedcab","block_type":"box","text":"expected to serve, in line with market norms where those exist. We find it helpful when companies","page_number":207,"box":{"x":116,"y":595,"width":733,"height":12}},{"id":"a5b258d9-b7f0-44da-9008-4600c4133bf7","block_type":"box","text":"disclose their approach to director tenure particularly around the contributions of directors who have","page_number":207,"box":{"x":116,"y":611,"width":745,"height":12}},{"id":"f8254a96-a704-4149-a6d2-d60c2111e9ab","block_type":"box","text":"served for longer periods than typically provided for under local practice. In our experience, long","page_number":207,"box":{"x":116,"y":626,"width":718,"height":13}},{"id":"26efaf40-30e5-493d-a4fa-1bc4bfca88ea","block_type":"box","text":"serving directors could become less independent given their long-term relationship with management","page_number":207,"box":{"x":116,"y":642,"width":755,"height":12}},{"id":"dda79eb7-ee46-45d5-98e1-4fab83fcbdcc","block_type":"box","text":"and involvement in past board decisions.","page_number":207,"box":{"x":116,"y":658,"width":308,"height":11}},{"id":"5eafffdb-f224-424e-97c8-ff5e09e2d147","block_type":"box","text":"Succession planning for board roles helps achieve the appropriate cadence of turnover that balances","page_number":207,"box":{"x":116,"y":687,"width":750,"height":12}},{"id":"77cd906d-88fa-4dcd-bcc4-04cd75a61d5d","block_type":"box","text":"renewal through the regular introduction of directors with fresh perspectives and expertise with","page_number":207,"box":{"x":117,"y":702,"width":699,"height":12}},{"id":"e7485d13-12b3-4fbe-ba7e-6cffd8bd65af","block_type":"box","text":"continuity through the retention of directors with long-term knowledge of the board and company.","page_number":207,"box":{"x":116,"y":718,"width":718,"height":12}},{"id":"a2a52597-1adf-4d8b-84b1-330692fe85e3","block_type":"box","text":"In markets where there is not specific director tenure guidance from regulation or corporate","page_number":207,"box":{"x":117,"y":746,"width":675,"height":12}},{"id":"bd7030cd-2809-4050-9d4a-3aaeff68e6a6","block_type":"box","text":"governance best practices, we may vote against the election of the chair of the committee responsible","page_number":207,"box":{"x":116,"y":760,"width":757,"height":12}},{"id":"7f08dfa7-e739-4522-a7de-6ecd45d606fc","block_type":"box","text":"for board composition if a company does not clearly disclose its approach to director tenure and board","page_number":207,"box":{"x":116,"y":774,"width":757,"height":12}},{"id":"c2eeda6e-3c9b-48a3-b194-e436c1c0112e","block_type":"box","text":"renewal. We may vote against the election of directors who have served for more years than is typical","page_number":207,"box":{"x":117,"y":788,"width":754,"height":12}},{"id":"c7ec87be-e563-4a9c-b4ae-b7e35172cb3c","block_type":"box","text":"in markets with specific guidance, where the case for their continued service is not evident.","page_number":207,"box":{"x":117,"y":803,"width":673,"height":12}},{"id":"8e304dbd-7c1d-4e80-b13e-4e85714e2291","block_type":"box","text":"7","page_number":207,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"04d53477-0398-4481-a334-ec90db6a4f78","block_type":"box","text":"Common impediments to independence may include but are not limited to: current or recent employment at the","page_number":207,"box":{"x":170,"y":828,"width":659,"height":9}},{"id":"7567519b-bd26-49c4-a011-34ae49adbcba","block_type":"box","text":"company or a subsidiary; being, or representing, a shareholder with a substantial shareholding in the company;","page_number":207,"box":{"x":170,"y":841,"width":659,"height":9}},{"id":"679e52ca-b8db-4c62-832d-cbb2c7fb7b29","block_type":"box","text":"interlocking directorships; lengthy tenure, and having any other interest, business, or other relationship which could, or","page_number":207,"box":{"x":170,"y":854,"width":702,"height":9}},{"id":"7f20eac8-d5f5-4486-8a47-de3a9bd95c9d","block_type":"box","text":"could reasonably be perceived to, materially interfere with a director’s ability to act in the best interests of the company","page_number":207,"box":{"x":170,"y":866,"width":703,"height":10}},{"id":"49a10f95-a0e2-4c6f-8315-f0a245b260c1","block_type":"box","text":"and shareholders.","page_number":207,"box":{"x":170,"y":880,"width":106,"height":7}},{"id":"d2bc2612-3243-4493-bd78-1e9d021ccf3b","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":207,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ea8daedd-8cc7-47b7-96a6-c51e17a507c4","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":207,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"63d84e31-658b-4bc6-8244-421d4070df29","block_type":"box","text":"7","page_number":207,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"0a87ccf8-956b-45ff-acbc-cdaacf03f884","block_type":"box","text":"NM1026U-6039989-207/256","page_number":207,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5b8ef252-f4cb-4011-8e5c-5114f1ebab34","block_type":"box","text":"Capacity","page_number":208,"box":{"x":117,"y":87,"width":74,"height":12}},{"id":"5ff4f959-9027-4afe-8855-72446d0467a2","block_type":"box","text":"To be effective and engaged, directors need to have the time and energy to commit to the role. In our","page_number":208,"box":{"x":116,"y":118,"width":757,"height":13}},{"id":"6795ff7c-4a9c-4d3a-8bc2-ec6a93ad5f1d","block_type":"box","text":"view, an effective board will assess the ability of its members to maintain an appropriate focus on","page_number":208,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"ad58f4cc-b37c-498c-aa77-f2ad096b1198","block_type":"box","text":"board matters and the company taking into consideration competing responsibilities. We recognize that","page_number":208,"box":{"x":117,"y":150,"width":770,"height":12}},{"id":"44d3b553-5b9f-4422-b187-04a71d1b882d","block_type":"box","text":"board leadership roles vary across markets in responsibilities and required time commitment but note","page_number":208,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"b60701cf-ff45-42b1-a68b-174a695c4930","block_type":"box","text":"that they are generally more intensive than a standard directorship. We will take local norms and","page_number":208,"box":{"x":116,"y":181,"width":721,"height":12}},{"id":"33f6fbb6-3f0c-4ea9-bc44-ddef8b82513d","block_type":"box","text":"practices into consideration when making our voting determinations across markets.","page_number":208,"box":{"x":117,"y":196,"width":628,"height":12}},{"id":"f23c1c9e-6078-4500-975b-cec4a0cb0946","block_type":"box","text":"We may vote against the election of directors who do not seem to have sufficient capacity to effectively","page_number":208,"box":{"x":116,"y":227,"width":769,"height":13}},{"id":"e0834511-eb69-438a-8f81-8a64fc8d9d96","block_type":"box","text":"fulfil their duties to the board and company.","page_number":208,"box":{"x":116,"y":243,"width":326,"height":12}},{"id":"55880273-adbc-4bf6-b8b7-d3e8e03b1f13","block_type":"box","text":"Director elections","page_number":208,"box":{"x":116,"y":275,"width":147,"height":9}},{"id":"0416cefb-6b1c-4c29-bc82-e52ccdc7bebc","block_type":"box","text":"Regular election of directors, ideally annually, supports director accountability to shareholders. A","page_number":208,"box":{"x":117,"y":306,"width":720,"height":12}},{"id":"9c9a2f32-c032-4b5b-8dac-81cc95128816","block_type":"box","text":"classified board structure","page_number":208,"box":{"x":116,"y":321,"width":186,"height":10}},{"id":"e96f9228-f4a7-4d5a-87e5-c41ff23c9b05","block_type":"box","text":"8","page_number":208,"box":{"x":303,"y":321,"width":5,"height":7}},{"id":"a94e0a8f-524d-4f15-a4b9-a04657680da8","block_type":"box","text":"may be justified by a company when it needs consistency and stability","page_number":208,"box":{"x":309,"y":321,"width":530,"height":12}},{"id":"ffc8df1f-21f4-4d40-8da6-08dab7a7c250","block_type":"box","text":"during a time of transition, or on the basis of its business model (e.g., a non-operating company such","page_number":208,"box":{"x":116,"y":337,"width":754,"height":12}},{"id":"86bfd772-91e8-4c41-9095-3f96ef650856","block_type":"box","text":"as closed-end funds).","page_number":208,"box":{"x":116,"y":352,"width":165,"height":12}},{"id":"38960c66-2592-4d68-ba41-d7bbfcba08f7","block_type":"box","text":"Shareholders should have the opportunity to evaluate nominated directors individually rather than in","page_number":208,"box":{"x":116,"y":384,"width":746,"height":12}},{"id":"a3b23fd2-77ae-42aa-b581-03993ed65154","block_type":"box","text":"bundled slates. We look to companies to provide sufficient information on each director standing for","page_number":208,"box":{"x":117,"y":399,"width":743,"height":12}},{"id":"1891e756-3d1a-49c2-b35f-b264641fd6a7","block_type":"box","text":"election so that shareholders can assess their capabilities and suitability. We will generally not support","page_number":208,"box":{"x":116,"y":415,"width":765,"height":12}},{"id":"0bdf0182-79bb-465f-bfeb-a4edef551310","block_type":"box","text":"the election of directors whose names and biographical details have not been disclosed sufficiently in","page_number":208,"box":{"x":116,"y":430,"width":755,"height":12}},{"id":"f9c4324c-8fe2-49cd-9d67-2e9bc2481f03","block_type":"box","text":"advance of the shareholder meeting.","page_number":208,"box":{"x":116,"y":446,"width":278,"height":12}},{"id":"eb855093-664d-4647-b6de-49465c76b5b3","block_type":"box","text":"Each director’s appointment should be dependent on receiving a simple majority of the votes cast at","page_number":208,"box":{"x":117,"y":477,"width":746,"height":12}},{"id":"619b2061-77f2-478a-9cf7-9561f8fb747f","block_type":"box","text":"the shareholder meeting. Where a company’s practices differ, we look to the board to provide a","page_number":208,"box":{"x":116,"y":493,"width":712,"height":12}},{"id":"40845a29-e008-4d14-9567-c77ea14b1fbd","block_type":"box","text":"detailed explanation as to how its approach best serves investors’ interests.","page_number":208,"box":{"x":116,"y":508,"width":567,"height":12}},{"id":"6945b9a9-bdf9-4f7e-8ae8-9466b6e18ea2","block_type":"box","text":"We may vote for shareholder or management proposals seeking to establish annual election of","page_number":208,"box":{"x":116,"y":540,"width":710,"height":12}},{"id":"b8501549-1ffc-4e16-b753-9e1d8ba15e53","block_type":"box","text":"directors and/or a simple majority vote standard for director elections. We may vote against all the","page_number":208,"box":{"x":116,"y":555,"width":732,"height":12}},{"id":"c0ec1bac-2931-492f-ac21-04e0c4c47226","block_type":"box","text":"directors standing for election as part of a single slate if we have concerns about the profile or","page_number":208,"box":{"x":116,"y":571,"width":701,"height":12}},{"id":"1e8cb4ef-d73b-4947-a743-6330f718d1b5","block_type":"box","text":"performance of an individual director.","page_number":208,"box":{"x":117,"y":586,"width":280,"height":12}},{"id":"f22039c3-9417-475e-95cc-2126e0402255","block_type":"box","text":"Committees","page_number":208,"box":{"x":117,"y":618,"width":100,"height":9}},{"id":"c05c78c9-d850-4fb9-be5c-e0c8cfd856a5","block_type":"box","text":"Many boards establish committees to focus on specific responsibilities of the board such as audit and","page_number":208,"box":{"x":117,"y":649,"width":757,"height":12}},{"id":"2942efa9-9282-41b2-abe6-16001dc17d17","block_type":"box","text":"risk, governance and human capital, and executive compensation, amongst other matters. We do not","page_number":208,"box":{"x":117,"y":665,"width":751,"height":12}},{"id":"7829d357-f3a8-4052-9626-830eb4401921","block_type":"box","text":"prescribe to companies what committees they should establish, but we seek to understand the board’s","page_number":208,"box":{"x":117,"y":680,"width":760,"height":12}},{"id":"e5d77601-26d6-4cad-a9d1-be5649ce3a98","block_type":"box","text":"rationale for the committee structure it determines is appropriate. We note that, in some markets,","page_number":208,"box":{"x":117,"y":696,"width":717,"height":12}},{"id":"35fc60cf-1b91-4ea1-b14d-18c95c49be8d","block_type":"box","text":"regulation requires such committees. The responsibilities of each committee should be clear, and the","page_number":208,"box":{"x":117,"y":711,"width":748,"height":12}},{"id":"ad5de8c5-8e53-4502-a46f-700100da664e","block_type":"box","text":"board should ensure that all critical matters are assigned either to the full board or to one of the","page_number":208,"box":{"x":117,"y":727,"width":706,"height":12}},{"id":"0596362e-57ab-4ce5-9732-ab831b297a6a","block_type":"box","text":"committees. It is helpful to investor understanding when the board discloses the structure,","page_number":208,"box":{"x":116,"y":742,"width":665,"height":12}},{"id":"a9077de7-eff5-4303-9e23-25c74b5833fe","block_type":"box","text":"membership, proportion of independent directors, and responsibilities of each committee. The","page_number":208,"box":{"x":117,"y":758,"width":694,"height":12}},{"id":"6b331dbc-9246-4e96-8287-583193a27f95","block_type":"box","text":"responsibilities we typically see assigned to the three most common committees include:","page_number":208,"box":{"x":117,"y":773,"width":656,"height":12}},{"id":"d6cf6a5b-a9d6-4c90-a451-217e575c2504","block_type":"box","text":"• Audit and risk – oversight responsibilities for the integrity of financial reporting, risk management","page_number":208,"box":{"x":117,"y":805,"width":747,"height":12}},{"id":"60129b30-3add-4772-8984-c4dd31f2eb1d","block_type":"box","text":"and compliance with legal and regulatory requirements; may also play an oversight role in relation","page_number":208,"box":{"x":150,"y":820,"width":725,"height":12}},{"id":"3d9369a5-8cb1-4297-a5f8-faffda10ca05","block_type":"box","text":"to the internal audit function and whistleblowing mechanisms.","page_number":208,"box":{"x":150,"y":836,"width":460,"height":12}},{"id":"8ffd9023-323d-485b-949a-cad3d5508c68","block_type":"box","text":"8","page_number":208,"box":{"x":116,"y":862,"width":5,"height":6}},{"id":"f50e502d-c9bc-49f7-be81-25d35a7a73f7","block_type":"box","text":"A classified board divides the directors into classes with different overlapping terms. As a result,","page_number":208,"box":{"x":122,"y":862,"width":744,"height":12}},{"id":"5bb161c0-0241-46e4-9ced-372551aec5f2","block_type":"box","text":"only one class of directors stands for election in any one year.","page_number":208,"box":{"x":150,"y":877,"width":464,"height":12}},{"id":"56524e77-1221-411d-9c0c-c47693183598","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":208,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"828635de-fc98-41b9-89d5-ca4d5a2fd06e","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":208,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"0dfd7ea9-da10-4957-89bf-fc8fb3b0b82a","block_type":"box","text":"8","page_number":208,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"5697222b-a37d-478a-b86b-56e47ad284b0","block_type":"box","text":"NM1026U-6039989-208/256","page_number":208,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"92982f13-10a5-405f-80cb-7183ce0ab970","block_type":"box","text":"• Nominating, governance and human capital – oversight responsibilities for corporate governance","page_number":209,"box":{"x":117,"y":87,"width":756,"height":12}},{"id":"634ef684-dfff-407b-9eb1-b38799050328","block_type":"box","text":"principles and practices of the company, including the periodic review of board performance;","page_number":209,"box":{"x":150,"y":102,"width":691,"height":13}},{"id":"c5d6ad40-c650-43a5-b46f-384d30b63039","block_type":"box","text":"responsibility for succession planning for CEO and key board roles, as well as the director","page_number":209,"box":{"x":150,"y":118,"width":672,"height":12}},{"id":"d6c3323c-513c-44f0-a907-ba1c60090ee9","block_type":"box","text":"appointment process; may also have oversight responsibilities for human capital management","page_number":209,"box":{"x":150,"y":134,"width":703,"height":12}},{"id":"82ab735f-fe49-4285-aa47-d46b96b9b4ae","block_type":"box","text":"strategies, including corporate culture and purpose.","page_number":209,"box":{"x":150,"y":149,"width":387,"height":12}},{"id":"e2a16e42-36e8-44dc-a1f0-a02b5c967498","block_type":"box","text":"• Executive compensation – determines the compensation policies and programs for the CEO and","page_number":209,"box":{"x":117,"y":174,"width":755,"height":12}},{"id":"56c2f84d-8340-40c4-9c66-05bcd963ff72","block_type":"box","text":"other executive officers, approves annual awards and payments under the policies; may also have","page_number":209,"box":{"x":150,"y":189,"width":735,"height":12}},{"id":"db3682de-fdf1-47af-9633-e0aa7dc1f44b","block_type":"box","text":"oversight responsibilities for firm-wide compensation policies.","page_number":209,"box":{"x":150,"y":205,"width":460,"height":12}},{"id":"7b94f21b-0367-452b-be58-3aa54e370d7d","block_type":"box","text":"We may vote against the election of the chair of the committee or other directors serving as committee","page_number":209,"box":{"x":116,"y":239,"width":765,"height":12}},{"id":"f2ffe57a-7437-4aba-a345-c9608d1ef75d","block_type":"box","text":"members to convey concerns about how a committee has undertaken its responsibilities. We may vote","page_number":209,"box":{"x":117,"y":255,"width":767,"height":12}},{"id":"71c5b9a8-d89d-446a-9f9c-3d3e4e9e805f","block_type":"box","text":"against the election of the most senior non-executive director if there is not a clearly disclosed","page_number":209,"box":{"x":116,"y":270,"width":702,"height":12}},{"id":"c8121538-244e-4d0c-ad11-de93c88fb18c","block_type":"box","text":"approach to board committees.","page_number":209,"box":{"x":116,"y":286,"width":236,"height":11}},{"id":"09095d78-b75c-4281-8878-5a5aed450c99","block_type":"box","text":"Board and director evaluation","page_number":209,"box":{"x":116,"y":320,"width":243,"height":9}},{"id":"3e9dd7ea-b1cc-44ea-b44c-38119ca2dda2","block_type":"box","text":"We consider it best practice for companies to conduct an annual review of the performance of the","page_number":209,"box":{"x":116,"y":354,"width":729,"height":12}},{"id":"8512c571-73fa-4913-954b-dcffe605e3c2","block_type":"box","text":"board, the committees, the chair and individual directors. Periodically, this review could be undertaken","page_number":209,"box":{"x":117,"y":369,"width":762,"height":12}},{"id":"29e5fa6c-2c7b-4938-874d-4cbb1702d3e3","block_type":"box","text":"by an independent third party able to bring objective perspectives to the board on governance and","page_number":209,"box":{"x":117,"y":385,"width":732,"height":12}},{"id":"ab2f6bed-a986-461d-ab12-8a3f7c570fe6","block_type":"box","text":"performance. We encourage companies to disclose their approach to and the objectives of","page_number":209,"box":{"x":117,"y":400,"width":677,"height":12}},{"id":"6368183f-3e25-4f06-a178-64fabdee170a","block_type":"box","text":"evaluations, including any changes made to the board’s approach as a result.","page_number":209,"box":{"x":116,"y":416,"width":581,"height":12}},{"id":"c9f64033-56b6-4fff-b4b5-5af08dbbe324","block_type":"box","text":"Access to independent advice","page_number":209,"box":{"x":116,"y":450,"width":246,"height":12}},{"id":"8749ccb0-5c1d-4daf-b3bf-64886c86073c","block_type":"box","text":"To support the directors in effectively fulfilling their duties to the company and shareholders, they","page_number":209,"box":{"x":116,"y":484,"width":723,"height":12}},{"id":"722ba1ce-dbfa-42aa-b6d8-35eb3da987ed","block_type":"box","text":"should have access to independent advice. In certain circumstances, it may be helpful to boards to","page_number":209,"box":{"x":116,"y":499,"width":738,"height":13}},{"id":"e541e09c-0359-4a91-9038-4a4cedd10ac5","block_type":"box","text":"retain independent third parties to advise on critical matters. These might include new industry","page_number":209,"box":{"x":117,"y":515,"width":703,"height":12}},{"id":"5ae5e807-37ac-4989-b5ca-9bcc1de1d438","block_type":"box","text":"developments such as emergent and disruptive technology, operating events with material","page_number":209,"box":{"x":116,"y":531,"width":676,"height":12}},{"id":"cfe4d027-7579-45ad-9856-367125492f5e","block_type":"box","text":"consequences for the company’s reputation and/or performance, or significant transactions. Board","page_number":209,"box":{"x":116,"y":546,"width":735,"height":12}},{"id":"6322e448-016c-4fa1-a8dc-4052bcbbfd0a","block_type":"box","text":"committees may similarly retain third parties to advise them on specialist matters such as audit,","page_number":209,"box":{"x":116,"y":562,"width":713,"height":12}},{"id":"de6de018-60f5-43d8-8661-899ed3775df9","block_type":"box","text":"compensation and succession planning.","page_number":209,"box":{"x":116,"y":577,"width":303,"height":12}},{"id":"39b86d87-b204-4b06-adf2-fcac0374b7fb","block_type":"box","text":"Executive compensation","page_number":209,"box":{"x":402,"y":620,"width":201,"height":12}},{"id":"3dd5e2b9-42fb-403e-a324-f2b31a5520ea","block_type":"box","text":"Boards play an important role in establishing compensation arrangements that enable the company to","page_number":209,"box":{"x":117,"y":655,"width":760,"height":12}},{"id":"f455d3cf-e058-4dfc-acee-e83e5e8332b5","block_type":"box","text":"recruit, retain and reward the caliber of executive management necessary to lead and operate the","page_number":209,"box":{"x":117,"y":670,"width":724,"height":12}},{"id":"6dd047c0-a516-419c-97e1-3d746e959875","block_type":"box","text":"company to deliver superior financial returns over time. We focus on alignment between variable pay","page_number":209,"box":{"x":116,"y":685,"width":748,"height":13}},{"id":"1e90e75c-9fa2-48c3-bc21-1f79932cdf14","block_type":"box","text":"and a company’s financial performance.","page_number":209,"box":{"x":116,"y":701,"width":296,"height":12}},{"id":"948ef1a8-cb81-406b-b118-6978cf67987c","block_type":"box","text":"Generally, executive compensation arrangements have four components: base salary, annual bonus","page_number":209,"box":{"x":117,"y":735,"width":746,"height":12}},{"id":"3e6f8229-6dbf-4ab0-bafa-492ad66b2e8e","block_type":"box","text":"that rewards performance against short-term metrics, incentives—most often share-based- that reward","page_number":209,"box":{"x":116,"y":751,"width":762,"height":12}},{"id":"3e7717b8-5636-4044-8ba3-c54106ac6f30","block_type":"box","text":"performance against long-term metrics, and pensions and benefits. In our observation, base salary,","page_number":209,"box":{"x":117,"y":766,"width":736,"height":12}},{"id":"1a702c3d-d496-4cde-a1cb-b311c3aa95de","block_type":"box","text":"pensions and benefits are largely set relative to market norms and benchmarks. The annual bonus and","page_number":209,"box":{"x":117,"y":782,"width":763,"height":12}},{"id":"7d1f6f86-1451-41d8-b1b7-3693fad877f6","block_type":"box","text":"share-based incentive, or variable pay plans, tend to be tailored to the company, its sector and long","page_number":209,"box":{"x":116,"y":797,"width":744,"height":12}},{"id":"27382940-6638-468f-93e8-436db348b266","block_type":"box","text":"term strategy, as well as the individuals the board is seeking to recruit and motivate.","page_number":209,"box":{"x":116,"y":813,"width":622,"height":12}},{"id":"e0da8888-5fac-486c-9f4a-f50d8df0ae93","block_type":"box","text":"Recognizing the unique circumstances of each company, we determine whether to support a","page_number":209,"box":{"x":117,"y":847,"width":693,"height":12}},{"id":"d72feaba-88fc-4de0-9a1c-0292c73c66f9","block_type":"box","text":"company’s approach to executive compensation on a case-by-case basis. We rely on companies","page_number":209,"box":{"x":116,"y":862,"width":726,"height":12}},{"id":"c29fe150-18ab-4a6e-a0a5-c6ca41914091","block_type":"box","text":"providing sufficient quantitative and qualitative information in their disclosures to enable shareholders","page_number":209,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"e32f8997-4789-4aec-bac4-4bf83b6f2e62","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":209,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"0631a982-f554-4976-bd82-e09b95aa1bf2","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":209,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"55e67f94-e426-4e36-8769-f283bff4d689","block_type":"box","text":"9","page_number":209,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"1b434d82-4f85-4179-bb57-2590274c2de4","block_type":"box","text":"NM1026U-6039989-209/256","page_number":209,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b2de45e8-38d5-41fc-a10e-60bddcadd66d","block_type":"box","text":"to understand the compensation arrangements and assess the alignment with investors’ interests.","page_number":210,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"a447452f-6cfb-4584-a54d-05a1763e585f","block_type":"box","text":"Features we look for in compensation arrangements include:","page_number":210,"box":{"x":117,"y":102,"width":454,"height":13}},{"id":"868a6464-9981-4ef0-a5de-d18685c7a9b5","block_type":"box","text":"• Fixed pay components, including base salary, benefits and prerequisites that are appropriate in","page_number":210,"box":{"x":117,"y":133,"width":744,"height":12}},{"id":"6a7b72e3-999f-4828-a8ac-8e8c9505957d","block_type":"box","text":"the context of the company’s size, sector and market.","page_number":210,"box":{"x":150,"y":148,"width":402,"height":12}},{"id":"dd167aa2-76b6-4298-9f44-3862e582a0ae","block_type":"box","text":"• Variable pay subject to performance metrics that are closely linked to the company’s short- and","page_number":210,"box":{"x":117,"y":171,"width":745,"height":12}},{"id":"08d27703-df70-488b-9f15-99bcd967dd63","block_type":"box","text":"long-term strategic objectives.","page_number":210,"box":{"x":150,"y":187,"width":228,"height":12}},{"id":"5e15aa97-4178-4259-9bca-ca1e899e303b","block_type":"box","text":"• Long-term incentives that motivate sustained performance across a multi-year period.","page_number":210,"box":{"x":117,"y":210,"width":674,"height":12}},{"id":"05b490fa-f715-4320-becb-2fff1a7aa390","block_type":"box","text":"• A balance between fixed and variable pay, short- and long-term incentives, and specific","page_number":210,"box":{"x":117,"y":233,"width":687,"height":12}},{"id":"2376065b-9769-4746-952e-72d4c0d2a1be","block_type":"box","text":"instruments (cash and equity awards) that promotes pay program durability and seldom","page_number":210,"box":{"x":150,"y":248,"width":654,"height":12}},{"id":"9233da4f-1a51-4cef-96b3-66682fbdb5b2","block_type":"box","text":"necessitates one-off, discretionary payments.","page_number":210,"box":{"x":150,"y":264,"width":342,"height":12}},{"id":"6d2b00d0-377c-4c6e-ae97-50b8369eb2c9","block_type":"box","text":"• Pay outcomes that are consistent with the returns to investors over the relevant time period.","page_number":210,"box":{"x":117,"y":287,"width":720,"height":12}},{"id":"05e5213b-04d7-4be1-8f74-0dfecc4ab5e9","block_type":"box","text":"• Board discretion, if allowed within the variable pay arrangements, to be used sparingly,","page_number":210,"box":{"x":117,"y":310,"width":683,"height":12}},{"id":"010e8989-3171-4a1b-a086-abddd0f8b713","block_type":"box","text":"responsibly and transparently.","page_number":210,"box":{"x":150,"y":325,"width":228,"height":12}},{"id":"20d9666e-f5ef-46eb-a688-a2cc4d4fdd5a","block_type":"box","text":"• A requirement, that participants in long-term share-based incentive plans build a meaningful","page_number":210,"box":{"x":117,"y":348,"width":720,"height":12}},{"id":"6b7fd9ad-e083-40f1-aacf-be653d849d5d","block_type":"box","text":"shareholding in the company within a defined time period, as determined by the board or relevant","page_number":210,"box":{"x":150,"y":363,"width":727,"height":13}},{"id":"a007b405-436b-40f3-bd90-f3cbea28de61","block_type":"box","text":"board committee.","page_number":210,"box":{"x":150,"y":379,"width":134,"height":10}},{"id":"242a6a6c-c2d8-448c-929d-9c05ec4be40d","block_type":"box","text":"• Change of control provisions that appropriately balance the interests of executives and","page_number":210,"box":{"x":117,"y":402,"width":681,"height":12}},{"id":"f652c1da-3590-4a2f-93d1-4f2237b5d66f","block_type":"box","text":"shareholders.","page_number":210,"box":{"x":150,"y":418,"width":106,"height":9}},{"id":"2e4239df-9077-4d6b-8ac6-1af37ddc5208","block_type":"box","text":"• Clawback or malus provisions that allow the company to recoup or hold back variable","page_number":210,"box":{"x":117,"y":440,"width":671,"height":12}},{"id":"5bc3fd5f-e6f8-464f-870b-f43ae4b3c164","block_type":"box","text":"compensation from individuals whose awards were based on fraudulent activities, misstated","page_number":210,"box":{"x":150,"y":456,"width":688,"height":12}},{"id":"04f3bbb6-b86e-4e18-9b44-0695a176dd78","block_type":"box","text":"financial reports, or executive misconduct.","page_number":210,"box":{"x":149,"y":471,"width":318,"height":12}},{"id":"1ba4a577-9f31-485b-8fcd-14006492e6a5","block_type":"box","text":"• Severance arrangements that protect the company’s interests but do not cost more than is","page_number":210,"box":{"x":117,"y":494,"width":709,"height":12}},{"id":"1c0a317c-baf5-40b9-bf4e-e74354cb65b7","block_type":"box","text":"contractual.","page_number":210,"box":{"x":150,"y":510,"width":91,"height":9}},{"id":"69db82f0-b24a-4a93-980f-ee62745f108d","block_type":"box","text":"We may vote against proposals to introduce new share-based incentives, approve existing policies or","page_number":210,"box":{"x":116,"y":540,"width":757,"height":12}},{"id":"cbdca1cc-fe95-4cb5-8105-174da908dbb6","block_type":"box","text":"plans, or approve the compensation report where we do not see alignment between executive","page_number":210,"box":{"x":117,"y":556,"width":701,"height":12}},{"id":"d58638ce-9ed0-418e-bec9-62314c51e878","block_type":"box","text":"compensation arrangements and our clients’ financial interests. When there is not an alternative, or","page_number":210,"box":{"x":116,"y":571,"width":742,"height":12}},{"id":"1018b0e7-f598-40b9-a00c-65f943292b40","block_type":"box","text":"where there have been multi-year issues with compensation misaligned with performance, we may","page_number":210,"box":{"x":116,"y":587,"width":738,"height":12}},{"id":"fa78ad40-c937-4ca1-aee2-27f8756a6c6b","block_type":"box","text":"vote against the election of the chair of the responsible committee, or the most senior independent","page_number":210,"box":{"x":116,"y":602,"width":735,"height":12}},{"id":"479c4d9b-b8d8-4f69-a520-a12680abbe9e","block_type":"box","text":"director.","page_number":210,"box":{"x":116,"y":618,"width":65,"height":9}},{"id":"654e463f-5894-44f5-8049-8377ccb485b7","block_type":"box","text":"Non-executive director compensation","page_number":210,"box":{"x":350,"y":656,"width":305,"height":11}},{"id":"489db3eb-f685-4651-b362-e612c418d3df","block_type":"box","text":"Companies generally pay non-executive directors an annual retainer or fee in cash, shares or a","page_number":210,"box":{"x":117,"y":686,"width":706,"height":12}},{"id":"b33fd63f-9e05-450b-8645-141d98f78116","block_type":"box","text":"combination of the two. Some companies also pay additional fees for service on board committees or","page_number":210,"box":{"x":116,"y":701,"width":752,"height":12}},{"id":"ed2e5eeb-224d-42a9-9312-a7cdfe071f14","block_type":"box","text":"in board leadership roles. We do not support non-executive directors participating in performance","page_number":210,"box":{"x":117,"y":717,"width":726,"height":12}},{"id":"36587399-e9d3-466c-b7d9-6fc4210257a0","block_type":"box","text":"based incentive plans as doing so may create a conflict of interest and undermine their independence","page_number":210,"box":{"x":117,"y":732,"width":753,"height":12}},{"id":"50260910-3747-47e4-9b4f-f396234a0365","block_type":"box","text":"from management, whom they oversee.","page_number":210,"box":{"x":116,"y":748,"width":295,"height":12}},{"id":"9ff1c5af-05df-4496-807c-d22c5c769bdd","block_type":"box","text":"Capital structure","page_number":210,"box":{"x":433,"y":786,"width":133,"height":12}},{"id":"e4b8e027-4abf-41b2-8772-75e080b2a40f","block_type":"box","text":"Boards are responsible for ensuring senior executive leadership has established a capital strategy that","page_number":210,"box":{"x":117,"y":816,"width":760,"height":12}},{"id":"ce6fa6b5-7007-4b74-9cb1-25667c861667","block_type":"box","text":"achieves appropriate capital allocation in support of long-term financial resilience.","page_number":210,"box":{"x":116,"y":832,"width":610,"height":12}},{"id":"f783a22d-8469-4e74-8afe-7a5d3161fea2","block_type":"box","text":"Where company practices diverge from those set out below, we look for companies to disclose why","page_number":210,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"180a9c04-2eb5-4863-a7c8-9f41e1618b67","block_type":"box","text":"they view these practices to be aligned with shareholders’ interests. We may vote against management","page_number":210,"box":{"x":116,"y":878,"width":772,"height":11}},{"id":"38d4c173-bdf2-4359-8016-6df79bf6e849","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":210,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f1b4ba2f-4f53-40a9-8e53-5e4526944540","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":210,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"ebe1266e-e3b4-4645-b96b-3f118f4e93cf","block_type":"box","text":"10","page_number":210,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"605ac62a-5c59-4b84-bc31-006b48550313","block_type":"box","text":"NM1026U-6039989-210/256","page_number":210,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"04d6991e-4ec6-47d0-8f0d-f1599fcd22fb","block_type":"box","text":"proposals seeking capital-related authorities, or the election of the most senior independent director, if","page_number":211,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"dacedf74-fbb5-48db-8d88-7be25a72fd70","block_type":"box","text":"we have concerns about a company’s approach. We may also support a shareholder proposal seeking","page_number":211,"box":{"x":116,"y":103,"width":768,"height":12}},{"id":"943e65a9-59fe-43e6-b982-8938a8881588","block_type":"box","text":"conversion of shares with differentiated voting rights to a one-share, one-vote standard.","page_number":211,"box":{"x":116,"y":118,"width":655,"height":12}},{"id":"ec63d6e0-e483-4050-8bac-2e636e3c0c8d","block_type":"box","text":"Share","page_number":211,"box":{"x":116,"y":148,"width":46,"height":10}},{"id":"5f546a73-03cb-4973-b751-6a930229c226","block_type":"box","text":"issuance","page_number":211,"box":{"x":168,"y":149,"width":76,"height":9}},{"id":"61ea5755-1c72-4463-9541-f7fd634335f4","block_type":"box","text":"We assess requests for share issuance for particular transactions on a case-by-case basis. We will","page_number":211,"box":{"x":116,"y":179,"width":741,"height":12}},{"id":"d73302b7-176e-4dfb-b796-787fda2270cc","block_type":"box","text":"generally support authorities to issue shares when subject to pre-emptive rights, and up to 20% absent","page_number":211,"box":{"x":116,"y":194,"width":768,"height":12}},{"id":"56f082a3-640d-4621-9a44-c786c2e525c0","block_type":"box","text":"pre-emptive rights. We consider it good practice for companies to seek regular approval of these","page_number":211,"box":{"x":117,"y":210,"width":720,"height":12}},{"id":"46c4153d-6535-4351-befa-b2ac6e7ac52a","block_type":"box","text":"authorities to allow shareholders to take into consideration how prior authorities were used, as well as","page_number":211,"box":{"x":116,"y":226,"width":759,"height":11}},{"id":"ffc52ff2-47df-4e79-a78e-a5cab1d34234","block_type":"box","text":"the current circumstances of the company and the market environment.","page_number":211,"box":{"x":116,"y":241,"width":536,"height":12}},{"id":"035c4d70-b3f9-4583-9325-c722180e2d32","block_type":"box","text":"Share buybacks","page_number":211,"box":{"x":116,"y":271,"width":133,"height":12}},{"id":"82fa26f1-08cd-4111-a991-29ae1c5af952","block_type":"box","text":"We assess share buyback proposals in the context of the company’s disclosed capital management","page_number":211,"box":{"x":116,"y":302,"width":746,"height":12}},{"id":"f9381ff7-311f-4abd-9914-9004fc83c4f0","block_type":"box","text":"strategy and management’s determination of the appropriate balance between investment that","page_number":211,"box":{"x":116,"y":317,"width":706,"height":12}},{"id":"e5d0dafe-5ca5-4675-9a16-f7a76384e3c0","block_type":"box","text":"supports the long-term growth of the company and returning cash to investors. We also take into","page_number":211,"box":{"x":116,"y":333,"width":721,"height":12}},{"id":"e3ba1743-572b-4b1f-9247-38a5b00a41c2","block_type":"box","text":"consideration the effect of a buyback program on the company’s balance sheet and executive","page_number":211,"box":{"x":116,"y":348,"width":701,"height":12}},{"id":"396c048e-ee19-45b7-bc8c-7f2a4dbd69ac","block_type":"box","text":"compensation arrangements and the price at which shares are repurchased relative to market price.","page_number":211,"box":{"x":116,"y":364,"width":748,"height":12}},{"id":"ae6c142e-a435-416d-8a2f-56c5e5914fef","block_type":"box","text":"We consider it good practice for companies to seek regular approval of these authorities to allow","page_number":211,"box":{"x":116,"y":379,"width":721,"height":12}},{"id":"299dd741-7b65-4811-956a-ba2a774e11e5","block_type":"box","text":"shareholders to take into consideration how prior authorities were used, as well as the current","page_number":211,"box":{"x":116,"y":395,"width":700,"height":12}},{"id":"a180005b-e22a-4e28-b153-21b67f770d1e","block_type":"box","text":"circumstances of the company and the market environment.","page_number":211,"box":{"x":116,"y":410,"width":451,"height":12}},{"id":"d8473a22-012a-400c-943d-5a2ba1a78554","block_type":"box","text":"Dividends","page_number":211,"box":{"x":117,"y":441,"width":84,"height":9}},{"id":"3971b9de-cad4-4352-a940-89bce31ba328","block_type":"box","text":"We generally defer to management and the board on dividend policy but may engage to seek further","page_number":211,"box":{"x":116,"y":471,"width":752,"height":12}},{"id":"918ab9f0-3c30-4291-8c58-4bc49a279713","block_type":"box","text":"clarification where a proposed dividend appears out of line with the company’s financial position.","page_number":211,"box":{"x":116,"y":487,"width":720,"height":12}},{"id":"9aa9cdbe-fc07-4ad0-aa09-e14a9c6a8180","block_type":"box","text":"Differentiated voting rights","page_number":211,"box":{"x":117,"y":517,"width":219,"height":12}},{"id":"b6aeed47-aea6-4aef-8b2b-3ecc80eae0a4","block_type":"box","text":"We prefer companies to adopt a one-share, one-vote structure for share classes with the same","page_number":211,"box":{"x":116,"y":547,"width":710,"height":12}},{"id":"0f7456a0-ce51-4f37-a248-ede6bcc14f55","block_type":"box","text":"economic exposure. Certain companies, particularly those new to public markets, could make the case","page_number":211,"box":{"x":116,"y":563,"width":768,"height":12}},{"id":"aa9caf14-37ec-4d26-a66e-c53e7a05500f","block_type":"box","text":"to adopt a differentiated voting rights structure, or dual class stock. In those situations, we encourage","page_number":211,"box":{"x":116,"y":578,"width":755,"height":13}},{"id":"efb18fc0-c298-489a-8a4f-4eea770cf811","block_type":"box","text":"companies to evaluate and seek approval for their capital structure on a periodic basis.","page_number":211,"box":{"x":116,"y":594,"width":650,"height":12}},{"id":"380982fa-5c1a-4a90-a4cf-de0e4533070d","block_type":"box","text":"Transactions and special situations","page_number":211,"box":{"x":357,"y":632,"width":290,"height":12}},{"id":"49a6fddf-2dbf-498b-9140-a5104b88412d","block_type":"box","text":"We monitor developments in transactions and special situations closely and undertake our own","page_number":211,"box":{"x":116,"y":662,"width":706,"height":12}},{"id":"7f170e39-b465-4103-b763-52ffa7480b75","block_type":"box","text":"detailed analyses of proposals.","page_number":211,"box":{"x":116,"y":678,"width":229,"height":12}},{"id":"28f8bbd3-1d32-450f-8cbe-f1e420e2bc27","block_type":"box","text":"Mergers and acquisitions","page_number":211,"box":{"x":117,"y":708,"width":201,"height":12}},{"id":"d3910171-e2e6-4def-bb06-f790e59b3be1","block_type":"box","text":"We evaluate proposed mergers or acquisitions by assessing the financial outcome for our clients as","page_number":211,"box":{"x":116,"y":739,"width":740,"height":12}},{"id":"b1ba8215-bfbc-4f70-9833-7d4e0c8bd6a6","block_type":"box","text":"minority shareholders. Management should provide an assessment of the proposed transaction’s","page_number":211,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"f50fbd86-16da-45e0-b49e-e8526bb5db0d","block_type":"box","text":"strategic and financial rationale, along with its execution and operational risks. We review each","page_number":211,"box":{"x":116,"y":770,"width":703,"height":12}},{"id":"68dc4efc-25da-440d-880a-5e272bbe20f6","block_type":"box","text":"transaction independently based on these factors and the degree to which the transaction enhances","page_number":211,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"53e3d42f-bc4e-4076-92e8-16893c819e50","block_type":"box","text":"shareholder value. The board might consider establishing an ad hoc transaction committee to","page_number":211,"box":{"x":116,"y":801,"width":693,"height":12}},{"id":"c0b213ae-92cd-4bcf-ac2b-749c66b2e594","block_type":"box","text":"undertake an independent assessment of a significant merger or acquisition, in advance of making its","page_number":211,"box":{"x":117,"y":816,"width":752,"height":12}},{"id":"cbe8dde1-e859-4535-b45d-e60d2c9c4bab","block_type":"box","text":"recommendation to shareholders.","page_number":211,"box":{"x":117,"y":832,"width":254,"height":9}},{"id":"63c23e66-77e3-4fdb-ab52-9f719aaeb15c","block_type":"box","text":"We will vote against transactions that, in our assessment, do not advance our clients’ financial","page_number":211,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"9ae42880-3cdf-47f3-a186-27029af9fdbe","block_type":"box","text":"interests.","page_number":211,"box":{"x":117,"y":878,"width":72,"height":9}},{"id":"46827fbf-c87e-497e-acee-598b62d7071e","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":211,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"cd128533-0751-46c3-8383-67b23ec4cdf4","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":211,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"455c1f0e-9cc2-439d-beb8-1a27d3efc373","block_type":"box","text":"11","page_number":211,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"e068a5c5-9ce3-478c-a2e4-02249e3dd06e","block_type":"box","text":"NM1026U-6039989-211/256","page_number":211,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"74683bb9-569d-400e-8902-a99825bf9be5","block_type":"box","text":"Anti-takeover defenses","page_number":212,"box":{"x":116,"y":87,"width":190,"height":10}},{"id":"44d44048-e035-48e0-adc4-486a40e065ed","block_type":"box","text":"In principle, we do not support companies using anti-takeover defenses, also known as poison pills or","page_number":212,"box":{"x":117,"y":119,"width":757,"height":12}},{"id":"ea5d21cb-af09-4439-b854-6d754b015532","block_type":"box","text":"shareholder rights plans, as they can entrench management and boards which have not delivered","page_number":212,"box":{"x":116,"y":134,"width":731,"height":12}},{"id":"30c3edfe-bc28-41ab-aa3a-f3f2d2f3474a","block_type":"box","text":"long-term shareholder value. By exception, a poison pill may be supported if its purpose is to delay a","page_number":212,"box":{"x":117,"y":150,"width":751,"height":12}},{"id":"e1af76b9-d7e5-47c9-8155-37745b5153ec","block_type":"box","text":"takeover that is considered sub-optimal and enable management to seek an improved offer. Similarly,","page_number":212,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"758234cf-7a32-4810-8555-4c609d8e508f","block_type":"box","text":"management could make the case to use a poison pill to block a shareholder activism campaign that","page_number":212,"box":{"x":117,"y":181,"width":751,"height":12}},{"id":"58436871-b82a-4c56-91a1-f55acc2364e6","block_type":"box","text":"may be counter to the interests of other investors. Defense mechanisms introduced in these","page_number":212,"box":{"x":117,"y":196,"width":687,"height":12}},{"id":"77d66337-e676-437a-bd6b-86ae2113efb7","block_type":"box","text":"circumstances should be limited in term and threshold, and also be closely monitored by the","page_number":212,"box":{"x":116,"y":212,"width":688,"height":12}},{"id":"f1f79a2e-6cd7-42de-994c-720d4fd4e1b0","block_type":"box","text":"independent members of the board. We consider it good practice for companies to put to a shareholder","page_number":212,"box":{"x":117,"y":227,"width":771,"height":12}},{"id":"a647bc29-0476-4057-848a-16492a5f0b86","block_type":"box","text":"vote any mechanisms expected to be in place for more than 12 months.","page_number":212,"box":{"x":116,"y":243,"width":538,"height":12}},{"id":"bf467e31-7e85-4b34-8f50-6f4fc209fd1c","block_type":"box","text":"Shareholder activism","page_number":212,"box":{"x":116,"y":274,"width":175,"height":10}},{"id":"7645dd79-b805-4558-9836-c8118fcbe2dc","block_type":"box","text":"When companies are the focus of an activism campaign, we may communicate with the activist to","page_number":212,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"7fb14dc5-c1be-4c1f-8cf4-08a5eb92b10f","block_type":"box","text":"understand their analysis and objectives, once they have publicly disclosed their campaign. We may","page_number":212,"box":{"x":117,"y":322,"width":748,"height":12}},{"id":"a737de5e-a611-4da7-918c-04518991e23c","block_type":"box","text":"also engage with company management and possibly board members, especially those the activist","page_number":212,"box":{"x":116,"y":337,"width":741,"height":12}},{"id":"e93f8893-76a9-4357-8c85-2571d437adf1","block_type":"box","text":"may be seeking to replace. In our assessment, we evaluate various factors, including the concerns","page_number":212,"box":{"x":117,"y":353,"width":737,"height":12}},{"id":"7b3ee3a3-ab96-444a-b7b0-2910be1f277f","block_type":"box","text":"raised by the activist and the case for change; the quality of both the activist’s and management’s","page_number":212,"box":{"x":117,"y":368,"width":728,"height":12}},{"id":"b4b7703e-b85a-4bff-9ff4-4e7506b96783","block_type":"box","text":"plans; and the qualifications of each party’s candidates. We evaluate each contested situation by","page_number":212,"box":{"x":117,"y":384,"width":723,"height":12}},{"id":"f196da41-a384-48b6-98f3-7df31d64a957","block_type":"box","text":"assessing the potential financial outcome for our clients as minority shareholders.","page_number":212,"box":{"x":116,"y":399,"width":610,"height":12}},{"id":"0a1ef200-8ec4-4038-b23c-1605749f6076","block_type":"box","text":"We may support board candidates nominated by a shareholder activist if BAIS, in its independent","page_number":212,"box":{"x":116,"y":431,"width":728,"height":12}},{"id":"2ce65847-372e-4465-be17-7fd713fc4035","block_type":"box","text":"judgment, or the relevant portfolio manager has determined that there is a case for change to enhance","page_number":212,"box":{"x":115,"y":446,"width":767,"height":13}},{"id":"8d3031de-807d-4e57-b0d4-d62868caf31d","block_type":"box","text":"shareholder value, or if the incumbent board members do not demonstrate the relevant skills and","page_number":212,"box":{"x":116,"y":462,"width":725,"height":11}},{"id":"74cd665c-d675-4621-ac82-1ca68fcc8111","block_type":"box","text":"expertise or have a poor track record of protecting shareholders’ interests.","page_number":212,"box":{"x":116,"y":477,"width":556,"height":13}},{"id":"d6ea01cc-8bea-4bc2-b144-f79e644d52c1","block_type":"box","text":"Significant shareholders and related party transactions","page_number":212,"box":{"x":116,"y":509,"width":446,"height":12}},{"id":"f7897516-0523-443d-8a64-0426e0fa949e","block_type":"box","text":"Boards of companies with affiliated shareholders or directors should give equitable consideration to the","page_number":212,"box":{"x":117,"y":541,"width":768,"height":12}},{"id":"c3723044-6219-48e2-8409-b99e3f71855f","block_type":"box","text":"interests of all shareholders when evaluating related party transactions.","page_number":212,"box":{"x":117,"y":556,"width":534,"height":12}},{"id":"72a32cc5-affa-44b7-8932-988bcfd7e48c","block_type":"box","text":"We consider it good practice for transactions with related parties, such as significant shareholders or","page_number":212,"box":{"x":116,"y":588,"width":751,"height":12}},{"id":"44fd3e6d-28c2-4081-b1d9-d8819ed20d93","block_type":"box","text":"companies affiliated with the public company, to be disclosed in detail and conducted on terms similar","page_number":212,"box":{"x":116,"y":604,"width":760,"height":12}},{"id":"9ac7ddbc-4bf3-4ac3-8516-e8a2c110d89d","block_type":"box","text":"to what would objectively have been agreed with a non-related party. In our view, such transactions","page_number":212,"box":{"x":116,"y":619,"width":743,"height":12}},{"id":"df88ec77-5085-4c08-b510-bf6c339d6ca6","block_type":"box","text":"should be reviewed and approved by the independent members of the board, and if voted on, only","page_number":212,"box":{"x":116,"y":635,"width":734,"height":12}},{"id":"613bfcbe-b30c-4059-998b-af762e40d65e","block_type":"box","text":"disinterested shareholders should vote.","page_number":212,"box":{"x":116,"y":650,"width":297,"height":10}},{"id":"4a1b357d-9208-4bb2-abc9-a7bd2471dfe9","block_type":"box","text":"Corporate reporting, risk management and audit","page_number":212,"box":{"x":307,"y":690,"width":385,"height":12}},{"id":"95cee6d4-a931-4749-98ee-6327eba90536","block_type":"box","text":"Investors depend on corporate reporting, both regulatory and voluntary, to understand a company’s","page_number":212,"box":{"x":117,"y":722,"width":737,"height":12}},{"id":"6ee9094d-13b3-4f17-a638-caf106c7c0f9","block_type":"box","text":"strategy, its implementation and financial performance, as well as to assess the quality of management","page_number":212,"box":{"x":116,"y":737,"width":765,"height":12}},{"id":"59b2b1e7-5c2c-4d9f-ae9d-be0a2e248032","block_type":"box","text":"and operations and potential for the company to create shareholder value over time. We consider it","page_number":212,"box":{"x":116,"y":753,"width":736,"height":12}},{"id":"68d2c09b-b687-4cf0-94a4-4316ae0aa40f","block_type":"box","text":"good practice for the board to oversee corporate reporting and the policies and procedures","page_number":212,"box":{"x":116,"y":768,"width":674,"height":12}},{"id":"b116137b-2c88-4882-a319-09a8975c7c66","block_type":"box","text":"underpinning the internal audit function and external audit.","page_number":212,"box":{"x":117,"y":784,"width":430,"height":12}},{"id":"9760ee8c-27e5-4338-a098-6f03751f738c","block_type":"box","text":"A company’s financial reporting should provide decision-useful information for investors, and other","page_number":212,"box":{"x":116,"y":815,"width":730,"height":13}},{"id":"9c42760d-a93a-47db-b639-249c3facf9b1","block_type":"box","text":"stakeholders, on its financial performance and position. It should provide an accurate and balanced","page_number":212,"box":{"x":116,"y":831,"width":742,"height":12}},{"id":"091423bc-e128-4c2f-8053-0fb57e3c54bf","block_type":"box","text":"assessment of the risks and opportunities the company faces in realizing its long-term strategy.","page_number":212,"box":{"x":116,"y":846,"width":712,"height":13}},{"id":"48868575-ee7a-4693-929b-cc3760972130","block_type":"box","text":"Accordingly, the assumptions made by management and reviewed by the auditor in preparing the","page_number":212,"box":{"x":116,"y":862,"width":729,"height":12}},{"id":"1d61cb75-7817-426a-ac2f-1fde4042c919","block_type":"box","text":"financial statements should be reasonable and justified. Financial statements should be prepared in","page_number":212,"box":{"x":116,"y":877,"width":744,"height":13}},{"id":"b023bf75-c886-4d5a-a78e-44793172ca1d","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":212,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"a1aae72d-d861-4eef-8cb5-c6704936fca4","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":212,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"932495b4-3298-479f-8b79-9b4f8faed925","block_type":"box","text":"12","page_number":212,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"5022d26a-2c1b-4e4d-bd8d-9d433a2a45f1","block_type":"box","text":"NM1026U-6039989-212/256","page_number":212,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fd7082f5-b3c3-47df-a197-eef6e1118a0b","block_type":"box","text":"accordance with globally developed reporting standards and any divergence from generally accepted","page_number":213,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"af1f0898-f1b6-417c-831f-ea96844a38ce","block_type":"box","text":"accounting principles should be explained in detail and justified. Accounting restatements should be","page_number":213,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"dd56c901-33f7-477e-865b-c3d77f483505","block_type":"box","text":"explained in detail and any remedial actions, and the implications of these, disclosed.","page_number":213,"box":{"x":116,"y":118,"width":638,"height":12}},{"id":"64ed1e68-fa54-4cf6-a886-af91c5f60030","block_type":"box","text":"In this context, audit committees play a vital role in a company’s financial reporting system by providing","page_number":213,"box":{"x":117,"y":149,"width":769,"height":12}},{"id":"6deaedd7-2d9d-435a-a92e-661a1664ae1d","block_type":"box","text":"independent oversight of the accounts, material financial and, where appropriate to the jurisdiction,","page_number":213,"box":{"x":117,"y":165,"width":737,"height":12}},{"id":"6f09ac27-d54f-41e4-a228-1179f03bdeb3","block_type":"box","text":"non-financial information, internal control frameworks and Enterprise Risk Management systems. In","page_number":213,"box":{"x":117,"y":180,"width":743,"height":12}},{"id":"5a99c795-28b7-4a57-bef6-8c175a37f234","block_type":"box","text":"our view, effective audit committee oversight strengthens the quality and reliability of a company’s","page_number":213,"box":{"x":116,"y":196,"width":730,"height":12}},{"id":"0985df1c-daa1-45f8-b466-d3370a87d67a","block_type":"box","text":"financial statements and provides an important level of reassurance to shareholders. Audit committees","page_number":213,"box":{"x":116,"y":211,"width":767,"height":12}},{"id":"1570f1f1-a053-4e70-983c-834bfc2db3fd","block_type":"box","text":"should have a procedure in place for assessing the independence of the auditor and the quality of the","page_number":213,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"eb58faaa-b7ba-4cf9-9786-86699464a9f2","block_type":"box","text":"external audit process annually.","page_number":213,"box":{"x":116,"y":242,"width":241,"height":12}},{"id":"48f70015-0860-4365-a85f-60c1ee87e609","block_type":"box","text":"Similarly, we encourage companies to disclose material sustainability-related factors that are integral to","page_number":213,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"5e518158-59fc-4808-b1ea-4a8237fbf56c","block_type":"box","text":"how a company manages risks or generates revenue. BAIS finds it helpful to our understanding when","page_number":213,"box":{"x":117,"y":289,"width":758,"height":12}},{"id":"7fba473c-162d-44fd-8527-a6fe88c1dde4","block_type":"box","text":"companies provide robust, standardized disclosures on their material sustainability-related risks and","page_number":213,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"7bec2981-f0d8-425b-903a-d739b36255be","block_type":"box","text":"opportunities. The International Sustainability Standards Board (ISSB) is one entity working to meet","page_number":213,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"4a8151fc-8e43-4101-b40d-a7726b21596a","block_type":"box","text":"these objectives through its reporting standards, which may be helpful to companies in preparing such","page_number":213,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"c52c01fe-a826-4ca7-b0ed-0989280934dc","block_type":"box","text":"reports.","page_number":213,"box":{"x":117,"y":351,"width":54,"height":12}},{"id":"78df3ec4-2c8e-46d0-88ff-066b84a7001d","block_type":"box","text":"9","page_number":213,"box":{"x":173,"y":351,"width":5,"height":6}},{"id":"d35ce24b-ef02-40ed-bc25-5df151b8c801","block_type":"box","text":"However, we do not mandate any specific disclosure framework, and note that companies in","page_number":213,"box":{"x":179,"y":351,"width":696,"height":12}},{"id":"1490522e-401f-4fc6-a02d-dc2c9aca81b8","block_type":"box","text":"certain jurisdictions are subject to mandatory reporting requirements under standards specified by","page_number":213,"box":{"x":116,"y":366,"width":731,"height":12}},{"id":"9ba307c6-ee9a-49a6-9155-6976b200976b","block_type":"box","text":"policy makers.","page_number":213,"box":{"x":117,"y":382,"width":105,"height":12}},{"id":"848d9f2b-658b-4ca2-8f4c-448b7f6bf953","block_type":"box","text":"10","page_number":213,"box":{"x":224,"y":382,"width":11,"height":6}},{"id":"1cd76b5b-0c73-4d94-82c2-ab7a181358a2","block_type":"box","text":"Companies should establish robust risk management and internal control processes appropriate to the","page_number":213,"box":{"x":117,"y":413,"width":765,"height":12}},{"id":"b008a003-7abe-461c-b519-2bd18244bc30","block_type":"box","text":"company’s business, risk tolerance, and regulatory environment. A credible whistleblowing system for","page_number":213,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"c2dd08ae-aee0-48ff-b196-c4b4fe38a34c","block_type":"box","text":"employees, and potentially other stakeholders, can be a useful mechanism for ensuring that senior","page_number":213,"box":{"x":116,"y":444,"width":738,"height":12}},{"id":"e8875861-2cca-4f6b-950e-f8858aa2a07f","block_type":"box","text":"management and the board are aware of potential misconduct or breaches in risk management and","page_number":213,"box":{"x":117,"y":459,"width":745,"height":12}},{"id":"a94a5e00-fbc2-4535-93ef-8acca9db061e","block_type":"box","text":"internal control processes.","page_number":213,"box":{"x":117,"y":475,"width":200,"height":12}},{"id":"31abb287-66d9-4537-80d5-0806040e6911","block_type":"box","text":"A comprehensive audit conducted by an independent audit firm contributes to investor confidence in","page_number":213,"box":{"x":116,"y":506,"width":748,"height":12}},{"id":"ad414866-b2be-4222-9e18-38b9a5059583","block_type":"box","text":"the quality of corporate reporting. It is helpful when the audit report gives some insight into the scope","page_number":213,"box":{"x":116,"y":521,"width":752,"height":12}},{"id":"992513d9-636f-465f-aeff-4e114c4eb0d6","block_type":"box","text":"and focus of the audit, as well as any critical audit matters identified and how these were resolved. A","page_number":213,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"f8178a28-25f4-4d9c-a0c5-731181729e61","block_type":"box","text":"comprehensive and effective audit is time and resource intensive, and the audit fee should be","page_number":213,"box":{"x":116,"y":552,"width":700,"height":12}},{"id":"cd1c9a06-d6f7-4a00-af3d-9de834ff27f7","block_type":"box","text":"commensurate. Fees paid to the audit firm for non-audit consulting should not exceed the audit fee to a","page_number":213,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"957fc75e-d726-47bc-ab87-469823d914fa","block_type":"box","text":"degree that may prompt concerns about the independence of the audit. The audit committee should","page_number":213,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"ca94bfda-fdcc-42ad-84fd-e0dab07983d5","block_type":"box","text":"explain its position on auditor tenure and how it confirmed that the auditor remained independent.","page_number":213,"box":{"x":116,"y":599,"width":728,"height":12}},{"id":"b46378e5-04df-4941-9957-1b6d1abd946e","block_type":"box","text":"We may vote against the election of the responsible directors if corporate reporting is insufficient or","page_number":213,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"177e260c-e02d-45cb-9e86-b00cc1924a00","block_type":"box","text":"there are material misstatements in financial reports. In markets where relevant, we may vote against a","page_number":213,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"5b3d42b5-8dfc-42f1-a686-3525bb449bc5","block_type":"box","text":"proposal to approve the financial statements or the discharge of the board when we are concerned","page_number":213,"box":{"x":117,"y":661,"width":731,"height":12}},{"id":"55f13098-17f2-4121-bccc-5650cbd0063a","block_type":"box","text":"about the quality of corporate reporting or the audit. We may vote against proposals to appoint the","page_number":213,"box":{"x":116,"y":676,"width":728,"height":12}},{"id":"5aaa714a-1476-4f52-ba52-bf590944d2d8","block_type":"box","text":"auditor, ratify the audit report, or approve the audit fee if we are concerned about the auditor’s","page_number":213,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"da4de754-7fd8-4ddf-9c07-055d6f8ede4f","block_type":"box","text":"independence, the quality of the audit, or there are material misstatements in financial reports and the","page_number":213,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"9588d1e6-1b4f-4551-b438-c7da48fc075f","block_type":"box","text":"board has not established reasonable remediation plans.","page_number":213,"box":{"x":117,"y":723,"width":420,"height":12}},{"id":"ecb519c1-5fb8-49e8-84f3-0190d390504b","block_type":"box","text":"9","page_number":213,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"d79be46c-a156-4ff7-b7c8-7d82782927cc","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":213,"box":{"x":170,"y":815,"width":666,"height":10}},{"id":"a3fa6179-28e3-47ce-aae5-968620b44fa3","block_type":"box","text":"Foundation. Please refer to the IFRS website to learn more about the framework and standards S1 “General","page_number":213,"box":{"x":171,"y":828,"width":641,"height":8}},{"id":"5d3fa9b9-e2a6-4e76-90d0-a9de544aa74c","block_type":"box","text":"Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related Disclosures.”","page_number":213,"box":{"x":171,"y":841,"width":672,"height":9}},{"id":"f4377b7c-e793-46d7-a0cb-69d42f34b030","block_type":"box","text":"10","page_number":213,"box":{"x":144,"y":854,"width":8,"height":5}},{"id":"d5935e2a-e2dd-456c-a7d1-2131640892bd","block_type":"box","text":"See, for examples, https://www.ifrs.org/news-and-events/news/2025/06/ifrs-foundation-publishes-jurisdictional-profiles","page_number":213,"box":{"x":170,"y":854,"width":705,"height":9}},{"id":"7f0affda-0a5f-4b72-bb0b-a4d59e04028e","block_type":"box","text":"issb-standards/ and https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company","page_number":213,"box":{"x":170,"y":867,"width":615,"height":9}},{"id":"f17c7a5a-9a20-4e28-9c7e-ca95351da601","block_type":"box","text":"reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en","page_number":213,"box":{"x":170,"y":880,"width":468,"height":9}},{"id":"a13e871f-7427-44fd-9751-d56c5dded269","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":213,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4140988d-2bd1-4e18-87e9-2a4b5fa244c6","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":213,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"4c03407b-5fb5-48ed-84c0-31b9f941e5a6","block_type":"box","text":"13","page_number":213,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"f0f267a5-9887-407c-a110-9d16cd23554c","block_type":"box","text":"NM1026U-6039989-213/256","page_number":213,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8e3db23a-e997-49e0-85ba-4b6315a13c61","block_type":"box","text":"Shareholder rights and protections","page_number":214,"box":{"x":360,"y":87,"width":285,"height":12}},{"id":"facab0f7-d30b-447e-8852-fa88cc3690f7","block_type":"box","text":"General shareholder meetings","page_number":214,"box":{"x":116,"y":116,"width":247,"height":12}},{"id":"abb82eac-f5ea-41f6-ac9e-ef3fb087c228","block_type":"box","text":"Companies normally have an annual general meeting of shareholders at which routine and non-routine","page_number":214,"box":{"x":117,"y":144,"width":768,"height":13}},{"id":"df7774f0-447e-4108-b1ab-6c2e1dbb5b08","block_type":"box","text":"items of business are discussed and voted on by shareholders in attendance or submitting proxy votes.","page_number":214,"box":{"x":117,"y":160,"width":771,"height":12}},{"id":"19d7b607-0ccf-462c-8ed7-b98689aeada8","block_type":"box","text":"Companies should disclose materials relevant to the shareholder meeting sufficiently in advance so","page_number":214,"box":{"x":117,"y":175,"width":742,"height":13}},{"id":"0ade0b32-2c36-4b98-8189-b2db32a126f9","block_type":"box","text":"that shareholders can take them into consideration in their voting decisions. Many companies offer","page_number":214,"box":{"x":116,"y":191,"width":736,"height":12}},{"id":"d5e5fc11-f82b-417d-82e3-5ca78fdf3df0","block_type":"box","text":"shareholders the option of participating in the meeting virtually which, whilst welcome, should not limit","page_number":214,"box":{"x":116,"y":207,"width":758,"height":12}},{"id":"72958a17-6832-4961-abc7-cb582dee9b6c","block_type":"box","text":"the rights of shareholders to participate as they would during an in-person meeting.","page_number":214,"box":{"x":116,"y":222,"width":622,"height":12}},{"id":"05b3ce51-12f4-42d8-a48d-416e0247ebf2","block_type":"box","text":"We may vote against directors when materials related to the business of the shareholder meeting are","page_number":214,"box":{"x":116,"y":251,"width":757,"height":12}},{"id":"58864e5a-a2f3-4db7-83ea-07329344e360","block_type":"box","text":"not provided in a timely manner or do not provide sufficient information for us to make an informed","page_number":214,"box":{"x":117,"y":266,"width":733,"height":12}},{"id":"d296109e-06d2-4e2e-ba64-0279aff89478","block_type":"box","text":"voting decision. We may vote against directors if the format of the shareholder meeting does not","page_number":214,"box":{"x":116,"y":282,"width":719,"height":12}},{"id":"05a80449-09ed-4759-a183-70be8d664cbd","block_type":"box","text":"accommodate reasonable shareholder participation.","page_number":214,"box":{"x":116,"y":297,"width":392,"height":12}},{"id":"07c3c15c-89b4-4f9d-8d4e-c61014f4d37d","block_type":"box","text":"Bylaw amendments","page_number":214,"box":{"x":117,"y":326,"width":161,"height":12}},{"id":"d6288b9c-430b-4309-b84a-a0de55db1b2f","block_type":"box","text":"We review bylaw amendments proposed by management on a case-by-case basis and will generally","page_number":214,"box":{"x":116,"y":355,"width":753,"height":12}},{"id":"ad668f0f-2303-4b41-b71d-12f12fb22860","block_type":"box","text":"support those that are aligned with the interests of minority shareholders. Any material changes to the","page_number":214,"box":{"x":116,"y":370,"width":761,"height":12}},{"id":"f143bbb2-071a-412e-8761-91ffbcd055d9","block_type":"box","text":"bylaws should be explained in detail and put to a shareholder vote.","page_number":214,"box":{"x":117,"y":386,"width":500,"height":12}},{"id":"3178d044-6ddb-4dcc-bbdf-ff1d39cc3525","block_type":"box","text":"We may vote against bylaw amendments that reduce shareholder rights and protections or introduce","page_number":214,"box":{"x":116,"y":415,"width":753,"height":12}},{"id":"0895551d-1bf7-496f-a7e5-1eec1517b38d","block_type":"box","text":"additional burdens. We may vote against directors if material changes are made to the bylaws without","page_number":214,"box":{"x":116,"y":430,"width":760,"height":12}},{"id":"2cba5313-3b28-4230-8daf-08d9ec8b5dbd","block_type":"box","text":"shareholder approval.","page_number":214,"box":{"x":116,"y":446,"width":167,"height":11}},{"id":"a488cd72-a515-44a2-8b48-282fbaf063ff","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":214,"box":{"x":117,"y":474,"width":688,"height":12}},{"id":"5c679d37-99db-49e8-a1d4-c4fceb04ac0b","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to call a special meeting of","page_number":214,"box":{"x":117,"y":490,"width":704,"height":12}},{"id":"1e967422-17fe-4c1f-b843-a1f300ef8f64","block_type":"box","text":"shareholders. The shareholding required to exercise this right should balance its utility with the cost to","page_number":214,"box":{"x":116,"y":505,"width":761,"height":12}},{"id":"c688d8df-5c59-4edc-aeb4-1f01cb2551d5","block_type":"box","text":"the company of holding special meetings.","page_number":214,"box":{"x":116,"y":521,"width":307,"height":12}},{"id":"4ca74aad-1f7a-4976-bfe1-cd9833130123","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":214,"box":{"x":117,"y":550,"width":688,"height":12}},{"id":"eb01333e-b5d0-4f87-a3bc-d1fc52b88769","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to nominate directors to the","page_number":214,"box":{"x":117,"y":565,"width":710,"height":12}},{"id":"0cfcf409-1f90-4e98-8cf6-f966aae58994","block_type":"box","text":"company’s board. The threshold for this right should be set so that shareholders can exercise it without","page_number":214,"box":{"x":116,"y":581,"width":770,"height":12}},{"id":"70961ea5-3159-4750-bdc4-f1abb3960a23","block_type":"box","text":"being unduly disruptive to the board’s own nomination process.","page_number":214,"box":{"x":117,"y":596,"width":473,"height":12}},{"id":"f6cc8159-584d-440d-bd87-658bd21bf2fe","block_type":"box","text":"Whilst we would not use either of these rights ourselves, we see them as important accountability","page_number":214,"box":{"x":116,"y":625,"width":728,"height":12}},{"id":"30e3483e-f691-44f0-9db7-75aa64c4bc23","block_type":"box","text":"mechanisms. We may vote for a shareholder proposal seeking the addition of either of these","page_number":214,"box":{"x":117,"y":640,"width":691,"height":12}},{"id":"2ec48416-c228-48d2-9a33-24130c9e83fd","block_type":"box","text":"provisions to a company’s bylaws.","page_number":214,"box":{"x":117,"y":656,"width":258,"height":12}},{"id":"a93464ac-3b8f-40e1-8cc7-a05d687f321e","block_type":"box","text":"Change of domicile","page_number":214,"box":{"x":116,"y":685,"width":154,"height":12}},{"id":"2b08d4a9-ae30-4bbd-8064-a4a61e0543a7","block_type":"box","text":"We generally defer to management on proposals to change a company’s domicile as long as the","page_number":214,"box":{"x":116,"y":713,"width":717,"height":12}},{"id":"7f77261e-e0f3-4891-9b93-f90d8bdd829e","block_type":"box","text":"rationale for doing so is consistent with the company’s long-term strategy and business model and the","page_number":214,"box":{"x":117,"y":729,"width":756,"height":12}},{"id":"bd98f956-32f7-4c65-9914-4acc442fed53","block_type":"box","text":"related costs are immaterial.","page_number":214,"box":{"x":117,"y":744,"width":209,"height":10}},{"id":"199fff29-ad73-4b56-a833-33383da1bf53","block_type":"box","text":"We may vote against directors or a proposal to change a company’s domicile where it does not seem","page_number":214,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"09a22632-d7ea-465a-b58e-4a58736a155b","block_type":"box","text":"aligned with our clients’ financial interests.","page_number":214,"box":{"x":116,"y":789,"width":311,"height":12}},{"id":"1e1a5bb5-0cfa-4c23-a212-e8a64b180f1c","block_type":"box","text":"Changes to a company’s purpose or the nature of its business","page_number":214,"box":{"x":116,"y":817,"width":499,"height":12}},{"id":"7e5caeca-48dd-48c6-a528-69f9e616c579","block_type":"box","text":"Plans to materially change the nature of a company’s business or its purpose should be disclosed and","page_number":214,"box":{"x":117,"y":846,"width":762,"height":12}},{"id":"e92c0d45-704e-4c22-be5f-7e5aa52b0568","block_type":"box","text":"explained in the context of long-term strategy and business dynamics. Such changes may significantly","page_number":214,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"d382cb3b-7944-47a4-b7a1-07f4a73c20ba","block_type":"box","text":"alter an investor’s views on the suitability of a company for their investment strategy or portfolio.","page_number":214,"box":{"x":116,"y":877,"width":716,"height":12}},{"id":"8aa6570b-246d-4361-a4e5-63f4b6865168","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":214,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"6dfb0ac5-5eb0-474e-bd4b-572f91ea579f","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":214,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"26c2847e-80a4-4c0d-8caa-bbcaaf75e400","block_type":"box","text":"14","page_number":214,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"6234f536-d3ec-426e-a9f1-518e96654668","block_type":"box","text":"NM1026U-6039989-214/256","page_number":214,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"19b4c897-1e15-4b52-843c-adb50295d46e","block_type":"box","text":"Where relevant, we may vote against proposals to change a company’s purpose or the nature of its","page_number":215,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"09578648-8fe2-44ce-a9a1-c16e5348e91d","block_type":"box","text":"business if the board has not provided a credible argument for change.","page_number":215,"box":{"x":117,"y":102,"width":530,"height":13}},{"id":"7cd18bc4-18c6-4b7e-8ea4-f814f33b6d05","block_type":"box","text":"Shareholder proposals","page_number":215,"box":{"x":409,"y":141,"width":187,"height":12}},{"id":"8f982e55-9a3a-4bc1-a0ef-5b6bbcb1999a","block_type":"box","text":"Shareholders in many markets, who meet certain eligibility criteria, have the right to submit proposals","page_number":215,"box":{"x":116,"y":172,"width":756,"height":12}},{"id":"a735bc1e-6ab1-413a-b34b-47d52c32260c","block_type":"box","text":"to the general shareholder meeting asking a company to take a particular course of action subject to","page_number":215,"box":{"x":116,"y":188,"width":749,"height":12}},{"id":"47e62957-9a93-4153-8ee6-7fd969f1ccc3","block_type":"box","text":"the proposal being supported by a majority of votes cast at the meeting. The topics raised can address","page_number":215,"box":{"x":116,"y":203,"width":767,"height":12}},{"id":"ff256771-8aae-48fc-9999-692825644f6d","block_type":"box","text":"a range of matters that may be relevant to a company’s business.","page_number":215,"box":{"x":116,"y":219,"width":492,"height":12}},{"id":"297e4019-5412-4878-bb71-2c3cd86d1f7b","block_type":"box","text":"We vote on these proposals on a case-by-case basis. We assess the relevance of the topic raised to a","page_number":215,"box":{"x":116,"y":250,"width":767,"height":12}},{"id":"8d1ef028-5f9c-4bac-a5e5-9495df6486ac","block_type":"box","text":"company’s business and its current approach, whether the actions sought are consistent with","page_number":215,"box":{"x":116,"y":265,"width":697,"height":12}},{"id":"19d34fdd-3db6-479a-aa36-dd887fc0242c","block_type":"box","text":"shareholders’ interests, and what impact the proposal being acted upon might have on financial","page_number":215,"box":{"x":116,"y":281,"width":714,"height":12}},{"id":"f67ca723-e990-43de-918c-cb45d8a9d0e0","block_type":"box","text":"performance.","page_number":215,"box":{"x":117,"y":296,"width":103,"height":12}},{"id":"1fc2bb2a-8123-466b-b3b7-1ac5ebbefda1","block_type":"box","text":"Our general approach where we have concerns about","page_number":215,"box":{"x":116,"y":327,"width":393,"height":12}},{"id":"afadbd14-df1c-414e-8fe3-589c9838ef13","block_type":"box","text":"t a company’s governance, disclosures or","page_number":215,"box":{"x":509,"y":327,"width":303,"height":12}},{"id":"1ccd9866-d3f1-4d36-920a-18599c42e0df","block_type":"box","text":"performance is to engage to understand the apparent diffe","page_number":215,"box":{"x":117,"y":343,"width":423,"height":12}},{"id":"d05d875c-22b0-48af-b42d-11fa9e4f7120","block_type":"box","text":"rence in perspective. If we are concerned a","page_number":215,"box":{"x":541,"y":343,"width":319,"height":12}},{"id":"caf656dd-df94-4422-b044-1796871f5f96","block_type":"box","text":"company is not acting in shareholders’ financial interest","page_number":215,"box":{"x":116,"y":358,"width":403,"height":12}},{"id":"3ec51570-13c0-4fcc-a78d-f971498d27ac","block_type":"box","text":"s, we may vote against the election of directors.","page_number":215,"box":{"x":519,"y":358,"width":351,"height":12}},{"id":"c64939d2-4c0d-4d3d-b48b-fa79ab587c6a","block_type":"box","text":"We may support a relevant shareholder proposal if doing","page_number":215,"box":{"x":116,"y":374,"width":418,"height":12}},{"id":"5e050f5a-30ed-4850-a13e-3cdcffdb7dd3","block_type":"box","text":"so is aligned with our clients’ financial interests.","page_number":215,"box":{"x":534,"y":374,"width":348,"height":12}},{"id":"e5def805-4731-48ab-931e-c161917c307f","block_type":"box","text":"We generally do not support shareholder proposals that","page_number":215,"box":{"x":116,"y":389,"width":410,"height":12}},{"id":"4e5cce73-b716-429d-9b78-8c3840a5ce73","block_type":"box","text":"are legally binding on the company, seek to alter","page_number":215,"box":{"x":526,"y":389,"width":357,"height":12}},{"id":"8510b844-e392-4950-8095-5c7b33d74d96","block_type":"box","text":"a company’s strategy or direct its operations,","page_number":215,"box":{"x":116,"y":405,"width":331,"height":12}},{"id":"cd58450b-d3a8-49f2-9179-e196a16fe909","block_type":"box","text":"or are unrelated to how a company manages risk or","page_number":215,"box":{"x":447,"y":405,"width":381,"height":12}},{"id":"1bce061f-c1b4-4c7e-b615-8d3704c0467a","block_type":"box","text":"generates financial returns.","page_number":215,"box":{"x":116,"y":420,"width":203,"height":12}},{"id":"8229ac39-b130-42c2-9304-6ef438477b45","block_type":"box","text":"BlackRock is subject to rules, regulations, agency guidance and contractual agreements that place","page_number":215,"box":{"x":117,"y":451,"width":737,"height":12}},{"id":"7a9bb545-9fc3-4968-a140-ed281326c14b","block_type":"box","text":"restrictions and limitations on how we can interact with the companies in which we invest on behalf of","page_number":215,"box":{"x":117,"y":467,"width":755,"height":12}},{"id":"911a0eb1-a864-4ccd-8418-357bc9f30987","block_type":"box","text":"our clients, including our ability to submit shareholder proposals. We do not submit shareholder","page_number":215,"box":{"x":116,"y":482,"width":712,"height":12}},{"id":"9d332d0e-0ff1-4cba-981b-10b0098b907b","block_type":"box","text":"proposals but can vote, on behalf of clients who authorize us to do so, on proposals put forth by others.","page_number":215,"box":{"x":117,"y":498,"width":770,"height":12}},{"id":"6a219d75-3317-491c-a743-8785f08c1b6a","block_type":"box","text":"Corporate political activities","page_number":215,"box":{"x":387,"y":537,"width":230,"height":12}},{"id":"6b58936f-dd70-4f4d-b81c-122d733da72b","block_type":"box","text":"A corporation’s ability to engage in the policy process is subject to rules and regulations set by the","page_number":215,"box":{"x":116,"y":568,"width":733,"height":12}},{"id":"1cd1e8d0-58c0-4cc2-934a-4782f053744a","block_type":"box","text":"jurisdictions in which they engage. When a corporation reports material financial risk related to policy","page_number":215,"box":{"x":115,"y":583,"width":754,"height":12}},{"id":"f93f5f0e-5bbc-470d-864a-dceb80e5db0c","block_type":"box","text":"and or regulatory changes, BAIS may seek to understand how it is addressing the material risk","page_number":215,"box":{"x":116,"y":599,"width":708,"height":12}},{"id":"e5a685f7-c13d-42ca-af1c-6d78677b7fdf","block_type":"box","text":"identified. We seek to understand how companies engage in corporate political activities and ensure","page_number":215,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"3fe76165-cc50-4f03-be36-71e30f55f96d","block_type":"box","text":"that their participation is consistent with their public statements on policy matters material to the","page_number":215,"box":{"x":116,"y":630,"width":714,"height":12}},{"id":"915311c5-96f7-49d1-8ae0-033c16921c04","block_type":"box","text":"company’s long-term strategy. The board should be aware of the approach taken by management on","page_number":215,"box":{"x":116,"y":645,"width":756,"height":12}},{"id":"fc831d30-8607-4a41-b6ad-601f8bc93ed8","block_type":"box","text":"corporate political activities as there can be reputational risks arising from inconsistencies between a","page_number":215,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"3eab909c-570b-4fab-9e41-8668dfd2e359","block_type":"box","text":"company’s policy engagement and stated policy positions. Companies should, as a minimum, meet all","page_number":215,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"0cf6f663-583c-4bcf-b91d-377c0c5e3792","block_type":"box","text":"regulatory disclosure requirements on political activities. We may engage a company where we would","page_number":215,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"ca8e2de5-a513-4a6e-98d6-1bb3b86b50c4","block_type":"box","text":"like to better understand its approach to policy engagement, where relevant.","page_number":215,"box":{"x":117,"y":707,"width":563,"height":12}},{"id":"2b62e484-0cd0-4999-acd9-4f93cd15d405","block_type":"box","text":"To mitigate the risk of inconsistencies, companies may wish to assess the alignment between their","page_number":215,"box":{"x":116,"y":738,"width":732,"height":12}},{"id":"4dd13b78-8f38-4024-b0e0-cc4f05bdc993","block_type":"box","text":"policy priorities and the policy positions of the trade associations of which they are active members and","page_number":215,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"093f5bd8-148b-434a-a68e-0c0a81fbd259","block_type":"box","text":"any engagements undertaken by trade associations on behalf of members.","page_number":215,"box":{"x":116,"y":769,"width":556,"height":12}},{"id":"e627245b-c726-4603-a59c-b6ed0abcadc7","block_type":"box","text":"We may support a relevant shareholder proposal, or vote against directors, where a company’s","page_number":215,"box":{"x":116,"y":800,"width":707,"height":12}},{"id":"58e4f910-bc2a-4c04-8ffd-a7f2dd51d73d","block_type":"box","text":"disclosures are insufficient to address the material risk it has identified.","page_number":215,"box":{"x":116,"y":816,"width":524,"height":9}},{"id":"ce78b347-0231-43d1-81b0-30fe1b73e7f2","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":215,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"122c88c5-1b33-4d3f-bc49-b103cc184241","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":215,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"203415fb-ac43-4835-b250-66816c13fae4","block_type":"box","text":"15","page_number":215,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"9a3a9de5-f7dc-4e6d-be67-7af1c934d42f","block_type":"box","text":"NM1026U-6039989-215/256","page_number":215,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a9126d54-6ec4-4445-98d8-6f994319093a","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":216,"box":{"x":287,"y":87,"width":431,"height":12}},{"id":"4bf78adc-7cac-4a19-88bb-cebfaaa16078","block_type":"box","text":"We seek to understand how companies manage the material risks and opportunities inherent in their","page_number":216,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"8eb58c67-a168-44cc-9b90-ca1d7700e3f1","block_type":"box","text":"business operations. In our experience, sustainability-related factors","page_number":216,"box":{"x":117,"y":133,"width":505,"height":12}},{"id":"f1f4bc00-8766-446f-bdf4-93d7237c2259","block_type":"box","text":"11","page_number":216,"box":{"x":624,"y":133,"width":9,"height":6}},{"id":"29f771e7-01d1-45cb-a9a0-bba0975890e2","block_type":"box","text":"that are relevant to a company’s","page_number":216,"box":{"x":635,"y":133,"width":249,"height":12}},{"id":"79c5a6e2-2ff5-43ed-8ee2-90e70ef643c5","block_type":"box","text":"business or material to its financial performance, are generally operational considerations embedded","page_number":216,"box":{"x":117,"y":149,"width":752,"height":12}},{"id":"57a0e774-9c31-4ba9-9ff3-ea0ff8571654","block_type":"box","text":"into day-to-day management systems. Certain sustainability issues may also inform long-term strategic","page_number":216,"box":{"x":117,"y":164,"width":769,"height":12}},{"id":"5305be4f-6a26-47a5-a722-0bc06f22e823","block_type":"box","text":"planning, for example, investing in product innovation in anticipation of changing consumer demand or","page_number":216,"box":{"x":117,"y":180,"width":763,"height":12}},{"id":"fdcf5618-7d2c-4d47-a5ff-368207a27fec","block_type":"box","text":"adapting supply chains in response to changing regulatory requirements.","page_number":216,"box":{"x":116,"y":195,"width":546,"height":12}},{"id":"3ffc4663-7828-4dc9-aca3-4e247fa32eb7","block_type":"box","text":"We recognize that the specific sustainability-related factors that may be financially material or business","page_number":216,"box":{"x":116,"y":226,"width":769,"height":12}},{"id":"97a2e062-9ef5-4896-9d30-9f1bd352917c","block_type":"box","text":"relevant will vary by company business model, sector, key markets, and time horizon, amongst other","page_number":216,"box":{"x":117,"y":241,"width":751,"height":12}},{"id":"dbb97023-91c6-46f1-9425-fd9b50282ca6","block_type":"box","text":"considerations. From company disclosures and our engagement, we aim to understand how","page_number":216,"box":{"x":116,"y":257,"width":689,"height":12}},{"id":"d690a30d-d097-42e2-81eb-7a6006d8b16f","block_type":"box","text":"management is identifying, assessing and integrating material sustainability-related risks and","page_number":216,"box":{"x":117,"y":272,"width":694,"height":12}},{"id":"5d60b55f-947e-438e-942d-d4c8619e9443","block_type":"box","text":"opportunities into their business decision-making and practices. Doing so helps us undertake a more","page_number":216,"box":{"x":116,"y":288,"width":752,"height":12}},{"id":"0d94867a-2838-491f-8162-61f2b9264779","block_type":"box","text":"holistic assessment of a company’s potential financial performance and the likely risk-adjusted returns","page_number":216,"box":{"x":117,"y":303,"width":761,"height":12}},{"id":"60f32634-176c-4019-92d4-b9e1ccdefbc6","block_type":"box","text":"of an investment.","page_number":216,"box":{"x":116,"y":319,"width":133,"height":9}},{"id":"06f9eb70-7f31-4ffb-9367-7b9405493d5c","block_type":"box","text":"We may vote against directors or support a relevant shareholder proposal if we have concerns about","page_number":216,"box":{"x":116,"y":349,"width":753,"height":13}},{"id":"8ed30de0-385a-4169-89a7-07cb1301aacb","block_type":"box","text":"how a company is managing or disclosing its approach to material sustainability-related risks that may","page_number":216,"box":{"x":117,"y":365,"width":761,"height":12}},{"id":"8f147eec-27d8-4681-b751-5ac96bc3daa4","block_type":"box","text":"impact financial returns.","page_number":216,"box":{"x":117,"y":380,"width":181,"height":12}},{"id":"8daa0bc8-ecf6-4d6d-916e-13cabc20fab3","block_type":"box","text":"Key stakeholders","page_number":216,"box":{"x":431,"y":419,"width":143,"height":12}},{"id":"090ab013-ece4-4050-a82a-4f34983338ff","block_type":"box","text":"In our view, companies should understand and take into consideration the interests of the various","page_number":216,"box":{"x":117,"y":449,"width":727,"height":12}},{"id":"636a6732-a3f1-4453-b380-7b1d993f8443","block_type":"box","text":"parties on whom they depend for their success over time. It is for each company to determine their key","page_number":216,"box":{"x":117,"y":465,"width":766,"height":12}},{"id":"b1247b59-d550-4a48-9120-e211c9e6c238","block_type":"box","text":"stakeholders based on what is material to their business and long-term financial performance. For","page_number":216,"box":{"x":116,"y":480,"width":731,"height":12}},{"id":"11dbe67d-ed97-437b-936f-286db2b49976","block_type":"box","text":"many companies, key stakeholders include employees, business partners (such as suppliers and","page_number":216,"box":{"x":117,"y":496,"width":726,"height":12}},{"id":"8224c4f1-d3fd-469c-bdf4-1bc03476c8e3","block_type":"box","text":"distributors), clients and consumers, regulators, and the communities in which they operate.","page_number":216,"box":{"x":116,"y":511,"width":687,"height":12}},{"id":"4b4637c7-4181-4454-908d-ee189c7493e7","block_type":"box","text":"Companies that appropriately balance the interests of investors and other stakeholders are, in our","page_number":216,"box":{"x":117,"y":527,"width":730,"height":12}},{"id":"9939011a-30a6-4330-b4d2-4d3c914c6c88","block_type":"box","text":"experience, more likely to be financially resilient over time.","page_number":216,"box":{"x":116,"y":542,"width":438,"height":12}},{"id":"a8a29711-93e2-486b-a6b2-078065822ee8","block_type":"box","text":"Climate and decarbonization investment objectives","page_number":216,"box":{"x":295,"y":581,"width":414,"height":12}},{"id":"9e588c08-a8b6-41a1-8bf6-272a5a3904b1","block_type":"box","text":"Certain active BlackRock funds have climate and decarbonization objectives in addition to financial","page_number":216,"box":{"x":117,"y":611,"width":737,"height":12}},{"id":"a0243af9-8566-422d-b006-66c17fc9a00b","block_type":"box","text":"objectives. Consistent with the objectives of those investment strategies, our stewardship activity in","page_number":216,"box":{"x":116,"y":627,"width":741,"height":12}},{"id":"2b7af28c-b2aa-4000-be4c-bd63e8577677","block_type":"box","text":"relation to the holdings in those funds differs in some respects from BAIS’ benchmark guidelines, which","page_number":216,"box":{"x":117,"y":642,"width":771,"height":12}},{"id":"7a304272-79cb-46fe-b9a1-1acce91dcb83","block_type":"box","text":"are described above. Specifically, for those funds’ holdings, we look to investee companies to","page_number":216,"box":{"x":116,"y":658,"width":699,"height":12}},{"id":"bfaee2bb-3cb5-4b70-9702-a9755cb8a7f0","block_type":"box","text":"demonstrate that they are aligned with a decarbonization pathway that means their business model","page_number":216,"box":{"x":116,"y":673,"width":736,"height":12}},{"id":"a66248af-28c8-4869-9aad-335f7a0a00f8","block_type":"box","text":"would be viable in a low-carbon economy, i.e., one in which global temperature rise is limited to 1.5°C","page_number":216,"box":{"x":116,"y":689,"width":754,"height":12}},{"id":"eb05e773-5475-4366-982f-9c9cd0481503","block_type":"box","text":"above pre-industrial levels. In addition, clients in separately managed accounts may instruct BlackRock","page_number":216,"box":{"x":116,"y":704,"width":766,"height":12}},{"id":"5f043fc8-de78-439c-a57b-185f2c89451e","block_type":"box","text":"to apply these guidelines to their holdings. Both in the case of funds and separately managed","page_number":216,"box":{"x":116,"y":720,"width":692,"height":12}},{"id":"f738abc0-7af8-40ed-80bd-b4bf6434a4e5","block_type":"box","text":"accounts, these guidelines are only implemented upon explicit selection and approval by the applicable","page_number":216,"box":{"x":116,"y":735,"width":765,"height":12}},{"id":"a20c16ad-3f9e-425e-a076-e49d1fdd6976","block_type":"box","text":"fund board or client.","page_number":216,"box":{"x":116,"y":751,"width":147,"height":9}},{"id":"73353f71-1942-422d-abc9-b5e07aa4a1d0","block_type":"box","text":"11","page_number":216,"box":{"x":144,"y":776,"width":7,"height":5}},{"id":"fb747db2-8975-4bc2-a8ca-e40121a8341b","block_type":"box","text":"By material sustainability-related risks and opportunities, we mean the drivers of risk and financial value creation in a","page_number":216,"box":{"x":171,"y":776,"width":691,"height":10}},{"id":"05685b08-edee-4dad-9045-64207797509c","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":216,"box":{"x":170,"y":789,"width":686,"height":9}},{"id":"76463bed-65a5-4ffb-9778-3c86e74149a9","block_type":"box","text":"issues include, but are not limited to, water use, land use, waste management, and climate risk. Examples of social","page_number":216,"box":{"x":170,"y":802,"width":682,"height":9}},{"id":"d4ad3bdd-afcd-4706-8fa0-c288beb7fc51","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":216,"box":{"x":170,"y":815,"width":683,"height":9}},{"id":"b54f8bb2-c599-4edc-8058-f151419f82dc","block_type":"box","text":"operates, customer loyalty, and relationships with regulators. It is our view that well-managed companies will effectively","page_number":216,"box":{"x":170,"y":828,"width":708,"height":9}},{"id":"9d114fb3-0c28-4aeb-b75a-2654b558a7fe","block_type":"box","text":"evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. Governance is","page_number":216,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"c1a9f6af-ad33-4a36-9c8d-a6d1d89db30d","block_type":"box","text":"the core means by which boards can oversee the creation of durable financial value over time. Appropriate risk","page_number":216,"box":{"x":170,"y":853,"width":658,"height":10}},{"id":"a036e08b-a854-4968-944c-2e9ba8829e68","block_type":"box","text":"oversight of business-relevant and material sustainability-related considerations is a component of a sound governance","page_number":216,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"ce8f4daa-afeb-418e-9253-3be94bea17d6","block_type":"box","text":"framework.","page_number":216,"box":{"x":170,"y":879,"width":65,"height":8}},{"id":"5d922e25-544e-4bf2-99d2-d775bcbdd042","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":216,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ca73329e-b1d6-43e8-a7ee-dc7508bf46b8","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":216,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"92044798-3409-444c-bb87-6967d715f1ea","block_type":"box","text":"16","page_number":216,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"e54423ee-bc35-47cb-a90e-d64c3566b8ac","block_type":"box","text":"NM1026U-6039989-216/256","page_number":216,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ee9abc8b-1329-4a45-bba2-dc5baf2ba418","block_type":"box","text":"These decarbonization stewardship guidelines focus on companies which produce goods and services","page_number":217,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"2418e4e8-c408-4e6f-9505-f5484c75ba4a","block_type":"box","text":"that contribute to real world decarbonization or have a carbon intensive business model and face","page_number":217,"box":{"x":116,"y":102,"width":724,"height":10}},{"id":"c89b930c-7e9a-4522-8151-41f2602f3aeb","block_type":"box","text":"outsized impacts from the low carbon transition, based on reported and estimated scopes 1, 2, and 3","page_number":217,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"72536494-24f3-44f8-941c-478abffbf6a6","block_type":"box","text":"greenhouse gas emissions. These companies should provide disclosures that set out their","page_number":217,"box":{"x":116,"y":134,"width":675,"height":12}},{"id":"b8b2dd31-c22e-45d1-b326-bb4c1144615b","block_type":"box","text":"governance, strategy, risk management processes and metrics and targets relevant to","page_number":217,"box":{"x":116,"y":149,"width":646,"height":12}},{"id":"552a8bde-e362-40fc-bfa4-e44e5307b8ff","block_type":"box","text":"decarbonization. It is helpful to investors’ understanding when these disclosures include an explanation","page_number":217,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"5b4a7fbd-880e-4ca6-a09c-bd55634fe1bd","block_type":"box","text":"of the decarbonization scenarios a company is using in its near- and long-term planning, as well as its","page_number":217,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"4be03884-8dff-4c3a-a253-db80c2de5b71","block_type":"box","text":"scope 1, scope 2 and material scope 3 greenhouse gas (GHG) emissions and reduction targets for","page_number":217,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"b96c8f31-6766-4bb8-a81c-43383268fc0f","block_type":"box","text":"scope 1 and 2 emissions.","page_number":217,"box":{"x":116,"y":211,"width":194,"height":12}},{"id":"65e077f4-c637-438c-9681-f8c83b43139c","block_type":"box","text":"Under these climate- and decarbonization-specific guidelines, BAIS may recommend a vote against","page_number":217,"box":{"x":117,"y":242,"width":744,"height":12}},{"id":"d7510ac3-2d36-43c6-93fa-d8968b4d1019","block_type":"box","text":"directors or support for a relevant shareholder proposal if a company does not appear to be adequately","page_number":217,"box":{"x":116,"y":258,"width":771,"height":12}},{"id":"81e181eb-e15b-4271-8bd2-435109be3a4c","block_type":"box","text":"acting to address or disclosing material climate-related risks, consistent with the parameters set out in","page_number":217,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"e5107ae5-3f9d-48e1-83b5-734a634fa2fc","block_type":"box","text":"these climate- and decarbonization-specific guidelines. We may recommend supporting shareholder","page_number":217,"box":{"x":116,"y":289,"width":749,"height":12}},{"id":"ffeba945-9501-40f4-ada4-594a2f599c8b","block_type":"box","text":"proposals seeking information relevant to a company’s stated low-carbon transition strategy or targets","page_number":217,"box":{"x":117,"y":304,"width":760,"height":12}},{"id":"6676fbe2-cb1f-4d9b-8494-2ba0a3fa304b","block_type":"box","text":"that the company does not currently provide and that would be helpful to investment decision-making.","page_number":217,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"28a7501a-3fad-4e40-bf0d-6d5ed474fd59","block_type":"box","text":"We would not recommend support for shareholder proposals that seek to constrain board or","page_number":217,"box":{"x":116,"y":335,"width":689,"height":12}},{"id":"78a7e0c6-6ad6-45d6-b3e6-3dc1d09e2445","block_type":"box","text":"management decision-making or direct specific business or strategic decisions. As under the BAIS","page_number":217,"box":{"x":117,"y":351,"width":736,"height":12}},{"id":"0aac978b-1ff3-4171-94f4-cb77fe3cf251","block_type":"box","text":"benchmark approach, the active portfolio managers are ultimately responsible for voting consistent","page_number":217,"box":{"x":117,"y":366,"width":737,"height":12}},{"id":"7fefb481-a69a-42da-ba5a-52a1714f0541","block_type":"box","text":"with their investment mandate and fund objectives. For the funds and accounts in scope, voting on","page_number":217,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"2052105d-c447-4b46-b049-8a64a9308f08","block_type":"box","text":"matters not related to climate risk and the energy transition is undertaken in line with BAIS’ benchmark","page_number":217,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"14728777-0961-4fa5-be0c-1ca8f5f2cf72","block_type":"box","text":"guidelines.","page_number":217,"box":{"x":116,"y":413,"width":85,"height":12}},{"id":"33aa181b-4644-404f-b7b0-5459e13aae57","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":217,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"606a8825-ec39-4ff2-8258-ee3904d235cb","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":217,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"1510e52b-146a-40c7-8260-beea918d97d2","block_type":"box","text":"17","page_number":217,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"9b4a0f26-2ca0-4198-87a8-2a6cfcb5ab85","block_type":"box","text":"NM1026U-6039989-217/256","page_number":217,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fe5ce173-0ad3-4dfd-9552-af6b9dfb4b03","block_type":"box","text":"Appendix 1: How we fulfil and oversee our investment stewardship responsibilities","page_number":218,"box":{"x":168,"y":87,"width":668,"height":12}},{"id":"149f75fa-a71c-4edd-a5ae-09a8eb12a4a9","block_type":"box","text":"Oversight","page_number":218,"box":{"x":116,"y":118,"width":83,"height":12}},{"id":"8d62e920-5234-4b80-928e-40934a7560d6","block_type":"box","text":"The Global Head of BAIS has primary oversight of and responsibility for the team’s activities, including","page_number":218,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"a525674d-9ade-4b2d-961d-5a1b5e4510c8","block_type":"box","text":"voting in accordance with the BlackRock Active Investment Stewardship Global Engagement and","page_number":218,"box":{"x":116,"y":165,"width":726,"height":12}},{"id":"438715a0-ecd7-4570-8b43-109f5b81f9a7","block_type":"box","text":"Voting Guidelines (the “Guidelines”), which require the application of professional judgment and","page_number":218,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"16d99546-4b5c-47b0-baf2-9bcf26a73dba","block_type":"box","text":"consideration of each company’s unique circumstances, as well as input from active investors. BAIS is","page_number":218,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"703afa9f-c74b-4691-b2f7-f8b967631599","block_type":"box","text":"independent from BlackRock Investment Stewardship in our engagement and voting activities,","page_number":218,"box":{"x":117,"y":211,"width":704,"height":12}},{"id":"6d976025-9afa-4a86-91e5-0c52ed583e58","block_type":"box","text":"reporting lines, and oversight.","page_number":218,"box":{"x":117,"y":227,"width":224,"height":12}},{"id":"452f8d39-40d5-4da3-b2ba-a336fcfdf060","block_type":"box","text":"The Stewardship Leaders Group, comprised of senior active investors and other relevant stakeholders","page_number":218,"box":{"x":116,"y":258,"width":765,"height":11}},{"id":"b14d45d4-dfd6-43a0-aa7f-ab923610b3ba","block_type":"box","text":"in BlackRock’s legal, public policy, sustainability and communications teams, helps shape the firm’s","page_number":218,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"845d2f28-bada-420a-b4bb-98af0b841d53","block_type":"box","text":"approach to investment stewardship on non-index equity investment strategies. The Group may advise","page_number":218,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"7cad0d34-88a2-4cba-acd1-b4cdfde4db7c","block_type":"box","text":"on and review amendments to BAIS’ policies and practices. It does not determine voting decisions,","page_number":218,"box":{"x":116,"y":304,"width":739,"height":12}},{"id":"73c2c7ed-24b3-4297-8be0-c14d874f1288","block_type":"box","text":"which are the responsibility of BAIS and the relevant active equity investors.","page_number":218,"box":{"x":116,"y":320,"width":568,"height":12}},{"id":"ac05df25-88fc-4404-ae0c-222f38514a24","block_type":"box","text":"BAIS carries out engagement with companies in collaboration with active investment colleagues,","page_number":218,"box":{"x":117,"y":351,"width":721,"height":12}},{"id":"31a49e8f-d188-43a2-86b4-a012ab93ef17","block_type":"box","text":"executes proxy votes, and conducts vote operations (including maintaining records of votes cast) in a","page_number":218,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"e222750f-1b2a-40cf-82a4-0e6e37c92e7e","block_type":"box","text":"manner consistent with the Guidelines. BAIS also conducts research on corporate governance issues","page_number":218,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"5294f6a1-83aa-42c6-9254-b7e1550b54a8","block_type":"box","text":"and participates in industry discussions to contribute to and keep abreast of important developments in","page_number":218,"box":{"x":116,"y":397,"width":768,"height":12}},{"id":"cb0ca445-7531-4829-b6c4-733b6b05e2b2","block_type":"box","text":"the corporate governance field. BAIS may use third parties for certain of the foregoing activities and","page_number":218,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"ec23555c-6a8d-4157-aa1f-3c89dd8163c8","block_type":"box","text":"performs oversight of those third parties (see “Use and oversight of third-party vote services providers”","page_number":218,"box":{"x":117,"y":428,"width":765,"height":12}},{"id":"44289243-e558-4b26-a7ee-678334053d2a","block_type":"box","text":"below).","page_number":218,"box":{"x":117,"y":444,"width":58,"height":12}},{"id":"894ca9b7-9d79-4f85-adfe-18ba0c843e22","block_type":"box","text":"Voting guidelines and vote execution","page_number":218,"box":{"x":116,"y":475,"width":302,"height":12}},{"id":"d743c835-3070-4f0d-8020-971fdc4dbf20","block_type":"box","text":"BlackRock votes on proxy issues when our clients authorize us to do so. We carefully consider the","page_number":218,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"fd265cb0-165d-471b-997d-083e7584f537","block_type":"box","text":"voting items submitted to funds and other fiduciary account(s) (Fund or Funds) for which we have","page_number":218,"box":{"x":116,"y":521,"width":728,"height":12}},{"id":"0a74dd28-e214-4136-9805-13c8e44b6ddd","block_type":"box","text":"voting authority. BlackRock votes (or refrains from voting) for each Fund for which we have voting","page_number":218,"box":{"x":116,"y":537,"width":730,"height":12}},{"id":"755d5372-1afe-4109-9de7-6f3b3d0f4f5b","block_type":"box","text":"authority based on our evaluation of the alignment of the voting items with the long-term economic","page_number":218,"box":{"x":116,"y":552,"width":734,"height":12}},{"id":"eee8342b-3c12-40af-ab4d-b3e5477073ff","block_type":"box","text":"interests of our clients, in the exercise of our independent business judgment, and without regard to the","page_number":218,"box":{"x":117,"y":568,"width":771,"height":12}},{"id":"a45892c3-7bcf-4d46-badf-af8e32b0956a","block_type":"box","text":"relationship of the issuer (or any shareholder proponent or dissident shareholder) to the Fund, the","page_number":218,"box":{"x":117,"y":583,"width":730,"height":12}},{"id":"3b77af7b-12d6-49e1-ab0d-aa1c779984f7","block_type":"box","text":"Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts","page_number":218,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"da1629f9-0626-4803-a255-d3bc45200bcd","block_type":"box","text":"management policies and procedures,” below).","page_number":218,"box":{"x":117,"y":614,"width":353,"height":12}},{"id":"fc7b8884-88e6-4bf0-8632-f09f9b43d398","block_type":"box","text":"When exercising voting rights, BAIS will normally vote on specific proxy issues in accordance with the","page_number":218,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"995ea919-cdc8-4b64-af79-9d66c6c12979","block_type":"box","text":"Guidelines, although portfolio managers have the right to vote differently on their holdings if they","page_number":218,"box":{"x":117,"y":661,"width":713,"height":12}},{"id":"1988c1e6-0b52-48d6-ba49-fee7b8223113","block_type":"box","text":"determine doing so is more aligned with the investment objective and financial interests of clients","page_number":218,"box":{"x":116,"y":676,"width":719,"height":12}},{"id":"49bf1979-1c15-48e8-99b1-bb527f74a6cf","block_type":"box","text":"invested in the funds they manage.","page_number":218,"box":{"x":117,"y":692,"width":258,"height":12}},{"id":"05b7db72-9382-4921-aec7-09f5174a418a","block_type":"box","text":"The Guidelines are not intended to be exhaustive. BAIS applies the Guidelines on a case-by-case","page_number":218,"box":{"x":116,"y":723,"width":726,"height":12}},{"id":"e5fb212e-8a78-43cb-8785-4fd993af0c58","block_type":"box","text":"basis, in the context of the individual circumstances of each company and the specific issue under","page_number":218,"box":{"x":117,"y":738,"width":728,"height":12}},{"id":"e87639b9-8065-40b7-83a9-40ec3d26619d","block_type":"box","text":"review. As such, the Guidelines do not indicate how BAIS will vote in every instance. Rather, they","page_number":218,"box":{"x":117,"y":754,"width":723,"height":12}},{"id":"65ae46cf-f391-4665-968b-231fdd58df35","block_type":"box","text":"reflect our view about corporate governance issues generally, and provide insight into how we typically","page_number":218,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"6f52e9b4-453a-4945-b0d4-76349ad8e5ef","block_type":"box","text":"approach issues that are commonly put to a shareholder vote. The Guidelines are reviewed annually","page_number":218,"box":{"x":116,"y":785,"width":747,"height":12}},{"id":"5cb1bd2b-d5a0-43b9-9237-1d8f779c00af","block_type":"box","text":"and updated as necessary to reflect changes in market practices, developments in corporate","page_number":218,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"0b31b162-393c-4cc6-aee7-352176a2013a","block_type":"box","text":"governance and feedback from companies and clients. In this way, BAIS aims to maintain policies that","page_number":218,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"3a752a36-f218-4733-b8ab-7b3b64e27404","block_type":"box","text":"explain our approach to governance practices most aligned with clients’ long-term financial interests.","page_number":218,"box":{"x":116,"y":831,"width":751,"height":12}},{"id":"be4bb9d6-7148-43cd-82f4-03c4845ec48f","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BAIS’ ability to vote such","page_number":218,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"9ae3b2a1-881f-4eb1-8565-aed2b18f5b0d","block_type":"box","text":"proxies, as well as the desirability of voting such proxies. These issues include, but are not limited to: i)","page_number":218,"box":{"x":117,"y":878,"width":768,"height":12}},{"id":"9c096769-97c2-4a6c-a9bf-811819e6481e","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":218,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"dfb723a1-bfa9-4dc2-b1ec-a4b854b1b2fe","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":218,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"4d4a4234-060b-4f6f-9d5b-a25937691630","block_type":"box","text":"18","page_number":218,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"1f7cac32-9168-4ae3-ab7a-e4fc010ff465","block_type":"box","text":"NM1026U-6039989-218/256","page_number":218,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6f6e9504-e192-4d21-bc5c-674593ac2f74","block_type":"box","text":"untimely notice of shareholder meetings; ii) restrictions on a foreigner’s ability to exercise votes; iii)","page_number":219,"box":{"x":117,"y":87,"width":735,"height":12}},{"id":"d28c2f7a-6ff7-4f16-bf39-5193a0a9357b","block_type":"box","text":"requirements to vote proxies in person; iv) “share-blocking” (requirements that investors who exercise","page_number":219,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"7aa47d46-0404-4ac6-ab97-5f8272cd526f","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":219,"box":{"x":116,"y":118,"width":728,"height":12}},{"id":"ee1eeb52-1be1-4170-8465-5ad5394044a4","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); v) potential difficulties in","page_number":219,"box":{"x":116,"y":134,"width":700,"height":12}},{"id":"bdb3b44a-4172-4876-a330-5691745a0ed7","block_type":"box","text":"translating the proxy; vi) regulatory constraints; and vii) requirements to provide local agents with","page_number":219,"box":{"x":116,"y":149,"width":723,"height":12}},{"id":"6688e9d9-f1d7-4228-9970-655d538d8246","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":219,"box":{"x":117,"y":165,"width":706,"height":12}},{"id":"42f3a86a-415d-4374-88b8-0de88c3d9010","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":219,"box":{"x":116,"y":180,"width":742,"height":12}},{"id":"9a7a7bf9-ee9f-4b58-8d22-c21f7fac3b1c","block_type":"box","text":"BlackRock votes proxies in these situations on a “best-efforts” basis. In addition, BAIS may determine","page_number":219,"box":{"x":117,"y":211,"width":759,"height":12}},{"id":"b931ab11-d734-436e-9358-28bb0df6f144","block_type":"box","text":"that it is generally in the interests of BlackRock’s clients not to vote proxies (or not to vote our full","page_number":219,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"18cd7562-a261-41eb-a4b5-32d8277e9a0a","block_type":"box","text":"allocation) if the costs (including but not limited to opportunity costs associated with share-blocking","page_number":219,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"1ddabb67-fbf8-4773-8f56-c0fc384c63f2","block_type":"box","text":"constraints) associated with exercising a vote are expected to outweigh the benefit the client would","page_number":219,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"46e1edd7-4e8e-4e7e-80a0-57b7b5318a73","block_type":"box","text":"derive by voting on the proposal.","page_number":219,"box":{"x":116,"y":273,"width":248,"height":12}},{"id":"a558fb04-6028-4823-a220-1debac9e393c","block_type":"box","text":"Voting Choice","page_number":219,"box":{"x":116,"y":304,"width":118,"height":12}},{"id":"89769d85-20cf-400e-a0bd-8f6e68501066","block_type":"box","text":"BlackRock offers Voting Choice, a program that provides eligible clients with more opportunities to","page_number":219,"box":{"x":117,"y":335,"width":733,"height":12}},{"id":"801bb348-3b4a-41c0-af3f-d4487efdc9b9","block_type":"box","text":"participate in the proxy voting process where legally and operationally viable.","page_number":219,"box":{"x":117,"y":351,"width":575,"height":12}},{"id":"c9047043-9a7c-4a12-9f95-8b8242f014ef","block_type":"box","text":"Voting Choice is currently available for eligible clients invested in certain institutional pooled funds in","page_number":219,"box":{"x":116,"y":382,"width":748,"height":12}},{"id":"8a05ead0-ca4f-4b5d-858d-f6764955800e","block_type":"box","text":"the U.S., UK, and Canada that use systematic active equity (SAE) and multi-asset strategies. In","page_number":219,"box":{"x":116,"y":397,"width":716,"height":12}},{"id":"81835f88-fea1-40a2-9795-42becc372dd8","block_type":"box","text":"addition, institutional clients in separately managed accounts (SMAs) are eligible for BlackRock Voting","page_number":219,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"634f88b5-6f0a-4ea6-943c-710366d1cab0","block_type":"box","text":"Choice regardless of their investment strategies.","page_number":219,"box":{"x":117,"y":428,"width":357,"height":12}},{"id":"9fb17638-0528-4c86-a85e-b37976b5dfdb","block_type":"box","text":"12","page_number":219,"box":{"x":477,"y":428,"width":11,"height":6}},{"id":"7cbcd538-77b7-4f86-b5e2-1b63654f5221","block_type":"box","text":"As a result, the shares attributed to BlackRock in company share registers may be voted differently","page_number":219,"box":{"x":116,"y":459,"width":740,"height":12}},{"id":"84353217-103d-4e11-88a7-2b7f70d04716","block_type":"box","text":"depending on whether our clients have authorized BAIS to vote on their behalf, have authorized","page_number":219,"box":{"x":116,"y":475,"width":715,"height":12}},{"id":"e0912e3b-bc95-4c8f-8a97-4ac0a6630dc3","block_type":"box","text":"BlackRock to vote in accordance with a third-party policy, or have elected to vote shares in accordance","page_number":219,"box":{"x":117,"y":490,"width":769,"height":12}},{"id":"21caf636-f356-4b0b-bc42-9bafbf160629","block_type":"box","text":"with their own policy. Our clients have greater control over proxy voting because of Voting Choice.","page_number":219,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"51c8f393-d7a0-40d7-9e75-f6992af29286","block_type":"box","text":"13","page_number":219,"box":{"x":846,"y":506,"width":10,"height":6}},{"id":"b7408d2d-7e2c-4a3d-a4cd-793932f700a1","block_type":"box","text":"Use and oversight of third-party vote services providers","page_number":219,"box":{"x":117,"y":537,"width":452,"height":12}},{"id":"d09645ce-359e-49b5-a249-0e8e7fe74b5e","block_type":"box","text":"Third-party vote services providers – or proxy research firms—provide research and recommendations","page_number":219,"box":{"x":116,"y":568,"width":767,"height":12}},{"id":"fd05a7ef-97e3-40fe-9e30-1651cba47095","block_type":"box","text":"on proxy votes, as well as voting infrastructure. BlackRock contracts primarily with the vote services","page_number":219,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"cce13ade-8b59-45c9-abfe-1657f8112db6","block_type":"box","text":"provider ISS and leverages its online platform to supply research and support voting, record keeping,","page_number":219,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"65657dfc-e91d-424d-b663-45b4369461f9","block_type":"box","text":"and reporting processes. We also use Glass Lewis’ research and analysis as an input into our voting","page_number":219,"box":{"x":116,"y":614,"width":752,"height":12}},{"id":"878a0e2f-c76d-4c95-bb70-3b492df1ddf0","block_type":"box","text":"process. It is important to note that, although proxy research firms provide important data and analysis,","page_number":219,"box":{"x":117,"y":630,"width":768,"height":12}},{"id":"5e0adca6-3252-4a6c-94d3-861b1b8bd52b","block_type":"box","text":"BAIS does not rely solely on their information or follow their voting recommendations. A company’s","page_number":219,"box":{"x":117,"y":645,"width":738,"height":12}},{"id":"2d62ac80-c879-49f2-aace-efcc19d110d7","block_type":"box","text":"disclosures, our engagements and voting, investment colleagues’ insights and our Guidelines are","page_number":219,"box":{"x":116,"y":661,"width":722,"height":12}},{"id":"9dbce68a-dd5a-4d0c-acd7-a23f2adc2e12","block_type":"box","text":"important inputs into our voting decisions on behalf of clients.","page_number":219,"box":{"x":117,"y":676,"width":452,"height":12}},{"id":"3c173cb0-9b53-4ff5-880e-2f39621a6da8","block_type":"box","text":"Given the large universe of actively held companies, BAIS employs the proxy services provider to","page_number":219,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"4ae460fa-663d-49ec-b3ea-92be3a9aa18d","block_type":"box","text":"streamline the voting process by making voting recommendations based on BAIS’ Guidelines when the","page_number":219,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"f7e61345-845e-4724-a877-beb77b7a3a83","block_type":"box","text":"items on a shareholder meeting agenda are routine. Agenda items that are not routine are referred","page_number":219,"box":{"x":117,"y":738,"width":730,"height":12}},{"id":"81f226ab-470b-4d92-b642-39cec51761c9","block_type":"box","text":"back to BAIS to assess, escalate as necessary to the relevant portfolio managers and vote. BAIS","page_number":219,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"5daac86d-498b-4440-a728-065a98473dee","block_type":"box","text":"reviews and can override the recommendations of the vote services provider at any time prior to the","page_number":219,"box":{"x":117,"y":769,"width":739,"height":12}},{"id":"da273d11-b50f-4d07-af73-706ce150f761","block_type":"box","text":"vote deadline. Both BAIS and the vote services provider actively monitor securities filings, research","page_number":219,"box":{"x":116,"y":785,"width":735,"height":12}},{"id":"27a55d40-b2e9-4bda-a2ff-7af16d39b3c7","block_type":"box","text":"reports, company announcements, and direct communications from companies to ensure awareness","page_number":219,"box":{"x":117,"y":800,"width":748,"height":12}},{"id":"a7f51b22-0aeb-4f99-a58c-ed553883efc9","block_type":"box","text":"of supplemental disclosures and proxy materials that may require a modification of votes.","page_number":219,"box":{"x":116,"y":816,"width":661,"height":12}},{"id":"d76e0b35-ffe4-4c4c-afe8-9311140540e8","block_type":"box","text":"12","page_number":219,"box":{"x":144,"y":841,"width":8,"height":5}},{"id":"b776e2ec-f1d0-4f9b-a016-cdf268029a9c","block_type":"box","text":"With Voting Choice, SMAs have the ability to select from a set of voting policies from third-party proxy advisers the","page_number":219,"box":{"x":170,"y":841,"width":679,"height":9}},{"id":"a3bae2fc-f161-4477-9b21-5a0ab1ccbfbf","block_type":"box","text":"policy that best aligns with their views and preferences. BlackRock can then use its proxy voting infrastructure to cast","page_number":219,"box":{"x":170,"y":854,"width":695,"height":9}},{"id":"251f47bc-e5c0-4107-9399-4d4e58462dce","block_type":"box","text":"votes based on the client’s selected voting policy.","page_number":219,"box":{"x":170,"y":867,"width":292,"height":9}},{"id":"8d405bff-7187-4aa3-8a75-179dcb2ad421","block_type":"box","text":"13","page_number":219,"box":{"x":144,"y":880,"width":8,"height":5}},{"id":"c1f678cb-f756-4f59-acef-9393d60ea6af","block_type":"box","text":"BlackRock does not disclose client information, including a client’s selection of proxy policy, without client consent.","page_number":219,"box":{"x":171,"y":880,"width":678,"height":9}},{"id":"4f80ac6d-ad45-4bd5-8774-04b6e7755c99","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":219,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"3578cb59-3599-4723-883b-2a8220857bb0","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":219,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"ace87709-3323-46e2-998f-53df6d837694","block_type":"box","text":"19","page_number":219,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"cc0527b6-cf38-4b06-ae36-a321962537ed","block_type":"box","text":"NM1026U-6039989-219/256","page_number":219,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d52aa400-c416-4ce2-892a-f69d2b3b9c85","block_type":"box","text":"BAIS closely monitors the third-party vote services providers we contract with to ensure that they are","page_number":220,"box":{"x":117,"y":87,"width":751,"height":12}},{"id":"b13c3816-cdca-4813-bfcc-e6edf0544e9e","block_type":"box","text":"meeting our service level expectations and have effective policies and procedures in place to manage","page_number":220,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"ed7307f5-64e4-4345-91d0-c7e2b5f307f9","block_type":"box","text":"potential conflicts of interest. Our oversight of service providers includes regular meetings with client","page_number":220,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"daa40b1c-09a4-4104-a7b3-d8c7517779f4","block_type":"box","text":"service teams, systematic monitoring of vendor operations, as well as annual due diligence meetings in","page_number":220,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"af93c06d-5871-4ecd-859d-0a1c93c58982","block_type":"box","text":"accordance with BlackRock’s firmwide policies.","page_number":220,"box":{"x":116,"y":149,"width":355,"height":12}},{"id":"bb79603b-fbf2-4044-9243-cd925513df98","block_type":"box","text":"Conflicts management policies and procedures","page_number":220,"box":{"x":116,"y":181,"width":383,"height":12}},{"id":"45610850-2fa9-4800-9940-6cdecd150a77","block_type":"box","text":"BlackRock maintains policies and procedures that seek to prevent undue influence on BAIS’ proxy","page_number":220,"box":{"x":117,"y":213,"width":734,"height":12}},{"id":"29edf357-d2dd-4ff4-952f-e3b5cb1d39f1","block_type":"box","text":"voting activity. Such influence might stem from any relationship between the investee company (or any","page_number":220,"box":{"x":116,"y":228,"width":767,"height":12}},{"id":"e646e4dd-fbcb-4d31-974b-886cf776bf0e","block_type":"box","text":"shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a","page_number":220,"box":{"x":116,"y":244,"width":743,"height":12}},{"id":"5f2d7fd1-4bb2-4905-a9fb-5f6de86271ea","block_type":"box","text":"Fund’s affiliates, or BlackRock employees. 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Within the normal course of business, BAIS may","page_number":220,"box":{"x":149,"y":730,"width":681,"height":12}},{"id":"57971a9d-ea39-4f08-941e-5b2a379cfd2f","block_type":"box","text":"engage directly with BlackRock clients, business partners and/or third parties, and/or with","page_number":220,"box":{"x":150,"y":746,"width":663,"height":11}},{"id":"0e706d9f-a0c2-4ac8-852f-ea2cf46d4e39","block_type":"box","text":"employees with sales, vendor management, or business partnership roles, in discussions","page_number":220,"box":{"x":150,"y":761,"width":662,"height":12}},{"id":"f1c2146d-adfa-430d-85b0-ba339b55da84","block_type":"box","text":"regarding our approach to stewardship, general corporate governance matters, client reporting","page_number":220,"box":{"x":150,"y":777,"width":701,"height":12}},{"id":"661d26b5-939a-4660-a478-e71e812fcd86","block_type":"box","text":"needs, and/or to otherwise ensure that proxy-related client service levels are met","page_number":220,"box":{"x":150,"y":792,"width":601,"height":12}},{"id":"9031af07-587b-4c88-a509-1dc8a1e13e3f","block_type":"box","text":"• Determined to engage, in certain instances, an independent third-party voting service provider to","page_number":220,"box":{"x":117,"y":816,"width":749,"height":12}},{"id":"63de924c-c699-4626-94be-0b4f97a66091","block_type":"box","text":"make proxy voting recommendations as a further safeguard to avoid perceived or potential","page_number":220,"box":{"x":150,"y":831,"width":678,"height":12}},{"id":"cf10c8d6-3f7d-48fa-871f-0498eaaa647b","block_type":"box","text":"conflicts of interest, to satisfy regulatory requirements, or as may be otherwise required by","page_number":220,"box":{"x":150,"y":847,"width":674,"height":12}},{"id":"73531b0e-9e57-4792-9381-7b9ceb87bf63","block_type":"box","text":"applicable law. In such circumstances, the independent third-party voting service provider provides","page_number":220,"box":{"x":150,"y":862,"width":737,"height":12}},{"id":"9c5ebdc6-75c9-4198-91e4-9004e682df9a","block_type":"box","text":"BlackRock with recommendations, in accordance with the Guidelines, as to how to vote such","page_number":220,"box":{"x":151,"y":878,"width":693,"height":11}},{"id":"fc5d934d-b0aa-4fe2-8304-78548f396ebd","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":220,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"c9f1f292-64ea-4339-b08f-714b494e1164","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":220,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"88bbaba4-c3e5-494b-8f7b-f79f34c1f029","block_type":"box","text":"20","page_number":220,"box":{"x":865,"y":909,"width":18,"height":9}},{"id":"db07a804-eedf-4cd7-ba88-c0a6ea91328e","block_type":"box","text":"NM1026U-6039989-220/256","page_number":220,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e9304da3-6f58-4ebb-96b9-cd75a3ca58e4","block_type":"box","text":"proxies. BlackRock uses an independent third-party voting service provider to make proxy voting","page_number":221,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"30df4d52-7a10-4d59-8302-034b0292f67e","block_type":"box","text":"recommendations for shares of BlackRock, Inc. and companies affiliated with BlackRock, Inc.","page_number":221,"box":{"x":150,"y":102,"width":698,"height":12}},{"id":"9e1878f5-4408-457a-92e3-68243e476c8f","block_type":"box","text":"BlackRock may also use an independent third-party voting service provider to make proxy voting","page_number":221,"box":{"x":151,"y":118,"width":721,"height":12}},{"id":"777aec7b-837e-48ac-ad3a-42f59da1061c","block_type":"box","text":"recommendations for certain perceived or potential conflicts of interest, including:","page_number":221,"box":{"x":150,"y":134,"width":608,"height":12}},{"id":"c58fa6aa-6b5f-4998-ad4b-d7461e1149f8","block_type":"box","text":"• public companies that include BlackRock employees on their boards of directors","page_number":221,"box":{"x":159,"y":156,"width":624,"height":12}},{"id":"e9f46a72-1920-41f5-b836-efba2c5b8e77","block_type":"box","text":"• public companies of which a BlackRock, Inc. board member serves as a senior executive or a","page_number":221,"box":{"x":159,"y":178,"width":725,"height":12}},{"id":"7a9b395b-35e8-4fe7-b959-424d736fc54a","block_type":"box","text":"member of the board of directors","page_number":221,"box":{"x":184,"y":193,"width":248,"height":10}},{"id":"03f6bb90-d917-4686-87d9-911026e1d930","block_type":"box","text":"• public companies that are the subject of certain transactions involving BlackRock Funds","page_number":221,"box":{"x":159,"y":215,"width":682,"height":12}},{"id":"b43988e6-fd25-4d0c-be39-492c14cc9fda","block_type":"box","text":"• public companies that are joint venture partners with BlackRock, and","page_number":221,"box":{"x":159,"y":238,"width":540,"height":11}},{"id":"493f7193-2b73-446d-aaef-181859c8143a","block_type":"box","text":"• public companies when legal or regulatory requirements compel BlackRock to use an","page_number":221,"box":{"x":159,"y":260,"width":663,"height":12}},{"id":"900dc6dd-9e61-4ab4-a7ba-5cd316816160","block_type":"box","text":"independent third-party voting service provider","page_number":221,"box":{"x":184,"y":275,"width":350,"height":12}},{"id":"54d8981f-be09-4632-98c6-8b9a132994d4","block_type":"box","text":"In selecting an independent third-party voting service provider, we assess several characteristics,","page_number":221,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"35f7a962-5fd4-472e-b6a0-93ac04a3c823","block_type":"box","text":"including but not limited to: independence, an ability to analyze proxy issues and make","page_number":221,"box":{"x":117,"y":319,"width":647,"height":12}},{"id":"0390dba9-ab2f-4e73-9d0d-14c65a65069b","block_type":"box","text":"recommendations in the economic interest of our clients in accordance with the Guidelines, reputation","page_number":221,"box":{"x":117,"y":335,"width":760,"height":12}},{"id":"a70a706d-dd04-4590-b277-a9e2eacc2c8b","block_type":"box","text":"for reliability and integrity, and operational capacity to accurately deliver the assigned","page_number":221,"box":{"x":116,"y":350,"width":637,"height":12}},{"id":"94a8b63b-7f29-4713-bf90-764c7a641b96","block_type":"box","text":"recommendations in a timely manner. We may engage more than one independent third-party voting","page_number":221,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"de2d1ef4-c847-4466-b946-8f92d6c508b9","block_type":"box","text":"service provider, in part to mitigate potential or perceived conflicts of interest at a single voting service","page_number":221,"box":{"x":116,"y":381,"width":761,"height":12}},{"id":"83281912-ca5e-4fb9-920a-be03f29c1dd7","block_type":"box","text":"provider.","page_number":221,"box":{"x":117,"y":397,"width":69,"height":12}},{"id":"158ffecb-63fa-4f46-b928-e84d4f59124e","block_type":"box","text":"Securities lending","page_number":221,"box":{"x":116,"y":425,"width":149,"height":13}},{"id":"b1a45a4e-4625-4f72-a997-f495ec82105d","block_type":"box","text":"If authorized, BlackRock acts as a securities lending agent on behalf of its clients. 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This decision is guided by our","page_number":221,"box":{"x":116,"y":530,"width":736,"height":12}},{"id":"48b222a0-c6c5-4c6b-b623-69e4cda72b89","block_type":"box","text":"fiduciary duty as an asset manager to our clients in helping them achieve their investment goals. 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However, in certain instances, BlackRock","page_number":221,"box":{"x":116,"y":698,"width":758,"height":12}},{"id":"de6ef85c-d9ef-41f4-8d93-3c6849b13276","block_type":"box","text":"may determine, in our independent business judgment as a fiduciary, that the value of voting","page_number":221,"box":{"x":117,"y":713,"width":685,"height":12}},{"id":"4b45bd2b-ce20-4a87-899b-ead31d083b14","block_type":"box","text":"outweighs the securities lending revenue loss to clients and would therefore recall shares to be voted","page_number":221,"box":{"x":116,"y":729,"width":750,"height":12}},{"id":"702b4179-8c17-4dff-b7f2-5200f60fa6f3","block_type":"box","text":"in those instances.","page_number":221,"box":{"x":117,"y":744,"width":137,"height":10}},{"id":"13e90eac-f95f-4674-8d2f-1a6c533ed199","block_type":"box","text":"Periodically, BlackRock reviews our process for determining whether to recall securities on loan in","page_number":221,"box":{"x":117,"y":773,"width":725,"height":12}},{"id":"795be6c1-7044-4733-bc92-47ee6d647724","block_type":"box","text":"order to vote and may modify it as necessary.","page_number":221,"box":{"x":116,"y":789,"width":338,"height":12}},{"id":"ee624039-634b-4c28-aa03-efb032f773e9","block_type":"box","text":"Reporting and vote transparency","page_number":221,"box":{"x":117,"y":817,"width":262,"height":12}},{"id":"ca0912d2-b231-4a14-9e64-f7106c589cc1","block_type":"box","text":"BAIS is committed to transparency in the stewardship work we do on behalf of clients. 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As a fiduciary, BlackRock is legally required to make proxy voting","page_number":229,"box":{"x":116,"y":313,"width":663,"height":12}},{"id":"86417072-7489-4cdf-91c0-31747018e260","block_type":"box","text":"determinations in a manner that is consistent with the investment objectives of clients who have","page_number":229,"box":{"x":116,"y":329,"width":715,"height":12}},{"id":"99f36c59-a1e3-48fe-97bf-738fbc3087fb","block_type":"box","text":"delegated voting authority to us. BIS’ Benchmark Policies, and the vote decisions made consistent with","page_number":229,"box":{"x":116,"y":344,"width":770,"height":12}},{"id":"cdf3a16e-965f-4fde-bbdd-4b5d0e0ffa7e","block_type":"box","text":"those policies, reflect our reasonable and independent judgment of what is in the long-term financial","page_number":229,"box":{"x":116,"y":360,"width":746,"height":12}},{"id":"ea4a5b3f-1a60-451c-ad2e-0856e606df8d","block_type":"box","text":"interests of clients. Our vote decisions are often informed by several factors, including in-depth","page_number":229,"box":{"x":117,"y":375,"width":706,"height":12}},{"id":"613ee1ab-3838-4c82-8025-d6150810582a","block_type":"box","text":"analysis of company disclosures, comparisons against industry peers, third-party research, and, where","page_number":229,"box":{"x":116,"y":391,"width":768,"height":12}},{"id":"e80e70cf-8608-4cfc-8058-3760abdbdebe","block_type":"box","text":"appropriate, engagement with companies.","page_number":229,"box":{"x":116,"y":407,"width":318,"height":11}},{"id":"cffed3f0-ea49-42d6-8caf-5cf717d72a14","block_type":"box","text":"Generally, BIS supports the vote recommendations of the board of directors and management at","page_number":229,"box":{"x":117,"y":434,"width":721,"height":12}},{"id":"cd395836-fe51-457f-a909-52e557f1ad87","block_type":"box","text":"companies which have sound corporate governance and deliver strong financial returns over time.","page_number":229,"box":{"x":116,"y":450,"width":734,"height":12}},{"id":"c2fac98a-b99b-4ad5-a0c4-bd88dc96abe0","block_type":"box","text":"When we determine it is in our clients’ financial interests to convey concern to companies through","page_number":229,"box":{"x":116,"y":465,"width":729,"height":12}},{"id":"777fe997-4577-40fd-b9fc-cf57134d7fca","block_type":"box","text":"voting, we may do so in two forms: we might not support the election of directors or other management","page_number":229,"box":{"x":116,"y":481,"width":768,"height":12}},{"id":"29eaaf9d-bec4-48a9-843e-5095b72cdaf8","block_type":"box","text":"proposals, or we might not support management’s voting recommendation on a shareholder proposal.","page_number":229,"box":{"x":117,"y":496,"width":761,"height":12}},{"id":"eaa31899-501c-46b1-9941-16a9c764d5ed","block_type":"box","text":"Shareholder rights","page_number":229,"box":{"x":425,"y":530,"width":154,"height":13}},{"id":"f997ced6-3321-48ea-b6ef-11dc7635f4d6","block_type":"box","text":"BlackRock’s global approach as a shareholder on behalf of our clients is underpinned by certain rights","page_number":229,"box":{"x":117,"y":558,"width":762,"height":12}},{"id":"b1ff4339-5566-483b-9ac1-6caf127731ac","block_type":"box","text":"attached to shareholding in most markets, as established by corporate laws, regulations, and listing","page_number":229,"box":{"x":116,"y":574,"width":743,"height":12}},{"id":"18a81d09-5c05-42ff-abda-07a1bfe6304a","block_type":"box","text":"rules.","page_number":229,"box":{"x":117,"y":590,"width":38,"height":9}},{"id":"6b01c53b-cb3c-4203-b9cc-64a358920570","block_type":"box","text":"3","page_number":229,"box":{"x":157,"y":590,"width":5,"height":6}},{"id":"36929f56-850a-4881-a7c3-34dbd8627ac6","block_type":"box","text":"For example, in most markets, shareholders have the right to:","page_number":229,"box":{"x":163,"y":590,"width":468,"height":11}},{"id":"07cb92a1-cc55-4cf8-b077-ef448280845f","block_type":"box","text":"• Vote to elect, remove, and nominate directors, approve the appointment of the auditor, and","page_number":229,"box":{"x":159,"y":617,"width":705,"height":12}},{"id":"c2a21cfe-9bca-40f7-8888-13b0283e7987","block_type":"box","text":"amend the corporate charter or bylaws.","page_number":229,"box":{"x":184,"y":633,"width":297,"height":12}},{"id":"ad3c572c-8c9f-46f9-b488-00014dde69f9","block_type":"box","text":"• Vote on key board decisions that are material to","page_number":229,"box":{"x":159,"y":655,"width":377,"height":12}},{"id":"a9b5ecb8-ab02-464a-8ca4-4ac20c551a35","block_type":"box","text":"the protection of their investment, including but","page_number":229,"box":{"x":536,"y":655,"width":345,"height":12}},{"id":"c36c4720-2b6c-4b3f-9d88-6945f0e8d9a9","block_type":"box","text":"not limited to, changes to the purpose of the busi","page_number":229,"box":{"x":184,"y":670,"width":353,"height":12}},{"id":"0b9b0970-1b64-414b-b197-aefd7b728084","block_type":"box","text":"ness, dilution levels, and pre-emptive rights.","page_number":229,"box":{"x":539,"y":670,"width":317,"height":12}},{"id":"63c2485d-358a-4640-932c-56fe14202297","block_type":"box","text":"• Access sufficient and timely information on governance, strategic, and business matters –","page_number":229,"box":{"x":159,"y":692,"width":691,"height":12}},{"id":"f48fbc2b-6a37-44c8-87a5-82453d5e49b2","block_type":"box","text":"where such matters are material – to make informed decisions.","page_number":229,"box":{"x":183,"y":707,"width":468,"height":10}},{"id":"39f116e6-823b-46c9-9667-8aba22170f05","block_type":"box","text":"Key governance topics","page_number":229,"box":{"x":409,"y":742,"width":182,"height":11}},{"id":"86846787-d237-435f-bdc6-96f08a630a5e","block_type":"box","text":"In our experience, there are certain globally applicable elements of corporate governance that","page_number":229,"box":{"x":117,"y":769,"width":696,"height":12}},{"id":"a80fbcd2-934c-4105-a51f-dd988e38cdd1","block_type":"box","text":"contribute to a company’s ability to create long-term financial value for shareholders. These are topics","page_number":229,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"a44e7ef7-f377-4f0d-bfb7-e869990bf45a","block_type":"box","text":"that shareholders may have the ability to vote on at shareholder meetings. These areas include:","page_number":229,"box":{"x":116,"y":800,"width":711,"height":12}},{"id":"81009bc4-29d4-4f65-9161-6c2c132c178e","block_type":"box","text":"• Boards and directors","page_number":229,"box":{"x":117,"y":828,"width":192,"height":10}},{"id":"c47f3d76-9bdc-4441-8065-bd071b7c6d89","block_type":"box","text":"3","page_number":229,"box":{"x":143,"y":853,"width":4,"height":5}},{"id":"4213fdec-83dc-4aeb-b310-ad8d41a07498","block_type":"box","text":"Examples include: Government of Canada, “Canada Business Corporations Act,” amended 2024; European Union,","page_number":229,"box":{"x":171,"y":853,"width":682,"height":10}},{"id":"00579c66-c76b-4fa7-90ba-02e69e74b3b7","block_type":"box","text":"“Shareholder Rights Directive II,” 2017; and the China Securities Regulatory Commission, “Code of Corporate","page_number":229,"box":{"x":170,"y":866,"width":651,"height":10}},{"id":"b5c5477c-d78f-4de5-802f-b84a7537ed9c","block_type":"box","text":"Governance for Listed Companies in China,” 2001. Websites accessed in December 2025.","page_number":229,"box":{"x":170,"y":879,"width":538,"height":10}},{"id":"68f03ce1-2dcd-4743-b3d1-7774e4356c84","block_type":"box","text":"BlackRock Investment Stewardship","page_number":229,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"457dad0f-e08f-4f80-8824-a55081fd1797","block_type":"box","text":"Global Principles |","page_number":229,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"455816ae-98fb-4a21-8dd1-51897e7e075e","block_type":"box","text":"4","page_number":229,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"29bd0adf-52f0-4ca4-b3cc-b8e298d78687","block_type":"box","text":"NM1026U-6039989-229/256","page_number":229,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9879f78e-f955-49fa-9f9a-97aa34e21ac2","block_type":"box","text":"• Auditors and audit-related issues","page_number":230,"box":{"x":117,"y":87,"width":282,"height":10}},{"id":"fde163ac-a854-451b-9c6e-8e22760ded07","block_type":"box","text":"• Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":230,"box":{"x":117,"y":109,"width":635,"height":12}},{"id":"2db849cd-1359-414c-91c1-e47c809d39d0","block_type":"box","text":"• Executive compensation","page_number":230,"box":{"x":117,"y":130,"width":219,"height":12}},{"id":"ae0a999b-a0d8-4274-a611-2394fce235a7","block_type":"box","text":"• Shareholder protections and other significant corporate governance matters","page_number":230,"box":{"x":117,"y":152,"width":600,"height":12}},{"id":"542720e9-55dd-457a-974b-13796984b4f0","block_type":"box","text":"• Shareholder proposals","page_number":230,"box":{"x":117,"y":173,"width":206,"height":12}},{"id":"e326a67a-e813-418b-a77f-4f7d3a2ddc92","block_type":"box","text":"The BIS Benchmark Policies are not prescriptive but rather are applied on a pragmatic basis, taking","page_number":230,"box":{"x":116,"y":201,"width":744,"height":12}},{"id":"38a2f8f3-5904-4740-a435-15ae51b19290","block_type":"box","text":"into consideration a number of company-specific factors, including the sector, market, and business","page_number":230,"box":{"x":117,"y":216,"width":744,"height":12}},{"id":"af69dbdd-9de2-457b-91d4-e996fbb37184","block_type":"box","text":"environment within which companies operate.","page_number":230,"box":{"x":116,"y":232,"width":345,"height":12}},{"id":"2433c650-9fec-4422-8e25-0ba9a8c02947","block_type":"box","text":"At the regional level, it is our view that companies should observe the accepted corporate governance","page_number":230,"box":{"x":116,"y":259,"width":761,"height":12}},{"id":"523b76a7-368e-4438-a817-9a677771d639","block_type":"box","text":"standards in their domestic market at a minimum, and we ask that, if they do not, they explain how","page_number":230,"box":{"x":116,"y":275,"width":736,"height":12}},{"id":"6d3cee58-14ef-47b4-b8ea-96b63f038f82","block_type":"box","text":"their approach better supports durable, long-term financial value creation. Our regional voting","page_number":230,"box":{"x":116,"y":290,"width":698,"height":12}},{"id":"a55f7b72-8dcf-4960-8a49-917a3d16da07","block_type":"box","text":"guidelines explain how the BIS Global Principles inform our voting decisions in relation to common","page_number":230,"box":{"x":116,"y":306,"width":735,"height":12}},{"id":"fc543538-d0aa-4d63-8d0e-36204be48ac6","block_type":"box","text":"ballot items for shareholder meetings in those markets.","page_number":230,"box":{"x":117,"y":321,"width":406,"height":12}},{"id":"53fbc953-d1ce-4fd5-8a20-a194ee129c99","block_type":"box","text":"4","page_number":230,"box":{"x":525,"y":321,"width":5,"height":6}},{"id":"363d1979-2cde-4063-98f8-a7b5948aef17","block_type":"box","text":"Boards and directors","page_number":230,"box":{"x":416,"y":355,"width":173,"height":9}},{"id":"76355632-4736-468a-bfe5-decaf8969fd8","block_type":"box","text":"Oversight role of the board","page_number":230,"box":{"x":117,"y":382,"width":220,"height":13}},{"id":"6d2c7303-2b81-4597-aa04-a7b43893935a","block_type":"box","text":"Companies whose boards are comprised of appropriately qualified, engaged directors with","page_number":230,"box":{"x":117,"y":410,"width":676,"height":12}},{"id":"d48ec9c7-69fc-42c5-aa7c-4c2f570cf391","block_type":"box","text":"professional characteristics relevant to a company’s business enhance the board’s ability to add long","page_number":230,"box":{"x":117,"y":426,"width":753,"height":12}},{"id":"53d84d62-ae8c-4330-8a1b-527f53bcd435","block_type":"box","text":"term financial value and serve as the voice of shareholders in board discussions. In our view, a strong","page_number":230,"box":{"x":116,"y":441,"width":761,"height":12}},{"id":"52acdbb0-bafc-4941-8e76-bdee3b1f2bc5","block_type":"box","text":"board gives a company a competitive advantage, providing valuable oversight and contributing to the","page_number":230,"box":{"x":117,"y":457,"width":754,"height":12}},{"id":"331f3ee0-80b1-4d26-9565-a13611c4fbc8","block_type":"box","text":"most important management decisions that support long-term financial performance.","page_number":230,"box":{"x":117,"y":472,"width":632,"height":12}},{"id":"1f111970-03aa-4dda-a7fb-6fc5b2806cdb","block_type":"box","text":"For this reason, our investment stewardship efforts focus on the effectiveness of the board of directors.","page_number":230,"box":{"x":117,"y":500,"width":768,"height":12}},{"id":"426e5547-90e2-414d-8686-08eaf1aeb895","block_type":"box","text":"We engage, as necessary, with members of the board’s nominating and/or governance committee to","page_number":230,"box":{"x":116,"y":515,"width":753,"height":12}},{"id":"3ececb4b-7683-477f-af4a-cc8a7a8099cc","block_type":"box","text":"assess whether governance practices and board composition are effective given a company’s","page_number":230,"box":{"x":116,"y":531,"width":701,"height":12}},{"id":"500a762f-6807-4717-addb-a8226b03db8e","block_type":"box","text":"business model, sector, market, and the business environment in which a company is operating.","page_number":230,"box":{"x":117,"y":546,"width":719,"height":12}},{"id":"7783cade-b625-43ec-87e7-37866bfebd6f","block_type":"box","text":"We consider it good practice when the board establishes and maintains a framework of robust and","page_number":230,"box":{"x":116,"y":574,"width":736,"height":12}},{"id":"2cf1e040-ecd8-4b27-bb9d-d2b3f7bc0263","block_type":"box","text":"effective governance mechanisms that supports its oversight of the company’s strategy and","page_number":230,"box":{"x":116,"y":589,"width":685,"height":12}},{"id":"3d7c2d26-8ee9-4526-9881-be93cf568a8b","block_type":"box","text":"operations, consistent with the long-term financial interests of investors. This includes having clear","page_number":230,"box":{"x":116,"y":605,"width":735,"height":12}},{"id":"ce4343a3-b8ea-4b77-b03b-0c91dc71103b","block_type":"box","text":"descriptions of the role of the board and the committees of the board and how directors engage with","page_number":230,"box":{"x":116,"y":620,"width":748,"height":12}},{"id":"3881ac8c-c323-4d68-a18b-d02a6826d200","block_type":"box","text":"and oversee management, as well as disclosure of material risks that may affect a company’s long","page_number":230,"box":{"x":116,"y":636,"width":738,"height":12}},{"id":"93d57bbd-64ea-47be-9aa2-2f1368e6894b","block_type":"box","text":"term strategy and how management is effectively identifying, managing, and mitigating such risks.","page_number":230,"box":{"x":116,"y":651,"width":732,"height":12}},{"id":"8efb3a14-b3a9-4be3-b907-94a6bcc41373","block_type":"box","text":"Understanding management’s long-term strategy and the milestones against which investors should","page_number":230,"box":{"x":117,"y":679,"width":741,"height":12}},{"id":"3a57261e-d50f-43ad-86fe-2596efade123","block_type":"box","text":"assess its implementation is central to our approach. If any strategic targets are significantly missed or","page_number":230,"box":{"x":116,"y":694,"width":761,"height":12}},{"id":"f4dce95f-d38c-4d85-ab8e-3071424b1392","block_type":"box","text":"materially restated, we find it helpful when company disclosures provide a detailed explanation of the","page_number":230,"box":{"x":117,"y":710,"width":747,"height":12}},{"id":"8479c05d-3dfe-4dc9-9085-17738f065b7f","block_type":"box","text":"changes and an indication of the board’s role in reviewing the revised targets. We look to the board to","page_number":230,"box":{"x":116,"y":725,"width":754,"height":12}},{"id":"5cb09cb4-ab87-4289-912b-b6be7c4291d5","block_type":"box","text":"articulate the effectiveness of these mechanisms in overseeing the management of business risks and","page_number":230,"box":{"x":116,"y":741,"width":759,"height":12}},{"id":"3595f350-da1b-4cd1-8508-53bbb0087605","block_type":"box","text":"opportunities and the fulfillment of the company’s strategy.","page_number":230,"box":{"x":116,"y":756,"width":432,"height":12}},{"id":"24e30b31-777a-4fe1-b2dc-cace2439e0c8","block_type":"box","text":"Where a company has not adequately disclosed or demonstrated that its board has fulfilled these","page_number":230,"box":{"x":116,"y":784,"width":722,"height":12}},{"id":"faf8bafd-b4ee-44c1-9921-c5b4966d6f54","block_type":"box","text":"corporate governance and risk oversight responsibilities, we may consider not supporting the election","page_number":230,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"10d24110-89f0-4e4a-9a53-fc42a2ab9579","block_type":"box","text":"of directors who, in our assessment, have particular responsibility for the issues.","page_number":230,"box":{"x":116,"y":815,"width":594,"height":12}},{"id":"c915363b-5f58-4ba6-a768-75a6a97ba1c5","block_type":"box","text":"4","page_number":230,"box":{"x":143,"y":840,"width":4,"height":5}},{"id":"8220db04-3799-4cc5-8187-1a1be41cc841","block_type":"box","text":"Our regional voting guidelines reflect these different market standards and norms. Depending on the market, generally","page_number":230,"box":{"x":170,"y":840,"width":702,"height":10}},{"id":"8a556249-dcaf-45a6-9394-adaf3ae6509f","block_type":"box","text":"accepted practice is informed by corporate law, market regulation, best practices, and industry initiatives, amongst other","page_number":230,"box":{"x":170,"y":853,"width":712,"height":10}},{"id":"d5064e4e-69af-46a6-a03f-41c0c7e45fd4","block_type":"box","text":"factors. BIS carries out engagement with companies, executes proxy votes, and conducts vote operations (including","page_number":230,"box":{"x":170,"y":866,"width":688,"height":10}},{"id":"0dc43f2f-d903-405f-92af-a129bdad6dba","block_type":"box","text":"maintaining records of votes cast) in a manner consistent with the relevant regional voting guidelines.","page_number":230,"box":{"x":170,"y":879,"width":600,"height":10}},{"id":"164076d3-9b03-4543-b57d-f50b9b65e723","block_type":"box","text":"BlackRock Investment Stewardship","page_number":230,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"ff663f30-5c83-4368-a42d-20fb320e2ae9","block_type":"box","text":"Global Principles |","page_number":230,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"30172b3b-5531-4472-902c-aa9281c505bb","block_type":"box","text":"5","page_number":230,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"3f8b88af-82bb-465a-9df7-073a9d688e36","block_type":"box","text":"NM1026U-6039989-230/256","page_number":230,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4dd8cdec-c2cc-4bb6-ad21-2613b3d5e37a","block_type":"box","text":"When casting vote decisions on behalf of clients on the election of directors, some of the factors that","page_number":231,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"648b94f5-36b4-42ae-a94b-5807970bde76","block_type":"box","text":"speak to the board’s effectiveness as a group include the relevance of individual directors’","page_number":231,"box":{"x":116,"y":102,"width":673,"height":13}},{"id":"b4d062f4-fbaf-48f0-86d6-2fd9c03eb34f","block_type":"box","text":"qualifications and skillsets, as well as directors’ capacity and other time commitments, and how these","page_number":231,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"88c53236-0732-47fd-b02f-4bb9d845112a","block_type":"box","text":"factors may contribute to the company’s financial performance. We look to boards to establish formal","page_number":231,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"640cd8c0-646d-4669-9834-2e153c2cef8c","block_type":"box","text":"and transparent processes for nominating directors that reflect the company’s long-term strategy and","page_number":231,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"c08d4a71-6ed0-4da1-9b7e-63bf3855e39a","block_type":"box","text":"business model.","page_number":231,"box":{"x":117,"y":165,"width":125,"height":9}},{"id":"009e7199-4f79-4418-9b2c-45967871b12f","block_type":"box","text":"In the section titled “Board quality and effectiveness” below, we provide more detail about our","page_number":231,"box":{"x":117,"y":193,"width":697,"height":12}},{"id":"fcef10eb-f3e0-45a6-805d-06cbc43a3d83","block_type":"box","text":"approach to board composition and how it underpins board effectiveness and long-term financial value","page_number":231,"box":{"x":116,"y":209,"width":766,"height":12}},{"id":"6a771048-db26-4c62-88bc-abdf2bd2256a","block_type":"box","text":"creation.","page_number":231,"box":{"x":116,"y":224,"width":69,"height":10}},{"id":"eeb8c9be-3df9-4910-8a66-8d51b22a9406","block_type":"box","text":"Regular accountability through director elections","page_number":231,"box":{"x":116,"y":253,"width":398,"height":12}},{"id":"6465a752-2f3b-4cda-85c9-7411e914cc02","block_type":"box","text":"The election of directors to the board is a right of shareholders and an important signal of support for,","page_number":231,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"adbbbdee-7ea0-44e7-880c-ecf43f4a4c04","block_type":"box","text":"or concern about, the performance of the board in overseeing and advising management. To ensure","page_number":231,"box":{"x":116,"y":297,"width":749,"height":12}},{"id":"9047195a-c1cf-4054-b99d-8f5f9a1715b3","block_type":"box","text":"accountability for their decisions on behalf of shareholders, directors should stand for election on a","page_number":231,"box":{"x":116,"y":312,"width":736,"height":12}},{"id":"118eeba7-89e3-4907-9520-a707083c8119","block_type":"box","text":"regular basis, ideally annually.","page_number":231,"box":{"x":117,"y":328,"width":223,"height":12}},{"id":"9b4c4cc6-378f-42ee-a6c8-25c6aa6e11b6","block_type":"box","text":"5","page_number":231,"box":{"x":341,"y":328,"width":6,"height":6}},{"id":"9df78888-e18b-4680-9721-e1b62008fc72","block_type":"box","text":"Annual director elections allow shareholders to reaffirm their support","page_number":231,"box":{"x":347,"y":328,"width":517,"height":12}},{"id":"1c113ff9-802b-4596-a137-beb7c9241ef5","block_type":"box","text":"for, or concerns about, board members’ decisions in a timely manner. When board members are not","page_number":231,"box":{"x":116,"y":343,"width":749,"height":12}},{"id":"08057273-e265-4b46-8745-5cdcc4ac8897","block_type":"box","text":"elected annually, we consider it good practice for boards to have a rotation policy to ensure that,","page_number":231,"box":{"x":116,"y":359,"width":719,"height":12}},{"id":"f6f6fbc1-646b-490a-8e0c-3afee77b9bc4","block_type":"box","text":"through a board cycle, all directors have had their appointment re-confirmed, with a proportion of","page_number":231,"box":{"x":116,"y":374,"width":722,"height":12}},{"id":"1c8c19de-5911-4351-ba13-84c6fcf54b65","block_type":"box","text":"directors being put forward for election at each shareholder meeting.","page_number":231,"box":{"x":116,"y":390,"width":513,"height":12}},{"id":"83540dcc-4b83-4b8f-b2aa-06f45ad5d57b","block_type":"box","text":"Board quality and effectiveness","page_number":231,"box":{"x":116,"y":418,"width":258,"height":12}},{"id":"f27cff5a-a90a-4370-8875-76574990a074","block_type":"box","text":"Regular director elections also give boards the opportunity to adjust their composition in an orderly way","page_number":231,"box":{"x":117,"y":447,"width":770,"height":12}},{"id":"4011da7b-e6f8-4bbd-a419-e990055fba74","block_type":"box","text":"to reflect developments in the company’s strategy and the market environment. In our view, it is","page_number":231,"box":{"x":116,"y":462,"width":714,"height":12}},{"id":"3018b152-03d5-46af-81fd-ec335cab51a6","block_type":"box","text":"beneficial for new directors to be brought onto the board periodically to refresh the group’s thinking,","page_number":231,"box":{"x":117,"y":478,"width":741,"height":12}},{"id":"5e84216e-7be6-4735-ac8f-43c858c842fc","block_type":"box","text":"while supporting both continuity and appropriate succession planning. We consider the average overall","page_number":231,"box":{"x":116,"y":493,"width":768,"height":12}},{"id":"bf87e7df-fd35-415b-8bdd-7f25701e1c7a","block_type":"box","text":"tenure of the board and seek a balance between the knowledge and experience of longer-serving","page_number":231,"box":{"x":116,"y":509,"width":728,"height":12}},{"id":"00bac03c-700e-4e0d-913b-b1f0dbf97e86","block_type":"box","text":"directors and the fresh perspectives of directors who joined more recently.","page_number":231,"box":{"x":116,"y":524,"width":556,"height":12}},{"id":"af0a6952-04e3-4a67-93d4-add83927d23f","block_type":"box","text":"We appreciate when companies regularly review and assess how directors nominated for election","page_number":231,"box":{"x":116,"y":553,"width":731,"height":12}},{"id":"29c50f9a-9e48-44bf-aa24-2c4165488b2d","block_type":"box","text":"contribute to the effectiveness of the board. In our view, the company’s assessment should consider a","page_number":231,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"c61bc883-29d4-45d7-aecf-80f23d89f956","block_type":"box","text":"number of factors, including each director’s independence and time commitments, as well as the","page_number":231,"box":{"x":117,"y":584,"width":720,"height":12}},{"id":"c66af0b3-8b30-416b-9ae6-e50ec6166030","block_type":"box","text":"breadth and relevance of director experiences and skillsets, and how these collectively contribute to","page_number":231,"box":{"x":117,"y":599,"width":744,"height":13}},{"id":"44bb5242-beb1-4344-a198-26f46e8905dc","block_type":"box","text":"the board’s effectiveness in advising and overseeing management in delivering long-term financial","page_number":231,"box":{"x":116,"y":615,"width":734,"height":12}},{"id":"9224d2be-3656-4883-a5ba-8aac7e66fe62","block_type":"box","text":"returns.","page_number":231,"box":{"x":117,"y":631,"width":60,"height":9}},{"id":"d0c87bc7-a5e9-40fb-b306-311bf3d102cb","block_type":"box","text":"Director independence","page_number":231,"box":{"x":116,"y":659,"width":187,"height":12}},{"id":"9bfd1604-06fb-4123-9199-80870344df91","block_type":"box","text":"Director independence – from management, significant shareholders, or other related parties – is a","page_number":231,"box":{"x":117,"y":688,"width":733,"height":12}},{"id":"54db68a3-e989-4ba5-992c-e84f0fb36b22","block_type":"box","text":"central tenet of sound corporate governance across markets.","page_number":231,"box":{"x":116,"y":703,"width":452,"height":12}},{"id":"05d530a1-0fff-4819-978c-3f65bcd0348f","block_type":"box","text":"6","page_number":231,"box":{"x":570,"y":703,"width":5,"height":6}},{"id":"bd417875-e38a-45cc-8f1f-5c732afff3c8","block_type":"box","text":"We look to boards to have a sufficient","page_number":231,"box":{"x":581,"y":703,"width":280,"height":10}},{"id":"ca44499f-6b14-4eb7-a84d-ce6f33e79075","block_type":"box","text":"number of independent directors, free from conflicts of interest or undue influence, to ensure objectivity","page_number":231,"box":{"x":117,"y":719,"width":763,"height":12}},{"id":"91e452b7-3c34-4e0a-a080-34b244e96893","block_type":"box","text":"in the decision-making of the board and its ability to oversee management. We generally consider it","page_number":231,"box":{"x":117,"y":734,"width":738,"height":12}},{"id":"a9d6c69d-ec2e-4536-8e96-acb564bb341b","block_type":"box","text":"good practice for independent directors to make a majority of the board, or in the case of controlled","page_number":231,"box":{"x":116,"y":750,"width":734,"height":12}},{"id":"d6ddf737-65f3-4f91-a886-a76060dc3c2d","block_type":"box","text":"companies, at least one-third.","page_number":231,"box":{"x":116,"y":765,"width":219,"height":12}},{"id":"422ad535-1343-4959-a02c-146349d50559","block_type":"box","text":"Common impediments to independence may include but are not limited to:","page_number":231,"box":{"x":117,"y":794,"width":551,"height":12}},{"id":"7d86ce7c-3dc3-445f-8d29-accdb562d3c7","block_type":"box","text":"• Current or recent employment at the company or a subsidiary","page_number":231,"box":{"x":117,"y":816,"width":490,"height":12}},{"id":"cbf1044b-7114-4d11-b2e4-2c89396c7d80","block_type":"box","text":"5","page_number":231,"box":{"x":143,"y":841,"width":4,"height":5}},{"id":"5cd8cfb9-4602-4672-9ed4-7ca07c300929","block_type":"box","text":"In most markets, directors stand for re-election on an annual or triennial basis, as determined by corporate law, market","page_number":231,"box":{"x":171,"y":841,"width":703,"height":9}},{"id":"cb9ea0a2-8ede-4615-9bb3-107f13bcf42c","block_type":"box","text":"regulation or voluntary best practice.","page_number":231,"box":{"x":170,"y":854,"width":215,"height":9}},{"id":"08083d4d-9650-4b2c-a9d7-d99026d9544d","block_type":"box","text":"6","page_number":231,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"c25bd90f-ab9f-4869-acbe-ca46b1620ac7","block_type":"box","text":"For example, please see: Tokyo Stock Exchange, “Japan’s Corporate Governance Code,” June 11, 2021; Financial","page_number":231,"box":{"x":171,"y":867,"width":683,"height":9}},{"id":"01157123-7d3f-4766-9e93-49e19d77c419","block_type":"box","text":"Reporting Council, “UK Corporate Governance Code,” January 2024, accessed in December 2025.","page_number":231,"box":{"x":171,"y":880,"width":587,"height":9}},{"id":"06d7eaec-4f47-4266-99ba-24a672b48652","block_type":"box","text":"BlackRock Investment Stewardship","page_number":231,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"e2288fad-b742-413e-91a8-804a4b78f4c3","block_type":"box","text":"Global Principles |","page_number":231,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"c9dca081-944a-4852-a911-17db129023f1","block_type":"box","text":"6","page_number":231,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"05a786fd-d026-45eb-9199-a70a69abf3b8","block_type":"box","text":"NM1026U-6039989-231/256","page_number":231,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"19b19bd3-0f89-44b6-b0c0-8dccfb2b65ee","block_type":"box","text":"• Being, or representing, a shareholder with a substantial shareholding in the company","page_number":232,"box":{"x":117,"y":87,"width":668,"height":12}},{"id":"d531397a-1886-46a4-9e7a-fd24466ddf9b","block_type":"box","text":"• Interlocking directorates","page_number":232,"box":{"x":117,"y":110,"width":216,"height":12}},{"id":"5b32ee31-2fae-4acf-ba91-d7e57f9ba2f6","block_type":"box","text":"• Having any other interest, business, or other relationship which could, or could reasonably be","page_number":232,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"10f61c46-5929-4db9-a2d6-40663fac5331","block_type":"box","text":"perceived to, materially interfere with a director’s ability to act in the best interests of the company","page_number":232,"box":{"x":150,"y":149,"width":729,"height":12}},{"id":"d48784db-b9e4-4af2-824a-3f585d3f3c5f","block_type":"box","text":"and shareholders","page_number":232,"box":{"x":150,"y":165,"width":134,"height":9}},{"id":"89c42952-109e-437e-8bf4-346aa6b95969","block_type":"box","text":"In our experience, boards are most effective at overseeing and advising management when there is a","page_number":232,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"f9f28c65-b38e-426f-82da-85c073f93888","block_type":"box","text":"senior, independent board leader. This director may chair the board, or, where the chair is also the","page_number":232,"box":{"x":116,"y":211,"width":736,"height":12}},{"id":"f284823e-6ecf-48a5-9385-e8b2fb8efe02","block_type":"box","text":"CEO (or is otherwise not independent), be designated as a lead independent director. The role of this","page_number":232,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"2b36a55b-154e-44ac-90b3-9fa158ae9869","block_type":"box","text":"director is to support independent board members in fulfilling their oversight responsibilities effectively","page_number":232,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"db302f14-e557-4bbb-a743-c4f5f70bceaa","block_type":"box","text":"by shaping the agenda, ensuring adequate information is provided to the board, and encouraging","page_number":232,"box":{"x":117,"y":258,"width":726,"height":12}},{"id":"dadeeba8-afd1-442b-bba1-08418ac06c0d","block_type":"box","text":"independent director participation in board deliberations. We appreciate when the lead independent","page_number":232,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"3af1167f-b9db-46bc-8c89-b44bbd9693df","block_type":"box","text":"director or another appropriate director is available to meet with shareholders to explain and","page_number":232,"box":{"x":116,"y":289,"width":687,"height":12}},{"id":"c3338e1d-4e0f-477d-93ea-837abecfc366","block_type":"box","text":"contextualize a company’s approach as a situation warrants.","page_number":232,"box":{"x":116,"y":304,"width":454,"height":12}},{"id":"d625a71b-0ee8-4efc-aa87-4078fb2adbcd","block_type":"box","text":"Boards may face matters that could involve conflicts of interest for executives or affiliated directors, or","page_number":232,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"91f78b6d-b093-43c2-8ecb-76bab1cc18a7","block_type":"box","text":"that require additional focus. It is our view that objective oversight of such matters is best achieved","page_number":232,"box":{"x":116,"y":351,"width":736,"height":12}},{"id":"0db89d9b-ebe4-42d8-ae30-5f1505cf821e","block_type":"box","text":"when the board forms committees with a majority of independent directors, depending on market","page_number":232,"box":{"x":116,"y":366,"width":723,"height":12}},{"id":"56b25a36-e637-4243-8604-3faef27da778","block_type":"box","text":"norms and a company’s ownership structure. In many markets, these committees of the board","page_number":232,"box":{"x":117,"y":382,"width":704,"height":12}},{"id":"8e123035-1ae9-431a-aeaf-b9ccf1112ed1","block_type":"box","text":"specialize in audit, director nominations, and compensation matters, among others. An ad hoc","page_number":232,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"e49436a1-60c4-4e9e-93ba-0a0f06893b90","block_type":"box","text":"committee might also be formed to decide on a special transaction, particularly one involving a related","page_number":232,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"20a7a632-b52b-4187-ad4e-ac2a3e6e3f6c","block_type":"box","text":"party, or to investigate a significant adverse event.","page_number":232,"box":{"x":117,"y":428,"width":378,"height":12}},{"id":"57179fb6-294b-4b96-9edb-652e2ce4c59e","block_type":"box","text":"Sufficient capacity","page_number":232,"box":{"x":117,"y":459,"width":152,"height":12}},{"id":"1edb96d6-d099-4914-8e09-0c22037ed24e","block_type":"box","text":"As the role and expectations of a director are increasingly demanding, directors must be able to","page_number":232,"box":{"x":116,"y":490,"width":715,"height":12}},{"id":"e465c85f-acc4-4d5a-b9cf-0fadb4f430b5","block_type":"box","text":"commit an appropriate amount of time to board and committee matters. It is important that directors","page_number":232,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"1e93ae72-bd75-4d7e-8a21-84829144a25b","block_type":"box","text":"have the capacity to meet all of their responsibilities – including when there are unforeseen events –","page_number":232,"box":{"x":117,"y":521,"width":747,"height":12}},{"id":"277739eb-1313-4568-be5e-110223aa720c","block_type":"box","text":"and therefore, we consider it best practice when they don’t take on an excessive number of roles that","page_number":232,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"6bff926b-5207-444d-9e69-db9d092ec3da","block_type":"box","text":"would impair their ability to fulfill their duties.","page_number":232,"box":{"x":116,"y":552,"width":333,"height":12}},{"id":"80eb115c-852a-4ef3-a147-c32dfb835c9a","block_type":"box","text":"Board composition","page_number":232,"box":{"x":116,"y":583,"width":158,"height":12}},{"id":"1cce85b0-4592-40c8-9151-dbf5ec8dd548","block_type":"box","text":"In assessing board composition, we take into account a company’s board size, business model,","page_number":232,"box":{"x":117,"y":614,"width":714,"height":12}},{"id":"6ab1a9fd-d943-4380-a6dc-42dc2ef1a804","block_type":"box","text":"strategy, market capitalization, and ownership structure, as well as the market in which the company","page_number":232,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"9bededee-6eab-457c-9544-94aeb4b5a9f3","block_type":"box","text":"operates. We find it helpful when companies explain how their approach to board composition supports","page_number":232,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"2f9870a6-a5fb-4bf4-9bfe-ffda92b78a53","block_type":"box","text":"the company’s governance practices.","page_number":232,"box":{"x":116,"y":661,"width":276,"height":12}},{"id":"aca9d7ac-7b00-4ca6-aa96-66416d4534f4","block_type":"box","text":"When nominating directors to the board, we look to companies to provide sufficient information on the","page_number":232,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"e08c7d84-f0a1-4bdf-b8ff-e3d133ed95b0","block_type":"box","text":"individual candidates so that shareholders can assess the capabilities and suitability of each individual","page_number":232,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"30d56301-965f-4782-988c-9d2becc2e1bd","block_type":"box","text":"nominee and their fit within overall board composition. These disclosures should explain how the","page_number":232,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"e4dd2107-a0a2-46fe-9356-ace864843e36","block_type":"box","text":"collective experience and expertise of the board, as well as the particular skillsets of individual","page_number":232,"box":{"x":116,"y":738,"width":697,"height":12}},{"id":"c086d1ba-be2d-4424-8657-158de7c8467a","block_type":"box","text":"directors, aligns with the company’s long-term strategy. Highly qualified, engaged directors with","page_number":232,"box":{"x":116,"y":754,"width":707,"height":12}},{"id":"37ee291a-9adf-4281-af47-3ec410b758a9","block_type":"box","text":"professional characteristics relevant to a company’s business and strategy enhance the ability of the","page_number":232,"box":{"x":117,"y":769,"width":744,"height":12}},{"id":"1dd8305a-7169-46b8-b315-8d5cd44194a4","block_type":"box","text":"board to add value and be the voice of shareholders in board discussions.","page_number":232,"box":{"x":117,"y":785,"width":547,"height":9}},{"id":"3fd926a7-0d99-40a8-b8a7-a595aeb26090","block_type":"box","text":"It is in this context that we are interested in a variety of experiences, perspectives, and skillsets in the","page_number":232,"box":{"x":117,"y":816,"width":750,"height":12}},{"id":"b793d054-be1e-4269-a00a-8493762a6469","block_type":"box","text":"board room. We see it as a means of avoiding “group think” in the board’s exercise of its","page_number":232,"box":{"x":117,"y":831,"width":659,"height":12}},{"id":"460c9468-b72e-45b6-8c87-9f3a04856a72","block_type":"box","text":"responsibilities to advise and oversee management. We note that in many markets, policymakers have","page_number":232,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"3b1706af-cf07-4dbf-9411-27aacb00030c","block_type":"box","text":"set board gender diversity goals which we may discuss with companies, particularly if there is a risk","page_number":232,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"a2efdf17-0900-4171-99a0-79353219b028","block_type":"box","text":"their board composition may be misaligned.","page_number":232,"box":{"x":116,"y":878,"width":329,"height":12}},{"id":"ac6fbce6-509e-4890-80d1-f9e3acd5e505","block_type":"box","text":"BlackRock Investment Stewardship","page_number":232,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"b32bac3a-2d97-4258-a384-4882afc8a347","block_type":"box","text":"Global Principles |","page_number":232,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"1ed7e5ac-941e-40c1-b9ba-83e4dab48a34","block_type":"box","text":"7","page_number":232,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"0859adeb-8294-4c5c-8671-35f578ef5f17","block_type":"box","text":"NM1026U-6039989-232/256","page_number":232,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"395e3fe1-4523-4f6a-9cf5-04b156d561eb","block_type":"box","text":"Auditors and audit-related issues","page_number":233,"box":{"x":366,"y":87,"width":272,"height":10}},{"id":"6827b099-d213-47db-8221-4744ca3fa63b","block_type":"box","text":"BIS recognizes the critical importance of financial statements to provide a complete and accurate","page_number":233,"box":{"x":117,"y":117,"width":725,"height":12}},{"id":"e7d77218-3e8a-49e4-b545-82ce4d0f1133","block_type":"box","text":"portrayal of a company’s financial condition. Accordingly, we look for the assumptions made by","page_number":233,"box":{"x":117,"y":133,"width":709,"height":12}},{"id":"1baf9d5f-2190-4668-8eaa-5f06e204859f","block_type":"box","text":"management, and reviewed by the auditor in preparing the financial statements, to be reasonable and","page_number":233,"box":{"x":117,"y":148,"width":760,"height":12}},{"id":"c9a6691f-2b1d-4f60-8c35-d1929a75392e","block_type":"box","text":"justified.","page_number":233,"box":{"x":115,"y":164,"width":67,"height":12}},{"id":"39fa4d29-763f-4e95-89b7-d1cf43366c8b","block_type":"box","text":"We view the audit committee, or its equivalent, as responsible for overseeing the management of the","page_number":233,"box":{"x":116,"y":194,"width":754,"height":12}},{"id":"6edcd64b-05cd-48a7-99ce-b9362336efe1","block_type":"box","text":"independent auditor and the internal audit function at a company. The committee plays an important","page_number":233,"box":{"x":117,"y":210,"width":746,"height":12}},{"id":"d76e518f-13e0-4ee3-b08c-a2ed3e33c6f0","block_type":"box","text":"role in a company’s financial reporting system by providing independent oversight of the accounts,","page_number":233,"box":{"x":117,"y":225,"width":733,"height":12}},{"id":"6f9840dd-cedf-46d3-8520-3f8aa1b83a80","block_type":"box","text":"material financial, and, where appropriate to the jurisdiction, non-financial information and internal","page_number":233,"box":{"x":117,"y":241,"width":728,"height":12}},{"id":"92dbd755-ae3d-4218-ae29-df151e7a0b6f","block_type":"box","text":"control frameworks. Moreover, in the absence of a dedicated risk committee, these committees can","page_number":233,"box":{"x":116,"y":256,"width":743,"height":11}},{"id":"eee1bab7-7fa5-4430-92d5-6c40d7b7c853","block_type":"box","text":"provide oversight of Enterprise Risk Management systems.","page_number":233,"box":{"x":117,"y":272,"width":437,"height":12}},{"id":"26749921-cf68-474b-9189-3b40071147f4","block_type":"box","text":"7","page_number":233,"box":{"x":556,"y":272,"width":5,"height":6}},{"id":"fcca053c-c2fd-42c6-8af3-06f7b240483f","block_type":"box","text":"In our view, effective audit committee","page_number":233,"box":{"x":562,"y":272,"width":286,"height":11}},{"id":"5647beb1-2d10-4389-9b0c-f8bc489b96db","block_type":"box","text":"oversight strengthens the quality and reliability of a company’s financial statements and provides an","page_number":233,"box":{"x":116,"y":287,"width":745,"height":12}},{"id":"a2b26704-31e6-4afc-b09f-afe5c92540f2","block_type":"box","text":"important level of reassurance to shareholders.","page_number":233,"box":{"x":117,"y":303,"width":354,"height":12}},{"id":"112c3097-d22d-49bf-8bd9-f47064d0e12e","block_type":"box","text":"We look to audit committees, or their equivalent, to have clearly articulated charters that set out their","page_number":233,"box":{"x":116,"y":333,"width":750,"height":12}},{"id":"5bb7ebe0-8d3d-452f-8367-fbc6d04424de","block_type":"box","text":"responsibilities. Additionally, having a rotation plan can periodically refresh the committee membership","page_number":233,"box":{"x":117,"y":349,"width":765,"height":12}},{"id":"a898bab5-6599-4e4f-a10f-d94998742a16","block_type":"box","text":"and introduce new perspectives. We recognize that audit committees will rely on management, internal","page_number":233,"box":{"x":116,"y":364,"width":769,"height":12}},{"id":"2cbc3204-7239-4d4c-b2ce-201afa95abd2","block_type":"box","text":"audit, and the independent auditor to fulfill their responsibilities. However, we look to committee","page_number":233,"box":{"x":116,"y":380,"width":712,"height":12}},{"id":"85c35d0a-2362-4b0f-ada3-4711ba9849ab","block_type":"box","text":"members to demonstrate they have relevant expertise to monitor and oversee the audit process and","page_number":233,"box":{"x":117,"y":395,"width":749,"height":12}},{"id":"abb056be-0939-42d0-9a2f-5e5df33009b7","block_type":"box","text":"related activities.","page_number":233,"box":{"x":117,"y":411,"width":129,"height":9}},{"id":"287b73a4-1802-4d76-af97-3fb9f4f35ff4","block_type":"box","text":"We take particular note of unexplained changes in reporting methodology, cases involving significant","page_number":233,"box":{"x":116,"y":441,"width":753,"height":12}},{"id":"652c6e4f-60e9-480b-ac30-267668c7d94c","block_type":"box","text":"financial restatements, or ad hoc notifications of material financial weakness. In this respect, we look to","page_number":233,"box":{"x":116,"y":457,"width":770,"height":11}},{"id":"167445dc-dee9-45e8-8710-2bf2771e2567","block_type":"box","text":"audit committees to provide timely disclosure on the remediation of key and critical audit matters","page_number":233,"box":{"x":116,"y":472,"width":720,"height":12}},{"id":"ba309afd-7551-4989-884c-e08cb0196ad6","block_type":"box","text":"identified either by the external auditor or internal audit function.","page_number":233,"box":{"x":117,"y":488,"width":478,"height":12}},{"id":"67a39010-0edc-4577-a459-9cc43f245eb6","block_type":"box","text":"The integrity of financial statements depends on the auditor being free of any impediments that could","page_number":233,"box":{"x":116,"y":518,"width":754,"height":12}},{"id":"9ce12207-cc14-46f9-b877-596917086199","block_type":"box","text":"compromise its ability to serve as an effective check on management. To that end, it is important that","page_number":233,"box":{"x":116,"y":533,"width":755,"height":12}},{"id":"4f788941-82be-42e0-afe9-71d14e52f89f","block_type":"box","text":"auditors are, and are seen to be, independent. Where an audit firm provides services to the company","page_number":233,"box":{"x":116,"y":549,"width":756,"height":12}},{"id":"b2a22a9c-acc9-4f37-b6d9-ae661cd8ab81","block_type":"box","text":"in addition to the audit, we look for the fees","page_number":233,"box":{"x":117,"y":564,"width":323,"height":12}},{"id":"81340528-0478-4b33-a8f1-40ef5527b5bb","block_type":"box","text":"earned to be disclosed and explained. We look for audit","page_number":233,"box":{"x":441,"y":564,"width":419,"height":12}},{"id":"ef3ad83a-6cc9-4017-9753-c660a145a5b7","block_type":"box","text":"committees to have in place a procedure for assessing the independence of the auditor and the quality","page_number":233,"box":{"x":116,"y":580,"width":767,"height":12}},{"id":"07c3b479-8517-4e5f-ad79-0eda69c92b51","block_type":"box","text":"of the external audit process on an annual basis.","page_number":233,"box":{"x":116,"y":595,"width":366,"height":12}},{"id":"676dba87-6630-41a3-b169-ede39411a581","block_type":"box","text":"Comprehensive disclosure provides investors with an understanding of the company’s long-term","page_number":233,"box":{"x":117,"y":626,"width":719,"height":12}},{"id":"4e9a9841-25c0-4bab-900b-f72f834c1453","block_type":"box","text":"operational risk management practices and, more broadly, the quality of the board’s oversight. We look","page_number":233,"box":{"x":116,"y":641,"width":770,"height":12}},{"id":"160c0967-afa6-451f-9ca6-6c4494b9af49","block_type":"box","text":"to the audit or risk committee to periodically review the company’s risk assessment and risk","page_number":233,"box":{"x":116,"y":657,"width":684,"height":12}},{"id":"ca61f87a-220e-42a7-8f5a-ce33340a04e2","block_type":"box","text":"management policies and the significant risks and exposures identified by management, the internal","page_number":233,"box":{"x":117,"y":672,"width":741,"height":12}},{"id":"b1829e55-0779-4398-b2c4-89241ad06627","block_type":"box","text":"auditors or the independent auditors, and management’s steps to address them. In the absence of","page_number":233,"box":{"x":116,"y":688,"width":731,"height":12}},{"id":"ea804f03-8169-4cfd-a5ed-ae310041e767","block_type":"box","text":"detailed disclosures, we may conclude that companies are not adequately managing risk.","page_number":233,"box":{"x":116,"y":703,"width":662,"height":12}},{"id":"b03da2e4-209e-44fc-919a-f85e4d3307b8","block_type":"box","text":"Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":233,"box":{"x":176,"y":741,"width":647,"height":12}},{"id":"f7bd1dc9-e25b-4cd6-97a7-34836bc6426e","block_type":"box","text":"The capital structure of a company is critical to shareholders as it impacts the value of their investment","page_number":233,"box":{"x":116,"y":771,"width":761,"height":13}},{"id":"f17f0d6a-40ef-49a3-b66f-fb54c16a9ce5","block_type":"box","text":"and the priority of their interest in the company relative to that of other equity or debt investors.","page_number":233,"box":{"x":116,"y":787,"width":700,"height":12}},{"id":"dd06b0e7-96a4-49a7-879d-3397d570d306","block_type":"box","text":"Pre-emptive rights are a key protection for shareholders against the dilution of their interests.","page_number":233,"box":{"x":117,"y":802,"width":687,"height":13}},{"id":"7ef31287-0d5c-4ec3-a6a5-6324dbcad286","block_type":"box","text":"7","page_number":233,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"9ff48fa1-47ea-40db-82ea-1aaf196b81dd","block_type":"box","text":"Enterprise Risk Management is a process, effected by the entity’s board of directors, management, and other","page_number":233,"box":{"x":171,"y":828,"width":648,"height":9}},{"id":"d0b42ec9-22f8-47d2-a7f7-7e716cced80d","block_type":"box","text":"personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the","page_number":233,"box":{"x":170,"y":840,"width":709,"height":10}},{"id":"3d55bc53-9555-4eba-975a-4423862616eb","block_type":"box","text":"entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of","page_number":233,"box":{"x":170,"y":853,"width":690,"height":10}},{"id":"c0e93f66-7de2-4be8-8b53-878fb94df5ee","block_type":"box","text":"objectives. Please see: The Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Enterprise","page_number":233,"box":{"x":170,"y":866,"width":710,"height":10}},{"id":"3a985225-ade4-4aa8-846a-c7279899e25e","block_type":"box","text":"Risk Management,” 2023, accessed in December 2025.","page_number":233,"box":{"x":171,"y":879,"width":329,"height":10}},{"id":"77a2c028-5cfe-41d2-a5a0-2cccf9b343f6","block_type":"box","text":"BlackRock Investment Stewardship","page_number":233,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"171b2911-58f9-4bbb-b4db-308e65d2ef79","block_type":"box","text":"Global Principles |","page_number":233,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"accde944-8b3b-4ffe-9606-3797119e06fb","block_type":"box","text":"8","page_number":233,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"12edf9fc-e869-4a52-8867-413fd935e3fa","block_type":"box","text":"NM1026U-6039989-233/256","page_number":233,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ff89584b-7c27-4663-a9a9-f001c9bfddc2","block_type":"box","text":"In principle, we have concerns with the creation of a share class with equivalent economic exposure","page_number":234,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"b5ef2a51-5167-468f-a2b6-c50cabb49b15","block_type":"box","text":"and differentiated voting rights. As a result, BIS generally supports bylaw amendments that introduce","page_number":234,"box":{"x":116,"y":102,"width":754,"height":13}},{"id":"c34af23e-57d2-47cd-bfeb-902e79c4ff4d","block_type":"box","text":"the adoption of “one share, one vote” for registered shareholders.","page_number":234,"box":{"x":116,"y":118,"width":491,"height":12}},{"id":"409a5734-fbba-4a08-9af8-3181e5b0c078","block_type":"box","text":"However, we recognize that in certain markets, at least for a period of time, companies may have a","page_number":234,"box":{"x":117,"y":149,"width":740,"height":13}},{"id":"ac262336-0c9b-4f2a-a7a7-d32a2f6ec4a1","block_type":"box","text":"valid reason for listing dual classes of shares with differentiated voting rights. In our view, such","page_number":234,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"06e13d72-5301-45e4-814e-4802fb6da338","block_type":"box","text":"companies should review these share class structures on a regular basis or as company","page_number":234,"box":{"x":116,"y":181,"width":661,"height":12}},{"id":"08a0c40b-d90e-4de3-9236-df572886af25","block_type":"box","text":"circumstances change. Additionally, they should seek shareholder approval of their capital structure on","page_number":234,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"9f030d75-9a21-4e13-9999-27f641e20205","block_type":"box","text":"a periodic basis via a management proposal at the company’s shareholder meeting. The proposal","page_number":234,"box":{"x":116,"y":212,"width":731,"height":12}},{"id":"e87d3b04-54d5-4f85-96cb-51c2344e8f16","block_type":"box","text":"should give unaffiliated shareholders the opportunity to affirm the current structure or establish","page_number":234,"box":{"x":116,"y":227,"width":705,"height":12}},{"id":"4fec5358-817b-457f-bb93-acb57a0d331d","block_type":"box","text":"mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs","page_number":234,"box":{"x":117,"y":243,"width":757,"height":12}},{"id":"741262b2-4901-489f-a438-e72210ada45b","block_type":"box","text":"to shareholders.","page_number":234,"box":{"x":116,"y":258,"width":125,"height":9}},{"id":"e3f4df2e-657c-4576-8d60-6e98c5fe43a9","block_type":"box","text":"In assessing mergers, asset sales, or other special situations, BIS’ primary consideration is the long","page_number":234,"box":{"x":117,"y":289,"width":745,"height":12}},{"id":"ef29ad57-215e-4d07-a073-5925c71024f7","block_type":"box","text":"term financial interests of our clients as shareholders, and so we will review any proposed transaction","page_number":234,"box":{"x":116,"y":305,"width":758,"height":12}},{"id":"0b1218a0-c6fb-4d12-a000-4125fd63c2c9","block_type":"box","text":"with that objective in mind. Typically, we review factors such as whether the proposed transaction has","page_number":234,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"5b5f1361-0a9d-4db5-aeac-2a90c2231cd6","block_type":"box","text":"the unanimous support of the board and has been negotiated at arm’s length, and whether the board","page_number":234,"box":{"x":116,"y":336,"width":753,"height":12}},{"id":"e812ebf5-a9d1-4864-add3-961d697d57e1","block_type":"box","text":"or management has clearly explained its economic and strategic rationale. We may also seek","page_number":234,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"8588e7ae-afe2-47b1-b6ca-f27fb96d76e6","block_type":"box","text":"reassurance from the board that the financial interests of executives and/or board members in a given","page_number":234,"box":{"x":117,"y":367,"width":761,"height":12}},{"id":"00e96664-5709-4ae5-a006-a9d75223ddd9","block_type":"box","text":"transaction have not adversely affected their ability to place shareholders’ interests before their own.","page_number":234,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"34816f6a-8515-4ef9-b120-9f0538cc83a6","block_type":"box","text":"Where the transaction involves related parties, the recommendation to support should come from the","page_number":234,"box":{"x":116,"y":398,"width":755,"height":12}},{"id":"9691061b-7955-4fd3-92c6-84beb42dea53","block_type":"box","text":"independent directors, a best practice in most markets, and ideally, the terms should have been","page_number":234,"box":{"x":117,"y":414,"width":715,"height":11}},{"id":"6f1b07f0-1a35-4c9c-8350-af611ce4a47b","block_type":"box","text":"assessed through an independent appraisal process. In addition, it is good practice that it be approved","page_number":234,"box":{"x":116,"y":429,"width":766,"height":12}},{"id":"5f5179cc-818f-4862-a1bd-0fbb1de68651","block_type":"box","text":"by a separate vote of the non-conflicted parties.","page_number":234,"box":{"x":117,"y":444,"width":358,"height":12}},{"id":"be194395-e588-4e7a-a01b-2dc83c2c96ed","block_type":"box","text":"As a matter of sound governance practice, shareholders should have a right to dispose of company","page_number":234,"box":{"x":116,"y":476,"width":743,"height":12}},{"id":"2e566b69-b034-4057-bb71-5f853d35ecd6","block_type":"box","text":"shares in the open market without unnecessary restriction. In our view, corporate mechanisms","page_number":234,"box":{"x":116,"y":491,"width":705,"height":12}},{"id":"47e2f775-c694-47e6-aeeb-e9090b0ff3b1","block_type":"box","text":"designed to limit shareholders’ ability to sell their shares are contrary to basic property rights. Such","page_number":234,"box":{"x":116,"y":507,"width":738,"height":12}},{"id":"49681bea-34b3-4fb5-adc3-debdbabd7903","block_type":"box","text":"mechanisms can serve to protect and entrench interests other than those of the shareholders. In our","page_number":234,"box":{"x":117,"y":522,"width":750,"height":12}},{"id":"96139cda-fed5-4935-8af3-9ee5e87fcabc","block_type":"box","text":"view, shareholders are broadly capable of making decisions in their own best interests. We encourage","page_number":234,"box":{"x":116,"y":538,"width":764,"height":12}},{"id":"4a4adac2-5a3d-49f3-8cdb-c0b553272afd","block_type":"box","text":"any shareholder rights plans proposed by a board to be subject to shareholder approval upon","page_number":234,"box":{"x":116,"y":553,"width":699,"height":12}},{"id":"5579baf1-7fb8-42a1-b230-9856acdb63ae","block_type":"box","text":"introduction and periodically thereafter.","page_number":234,"box":{"x":117,"y":569,"width":293,"height":12}},{"id":"68c29201-52aa-4cc0-8e7c-71c973663eed","block_type":"box","text":"Executive compensation and benefits","page_number":234,"box":{"x":350,"y":608,"width":305,"height":12}},{"id":"e1cf7b65-836b-46eb-9c8d-552710ad3fdc","block_type":"box","text":"Executive compensation is an important tool used by companies to support long-term financial value","page_number":234,"box":{"x":117,"y":640,"width":749,"height":12}},{"id":"d34a9e0c-8928-4791-9434-b77ec5e44304","block_type":"box","text":"creation. A well-structured compensation policy rewards the successful delivery of strategic,","page_number":234,"box":{"x":116,"y":655,"width":686,"height":12}},{"id":"69b9e189-e7af-4e85-91b0-1c622c2c293d","block_type":"box","text":"operational, and/or financial goals; encourages an appropriate risk appetite; and aligns the interests of","page_number":234,"box":{"x":116,"y":671,"width":759,"height":12}},{"id":"46aa0a69-4a6c-4f44-86e2-cb8c12f37ce8","block_type":"box","text":"shareholders and executives through equity ownership.","page_number":234,"box":{"x":116,"y":686,"width":410,"height":12}},{"id":"10b0bcc6-aac5-4e38-988e-0865f8e1cc77","block_type":"box","text":"8","page_number":234,"box":{"x":528,"y":686,"width":5,"height":6}},{"id":"3af68ffd-c4b5-42da-9087-0d8cdfb08ea7","block_type":"box","text":"We look for a clear link between variable pay and operational and financial performance that support","page_number":234,"box":{"x":116,"y":717,"width":746,"height":13}},{"id":"f203526b-f56b-4666-a7d8-e9eb0adeef3f","block_type":"box","text":"sustained financial value creation for our clients as shareholders. We appreciate when performance","page_number":234,"box":{"x":116,"y":733,"width":739,"height":12}},{"id":"62dc9f7d-6579-44b0-aa41-cfd5ed239713","block_type":"box","text":"targets incorporate ambitious objectives, and the corresponding metrics are aligned with the","page_number":234,"box":{"x":116,"y":749,"width":682,"height":12}},{"id":"9c7ebe26-0f4f-4f13-b423-8614c43ebb88","block_type":"box","text":"company’s strategy and business model. BIS does not have a position on whether companies choose","page_number":234,"box":{"x":116,"y":764,"width":755,"height":12}},{"id":"e9515cad-540a-41a4-8431-ba7d3ce4d93b","block_type":"box","text":"to use sustainability-related criteria in compensation structures, but, where they are included, we look","page_number":234,"box":{"x":116,"y":780,"width":752,"height":12}},{"id":"5c982f10-0309-4455-9a87-a87e986cf231","block_type":"box","text":"to companies to be as rigorous as they would be in setting other financial or operational targets. We","page_number":234,"box":{"x":116,"y":795,"width":740,"height":12}},{"id":"8370851e-fba6-49bf-9898-3c4dc3dc25fa","block_type":"box","text":"appreciate when long-term incentive plans encompass timeframes that: 1) are distinct from annual","page_number":234,"box":{"x":116,"y":810,"width":730,"height":13}},{"id":"9f018d85-6af0-49a4-9f65-9938e66d983c","block_type":"box","text":"executive compensation structures and metrics, and 2) encourage the delivery of strong financial","page_number":234,"box":{"x":116,"y":826,"width":724,"height":12}},{"id":"df9afda0-73bf-429c-bce9-4bf4a0528fb0","block_type":"box","text":"results over a period of years.","page_number":234,"box":{"x":117,"y":841,"width":225,"height":13}},{"id":"51f18bdc-e05c-4f83-9154-b56cfc8dc375","block_type":"box","text":"8","page_number":234,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"945e7431-9211-482f-ac92-177a100bea29","block_type":"box","text":"The terms “compensation,” “remuneration,” and “pay” are used interchangeably to describe the same concept in","page_number":234,"box":{"x":170,"y":867,"width":664,"height":9}},{"id":"1236b9d5-b5da-4e2f-9d55-5b687eae2d85","block_type":"box","text":"different markets.","page_number":234,"box":{"x":170,"y":880,"width":102,"height":7}},{"id":"b4ab62fd-700f-4bda-9a90-f2f1a97ad092","block_type":"box","text":"BlackRock Investment Stewardship","page_number":234,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"f1dea6cc-0756-42c7-8c52-5a19b04b1ea7","block_type":"box","text":"Global Principles |","page_number":234,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"3e547bc6-f3d8-4c7f-858a-c77ac6bcb716","block_type":"box","text":"9","page_number":234,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"c1dd49f4-e51e-4d55-b1ab-c340dbba7a30","block_type":"box","text":"NM1026U-6039989-234/256","page_number":234,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4aba3768-d223-44d0-8279-2aa2f651990a","block_type":"box","text":"We consider it best practice when board members responsible for designing and approving executive","page_number":235,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"5c5d2605-1b36-4dfb-8f10-55b2fc8f7707","block_type":"box","text":"compensation carefully consider the company’s specific circumstances. Factors to consider may","page_number":235,"box":{"x":116,"y":102,"width":720,"height":13}},{"id":"42c2c3f6-41d9-47ed-a0c0-437280ec4e59","block_type":"box","text":"include the company’s risk profile, the environment it operates in, and the individuals the board is trying","page_number":235,"box":{"x":117,"y":118,"width":770,"height":12}},{"id":"e935c9c2-c649-4c5f-80ae-4ecd47a50474","block_type":"box","text":"to attract and retain. We look to the compensation committees to guard against contractual","page_number":235,"box":{"x":116,"y":134,"width":679,"height":12}},{"id":"b68265a2-48ce-4d0c-8334-af217c601c83","block_type":"box","text":"arrangements that would entitle executives to material compensation for early termination of their","page_number":235,"box":{"x":116,"y":149,"width":726,"height":12}},{"id":"dd5d72a5-f9b9-417b-a8a8-99fe860387b2","block_type":"box","text":"employment. Finally, we look for pension contributions and other deferred compensation arrangements","page_number":235,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"ed01b33e-445c-40cf-9e6e-ff3e9b3ae50a","block_type":"box","text":"to be reasonable in light of market practices or the company’s business and executive compensation","page_number":235,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"923dd3bf-d3dc-4b10-9e74-ba1b50662ab9","block_type":"box","text":"strategies.","page_number":235,"box":{"x":116,"y":196,"width":82,"height":12}},{"id":"1cec4621-9ae8-44ac-ae31-c46e099d6c16","block_type":"box","text":"We are not supportive of one-off or special bonuses unrelated to company or individual performance.","page_number":235,"box":{"x":116,"y":227,"width":755,"height":12}},{"id":"821d52ac-d275-40ce-a89e-e114b1afc165","block_type":"box","text":"Where discretion has been used by the compensation committee, or its equivalent, we appreciate","page_number":235,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"bdff879b-d314-4453-a485-722d46f3d4ff","block_type":"box","text":"disclosure relating to how and why the discretion was used, and how the adjusted outcome is aligned","page_number":235,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"4082f156-ef8d-44c2-8ebf-e46e43d92746","block_type":"box","text":"with the interests of shareholders. In addition, we acknowledge that the use of peer group evaluation","page_number":235,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"a1ba289e-daa7-4eb9-b3dd-409302abae10","block_type":"box","text":"by compensation committees can help ensure competitive pay. However, we encourage companies to","page_number":235,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"6e4cf1fa-cb69-446d-b9ee-a91b00269aef","block_type":"box","text":"clearly explain how compensation outcomes have rewarded performance rather than solely base","page_number":235,"box":{"x":116,"y":304,"width":724,"height":12}},{"id":"ee19cafc-990c-4611-a3fd-94c3ea9f005d","block_type":"box","text":"increases in total compensation on peer benchmarking.","page_number":235,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"65b973c7-7bd0-4b01-bbc2-7b6899c483a0","block_type":"box","text":"We consider the inclusion of building clawback provisions into incentive plans as good practice. Such","page_number":235,"box":{"x":116,"y":351,"width":755,"height":12}},{"id":"b067ddcc-b96c-49a1-8280-4c7b39bec10d","block_type":"box","text":"provisions could require executives to forgo awards when compensation was based on faulty financial","page_number":235,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"1feaf0eb-4d9d-49c8-8e5c-78a86790b7a5","block_type":"box","text":"statements or deceptive business practices, or when their behavior caused material financial harm to","page_number":235,"box":{"x":116,"y":382,"width":754,"height":12}},{"id":"43192819-1848-4bc0-a8f8-ee9a84fd5557","block_type":"box","text":"shareholders, material reputational risk to the company, or resulted in a criminal investigation.","page_number":235,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"ecf3c40c-ca6e-4175-9f40-59a0bd13738b","block_type":"box","text":"In our view, non-executive directors should be compensated in a manner that is commensurate with","page_number":235,"box":{"x":117,"y":428,"width":745,"height":12}},{"id":"4e54110c-177c-4671-b994-335b4609a197","block_type":"box","text":"the time and effort expended in fulfilling their professional responsibilities. Additionally, these","page_number":235,"box":{"x":116,"y":444,"width":691,"height":12}},{"id":"626a9acf-612d-44b2-8378-8be04e03fd82","block_type":"box","text":"compensation arrangements should not risk compromising directors’ independence or aligning their","page_number":235,"box":{"x":116,"y":459,"width":743,"height":12}},{"id":"c95d7bcf-9f66-4a48-b499-5ca8128af9e7","block_type":"box","text":"interests too closely with those of the management, whom they are charged with overseeing.","page_number":235,"box":{"x":117,"y":475,"width":693,"height":12}},{"id":"2e8bbf81-c505-47c8-8273-4515c0b19aee","block_type":"box","text":"When assessing compensation proposals, BIS reviews companies’ disclosures to determine whether","page_number":235,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"78860b49-1686-42ea-bda2-0dc034e38b18","block_type":"box","text":"the board’s approach to executive compensation is rigorous in light of the company’s stated long-term","page_number":235,"box":{"x":116,"y":521,"width":760,"height":12}},{"id":"a5b02bd3-0752-4fab-894d-7730abc87831","block_type":"box","text":"corporate strategy and specific circumstances, as well as local market and policy developments.","page_number":235,"box":{"x":116,"y":537,"width":719,"height":12}},{"id":"a52cbd4b-9330-4fc6-bea0-33017b3ca46a","block_type":"box","text":"When our analysis indicates that executive compensation is misaligned with company performance,","page_number":235,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"58bedb49-8cdc-40f8-bd7b-70b2266700bd","block_type":"box","text":"BIS may not support management’s proposals to approve compensation, where they are on the","page_number":235,"box":{"x":117,"y":583,"width":715,"height":12}},{"id":"79824bca-3129-425b-974c-1620830d7c82","block_type":"box","text":"agenda. We may also not support members of the compensation committee or equivalent board","page_number":235,"box":{"x":116,"y":599,"width":719,"height":12}},{"id":"cb365f2e-282a-45b4-98f7-ca173f0e34bf","block_type":"box","text":"members for poor compensation practices or structures.","page_number":235,"box":{"x":117,"y":614,"width":421,"height":12}},{"id":"be6cfeed-342d-40a8-aee6-ca2fcf590143","block_type":"box","text":"Shareholder protections and other corporate governance matters","page_number":235,"box":{"x":239,"y":653,"width":527,"height":12}},{"id":"0fb83f65-385d-4072-b1d4-61ec2f2b57b0","block_type":"box","text":"Corporate form","page_number":235,"box":{"x":117,"y":684,"width":121,"height":12}},{"id":"98c836e5-ddb0-48ea-897d-3e6ce6a933ff","block_type":"box","text":"In our view, it is the responsibility of the board to determine the corporate form that is most appropriate","page_number":235,"box":{"x":117,"y":715,"width":760,"height":12}},{"id":"6b7b757b-4343-47a1-960d-be6d040bbcac","block_type":"box","text":"given the company’s purpose and business model.","page_number":235,"box":{"x":116,"y":731,"width":376,"height":12}},{"id":"9328277a-ad13-49dc-934f-ae0951c65692","block_type":"box","text":"9","page_number":235,"box":{"x":494,"y":731,"width":5,"height":6}},{"id":"081b97a3-3b2a-425c-bbec-75d90f8a2361","block_type":"box","text":"We look to companies proposing to change their","page_number":235,"box":{"x":504,"y":731,"width":361,"height":12}},{"id":"7cc88fc5-7346-4b09-84d2-ea9132f5bf26","block_type":"box","text":"corporate form to a public benefit corporation, or similar entity, to put it to a shareholder vote if not","page_number":235,"box":{"x":116,"y":746,"width":726,"height":12}},{"id":"0b42db97-2ef5-4d0c-a9ae-82581a55e623","block_type":"box","text":"already required to do so under applicable law. We appreciate when supporting documentation from","page_number":235,"box":{"x":116,"y":761,"width":742,"height":13}},{"id":"d378f88b-6248-48e5-ae41-9015db2b0329","block_type":"box","text":"companies or shareholders proposing to alter the corporate form clearly explains how the interests of","page_number":235,"box":{"x":116,"y":777,"width":751,"height":12}},{"id":"62c7422c-fdfd-4225-b909-d1efa512bb79","block_type":"box","text":"shareholders and different stakeholders would be impacted as well as the accountability and voting","page_number":235,"box":{"x":116,"y":792,"width":735,"height":13}},{"id":"b1fce775-7658-450a-b4ed-1e906bb1b9fb","block_type":"box","text":"mechanisms that would be available to shareholders. We generally support management proposals if","page_number":235,"box":{"x":117,"y":808,"width":752,"height":12}},{"id":"5a255177-46dc-4edb-b030-d313cf56e0e3","block_type":"box","text":"our analysis indicates that shareholders’ financial interests are adequately protected. Corporate form","page_number":235,"box":{"x":116,"y":823,"width":746,"height":13}},{"id":"215ff8a8-27e0-4ff5-8bb4-b89e3d7dc5f0","block_type":"box","text":"shareholder proposals are evaluated on a case-by-case basis.","page_number":235,"box":{"x":116,"y":839,"width":468,"height":12}},{"id":"04475ce8-56eb-48e1-aba8-8165635b802c","block_type":"box","text":"9","page_number":235,"box":{"x":143,"y":880,"width":4,"height":5}},{"id":"cc4c8fc8-abec-4583-9335-b9aa797d87d0","block_type":"box","text":"Corporate form refers to the legal structure by which a business is organized.","page_number":235,"box":{"x":170,"y":880,"width":457,"height":9}},{"id":"8a5ea1cd-b22e-4578-bee8-1057a88660fd","block_type":"box","text":"BlackRock Investment Stewardship","page_number":235,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"deac1f91-c5c1-466f-8345-595ce8d85cfa","block_type":"box","text":"Global Principles |","page_number":235,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"c2e7193f-7ac0-45a6-8ea4-7caf9fc1c508","block_type":"box","text":"10","page_number":235,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"63ab5043-1c80-44d7-b205-654bd3a70e0c","block_type":"box","text":"NM1026U-6039989-235/256","page_number":235,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3a9f213d-2768-4828-91c6-f16535aeec61","block_type":"box","text":"Shareholder proposals","page_number":236,"box":{"x":409,"y":87,"width":187,"height":12}},{"id":"801ea82d-186f-4bf9-bb83-8f8ee9f1b2db","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":236,"box":{"x":117,"y":120,"width":717,"height":11}},{"id":"9ffb53ab-fc3c-4449-bc3b-7df12aab6d32","block_type":"box","text":"meeting, as long as certain requirements are met. Shareholder proposals span a wide range of topics,","page_number":236,"box":{"x":117,"y":135,"width":762,"height":12}},{"id":"2fedc793-4e00-4aa5-91bf-d2d3faf5527c","block_type":"box","text":"including governance reforms, capital management, and changes in the management or disclosure of","page_number":236,"box":{"x":117,"y":150,"width":758,"height":12}},{"id":"fe0edc54-86f2-4f56-85fe-b724e27f4488","block_type":"box","text":"sustainability-related risks. These proposals have a varying degree of relevance for companies across","page_number":236,"box":{"x":116,"y":166,"width":763,"height":12}},{"id":"9566d244-a3e3-48dd-92bf-0a682fbc88c4","block_type":"box","text":"sectors, locations, and business models.","page_number":236,"box":{"x":116,"y":182,"width":307,"height":11}},{"id":"d0f57bdb-21c3-413d-8748-b2a4ca7adf93","block_type":"box","text":"BIS takes a case-by-case approach to voting on shareholder proposals and maintains a singular focus","page_number":236,"box":{"x":117,"y":214,"width":764,"height":12}},{"id":"5ffae204-b1fa-43e8-b1b4-dbafc7ee381d","block_type":"box","text":"on the proposal’s implications for long-term financial value creation for shareholders. Our analysis","page_number":236,"box":{"x":116,"y":229,"width":730,"height":12}},{"id":"e96140c0-3234-4043-a78e-144c7c8f04db","block_type":"box","text":"considers whether a shareholder proposal addresses a material risk that may impact a company’s","page_number":236,"box":{"x":116,"y":245,"width":732,"height":12}},{"id":"8fb99fe8-859f-433a-b7c2-a1919752e45c","block_type":"box","text":"long-term financial performance. BIS may support shareholder proposals that request disclosures that","page_number":236,"box":{"x":117,"y":260,"width":760,"height":12}},{"id":"578f474a-1f21-4475-b5d3-6f54b459cae6","block_type":"box","text":"help us, as long-term investors on behalf of our clients, better understand the material risks and","page_number":236,"box":{"x":117,"y":276,"width":713,"height":12}},{"id":"78fb4efe-3406-444c-a4e7-3a01b7d4b779","block_type":"box","text":"opportunities companies face and how they are managing them, especially where this information is","page_number":236,"box":{"x":116,"y":291,"width":747,"height":12}},{"id":"c5f912c6-e87a-4160-a5eb-02d2b95136f3","block_type":"box","text":"additive given the company’s existing disclosures. We look for consistency between the specific","page_number":236,"box":{"x":116,"y":307,"width":715,"height":12}},{"id":"da1861f5-5cd7-44c4-9d65-7f90477c70b6","block_type":"box","text":"request formally made in the proposal, the supporting documentation, and the proponents’ other","page_number":236,"box":{"x":117,"y":322,"width":717,"height":12}},{"id":"a862243c-c027-4b2d-a828-01280963b0eb","block_type":"box","text":"communications on the issues. We also assess the company’s practices and disclosures and the costs","page_number":236,"box":{"x":116,"y":338,"width":769,"height":12}},{"id":"b60cedfd-2003-417e-9d18-d7b55eb52f6b","block_type":"box","text":"and benefits to the company of meeting the request made in the proposal. We take into consideration a","page_number":236,"box":{"x":116,"y":353,"width":772,"height":12}},{"id":"19f59e98-e487-4575-8867-52bd56011f50","block_type":"box","text":"company’s governance practices and disclosures against those of their peers.","page_number":236,"box":{"x":116,"y":369,"width":583,"height":12}},{"id":"7320e6c3-fcf3-4d15-b959-126665b14a19","block_type":"box","text":"BIS does not support shareholder proposals that we view as inconsistent with long-term financial value","page_number":236,"box":{"x":117,"y":401,"width":767,"height":12}},{"id":"ffb0d8a6-fab3-4081-89ce-0c357db48c37","block_type":"box","text":"or that seek to micromanage companies. We take into consideration the legal effect of the proposal, as","page_number":236,"box":{"x":116,"y":417,"width":769,"height":12}},{"id":"da463550-9d4b-4cf2-a058-f184f7694724","block_type":"box","text":"shareholder proposals may be advisory or legally binding depending on the jurisdiction, while others","page_number":236,"box":{"x":116,"y":432,"width":747,"height":12}},{"id":"d788942f-1067-4e1c-b9f6-0dc5dedb23aa","block_type":"box","text":"may make requests that would be deemed illegal in a given jurisdiction.","page_number":236,"box":{"x":117,"y":448,"width":534,"height":12}},{"id":"c7c4f4e8-c406-4230-b205-ee6382822628","block_type":"box","text":"In our experience, it is helpful when companies disclose the names of the proponent or organization","page_number":236,"box":{"x":117,"y":480,"width":745,"height":12}},{"id":"33bb280e-9620-4ee1-b051-fa7840a64f4c","block_type":"box","text":"that has submitted or advised on the proposal. We recognize that some shareholder proposals bundle","page_number":236,"box":{"x":116,"y":496,"width":762,"height":12}},{"id":"dcd34b3f-4f39-4d71-83b3-3a7cb99885a2","block_type":"box","text":"topics and/or specific requests. Further, the proponent’s supporting statement may refer to topics that","page_number":236,"box":{"x":116,"y":511,"width":758,"height":12}},{"id":"d36a4de8-c19d-49b0-b87c-449d6f05f69b","block_type":"box","text":"are not directly related to the request made in the proposal. In voting on behalf of clients, we must vote","page_number":236,"box":{"x":116,"y":527,"width":767,"height":12}},{"id":"77a66674-865a-4f2f-a001-9e922a9d26f0","block_type":"box","text":"yes or no on the proposal as phrased by the proponent. Therefore, when we vote in support of a","page_number":236,"box":{"x":116,"y":542,"width":720,"height":12}},{"id":"4ea7e3a3-3892-404a-8247-fd6c4a93fffe","block_type":"box","text":"proposal, we are not necessarily endorsing every element of the proposal or the reasoning, objectives,","page_number":236,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"1d4675df-caa3-485e-b12e-d78dbdba0b3c","block_type":"box","text":"or supporting statement of the proponent. We may support a proposal for different reasons than those","page_number":236,"box":{"x":116,"y":573,"width":762,"height":12}},{"id":"39567813-cddf-4b26-aa4e-f1c8bf5df23f","block_type":"box","text":"put forth by the proponent, when we believe that overall it may advance our clients’ long-term financial","page_number":236,"box":{"x":117,"y":589,"width":762,"height":12}},{"id":"0a17c83f-e9e1-4f8b-9014-861d54b9d2ae","block_type":"box","text":"interests.","page_number":236,"box":{"x":117,"y":604,"width":72,"height":10}},{"id":"4dc2b4bb-f4b5-461d-a217-1c463ce55a50","block_type":"box","text":"BlackRock is subject to certain rules, regulations, agency guidance, and contractual agreements that","page_number":236,"box":{"x":117,"y":637,"width":752,"height":12}},{"id":"bb2dd35a-2a50-43e7-a02b-580a1d1217c6","block_type":"box","text":"place restrictions and limitations on how BlackRock can interact with the companies in which we invest","page_number":236,"box":{"x":117,"y":652,"width":766,"height":12}},{"id":"18d73116-6a49-4066-80c4-02d8e3232ffa","block_type":"box","text":"on behalf of our clients. BlackRock does not nominate directors for board elections or submit","page_number":236,"box":{"x":116,"y":667,"width":687,"height":10}},{"id":"d25c7bff-efd2-4119-b272-b85288c7ada9","block_type":"box","text":"shareholder proposals to companies. Non-compliance with these requirements could adversely affect","page_number":236,"box":{"x":116,"y":683,"width":752,"height":12}},{"id":"90d4881d-6007-4279-a5c3-3c2d54474b02","block_type":"box","text":"BlackRock’s ability to serve its clients’ interests.","page_number":236,"box":{"x":117,"y":699,"width":352,"height":12}},{"id":"37b222b4-5e75-4c9b-88a4-7b0b1b45970e","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":236,"box":{"x":287,"y":739,"width":426,"height":12}},{"id":"09b95e15-f062-48ee-a96c-73ea09aa5a34","block_type":"box","text":"Appropriate oversight of material risks and opportunities, including material sustainability-related risks","page_number":236,"box":{"x":116,"y":772,"width":753,"height":12}},{"id":"88476c65-0176-4c85-b745-d9601cb74b71","block_type":"box","text":"and opportunities, is an important component of having an effective governance framework that","page_number":236,"box":{"x":116,"y":787,"width":709,"height":12}},{"id":"4a380ee1-f145-4edd-be7c-ec870e695447","block_type":"box","text":"supports durable, long-term financial value creation.","page_number":236,"box":{"x":116,"y":803,"width":385,"height":12}},{"id":"23116add-e01b-4829-be2a-7f21eaf3a643","block_type":"box","text":"10","page_number":236,"box":{"x":503,"y":803,"width":11,"height":6}},{"id":"ad836ae9-e298-4128-9628-ced313e5f194","block_type":"box","text":"10","page_number":236,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"61b2f1dd-4743-49c3-afc2-2d3f738a445d","block_type":"box","text":"By material sustainability-related risks and opportunities, we mean the drivers of risk and financial value creation in a","page_number":236,"box":{"x":171,"y":828,"width":691,"height":9}},{"id":"65dbca13-7b9b-4466-a02d-63d3bb28d9a8","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":236,"box":{"x":170,"y":841,"width":686,"height":9}},{"id":"39181ee3-35c9-4c12-9c84-529870ae4c46","block_type":"box","text":"issues include, but are not limited to, water use, land use, waste management, and climate risk. Examples of social","page_number":236,"box":{"x":170,"y":854,"width":682,"height":9}},{"id":"bd9a5590-6a67-4eca-a284-f9db9fe5e7f4","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":236,"box":{"x":170,"y":867,"width":683,"height":9}},{"id":"c423ad0a-5398-435a-82e8-b134bb72b9ba","block_type":"box","text":"operates, customer loyalty, and relationships with regulators.","page_number":236,"box":{"x":170,"y":880,"width":360,"height":9}},{"id":"3f44975c-a3b5-4940-b3b3-3d48f4fae5fc","block_type":"box","text":"BlackRock Investment Stewardship","page_number":236,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"7e6eb036-6524-43c7-98ff-9d10fec02718","block_type":"box","text":"Global Principles |","page_number":236,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"1698ad6e-2984-4d98-aa9a-cdd665a5a4c2","block_type":"box","text":"11","page_number":236,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"dc4fbe32-d318-487f-b77e-1ef5e7ab9389","block_type":"box","text":"NM1026U-6039989-236/256","page_number":236,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9da2d8db-5169-4863-b5bd-e2f539f1a4f6","block_type":"box","text":"We look to companies to provide robust disclosure that allows investors to effectively evaluate","page_number":237,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"6cd71d41-0058-4d00-86c8-d8b96941299a","block_type":"box","text":"companies’ strategy and business practices related to material sustainability-related risks and","page_number":237,"box":{"x":116,"y":103,"width":699,"height":12}},{"id":"7d8630d6-2ebf-4886-a9d9-88216f3d8f22","block_type":"box","text":"opportunities. We find it helpful when companies’ disclosures demonstrate that they have a resilient","page_number":237,"box":{"x":116,"y":118,"width":743,"height":12}},{"id":"de005046-5ad1-4102-a270-2fa50d2b4d86","block_type":"box","text":"business model that integrates material sustainability-related risks and opportunities into their strategy,","page_number":237,"box":{"x":117,"y":134,"width":766,"height":12}},{"id":"c8f8cb0a-804d-4b74-9e65-dc58467610cc","block_type":"box","text":"risk management, and metrics and targets, including industry-specific metrics.","page_number":237,"box":{"x":117,"y":149,"width":583,"height":12}},{"id":"aad05667-cc85-4496-a056-e1ee3639b714","block_type":"box","text":"Standardized disclosure of sustainability-related data supports investors in making informed decisions.","page_number":237,"box":{"x":116,"y":177,"width":766,"height":12}},{"id":"ba61ea1d-6459-496b-a094-7d33aa5a18fe","block_type":"box","text":"The International Sustainability Standards Board (ISSB) standards, IFRS S1 and S2, represent one","page_number":237,"box":{"x":116,"y":193,"width":743,"height":12}},{"id":"1a1e5bc2-8e30-49eb-b686-17ad1f85d99b","block_type":"box","text":"such approach to standardization that we find useful in our analysis.","page_number":237,"box":{"x":116,"y":208,"width":503,"height":12}},{"id":"19217532-2e2a-4878-98b7-47dd30f212cc","block_type":"box","text":"11","page_number":237,"box":{"x":622,"y":209,"width":9,"height":6}},{"id":"aba64457-32ef-4664-bcd2-1617fa9af07b","block_type":"box","text":"However, we do not mandate","page_number":237,"box":{"x":633,"y":209,"width":228,"height":11}},{"id":"a137d2ae-8202-432f-896b-3da324dde7e6","block_type":"box","text":"any specific disclosure framework companies should use, and recognize that companies may report","page_number":237,"box":{"x":116,"y":224,"width":747,"height":12}},{"id":"4b340656-c1fd-4ff8-865f-226046c12ec9","block_type":"box","text":"using different standards, some of which may be required by regulation. In such cases, we ask that","page_number":237,"box":{"x":117,"y":239,"width":739,"height":12}},{"id":"2e866408-7470-48d9-a6c5-e650346bb13c","block_type":"box","text":"companies highlight the metrics that are industry- or company-specific.","page_number":237,"box":{"x":116,"y":255,"width":530,"height":12}},{"id":"46c21bce-1b1f-4411-b222-dd1274ea44bf","block_type":"box","text":"We also recognize that companies may be phasing in reporting over several years. We do not","page_number":237,"box":{"x":116,"y":283,"width":702,"height":12}},{"id":"9f11ea7e-2f73-47d6-b0a4-108ef0cda6dc","block_type":"box","text":"prescribe timelines regarding when companies should make sustainability-related disclosures but","page_number":237,"box":{"x":117,"y":299,"width":725,"height":12}},{"id":"d2acf8d4-5b7c-40e9-a7aa-43be6b98029d","block_type":"box","text":"appreciate it when companies produce them sufficiently in advance of their shareholder meeting, to the","page_number":237,"box":{"x":116,"y":314,"width":770,"height":12}},{"id":"58e4113e-bf77-4aa7-94e2-64449ab9d46d","block_type":"box","text":"best of their abilities, to provide investors with time to assess the data and make informed voting","page_number":237,"box":{"x":117,"y":330,"width":718,"height":12}},{"id":"c853e948-1211-4ae4-95b4-8021da1e90e4","block_type":"box","text":"decisions.","page_number":237,"box":{"x":116,"y":345,"width":79,"height":10}},{"id":"a7d2473b-5bbb-4ddb-9d73-24faf6365e1c","block_type":"box","text":"Industry initiatives on managing specific operational risks may also provide useful guidance to","page_number":237,"box":{"x":117,"y":374,"width":700,"height":12}},{"id":"43ef35be-b3fb-44d6-b536-a13fd924981d","block_type":"box","text":"companies on best practices and disclosures. While not a voting item, we find it helpful to our","page_number":237,"box":{"x":116,"y":389,"width":697,"height":12}},{"id":"eedfdffa-904f-4871-8a2e-5a7e45bf9a42","block_type":"box","text":"understanding of investment risk when companies disclose any relevant global sustainability-related","page_number":237,"box":{"x":117,"y":405,"width":746,"height":12}},{"id":"602aeaea-e94c-4809-8751-b6d73992afb9","block_type":"box","text":"standards adopted, the industry initiatives in which they participate, any peer group benchmarking","page_number":237,"box":{"x":116,"y":420,"width":731,"height":12}},{"id":"43e5ad2a-5b94-435b-932a-45a15374cc0e","block_type":"box","text":"undertaken, and any assurance processes to help investors understand their approach to sustainable","page_number":237,"box":{"x":117,"y":436,"width":758,"height":12}},{"id":"27aa9d21-87c9-4efb-8f4f-df30e4890bfb","block_type":"box","text":"and responsible business practices.","page_number":237,"box":{"x":116,"y":451,"width":271,"height":12}},{"id":"b06880d4-08b1-42d4-8b00-6b057c0e239c","block_type":"box","text":"Climate and nature-related risk","page_number":237,"box":{"x":117,"y":480,"width":250,"height":9}},{"id":"66ff7fe3-ffb2-472e-9aaa-970a7f8d8162","block_type":"box","text":"Many companies are assessing how to navigate the low-carbon transition while delivering long-term","page_number":237,"box":{"x":117,"y":508,"width":745,"height":12}},{"id":"09c0bc4c-212b-41e9-b3a0-c65547fcf64d","block_type":"box","text":"financial value to investors. For companies facing material climate-related risks, we find it helpful when","page_number":237,"box":{"x":116,"y":523,"width":766,"height":12}},{"id":"f1816607-d7cc-457c-85f0-f0b429af3b44","block_type":"box","text":"they publicly disclose, consistent with their business model and sector, how they intend to deliver long","page_number":237,"box":{"x":116,"y":539,"width":762,"height":12}},{"id":"332a1613-9b56-49a7-bc23-b84ce0938a59","block_type":"box","text":"term financial performance through the low-carbon transition, including where available, their transition","page_number":237,"box":{"x":116,"y":554,"width":766,"height":12}},{"id":"351eca54-572a-4c1f-847a-fb95e5b8f88c","block_type":"box","text":"plan.","page_number":237,"box":{"x":117,"y":570,"width":34,"height":12}},{"id":"fa8ff7b0-7f78-4c71-ac6f-8d5f5d75028d","block_type":"box","text":"12, 13","page_number":237,"box":{"x":153,"y":570,"width":29,"height":7}},{"id":"7aed312c-3a16-4dab-b4fc-b7977c6901c4","block_type":"box","text":"From company disclosures and engagement, we seek to understand the strategies","page_number":237,"box":{"x":182,"y":570,"width":626,"height":12}},{"id":"91147302-b41b-4be2-bead-fc18dd6e2df4","block_type":"box","text":"companies have in place to manage material risks to, and opportunities for, their long-term business","page_number":237,"box":{"x":116,"y":585,"width":748,"height":12}},{"id":"7e4ffaed-0b48-4928-b07b-14b497913689","block_type":"box","text":"model associated with a range of climate-related scenarios.","page_number":237,"box":{"x":117,"y":601,"width":446,"height":12}},{"id":"d472a6be-ce82-418b-ba9e-0059113540f7","block_type":"box","text":"Recognizing the value of these disclosures, certain markets such as the European Union mandate","page_number":237,"box":{"x":117,"y":629,"width":734,"height":12}},{"id":"dbe80f90-21a3-4e92-9af6-3632cce868b8","block_type":"box","text":"large companies to disclose such climate-related financial information, while in other jurisdictions these","page_number":237,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"f9d5d1a9-552d-45a9-b478-c81c9dc5048e","block_type":"box","text":"disclosures are viewed as best practice in the market.","page_number":237,"box":{"x":116,"y":660,"width":398,"height":12}},{"id":"bb4a949f-0c72-443f-9f5e-07ad5856f32e","block_type":"box","text":"11","page_number":237,"box":{"x":144,"y":685,"width":7,"height":5}},{"id":"f874e160-0daf-467a-b0c5-d5327a34071e","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":237,"box":{"x":170,"y":685,"width":666,"height":10}},{"id":"ab7715e9-b4e1-44a8-9cb9-2e43a16fb81d","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":237,"box":{"x":171,"y":698,"width":712,"height":10}},{"id":"e8930172-bab2-44b4-a0de-21a06ad43a32","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":237,"box":{"x":170,"y":711,"width":649,"height":10}},{"id":"9587ef32-4cd2-44ee-b887-6c331153ec57","block_type":"box","text":"converged under the ISSB. Please refer to the IFRS website to learn more about the framework and standards S1","page_number":237,"box":{"x":170,"y":724,"width":674,"height":10}},{"id":"e22ef693-6b4f-4580-8b79-65daa701c7d0","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":237,"box":{"x":170,"y":737,"width":647,"height":10}},{"id":"75ccce1a-663e-4d46-97f5-d2fb3a6bd8ad","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":237,"box":{"x":171,"y":750,"width":312,"height":8}},{"id":"92a6d59d-34d3-49f2-85c4-4c72f05ed46a","block_type":"box","text":"12","page_number":237,"box":{"x":144,"y":763,"width":8,"height":5}},{"id":"c23b295e-1d76-4c4b-b2eb-e9a5767c096e","block_type":"box","text":"We have observed that more companies are developing such plans, and public policymakers in certain markets are","page_number":237,"box":{"x":170,"y":763,"width":685,"height":10}},{"id":"68c808ac-a2e3-4b6f-987c-f8f89d3f201a","block_type":"box","text":"signaling their intentions to require them or already have requirements in place, such as Australia, Brazil, and the","page_number":237,"box":{"x":170,"y":776,"width":670,"height":10}},{"id":"8125c04e-f203-4503-b179-e2ff8b127a25","block_type":"box","text":"European Union (please see the International Transition Plan Network for information). We view transition plans as a","page_number":237,"box":{"x":171,"y":789,"width":691,"height":9}},{"id":"3f62fabe-77b3-403c-b524-01dba9fa96df","block_type":"box","text":"method for a company to both internally assess and externally communicate its long-term strategy, ambition, objectives,","page_number":237,"box":{"x":170,"y":802,"width":710,"height":9}},{"id":"63ce6c02-4da4-49be-850a-7eb39f852273","block_type":"box","text":"and actions to create financial value through the global transition towards a low-carbon economy. Across the landscape","page_number":237,"box":{"x":170,"y":815,"width":709,"height":9}},{"id":"5a9c8958-d639-4990-811e-680b951b07b1","block_type":"box","text":"there remains divergence on the objectives of such plans and the details they should contain. While transition plans can","page_number":237,"box":{"x":170,"y":828,"width":710,"height":9}},{"id":"6ab1f40f-153a-443a-b793-7c1f8f56196e","block_type":"box","text":"be helpful disclosure, BIS does not make the preparation and production of transition plans a voting issue. BIS may","page_number":237,"box":{"x":170,"y":840,"width":684,"height":10}},{"id":"42ee2e56-3f3c-46ee-91bc-8f8bf8c66b25","block_type":"box","text":"engage companies that have chosen to publish a transition plan to understand their planned actions and resource","page_number":237,"box":{"x":170,"y":853,"width":675,"height":10}},{"id":"24122eb1-3af6-4619-9101-f0aac7910b29","block_type":"box","text":"implications. Website accessed in December 2025.","page_number":237,"box":{"x":170,"y":866,"width":303,"height":10}},{"id":"e391ec67-4712-40de-b1f9-0553355a633f","block_type":"box","text":"13","page_number":237,"box":{"x":144,"y":879,"width":8,"height":5}},{"id":"404463a1-534f-4b04-83be-951ff54f086d","block_type":"box","text":"For more information, please see our commentary “Climate-related risks and a low-carbon transition,” December 2025.","page_number":237,"box":{"x":171,"y":879,"width":703,"height":10}},{"id":"e21be9d9-d06d-404d-8c66-0c88bcf141cd","block_type":"box","text":"BlackRock Investment Stewardship","page_number":237,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"4750461e-4290-48bf-aebf-fb9b523998e4","block_type":"box","text":"Global Principles |","page_number":237,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"4b8d2569-d11a-4cb6-9032-a8faefef780d","block_type":"box","text":"12","page_number":237,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"a8436046-83fb-406a-aae6-aeb33aee9dba","block_type":"box","text":"NM1026U-6039989-237/256","page_number":237,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"90ecd11c-f043-430a-aa46-937446512741","block_type":"box","text":"The ISSB standards provide one such framework that can assist investors in assessing company","page_number":238,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"797230f0-5d75-45a0-a4d1-5e47b3091659","block_type":"box","text":"specific climate-related risks and opportunities, and informing investment decisions. Such disclosures","page_number":238,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"78d77979-1259-4212-8bae-d3ed63b57be5","block_type":"box","text":"also provide investors with insights into how companies are managing the risks associated with a","page_number":238,"box":{"x":116,"y":118,"width":726,"height":12}},{"id":"cfac7bcc-d80a-4261-aee2-91908e93cda2","block_type":"box","text":"transition to a low-carbon economy by managing their own carbon emissions or emissions intensities","page_number":238,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"99eaa97f-0e52-4949-b170-5df17086b646","block_type":"box","text":"to the extent financially practicable.","page_number":238,"box":{"x":116,"y":149,"width":266,"height":12}},{"id":"2c60d4d9-7cf6-47f2-900e-7a37e53d1f51","block_type":"box","text":"The ISSB standards, for example, contemplate disclosures on how companies are setting short-,","page_number":238,"box":{"x":116,"y":177,"width":723,"height":12}},{"id":"8d4c6c07-0935-445e-8f72-fc105eae97c5","block_type":"box","text":"medium- and long-term targets, ideally science-based where these are available for their sector, for","page_number":238,"box":{"x":117,"y":193,"width":742,"height":12}},{"id":"443693e8-6f05-4fcb-8c43-8e964b799fd0","block_type":"box","text":"scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are","page_number":238,"box":{"x":116,"y":208,"width":760,"height":12}},{"id":"4464a3af-5d9c-4004-a228-b4778655bc5e","block_type":"box","text":"consistent with the long-term financial interests of their investors.","page_number":238,"box":{"x":116,"y":224,"width":486,"height":12}},{"id":"ace2114b-74ca-4d23-83d3-e23858d39213","block_type":"box","text":"While we recognize that regulators in some markets are moving to mandate certain disclosures, at this","page_number":238,"box":{"x":116,"y":252,"width":766,"height":12}},{"id":"2bf398e8-94b5-4418-a318-53ccfb5947b6","block_type":"box","text":"stage, we view scope 3 emissions differently from scopes 1 and 2, given methodological complexity,","page_number":238,"box":{"x":116,"y":268,"width":749,"height":12}},{"id":"f956b84f-cc75-4a10-b4b8-7edc6a16be42","block_type":"box","text":"regulatory uncertainty, concerns about double-counting, and lack of direct control by companies. We","page_number":238,"box":{"x":117,"y":283,"width":749,"height":12}},{"id":"03aecf7c-91f7-4bfa-b0bb-a39e909fbd9f","block_type":"box","text":"welcome disclosures and commitments that companies choose to make regarding material scope 3","page_number":238,"box":{"x":116,"y":299,"width":744,"height":12}},{"id":"0fc63e05-37e3-4f99-a96a-929680060d42","block_type":"box","text":"emissions and recognize that these are provided on a good-faith basis as methodology develops.","page_number":238,"box":{"x":116,"y":314,"width":728,"height":12}},{"id":"07bb371e-f6c8-4354-af12-73edf6a3ee8a","block_type":"box","text":"In addition to climate-related risks and opportunities, for companies whose strategies, operations or","page_number":238,"box":{"x":117,"y":343,"width":742,"height":12}},{"id":"fa587bd3-b90c-4d66-b3cb-a70d5a85220d","block_type":"box","text":"supply chains are materially reliant on natural capital, nature-related risks and opportunities may affect","page_number":238,"box":{"x":116,"y":358,"width":765,"height":12}},{"id":"cb97a40a-69d8-4ece-a086-52bdce074884","block_type":"box","text":"their ability to generate long-term financial returns.","page_number":238,"box":{"x":116,"y":374,"width":372,"height":12}},{"id":"132324e6-7a61-4ee3-9ea6-3785220377bd","block_type":"box","text":"14","page_number":238,"box":{"x":491,"y":374,"width":11,"height":6}},{"id":"a56b68bb-8eeb-48f8-9822-d6ebea3da150","block_type":"box","text":"For these companies, we rely on disclosures to","page_number":238,"box":{"x":502,"y":374,"width":360,"height":12}},{"id":"efb72229-322f-42f1-9419-63537f48a069","block_type":"box","text":"understand how their strategies consider nature-related impacts and dependencies and to assess how","page_number":238,"box":{"x":117,"y":389,"width":765,"height":12}},{"id":"a7ada731-c80d-4835-94b7-0abd7f2d0a15","block_type":"box","text":"the board oversees these risks.","page_number":238,"box":{"x":116,"y":405,"width":232,"height":9}},{"id":"0e9efee9-46ed-4050-8a76-f85efb780448","block_type":"box","text":"15","page_number":238,"box":{"x":351,"y":405,"width":10,"height":6}},{"id":"c8f84055-09cf-4c7a-80c8-387cfd7aa00e","block_type":"box","text":"Companies’ impact on their workforce, supply chains, and communities","page_number":238,"box":{"x":117,"y":433,"width":579,"height":12}},{"id":"b5394b05-055f-4b0a-ba9d-29a7e31f9a34","block_type":"box","text":"Companies determine their key stakeholders based on what is material to their business and long-term","page_number":238,"box":{"x":117,"y":461,"width":768,"height":12}},{"id":"80738259-d514-4426-aff3-97391e5e5900","block_type":"box","text":"financial performance. For many companies, key stakeholders include employees, business supply","page_number":238,"box":{"x":116,"y":477,"width":741,"height":12}},{"id":"e6dc39bb-6776-4596-ba63-a567235b8d6f","block_type":"box","text":"chains, clients and consumers, regulators, and the communities in which they operate.","page_number":238,"box":{"x":116,"y":493,"width":647,"height":11}},{"id":"b877b638-f43e-4e34-8b22-b09045702c52","block_type":"box","text":"In our experience, companies that invest in the relationships that are critical to their strategic objectives","page_number":238,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"5523895a-18fa-41bc-92a8-2adfed1a1910","block_type":"box","text":"are more likely to deliver durable, long-term financial performance. By contrast, we have found that","page_number":238,"box":{"x":116,"y":536,"width":739,"height":12}},{"id":"dd0fae9f-9d5b-4292-8920-257608ebcc5b","block_type":"box","text":"poor relationships may create adverse impacts that could expose companies to legal, regulatory,","page_number":238,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"13c10427-6967-4332-b48a-25f0c6230a8d","block_type":"box","text":"operational, and reputational risks. This is particularly relevant to a company’s workforce, which is","page_number":238,"box":{"x":116,"y":567,"width":730,"height":12}},{"id":"c0a38932-b6ff-41ad-badf-0e6091ed243f","block_type":"box","text":"central to long-term financial value creation.","page_number":238,"box":{"x":116,"y":583,"width":324,"height":12}},{"id":"47745020-0347-4c7a-b28d-6cc73e0ca895","block_type":"box","text":"16","page_number":238,"box":{"x":442,"y":583,"width":11,"height":6}},{"id":"1aecbfb4-f986-4b48-9ed8-8b46dbba6412","block_type":"box","text":"As a long-term shareholder on behalf of our clients, we find it helpful when companies disclose how","page_number":238,"box":{"x":116,"y":611,"width":743,"height":12}},{"id":"482255e0-5f63-4cbe-b509-df7de5a14084","block_type":"box","text":"they have identified their key stakeholders and considered their interests in business decision-making.","page_number":238,"box":{"x":116,"y":627,"width":763,"height":12}},{"id":"ea1247b0-c029-4138-8b76-9595552ae26f","block_type":"box","text":"In addition to understanding broader stakeholder relationships, BIS finds it helpful when companies","page_number":238,"box":{"x":117,"y":642,"width":740,"height":12}},{"id":"bd70f0af-79a9-4f0d-9d73-3386b2883e15","block_type":"box","text":"discuss how they consider the needs of their workforce today, and the skills required for their future","page_number":238,"box":{"x":116,"y":658,"width":742,"height":12}},{"id":"0f28d956-896c-40e9-90b8-11b744bcb945","block_type":"box","text":"business strategy. We are also interested in understanding how the board monitors and engages on","page_number":238,"box":{"x":117,"y":673,"width":741,"height":12}},{"id":"50098f6e-4031-47d1-8f3e-c620d703d5d4","block_type":"box","text":"these matters, given it is well positioned to ensure that the approach taken by management is informed","page_number":238,"box":{"x":116,"y":689,"width":764,"height":12}},{"id":"c87aac68-ec3a-490b-84c7-f06687be0b01","block_type":"box","text":"by and aligns with the company’s strategy. BIS does not direct a company’s policies or practices, which","page_number":238,"box":{"x":117,"y":704,"width":765,"height":12}},{"id":"8c075bff-0b89-48cf-8056-4bb64287a51d","block_type":"box","text":"are the responsibility of management and the board.","page_number":238,"box":{"x":116,"y":720,"width":387,"height":12}},{"id":"bfd4d30f-a467-410a-8fea-a9e0bba60099","block_type":"box","text":"In addition, we find it helpful when companies disclose their approach to addressing material adverse","page_number":238,"box":{"x":117,"y":748,"width":749,"height":12}},{"id":"88fdacf9-13da-4602-ab14-652da2acaedd","block_type":"box","text":"impacts that could arise from their business practices and affect critical relationships with their","page_number":238,"box":{"x":117,"y":763,"width":697,"height":12}},{"id":"9bac37e8-cf62-4c61-873f-95e6cb9aefef","block_type":"box","text":"14","page_number":238,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"2a3a8ce9-17f4-484c-af08-f445f6ea22e5","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on natural capital,” December 2025.","page_number":238,"box":{"x":171,"y":789,"width":697,"height":9}},{"id":"7a86ee2d-f5c0-44f6-8266-1f40b6c82ab9","block_type":"box","text":"15","page_number":238,"box":{"x":144,"y":802,"width":8,"height":5}},{"id":"86550dce-339a-42b8-95f7-b60de139c93b","block_type":"box","text":"Given the growing awareness of the materiality of these issues for certain businesses, enhanced reporting on a","page_number":238,"box":{"x":170,"y":802,"width":660,"height":9}},{"id":"f56220ff-9eed-4d26-ba95-652a8d8d11d8","block_type":"box","text":"company’s natural capital dependencies and impacts would aid investors’ understanding. The recommendations of the","page_number":238,"box":{"x":170,"y":814,"width":704,"height":10}},{"id":"91fee4bb-9290-41b6-9b1b-da8d79edc08f","block_type":"box","text":"Taskforce on Nature-related Financial Disclosures (TNFD) may prove useful to some companies. We recognize that","page_number":238,"box":{"x":170,"y":827,"width":689,"height":10}},{"id":"3bd54051-4970-414b-8acb-180c0b351dc0","block_type":"box","text":"some companies may report using different standards, which may be required by regulation, or one of a number of","page_number":238,"box":{"x":170,"y":840,"width":680,"height":10}},{"id":"fb48e9ea-a5a4-4179-8015-42ceb25cb720","block_type":"box","text":"other private sector standards. TNFD-aligned reporting is not a voting issue. Website accessed in December 2025.","page_number":238,"box":{"x":170,"y":853,"width":680,"height":10}},{"id":"e91efe40-ef97-4262-a07c-4a6a03cd9928","block_type":"box","text":"16","page_number":238,"box":{"x":144,"y":866,"width":8,"height":5}},{"id":"a74ca992-dc03-443a-ae1c-98e4ea3c4f5e","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on human capital management,”","page_number":238,"box":{"x":171,"y":866,"width":677,"height":10}},{"id":"22036a32-7d02-460d-a062-5afde8cabfa8","block_type":"box","text":"December 2025.","page_number":238,"box":{"x":171,"y":879,"width":97,"height":8}},{"id":"2aba11ea-a4d7-4026-91fc-4b6f33d851e2","block_type":"box","text":"BlackRock Investment Stewardship","page_number":238,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"43d0462f-759a-4e69-aac9-b0648a5f8671","block_type":"box","text":"Global Principles |","page_number":238,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"2e915839-9c0d-4ed0-bb6b-91202fc0a322","block_type":"box","text":"13","page_number":238,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"8fcc771d-9955-4498-9bb7-a0814c8783df","block_type":"box","text":"NM1026U-6039989-238/256","page_number":238,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2218bb13-3202-401a-9884-2fcc7b9726b2","block_type":"box","text":"stakeholders. We encourage companies to implement, to the extent appropriate, monitoring processes","page_number":239,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"ac69538b-7ae9-4f53-b71a-d91115a645aa","block_type":"box","text":"(often referred to as due diligence) to identify and mitigate potential adverse impacts and grievance","page_number":239,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"fd494f7d-72b7-4420-ad90-80a6cf07bfa1","block_type":"box","text":"mechanisms to remediate any actual adverse material impacts.","page_number":239,"box":{"x":117,"y":118,"width":474,"height":12}},{"id":"4ef49045-725a-4e7f-ad65-8e8fdc759e2b","block_type":"box","text":"We look to boards to oversee management’s approach to addressing material risks related to key","page_number":239,"box":{"x":116,"y":148,"width":729,"height":12}},{"id":"26638118-706a-4f53-898a-86e466ee6055","block_type":"box","text":"stakeholders and may convey concerns about board oversight in our voting on director elections or","page_number":239,"box":{"x":116,"y":164,"width":739,"height":12}},{"id":"ccafa454-b860-4b7a-98a9-28ad5c37c166","block_type":"box","text":"supporting a business relevant shareholder proposal when, in our assessment, the board is not acting","page_number":239,"box":{"x":116,"y":179,"width":761,"height":12}},{"id":"67678fbb-8bd2-4872-af25-074cb596e492","block_type":"box","text":"in shareholders’ long-term financial interests.","page_number":239,"box":{"x":117,"y":195,"width":337,"height":12}},{"id":"05193004-854b-47af-91fb-10bcb99c6faf","block_type":"box","text":"BlackRock’s oversight of its investment stewardship activities","page_number":239,"box":{"x":251,"y":232,"width":503,"height":12}},{"id":"b909f915-8087-4f2a-84f4-4512d80ad06a","block_type":"box","text":"BIS’ governance structure supports oversight and accountability of stewardship-related activities on","page_number":239,"box":{"x":117,"y":262,"width":742,"height":12}},{"id":"3f8dd09e-1a51-4a21-baa1-a81ebdd4683d","block_type":"box","text":"behalf of clients at the global and regional level.","page_number":239,"box":{"x":117,"y":278,"width":358,"height":12}},{"id":"742caeca-31a8-412d-94ab-2e4a5fda9555","block_type":"box","text":"At the top of this governance structure, the risk-focused BIS Global Oversight Committee (the","page_number":239,"box":{"x":116,"y":308,"width":699,"height":12}},{"id":"074a2d84-3e2a-45a6-9392-3d26961d8e4e","block_type":"box","text":"Committee) supports BIS’ regulatory responsibilities in relation to proxy voting, including adherence to","page_number":239,"box":{"x":117,"y":324,"width":760,"height":12}},{"id":"78e3a22e-eca5-4af8-854b-4e1eab4e69df","block_type":"box","text":"policies and procedures as well as market-level stewardship requirements. The Committee reviews","page_number":239,"box":{"x":117,"y":339,"width":740,"height":12}},{"id":"e5e4afdf-307d-4a5c-a918-bb5839298657","block_type":"box","text":"and approves amendments to the Global Principles and regional voting guidelines. The Committee","page_number":239,"box":{"x":116,"y":355,"width":738,"height":12}},{"id":"ffb93fc5-03a8-491d-a629-7dd664647f2d","block_type":"box","text":"also reviews periodic reports regarding the votes cast by BIS on behalf of clients, as well as updates","page_number":239,"box":{"x":116,"y":370,"width":749,"height":12}},{"id":"59b24c2e-46e9-4863-9c8e-4d459e2023b7","block_type":"box","text":"on material process issues, procedural changes, and other risk oversight considerations. The","page_number":239,"box":{"x":116,"y":386,"width":697,"height":12}},{"id":"05f49de9-0e05-4065-86f5-3bad707ad376","block_type":"box","text":"Committee is chaired by the Global Heads of the Investment Stewardship function and its members","page_number":239,"box":{"x":117,"y":401,"width":743,"height":12}},{"id":"64a25ea1-9202-4360-ba5a-f9141b1a036f","block_type":"box","text":"include senior BlackRock executives with legal, risk, and other experience relevant to team oversight","page_number":239,"box":{"x":117,"y":417,"width":752,"height":12}},{"id":"7b0f91a9-d552-4db9-8a84-51c4a9e7bebb","block_type":"box","text":"who are independent from the investment stewardship function.","page_number":239,"box":{"x":116,"y":432,"width":477,"height":12}},{"id":"1820b244-491a-45ce-a753-d8f33fc5308d","block_type":"box","text":"The Global Heads have primary oversight of BIS’ activities globally, including voting in accordance with","page_number":239,"box":{"x":116,"y":462,"width":769,"height":12}},{"id":"b93e76ab-0870-4882-b80a-13cc861cb8cc","block_type":"box","text":"the Global Principles and regional voting guidelines. At the regional level, three regional Heads for the","page_number":239,"box":{"x":116,"y":478,"width":761,"height":12}},{"id":"2e810ae1-d94f-4661-aea4-38c8c088ed11","block_type":"box","text":"Americas, APAC, and EMEA oversee BIS’ activities for their specific markets.","page_number":239,"box":{"x":116,"y":493,"width":581,"height":12}},{"id":"a75bf3ad-97bf-4283-a12b-c7b7fb253125","block_type":"box","text":"Vote execution","page_number":239,"box":{"x":118,"y":524,"width":122,"height":9}},{"id":"37912449-0f81-4686-a161-b36770d699aa","block_type":"box","text":"BIS votes proxies on behalf of index equity funds and accounts when authorized by our clients. We","page_number":239,"box":{"x":117,"y":554,"width":739,"height":12}},{"id":"df47d181-10f2-4075-855e-110684a0d698","block_type":"box","text":"have processes in place to consider all proxies for which we have voting authority, and submit voting","page_number":239,"box":{"x":117,"y":569,"width":751,"height":12}},{"id":"4abaa843-9299-468f-91b7-1e4bda0d7c91","block_type":"box","text":"decisions, or refrain from voting when logistical issues arise (see below). The BIS Benchmark","page_number":239,"box":{"x":116,"y":585,"width":698,"height":12}},{"id":"c75bf77c-0b76-4fc7-9111-f6692f1ebc18","block_type":"box","text":"Policies – and the vote decisions made consistent with those policies – reflect our reasonable and","page_number":239,"box":{"x":117,"y":600,"width":730,"height":12}},{"id":"8c6f0fcc-d20e-4571-9ad3-19a2a5579359","block_type":"box","text":"independent judgment and are made without regard to the relationship between the issuer of the proxy","page_number":239,"box":{"x":117,"y":616,"width":766,"height":12}},{"id":"17f7faef-3174-4a97-b713-71141766c36d","block_type":"box","text":"(or any shareholder proponent or dissident shareholder) and the Fund, the Fund’s affiliates (if any),","page_number":239,"box":{"x":117,"y":631,"width":739,"height":12}},{"id":"5cefa54e-1d6b-4c13-b872-2e6fc49c211b","block_type":"box","text":"BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts management policies and","page_number":239,"box":{"x":117,"y":647,"width":768,"height":12}},{"id":"ef8fc472-0cb9-41ef-8599-d9d08896b281","block_type":"box","text":"procedures,” below).","page_number":239,"box":{"x":117,"y":662,"width":151,"height":12}},{"id":"0cb95390-4edb-4f4d-b5f3-02a95708e646","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BIS’ ability to vote, as well","page_number":239,"box":{"x":117,"y":692,"width":743,"height":12}},{"id":"0653c522-6de5-4010-89e6-b065bbe57af2","block_type":"box","text":"as the cost of voting such proxies on behalf of our clients. These issues include, but are not limited to:","page_number":239,"box":{"x":116,"y":708,"width":754,"height":12}},{"id":"0376e36a-8680-4924-9120-24ed793a24a8","block_type":"box","text":"1) untimely notice of shareholder meetings; 2) restrictions on a foreigner’s ability to exercise votes; 3)","page_number":239,"box":{"x":118,"y":723,"width":748,"height":12}},{"id":"2228f703-9c96-4e9a-9832-81d2cf133492","block_type":"box","text":"requirements to vote proxies in person; 4) “share-blocking” (requirements that investors who exercise","page_number":239,"box":{"x":117,"y":739,"width":751,"height":12}},{"id":"7f0c8157-6921-42ba-8e6c-feb9f842d76d","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":239,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"fb09b9d0-5801-4428-a029-900d0bfa4f1e","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); 5) potential difficulties in","page_number":239,"box":{"x":116,"y":770,"width":695,"height":12}},{"id":"518b62d9-cdd2-4fbd-a537-f600f31e0813","block_type":"box","text":"translating the proxy; 6) regulatory constraints; and 7) requirements to provide local agents with","page_number":239,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"36ca39db-d157-4913-8d3b-1fdd7127b2f7","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":239,"box":{"x":117,"y":801,"width":701,"height":12}},{"id":"94a05a14-1036-47ca-8904-ce28ddf06674","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":239,"box":{"x":116,"y":816,"width":735,"height":12}},{"id":"4c853320-f8a0-40a0-aa5e-6bb7346e79d5","block_type":"box","text":"BIS votes proxies in these situations on a “best-efforts” basis. In addition, BIS may determine that it is","page_number":239,"box":{"x":117,"y":846,"width":758,"height":13}},{"id":"0810eaa8-906e-42a4-ac77-b27cea9f0669","block_type":"box","text":"generally in the interests of BlackRock’s clients not to vote proxies (or not to vote our full allocation) if","page_number":239,"box":{"x":116,"y":862,"width":755,"height":12}},{"id":"b777cecd-5e24-4980-a75f-eb314e244d07","block_type":"box","text":"the costs (including but not limited to opportunity costs associated with share-blocking constraints)","page_number":239,"box":{"x":116,"y":877,"width":734,"height":13}},{"id":"e0559811-aa38-4c0f-9cc6-728693885dc2","block_type":"box","text":"BlackRock Investment Stewardship","page_number":239,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"dd836e3c-de4e-482f-9be8-3576ed1f3aa9","block_type":"box","text":"Global Principles |","page_number":239,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"e44e6081-b1ba-4b2e-8f3e-3162930dfc4f","block_type":"box","text":"14","page_number":239,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"f830683e-6dfe-4dcb-acbd-1fba375a5529","block_type":"box","text":"NM1026U-6039989-239/256","page_number":239,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b13d5b64-c297-4459-8a35-f3614112d528","block_type":"box","text":"associated with exercising a vote are expected to outweigh the benefit the client would derive by voting","page_number":240,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"3dca4065-757c-41a1-9891-aae19c689ff4","block_type":"box","text":"on the proposal.","page_number":240,"box":{"x":116,"y":103,"width":125,"height":11}},{"id":"18bed576-3045-4bf0-a06c-82166dfa1583","block_type":"box","text":"Conflicts management policies and procedures","page_number":240,"box":{"x":117,"y":134,"width":382,"height":12}},{"id":"3fce5a5a-d78c-4beb-bd2f-2377b58e9c7f","block_type":"box","text":"BIS is a dedicated function whose responsibilities are separate from BlackRock’s sales, business","page_number":240,"box":{"x":117,"y":165,"width":724,"height":11}},{"id":"18f11a51-4914-469c-96db-53d1d53b03bd","block_type":"box","text":"partnership or enterprise-level vendor management activities.","page_number":240,"box":{"x":117,"y":180,"width":460,"height":12}},{"id":"baffeb72-2fa5-4b38-b004-89b596c84cd8","block_type":"box","text":"BlackRock maintains policies and procedures that are designed to prevent undue influence on BIS’","page_number":240,"box":{"x":117,"y":211,"width":739,"height":12}},{"id":"f6eefd03-78ac-45a3-acf8-bee9447e269d","block_type":"box","text":"proxy voting activity. Such influence might stem from any relationship between the investee company","page_number":240,"box":{"x":117,"y":227,"width":755,"height":12}},{"id":"394881f4-96b7-42f7-856a-87a0249393eb","block_type":"box","text":"(or any shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund","page_number":240,"box":{"x":117,"y":242,"width":766,"height":12}},{"id":"612c22c0-1efa-4713-a297-31bbd01488e1","block_type":"box","text":"or a Fund’s affiliates, or BlackRock employees.","page_number":240,"box":{"x":116,"y":258,"width":354,"height":12}},{"id":"c7dd78b0-2e05-4c50-b511-b097dfcf8925","block_type":"box","text":"For information on how BIS manages conflicts of interest, please see our disclosure.","page_number":240,"box":{"x":117,"y":289,"width":630,"height":12}},{"id":"fee0636e-82f4-4b30-b2d3-beb57ed2f607","block_type":"box","text":"Securities lending","page_number":240,"box":{"x":117,"y":320,"width":148,"height":12}},{"id":"6e2b079e-23fb-42b2-872d-f6c0fad2cb00","block_type":"box","text":"When authorized, BlackRock acts as a securities lending agent on behalf of its clients. 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Entitlements associated with the lent securities","page_number":240,"box":{"x":117,"y":397,"width":715,"height":12}},{"id":"7a7e61be-8871-475a-a0df-1508706d6281","block_type":"box","text":"(dividends, coupons, etc.), while on loan are paid back to the lender of the security as stipulated in","page_number":240,"box":{"x":117,"y":413,"width":733,"height":12}},{"id":"2ef56c4e-a2e8-4258-bdbb-66a47fd30b82","block_type":"box","text":"industry standard legal agreements.","page_number":240,"box":{"x":117,"y":428,"width":271,"height":12}},{"id":"8d9e6b7a-16a4-42b3-9c19-2983e9000482","block_type":"box","text":"With regard to the relationship between securities lending and proxy voting, BlackRock cannot vote","page_number":240,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"4f963aa2-a76d-449d-b089-2029379f3ec9","block_type":"box","text":"shares on loan and may determine to recall them for voting, as guided by our fiduciary duty as an asset","page_number":240,"box":{"x":116,"y":475,"width":772,"height":12}},{"id":"a2bca83e-6af1-4e32-ac91-b9658e4e7385","block_type":"box","text":"manager to our clients in helping them achieve their investment goals. 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As a result, voting decisions – on behalf of in-scope funds","page_number":247,"box":{"x":117,"y":699,"width":744,"height":13}},{"id":"88642b39-d763-43a7-9fe4-fc85ed512818","block_type":"box","text":"and SMAs – on similar proposals included on different companies’ shareholder meeting agendas may","page_number":247,"box":{"x":116,"y":715,"width":755,"height":12}},{"id":"65fffaf9-2043-47f0-a1f0-fc7e41f2c805","block_type":"box","text":"vary depending on company, sector, or market-specific circumstances.","page_number":247,"box":{"x":116,"y":730,"width":524,"height":13}},{"id":"70242d16-d052-4935-a649-5dd61d54d338","block_type":"box","text":"Consistent with the investment objective of each fund or account that has selected these Guidelines,","page_number":247,"box":{"x":117,"y":761,"width":744,"height":13}},{"id":"5737bcc9-1283-4c23-bb1b-116526dd4d39","block_type":"box","text":"the dedicated team will look to the companies to demonstrate the following:","page_number":247,"box":{"x":116,"y":777,"width":558,"height":12}},{"id":"5b3bf344-d193-4da7-ace2-dc25a063ae9d","block_type":"box","text":"12","page_number":247,"box":{"x":144,"y":841,"width":8,"height":5}},{"id":"73bfb27f-7a2f-4584-90ff-444e5661c67a","block_type":"box","text":"These Guidelines are not intended to limit the analysis of individual issues at specific companies or provide a guide as","page_number":247,"box":{"x":170,"y":841,"width":701,"height":9}},{"id":"6a5a80f3-2eeb-4224-946e-690572916581","block_type":"box","text":"to how the dedicated team will engage and/or vote in every instance. The Guidelines are applied by the dedicated team","page_number":247,"box":{"x":170,"y":854,"width":708,"height":9}},{"id":"d31c7d4d-e60e-4bbf-9122-2ff741942c63","block_type":"box","text":"with discretion, on a case-by-case basis, taking into consideration the range of issues and facts specific to the","page_number":247,"box":{"x":170,"y":867,"width":651,"height":9}},{"id":"4e7ff7c4-9a76-4b9a-9383-8681f699b87c","block_type":"box","text":"company, as well as individual ballot items at shareholder meetings.","page_number":247,"box":{"x":170,"y":880,"width":403,"height":9}},{"id":"bf9841c5-1cbd-4d70-bf64-e7ba348a2ff0","block_type":"box","text":"BlackRock Investment Stewardship","page_number":247,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"ad6f2470-ee52-4f9b-9ed3-d4f46afb9962","block_type":"box","text":"Climate and Decarbonization St","page_number":247,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"ef40e023-24aa-4719-bbac-0175502d0d11","block_type":"box","text":"ewardship Guidelines |","page_number":247,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"99d05c40-8656-438b-a702-f369c946d7a2","block_type":"box","text":"5","page_number":247,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"eafdaace-205a-465b-9670-5752ee81ba97","block_type":"box","text":"NM1026U-6039989-247/256","page_number":247,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9e158daa-4e3b-499c-b3bc-849102d6acc9","block_type":"box","text":"Corporate Disclosures","page_number":248,"box":{"x":117,"y":87,"width":179,"height":12}},{"id":"4123d258-6342-4a37-87b1-967a56635c93","block_type":"box","text":"13","page_number":248,"box":{"x":297,"y":87,"width":11,"height":6}},{"id":"7e3b2d4a-324b-49ab-a401-d22cc3ee83b2","block_type":"box","text":"In the context of these Guidelines, the dedicated team looks for companies to provide sufficient","page_number":248,"box":{"x":117,"y":114,"width":710,"height":12}},{"id":"ed83af97-1fab-4cb3-94df-38a9381de4e5","block_type":"box","text":"disclosure to assess whether the company’s strategy is aligned with the low-carbon transition. As a","page_number":248,"box":{"x":116,"y":129,"width":740,"height":12}},{"id":"90e2b997-3312-4e52-b6dc-80317371cb80","block_type":"box","text":"general point, the team looks to companies that are important to the transition to a low-carbon","page_number":248,"box":{"x":116,"y":145,"width":702,"height":12}},{"id":"241554e1-3fe4-4994-85b5-1a697ee64729","block_type":"box","text":"economy to explain the strategy and governance frameworks that they have determined most","page_number":248,"box":{"x":116,"y":160,"width":700,"height":12}},{"id":"f1158d87-e145-4699-86d1-d44d46b18fc6","block_type":"box","text":"appropriate, which may include:","page_number":248,"box":{"x":116,"y":176,"width":241,"height":12}},{"id":"178ffa9d-f338-49c0-898b-def9ba4ad141","block_type":"box","text":"(1) a low-carbon transition strategy to demonstrate their alignment with the ambition to limit","page_number":248,"box":{"x":150,"y":202,"width":688,"height":12}},{"id":"4d5714d9-029c-40f0-be0c-279ae01f5ce1","block_type":"box","text":"average global temperature rise to 1.5°C above pre-industrial levels. This would typically","page_number":248,"box":{"x":184,"y":218,"width":661,"height":12}},{"id":"29235248-0e71-4f47-b5d5-6b407182a16c","block_type":"box","text":"include a long-term strategy to achieve net-zero GHG emissions by 2050, with appropriate","page_number":248,"box":{"x":184,"y":233,"width":676,"height":12}},{"id":"29f1826a-a5d6-466b-8434-3fe6644a6912","block_type":"box","text":"near- and medium-term milestones to assess their progress.","page_number":248,"box":{"x":184,"y":249,"width":453,"height":12}},{"id":"141a6b72-702e-4115-863f-58028e04c530","block_type":"box","text":"(2) low-carbon transition-related reporting. Standardized disclosure of sustainability-related data","page_number":248,"box":{"x":150,"y":270,"width":724,"height":12}},{"id":"db9af5ae-4b90-44bf-af09-a3f6e947a6c4","block_type":"box","text":"supports investors in making informed decisions. The International Sustainability Standards","page_number":248,"box":{"x":184,"y":285,"width":683,"height":13}},{"id":"2dd79f57-0bd0-4957-a8bd-6fc0d22379a8","block_type":"box","text":"Board (ISSB) standards, IFRS S1 and S2, represent one such approach to standardization","page_number":248,"box":{"x":184,"y":301,"width":678,"height":12}},{"id":"8be0607c-d29c-4b5d-905d-7ec588e4bc3d","block_type":"box","text":"that the dedicated team finds useful in its analysis.","page_number":248,"box":{"x":183,"y":316,"width":374,"height":13}},{"id":"4ff09fd9-ff90-467e-a9a2-1fc4edac9673","block_type":"box","text":"14","page_number":248,"box":{"x":559,"y":317,"width":11,"height":6}},{"id":"e10df974-4061-4a18-bdac-f004e062d3af","block_type":"box","text":",","page_number":248,"box":{"x":572,"y":325,"width":8,"height":3}},{"id":"61ee78dd-60f6-4901-bbc7-6e165054be63","block_type":"box","text":"15","page_number":248,"box":{"x":581,"y":317,"width":11,"height":6}},{"id":"115e2f68-0ebb-48f9-bae9-8035712ff21e","block_type":"box","text":"IFRS S1 addresses the general","page_number":248,"box":{"x":592,"y":316,"width":244,"height":13}},{"id":"1e6345f9-de38-4a6f-afb6-fca6e035f3ff","block_type":"box","text":"requirements of sustainability reporting and IFRS S2 sets out the disclosures that provide","page_number":248,"box":{"x":184,"y":332,"width":667,"height":12}},{"id":"3290548a-64ad-401f-8d31-b89644f56fbc","block_type":"box","text":"investors with decision-useful information about a company’s most significant climate- and","page_number":248,"box":{"x":184,"y":347,"width":674,"height":13}},{"id":"52a64a6d-106e-4ff5-81ef-16d346a6cd41","block_type":"box","text":"low-carbon transition-related risks and opportunities. This includes receiving independent,","page_number":248,"box":{"x":184,"y":363,"width":671,"height":12}},{"id":"ba99b4bd-abf0-4f30-893d-acfb18afcd4b","block_type":"box","text":"third-party assurances, as audit and assurance standards are developed.","page_number":248,"box":{"x":183,"y":379,"width":549,"height":12}},{"id":"14138164-39b7-402d-86e6-c456c75558ec","block_type":"box","text":"(3) scope 1 and scope 2, and most significant scope 3 GHG emissions.","page_number":248,"box":{"x":150,"y":400,"width":536,"height":12}},{"id":"eac72c60-6732-443a-b404-78cc77620787","block_type":"box","text":"16","page_number":248,"box":{"x":689,"y":400,"width":10,"height":6}},{"id":"9a6dcfb4-9408-4792-aded-a37765d62d44","block_type":"box","text":",","page_number":248,"box":{"x":701,"y":408,"width":8,"height":3}},{"id":"7e973e7a-5695-410a-9c28-58b6270cfd5b","block_type":"box","text":"17","page_number":248,"box":{"x":710,"y":400,"width":11,"height":6}},{"id":"a26e17ad-36e2-46c6-b450-40c88df6bc4c","block_type":"box","text":"In addition, the","page_number":248,"box":{"x":721,"y":400,"width":120,"height":11}},{"id":"617c0ef7-d018-44c5-8215-8fc0bd5e18b0","block_type":"box","text":"dedicated team looks to companies to disclose their emissions reduction targets for scope 1","page_number":248,"box":{"x":184,"y":415,"width":687,"height":12}},{"id":"242ff7d0-58f9-4a14-b4ef-aae66b23c2f0","block_type":"box","text":"and 2 emissions, science-based where possible. The team welcomes disclosure of targets or","page_number":248,"box":{"x":184,"y":431,"width":695,"height":12}},{"id":"61ec3bb9-0b07-4c64-88df-87349ef2afdb","block_type":"box","text":"indicative goals, where companies have set them, for scope 3 emissions reductions. Scope 3","page_number":248,"box":{"x":184,"y":446,"width":696,"height":12}},{"id":"d4c1635a-c2ba-493a-8cc4-9313123bada2","block_type":"box","text":"information, including how a company is working with its value chain to accelerate reductions","page_number":248,"box":{"x":184,"y":462,"width":694,"height":12}},{"id":"09f47a8d-b945-4f47-a347-4ed68d4abb40","block_type":"box","text":"in GHG intensity, provides useful insight to investors focused on investing in the low-carbon","page_number":248,"box":{"x":184,"y":477,"width":684,"height":12}},{"id":"3f52d3b5-bebc-4f0f-9a18-29b0c02a32cc","block_type":"box","text":"transition and understanding the impact of their investments on their decarbonization goals.","page_number":248,"box":{"x":183,"y":493,"width":678,"height":12}},{"id":"ca173e2f-c5e1-4993-84a1-746222a9fda6","block_type":"box","text":"18","page_number":248,"box":{"x":864,"y":493,"width":10,"height":6}},{"id":"fd59cc88-9f15-4376-8837-e632a8ca8bbe","block_type":"box","text":"13","page_number":248,"box":{"x":144,"y":518,"width":8,"height":5}},{"id":"402597a4-5f63-41a6-8af0-066019ff526a","block_type":"box","text":"Given data and measurement limitations, companies may need to provide estimated GHG emissions where reporting","page_number":248,"box":{"x":170,"y":518,"width":695,"height":9}},{"id":"362cb91f-ff6a-4483-a67b-b9a6c2d0df6c","block_type":"box","text":"methodologies are nascent. In addition, certain disclosures related to a company’s plans for adapting their business","page_number":248,"box":{"x":170,"y":531,"width":686,"height":9}},{"id":"5f36f237-7975-4c51-8678-9b64bef11260","block_type":"box","text":"models through the low-carbon transition may require forward-looking statements.","page_number":248,"box":{"x":170,"y":544,"width":485,"height":9}},{"id":"de9f4cc3-2f71-48ce-ad8a-6f217888cf07","block_type":"box","text":"14","page_number":248,"box":{"x":144,"y":557,"width":8,"height":4}},{"id":"3d1ca5ec-1b6d-4369-a5ce-e43d8c1edcc0","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":248,"box":{"x":170,"y":556,"width":666,"height":10}},{"id":"9e077d54-cfa4-4483-bbd7-57ae290974c8","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":248,"box":{"x":171,"y":569,"width":712,"height":10}},{"id":"d7eef8ef-5528-496d-8438-15fd4ea025d0","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":248,"box":{"x":170,"y":582,"width":649,"height":10}},{"id":"0d565857-3bde-4acc-baa9-cf41991b824f","block_type":"box","text":"converged under the ISSB. Please refer to the IFRS website to learn more about the framework and standards S1","page_number":248,"box":{"x":170,"y":595,"width":674,"height":10}},{"id":"0b267d5f-255d-48e8-b09a-5ceb1ffdbf81","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":248,"box":{"x":170,"y":608,"width":647,"height":10}},{"id":"0b5b3aa6-cac4-45cc-8740-8ecc992f16c4","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":248,"box":{"x":171,"y":621,"width":312,"height":8}},{"id":"9ab2cf25-a15c-406d-a184-c1ed2a0fee93","block_type":"box","text":"15","page_number":248,"box":{"x":144,"y":634,"width":8,"height":5}},{"id":"ac7dc039-484e-43cd-a3bf-4c298c695ef5","block_type":"box","text":"A number of jurisdictions are consulting on adopting the standards issued to date or have already committed to doing","page_number":248,"box":{"x":170,"y":634,"width":694,"height":10}},{"id":"fba6888e-b6ed-4166-a512-1e3fb5f1094c","block_type":"box","text":"so. BIS does not mandate any specific disclosure framework companies should use, and recognize that some","page_number":248,"box":{"x":170,"y":647,"width":651,"height":10}},{"id":"be856388-9883-4be3-845d-03c421717d7a","block_type":"box","text":"companies may report using different standards, some of which may be required by regulation. In such cases, we ask","page_number":248,"box":{"x":170,"y":660,"width":698,"height":9}},{"id":"a36d5e73-93e7-43ab-8cfc-3fb7aef915f3","block_type":"box","text":"that companies highlight the metrics that are industry- or company-specific. We also recognize that companies may be","page_number":248,"box":{"x":170,"y":673,"width":703,"height":9}},{"id":"6e2827db-43a7-422e-b9e2-96680819c0fe","block_type":"box","text":"phasing in reporting over several years. We do not prescribe timelines regarding when companies should make","page_number":248,"box":{"x":170,"y":686,"width":661,"height":9}},{"id":"cceee26d-10b0-4e45-9867-2863cbfd3003","block_type":"box","text":"sustainability-related disclosures but appreciate it when companies produce them sufficiently in advance of their","page_number":248,"box":{"x":170,"y":699,"width":664,"height":9}},{"id":"efbfb8f3-0708-4f19-b69c-6b5b1017a12c","block_type":"box","text":"shareholder meeting, to the best of their abilities, to provide investors with time to assess the data and make informed","page_number":248,"box":{"x":170,"y":711,"width":698,"height":10}},{"id":"aab0532b-1348-4636-814b-744e49238d0d","block_type":"box","text":"voting decisions.","page_number":248,"box":{"x":170,"y":725,"width":98,"height":9}},{"id":"d2d68f72-c769-4026-ab3f-b5c84e863283","block_type":"box","text":"16","page_number":248,"box":{"x":144,"y":737,"width":8,"height":5}},{"id":"ccab1691-c2d5-4ddb-9a10-971bf2be81b4","block_type":"box","text":"FTSE Russell address the materiality of different categories of scope 3 GHG emissions by sector in a January 2024","page_number":248,"box":{"x":171,"y":737,"width":685,"height":10}},{"id":"26fae5a0-6ef1-4ace-9f49-639ce2ef52c7","block_type":"box","text":"paper: FTSE Russel, “Scope for improvement: Solving the Scope 3 conundrum,” January 2024, accessed in December","page_number":248,"box":{"x":170,"y":750,"width":708,"height":10}},{"id":"a5c6d7f0-e585-4cdd-81d7-0c2d6f0a69fe","block_type":"box","text":"2025.","page_number":248,"box":{"x":170,"y":763,"width":32,"height":8}},{"id":"8f8c86c2-6485-49a3-bae7-cae251cdc8c8","block_type":"box","text":"17","page_number":248,"box":{"x":144,"y":776,"width":8,"height":5}},{"id":"92b31981-ad47-449b-be8d-7c878938f2e7","block_type":"box","text":"Under this policy, the dedicated team looks for GHG emissions disclosures to be aligned with the Greenhouse Gas","page_number":248,"box":{"x":171,"y":776,"width":680,"height":10}},{"id":"343ba6b8-da05-4555-b343-555b82157401","block_type":"box","text":"Protocol (GHG Protocol). The Protocol Standards and Guidance are currently being updated to ensure they continue to","page_number":248,"box":{"x":171,"y":789,"width":706,"height":10}},{"id":"fa26a21f-28ee-4e0a-b909-45fc4f60a8dc","block_type":"box","text":"provide “a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward","page_number":248,"box":{"x":170,"y":802,"width":677,"height":10}},{"id":"df4245c1-b5f8-4891-889f-5f1b14bcc40d","block_type":"box","text":"science-based and net-zero targets in line with the global 1.5°C goal.” Websites accessed in December 2025.","page_number":248,"box":{"x":170,"y":815,"width":650,"height":10}},{"id":"5ab5a1f4-5496-4a53-8179-770fb213ec7f","block_type":"box","text":"18","page_number":248,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"b5f0f87c-d3d5-4565-b57c-78a02189505d","block_type":"box","text":"The dedicated team does not believe the purpose of scope 3 disclosure requirements should be to push publicly traded","page_number":248,"box":{"x":170,"y":828,"width":707,"height":9}},{"id":"e3f90f7a-de85-4849-9384-57485ba27e98","block_type":"box","text":"companies into the role of enforcing emission reduction targets outside of their control. Given methodological","page_number":248,"box":{"x":170,"y":841,"width":645,"height":9}},{"id":"4798ee8e-cb8d-40a9-b5ea-e698eca7258c","block_type":"box","text":"complexity for scope 3 emissions and the lack of direct control by companies over the requisite data, we find it most","page_number":248,"box":{"x":170,"y":854,"width":686,"height":9}},{"id":"1b28ce06-c9a0-4e62-8b3c-4243c96907f5","block_type":"box","text":"useful when companies focus their disclosures on those of the fifteen scope 3 GHG Protocol categories that are","page_number":248,"box":{"x":170,"y":867,"width":663,"height":9}},{"id":"648d523c-5382-4b78-92a5-c202cb2a234f","block_type":"box","text":"material to their business models.","page_number":248,"box":{"x":170,"y":880,"width":199,"height":7}},{"id":"edc26ae1-5001-4937-9602-070dd3d8a684","block_type":"box","text":"BlackRock Investment Stewardship","page_number":248,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"169e8810-94f9-4b54-9413-68652155dc94","block_type":"box","text":"Climate and Decarbonization St","page_number":248,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"f0d787fc-653c-4e57-8c4f-12fe059f680a","block_type":"box","text":"ewardship Guidelines |","page_number":248,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"d188b5c0-fb34-4ee7-9ba6-188e0e401db8","block_type":"box","text":"6","page_number":248,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"5f94364e-9f33-4712-9892-67bcaeea356f","block_type":"box","text":"NM1026U-6039989-248/256","page_number":248,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"18f10089-89f5-4687-8f98-4168ce17f872","block_type":"box","text":"However, the team recognizes that companies have varying ability to influence the emissions","page_number":249,"box":{"x":184,"y":87,"width":696,"height":12}},{"id":"66a2710c-46e2-40c0-9915-79091a82ccc0","block_type":"box","text":"across the different parts of their value chain and, therefore, it is helpful when disclosures","page_number":249,"box":{"x":184,"y":102,"width":667,"height":12}},{"id":"05fb7eae-77c6-4f30-964a-34640c851d88","block_type":"box","text":"explain the implications for the achievement of their decarbonization targets. For some","page_number":249,"box":{"x":184,"y":118,"width":647,"height":12}},{"id":"5c389fe3-b79b-4d21-9fc8-ac80a507a882","block_type":"box","text":"companies that play an important role in the low-carbon transition, scope 3 may represent","page_number":249,"box":{"x":184,"y":134,"width":671,"height":12}},{"id":"1004ec54-85c0-475e-bd0a-81789082e9a1","block_type":"box","text":"their only significant source of GHG emissions in the value chain. While we do not believe","page_number":249,"box":{"x":183,"y":149,"width":672,"height":12}},{"id":"769ed506-edb3-4c91-9cad-6e0d3222350c","block_type":"box","text":"companies should be required to enforce emissions reduction targets outside of their control,","page_number":249,"box":{"x":184,"y":165,"width":693,"height":12}},{"id":"670fef45-7695-411b-a5c0-614283558f24","block_type":"box","text":"where relevant, we look for disclosures on how the company approaches the low-carbon","page_number":249,"box":{"x":183,"y":180,"width":662,"height":12}},{"id":"c16309fe-ba07-4387-9a4d-e601cd0a7092","block_type":"box","text":"transition in these cases. This may include plans and targets to grow businesses that","page_number":249,"box":{"x":183,"y":196,"width":636,"height":12}},{"id":"421a2aa7-7ba7-43fa-b7b6-8c740800cd4c","block_type":"box","text":"contribute to real world decarbonization, forward-looking capital or procurement allocation","page_number":249,"box":{"x":184,"y":211,"width":670,"height":12}},{"id":"09dc6e4b-2fa0-4eca-93af-c6407bf6ea13","block_type":"box","text":"plans to net-zero aligned activities or suppliers, and strategies to mitigate material transition","page_number":249,"box":{"x":184,"y":227,"width":684,"height":12}},{"id":"6741a0c1-fa0a-4134-a2d9-2ad65fb0f377","block_type":"box","text":"risks.","page_number":249,"box":{"x":184,"y":242,"width":43,"height":10}},{"id":"60adfc65-60b9-4c14-916a-b540e1b2cc55","block_type":"box","text":"(4) where relevant, disclosures that describe the company’s exposure to climate-related physical","page_number":249,"box":{"x":150,"y":265,"width":729,"height":12}},{"id":"23d2246c-d101-4121-b42f-c496c0f66b40","block_type":"box","text":"risks – such as acute risks from extreme weather events or chronic risks from long-term shifts","page_number":249,"box":{"x":184,"y":280,"width":699,"height":13}},{"id":"f12a6bba-4c4a-4607-91ea-c1909bb86d8f","block_type":"box","text":"in climate patterns – and how these risks could reasonably be expected to affect the","page_number":249,"box":{"x":184,"y":296,"width":629,"height":12}},{"id":"cfb6fd43-eb48-4a50-ad03-730de8b93909","block_type":"box","text":"company’s operations, assets, or supply chains.","page_number":249,"box":{"x":184,"y":312,"width":361,"height":12}},{"id":"3cf69242-daab-4570-b50b-f597b059674f","block_type":"box","text":"Transition plans","page_number":249,"box":{"x":150,"y":342,"width":134,"height":12}},{"id":"139b7811-55a2-4f23-af59-13276a556cfd","block_type":"box","text":"Some companies have published transition plans outlining how they intend to implement their","page_number":249,"box":{"x":150,"y":372,"width":698,"height":12}},{"id":"bd965675-4733-4288-ac9a-6489c0b8fb37","block_type":"box","text":"low-carbon transition strategies. As defined by the ISSB, a transition plan “lays out the entity’s","page_number":249,"box":{"x":150,"y":387,"width":701,"height":12}},{"id":"5812e03d-f921-45db-a803-cdf0e63ca04c","block_type":"box","text":"targets, actions or resources for its transition towards a lower-carbon economy, including actions","page_number":249,"box":{"x":150,"y":403,"width":722,"height":12}},{"id":"e64cffb5-0738-4eb1-a006-a79687b5e0b4","block_type":"box","text":"such as reducing its greenhouse gas emissions” (see Appendix 1).","page_number":249,"box":{"x":150,"y":418,"width":494,"height":12}},{"id":"92bfe005-3a2a-48fa-a6c0-69bfa643bf3e","block_type":"box","text":"19","page_number":249,"box":{"x":646,"y":419,"width":11,"height":6}},{"id":"b1797905-44cb-4555-ae06-a4320bbb10e6","block_type":"box","text":"Work is also underway in a number of jurisdictions on establishing a common approach in a","page_number":249,"box":{"x":150,"y":441,"width":685,"height":12}},{"id":"853af861-1699-4252-afa7-ae1368014cb2","block_type":"box","text":"market to corporate transition plans.","page_number":249,"box":{"x":150,"y":457,"width":267,"height":12}},{"id":"86aee0f0-3e06-4346-a2ff-068bef4d5f1a","block_type":"box","text":"20","page_number":249,"box":{"x":418,"y":457,"width":12,"height":6}},{"id":"286aea81-f0aa-46fb-878b-08e807a4d755","block_type":"box","text":"Recent guidance from the ISSB on disclosures about","page_number":249,"box":{"x":430,"y":457,"width":404,"height":12}},{"id":"4be4a366-4d3a-43f9-b3e1-9f7892f01659","block_type":"box","text":"transition plans highlights the convergence of reporting approaches.","page_number":249,"box":{"x":150,"y":472,"width":509,"height":12}},{"id":"808338b8-5eb0-4010-9ff3-e3da9f735251","block_type":"box","text":"While the preparation of a transition plan, or lack thereof, is not, in itself, a voting issue, these","page_number":249,"box":{"x":150,"y":495,"width":697,"height":12}},{"id":"cc42d07f-0d98-4d4e-93da-7f191838bb29","block_type":"box","text":"disclosures typically provide valuable insights that inform the dedicated team’s approach to","page_number":249,"box":{"x":150,"y":511,"width":679,"height":12}},{"id":"377cc3c6-3beb-4397-81eb-9aae7cc1adab","block_type":"box","text":"engaging and voting on matters related to climate and transition risks on behalf of in-scope funds","page_number":249,"box":{"x":150,"y":526,"width":725,"height":12}},{"id":"23c1b8a3-6294-45a3-bf80-e4925f02fc29","block_type":"box","text":"and accounts.","page_number":249,"box":{"x":150,"y":542,"width":109,"height":9}},{"id":"d199398c-864d-4352-b25a-287e42a41e43","block_type":"box","text":"Boards and directors","page_number":249,"box":{"x":116,"y":572,"width":174,"height":9}},{"id":"751c8c47-3f6c-424b-b349-99b6bce88409","block_type":"box","text":"An effective and well-functioning board that has appropriate governance structures to facilitate","page_number":249,"box":{"x":116,"y":602,"width":704,"height":12}},{"id":"0ab0ae96-d45c-4ba4-b13b-79a825a3f5fa","block_type":"box","text":"oversight of a company’s management and strategic initiatives is critical to the company’s ability to","page_number":249,"box":{"x":116,"y":618,"width":736,"height":12}},{"id":"7e649eeb-823a-4446-811a-9149113ab7c3","block_type":"box","text":"deliver on its low-carbon transition strategy. In assessing the role and effectiveness of the board in this","page_number":249,"box":{"x":116,"y":633,"width":766,"height":12}},{"id":"f4b0b542-2d5a-4fa7-8af1-c8150371946e","block_type":"box","text":"regard, the dedicated team seeks to understand whether:","page_number":249,"box":{"x":117,"y":649,"width":430,"height":12}},{"id":"54a2d52e-29ec-4400-aa10-d613f6cfdd92","block_type":"box","text":"• The board has clear oversight responsibilities for climate and low-carbon transition-related","page_number":249,"box":{"x":150,"y":679,"width":702,"height":12}},{"id":"2bc6331b-fb21-477f-a649-42e20a652086","block_type":"box","text":"risks and opportunities in the company’s business model. The Guidelines consider the whole","page_number":249,"box":{"x":184,"y":694,"width":687,"height":12}},{"id":"6482da46-66b4-44b6-938a-e32ea1ae5556","block_type":"box","text":"board to have responsibility for oversight of the company’s long-term strategy, including those","page_number":249,"box":{"x":184,"y":710,"width":695,"height":12}},{"id":"93c3b7fc-7ade-4922-bf47-0134e78155a3","block_type":"box","text":"aspects related to the transition to a low-carbon economy.","page_number":249,"box":{"x":184,"y":726,"width":429,"height":11}},{"id":"408d0a89-f54d-46bf-8df7-5142180ee618","block_type":"box","text":"• Management has established a robust low-carbon transition framework and long-term","page_number":249,"box":{"x":150,"y":748,"width":669,"height":12}},{"id":"1d62e35c-8175-44f7-9640-1ee1baf7a8b7","block_type":"box","text":"strategy, with clear accountability for delivery by senior executives.","page_number":249,"box":{"x":184,"y":764,"width":493,"height":12}},{"id":"d983cbaa-e180-4d1e-bdf4-bd31a1d995e2","block_type":"box","text":"19","page_number":249,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"680a283e-2e9c-4bed-86f9-31915b27b4c2","block_type":"box","text":"International Financial Reporting Standards, “IFRS S2: Climate-related Disclosures,” June 2023, accessed in December","page_number":249,"box":{"x":171,"y":789,"width":712,"height":10}},{"id":"0975732d-410d-40b2-8a52-c5810cfcaec9","block_type":"box","text":"2025.","page_number":249,"box":{"x":170,"y":802,"width":32,"height":7}},{"id":"29bb219c-ba50-4eb7-9351-dbc0708a31be","block_type":"box","text":"20","page_number":249,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"d838afde-eca1-401f-9487-f414cbb10e98","block_type":"box","text":"More companies are developing such plans, and public policymakers in certain markets are signaling their intentions to","page_number":249,"box":{"x":171,"y":815,"width":705,"height":9}},{"id":"efd94101-ce97-44fd-a534-6bed55ad9aae","block_type":"box","text":"require them or already have requirements in place, such as Australia, Brazil, and the European Union (please see the","page_number":249,"box":{"x":170,"y":828,"width":704,"height":9}},{"id":"4bad6e91-29ad-4eef-a83e-83810c848ccd","block_type":"box","text":"International Transition Plan Network for information). BlackRock views transition plans as a method for a company to","page_number":249,"box":{"x":171,"y":841,"width":697,"height":9}},{"id":"3a20bfa5-2150-4c10-a1cf-39a4f98d1339","block_type":"box","text":"both internally assess and externally communicate its long-term strategy, ambition, objectives, and actions to create","page_number":249,"box":{"x":170,"y":854,"width":687,"height":9}},{"id":"43bd6a13-5c7f-4c44-9652-e9c4e1500fcd","block_type":"box","text":"financial value through the global transition towards a low-carbon economy. Across the landscape there remains","page_number":249,"box":{"x":170,"y":866,"width":666,"height":10}},{"id":"f039b7ff-da17-48d8-8466-e61695ba9068","block_type":"box","text":"divergence on the objectives of such plans and the details they should contain. 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Given forthcoming regulatory requirements in certain jurisdictions,","page_number":250,"box":{"x":184,"y":299,"width":684,"height":12}},{"id":"decec4eb-b155-470c-bac1-dd4ce4af3c84","block_type":"box","text":"some companies are voluntarily disclosing scope 3 emissions reductions targets and plans,","page_number":250,"box":{"x":184,"y":315,"width":683,"height":12}},{"id":"877519d2-10b9-48fa-aa2d-c14476d9323c","block_type":"box","text":"setting out how they are working on decarbonization with the different constituents in their","page_number":250,"box":{"x":184,"y":330,"width":670,"height":12}},{"id":"1ece328e-66c3-49d6-b67e-056dbe31de1d","block_type":"box","text":"value chain.","page_number":250,"box":{"x":183,"y":346,"width":94,"height":9}},{"id":"b810f4cc-b696-4169-be60-95857de7c64c","block_type":"box","text":"21","page_number":250,"box":{"x":278,"y":346,"width":10,"height":6}},{"id":"51456da9-65eb-45da-ab00-545a1fbb0b29","block_type":"box","text":"• The company’s governance and oversight processes for managing material risks associated","page_number":250,"box":{"x":150,"y":368,"width":723,"height":12}},{"id":"57ae472e-93ed-4fa7-87a5-c6982e2b86e8","block_type":"box","text":"with corporate political activities including applicable policies and procedures where","page_number":250,"box":{"x":183,"y":383,"width":624,"height":12}},{"id":"b947cadd-dd5b-4325-912c-f3d390143ca2","block_type":"box","text":"relevant.","page_number":250,"box":{"x":184,"y":399,"width":62,"height":9}},{"id":"8e0c814a-aba2-4ba4-93c7-83be91ef53d6","block_type":"box","text":"22","page_number":250,"box":{"x":248,"y":399,"width":11,"height":6}},{"id":"97e1cf6c-1af6-4305-90c9-2f14dbc40c79","block_type":"box","text":"The dedicated team looks for public policy engagement to be consistent with a","page_number":250,"box":{"x":260,"y":399,"width":592,"height":12}},{"id":"2783ed87-71db-4b5a-8a64-835cfa972eff","block_type":"box","text":"company’s stated strategic policy objectives, including those related to the low-carbon","page_number":250,"box":{"x":184,"y":414,"width":642,"height":12}},{"id":"fff5541e-0e89-4e9b-bae8-fd9a06dc81b7","block_type":"box","text":"transition.","page_number":250,"box":{"x":183,"y":430,"width":78,"height":9}},{"id":"5462584c-3405-46a7-819a-9d20f64c7d2f","block_type":"box","text":"Voting against directors over concerns about climate risk","page_number":250,"box":{"x":118,"y":458,"width":424,"height":12}},{"id":"b97fbf71-7c43-4f37-9f19-8f5708d28065","block_type":"box","text":"In implementing these Guidelines, the dedicated team generally supports non-executive directors","page_number":250,"box":{"x":117,"y":487,"width":726,"height":12}},{"id":"2879ac57-353f-4184-b9de-13ce9b5ed22f","block_type":"box","text":"standing for election where, in its assessment based on company disclosures and engagement, a","page_number":250,"box":{"x":116,"y":502,"width":729,"height":13}},{"id":"8c0dfe2d-be51-4cdf-8064-17b225afc459","block_type":"box","text":"company is executing on its commitment to align with the transition to a low-carbon economy, as","page_number":250,"box":{"x":116,"y":518,"width":722,"height":12}},{"id":"68f17a8b-6292-4882-9e29-db0b7fc92c83","block_type":"box","text":"defined above. 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The research uses a definition of materiality from the GHG Protocol,","page_number":250,"box":{"x":170,"y":737,"width":679,"height":10}},{"id":"29365280-3e06-446c-86bb-f1300d0d216a","block_type":"box","text":"which “encourages companies to maintain a representative inventory of the “most significant GHG emissions, [that]","page_number":250,"box":{"x":170,"y":750,"width":682,"height":10}},{"id":"fdf429b5-bb3f-40e7-ab80-4cf22ad4df8b","block_type":"box","text":"offer the most significant GHG reduction opportunities and are most relevant to the company’s business goals.” Website","page_number":250,"box":{"x":170,"y":763,"width":712,"height":10}},{"id":"0658a324-8ee8-4b20-9bd9-815b1085e318","block_type":"box","text":"accessed in December 2025.","page_number":250,"box":{"x":170,"y":776,"width":173,"height":7}},{"id":"709b76be-a510-4381-b84b-52fa83d0e608","block_type":"box","text":"22","page_number":250,"box":{"x":143,"y":789,"width":9,"height":5}},{"id":"5c16e6ff-1595-48b2-bf10-947946ac5824","block_type":"box","text":"Corporate political activities may include lobbying as defined by local regulations, policy engagement (including trade","page_number":250,"box":{"x":170,"y":789,"width":694,"height":9}},{"id":"6cc64578-90b7-4dcd-ad99-f75afc195646","block_type":"box","text":"association memberships), and corporate political contributions.","page_number":250,"box":{"x":170,"y":802,"width":378,"height":9}},{"id":"964e66e5-8edd-4fce-b50f-92208308a686","block_type":"box","text":"23","page_number":250,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"c961c08d-7ebd-41c0-b0b7-3c5e5d730f86","block_type":"box","text":"Board report votes are generally advisory and relate to reports issued by the board of directors that may contain","page_number":250,"box":{"x":171,"y":815,"width":661,"height":9}},{"id":"deccb7fd-0f80-457f-a58f-7f53a40a28e1","block_type":"box","text":"information on a company’s sustainability efforts, operational resilience, or financial condition, among others.","page_number":250,"box":{"x":170,"y":828,"width":643,"height":9}},{"id":"831586ab-dfd6-42ef-b202-80a3b309371d","block_type":"box","text":"24","page_number":250,"box":{"x":143,"y":841,"width":9,"height":4}},{"id":"7139d7cf-a75c-43af-bf6c-4133e55ae731","block_type":"box","text":"While the dedicated team may escalate voting by not supporting additional management proposals, principally director","page_number":250,"box":{"x":170,"y":841,"width":703,"height":9}},{"id":"5a4dc905-10ed-4de5-91f4-c057afc65031","block_type":"box","text":"elections, the team does not consider filing shareholder proposals, preannouncing voting intentions or using the media","page_number":250,"box":{"x":170,"y":853,"width":702,"height":10}},{"id":"01491630-08b7-47cd-a757-05c390a40ef3","block_type":"box","text":"to amplify concerns as appropriate courses of action. 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Some companies, in light of their long-term","page_number":252,"box":{"x":117,"y":134,"width":703,"height":12}},{"id":"6911dc7f-757e-46ad-850a-f6c3aee7db31","block_type":"box","text":"strategy, may decide to include relevant GHG emissions reduction targets or low-carbon transition","page_number":252,"box":{"x":116,"y":149,"width":734,"height":12}},{"id":"980628aa-b317-4623-b450-db48dc14501c","block_type":"box","text":"related metrics in their incentive plans. In such cases, the dedicated team would engage to understand","page_number":252,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"8e6bc45c-9e9d-43ad-aba0-3ca14aa27c26","block_type":"box","text":"the alignment between those metrics and the company’s stated climate strategy. 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The team notes that assurance of","page_number":252,"box":{"x":116,"y":320,"width":744,"height":12}},{"id":"490b2a72-6d32-4ffd-8dd7-aebc45a590df","block_type":"box","text":"corporate disclosures related to climate risk and the transition to a low-carbon economy is still nascent.","page_number":252,"box":{"x":116,"y":335,"width":769,"height":12}},{"id":"68ac6312-9b3c-4629-920d-423ae2255f42","block_type":"box","text":"Mergers, acquisitions, asset sales, and other special situations","page_number":252,"box":{"x":116,"y":366,"width":509,"height":12}},{"id":"ecb80f08-7f82-421e-8f10-064db143b1e4","block_type":"box","text":"Special situations will be considered on their financial merits, but the dedicated team may engage on","page_number":252,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"88c55f87-3261-4c03-9168-f2a21ce8b561","block_type":"box","text":"climate-related factors under these Guidelines where a transaction may significantly alter a company’s","page_number":252,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"4fe9ab64-e906-4358-a985-8447093d0cb3","block_type":"box","text":"climate strategy or a shareholder activist has proposed governance, strategic or operational changes","page_number":252,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"0ee1220e-e34c-41bd-b3bb-e592872a405b","block_type":"box","text":"that may impact its climate strategy. The dedicated team does not promote changes in corporate","page_number":252,"box":{"x":116,"y":444,"width":723,"height":12}},{"id":"e4effaa0-9a32-46a2-a53f-d27df41e337d","block_type":"box","text":"control or engage in shareholder activism.","page_number":252,"box":{"x":116,"y":459,"width":317,"height":12}},{"id":"b96eee6a-503c-4392-8bda-cb6d8650a4b3","block_type":"box","text":"Other business relevant sustainability-related risks and opportunities","page_number":252,"box":{"x":117,"y":490,"width":559,"height":12}},{"id":"2d8f6bad-cd0e-4176-adb8-50464d799011","block_type":"box","text":"Climate risk and the transition to a low-carbon economy are interconnected with a number of other","page_number":252,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"0507bef8-0cdb-4c67-ba4d-43ba35c5c979","block_type":"box","text":"material sustainability-related risks and opportunities that may be relevant to a company’s business","page_number":252,"box":{"x":117,"y":537,"width":741,"height":12}},{"id":"24f77b5e-08b0-44cf-80ab-5cf061fb235e","block_type":"box","text":"model and long-term financial performance. These include a company’s impacts or dependencies on","page_number":252,"box":{"x":117,"y":552,"width":752,"height":12}},{"id":"99949525-8689-4808-af81-0b7a7374bd29","block_type":"box","text":"natural capital and key stakeholders.","page_number":252,"box":{"x":117,"y":568,"width":270,"height":12}},{"id":"a36b21f7-7089-4869-b952-106c5fc94edc","block_type":"box","text":"26","page_number":252,"box":{"x":389,"y":568,"width":12,"height":6}},{"id":"fb3d6501-69a4-41b9-b908-6b68218ab434","block_type":"box","text":"In the context of these Guidelines, the dedicated team may","page_number":252,"box":{"x":401,"y":568,"width":448,"height":12}},{"id":"3b7e5acd-1e5e-4458-89e3-09af70643909","block_type":"box","text":"engage companies to better understand how they are managing the impact on people (e.g.,","page_number":252,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"a10654f5-96c8-4b0c-a32a-30631f567e30","block_type":"box","text":"employees, suppliers, customers and communities) of any strategic or operational changes they are","page_number":252,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"89b3873b-bfd5-4c40-b935-59ebe4eb1916","block_type":"box","text":"making in relation to their transition to a low-carbon economy. Similarly, the team may engage","page_number":252,"box":{"x":117,"y":614,"width":702,"height":12}},{"id":"21e3ef4d-899c-4b88-8094-c4c054adc827","block_type":"box","text":"companies that face risks and opportunities related to land use and deforestation, access to fresh","page_number":252,"box":{"x":116,"y":630,"width":729,"height":12}},{"id":"d5dd014a-8469-4074-9fa5-9916696560b6","block_type":"box","text":"water, or the ability to secure scarce resources critical to the transition to a low-carbon economy.","page_number":252,"box":{"x":116,"y":645,"width":722,"height":12}},{"id":"92fe7681-47e5-4e9e-8dd4-241d659a4178","block_type":"box","text":"26","page_number":252,"box":{"x":143,"y":867,"width":9,"height":5}},{"id":"2b195dff-8705-4de2-b6f0-f91a57f1443b","block_type":"box","text":"Engagement with companies on these issues is informed by BIS’ commentaries on natural capital, human capital","page_number":252,"box":{"x":171,"y":867,"width":669,"height":9}},{"id":"9afab3d8-6875-4014-85f4-97cfe1f0e6eb","block_type":"box","text":"management, and corporate human rights risks, December 2025.","page_number":252,"box":{"x":170,"y":880,"width":387,"height":9}},{"id":"246ccd68-e770-47f6-9ee3-a1d6d65fc8f7","block_type":"box","text":"BlackRock Investment Stewardship","page_number":252,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"e0c888ab-15ba-4084-91bc-01f056d3f34a","block_type":"box","text":"Climate and Decarbonization St","page_number":252,"box":{"x":496,"y":909,"width":212,"height":9}},{"id":"60d41c57-117e-455d-8aec-9d3dbd0bd71a","block_type":"box","text":"ewardship Guidelines |","page_number":252,"box":{"x":709,"y":909,"width":152,"height":12}},{"id":"4f182209-db72-41f7-9d5d-f71fc84a46ea","block_type":"box","text":"10","page_number":252,"box":{"x":867,"y":909,"width":16,"height":9}},{"id":"b00b553b-a0be-4caa-b2e7-fb2386df602f","block_type":"box","text":"NM1026U-6039989-252/256","page_number":252,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"90d54fb9-db3d-4ece-a483-42fc745267f3","block_type":"box","text":"Appendix 1","page_number":253,"box":{"x":116,"y":87,"width":95,"height":12}},{"id":"081f8261-c498-4a10-88c6-9ffa51ebc71b","block_type":"box","text":"Terminology","page_number":253,"box":{"x":449,"y":117,"width":106,"height":12}},{"id":"fa73d007-682c-4375-83f9-03e35f360dc8","block_type":"box","text":"We understand the key concepts referred to within these Guidelines as follows:","page_number":253,"box":{"x":116,"y":147,"width":593,"height":12}},{"id":"7c710ca6-e711-4656-9730-026019e02e49","block_type":"box","text":"Climate risk","page_number":253,"box":{"x":116,"y":170,"width":95,"height":10}},{"id":"be62fcd8-f917-4a33-bfdb-4ffb4fd5282d","block_type":"box","text":": Includes physical risk, the increased risk to companies’ assets and activities caused by","page_number":253,"box":{"x":213,"y":170,"width":658,"height":12}},{"id":"6dbe934a-7120-48b9-9360-f91e53762336","block_type":"box","text":"the direct impact of changing weather patterns and natural catastrophes, and transition risk, the impact","page_number":253,"box":{"x":116,"y":186,"width":768,"height":12}},{"id":"a3147680-844a-4df4-9ee4-975d19472c2e","block_type":"box","text":"of the transition to a low-carbon economy on a company’s long-term profitability.","page_number":253,"box":{"x":116,"y":201,"width":601,"height":12}},{"id":"d72492f5-1489-4217-b8bf-25c098ba7d12","block_type":"box","text":"Transition to a low-carbon economy (“low-carbon transition”)","page_number":253,"box":{"x":116,"y":224,"width":492,"height":12}},{"id":"3f9710d8-73f2-4265-9aa8-df8f02d2f3c2","block_type":"box","text":": The global economic shift toward","page_number":253,"box":{"x":610,"y":224,"width":259,"height":12}},{"id":"0bd07da2-9385-4ce8-85aa-142517c766e8","block_type":"box","text":"lower emissions across many sectors and business models. The economic transformation is being","page_number":253,"box":{"x":117,"y":239,"width":735,"height":13}},{"id":"f856b035-ace9-4ee3-a1d7-017861f2ce50","block_type":"box","text":"driven by changes in government policy, technology, and consumer and investor preferences, as well","page_number":253,"box":{"x":116,"y":255,"width":758,"height":12}},{"id":"2dd23ae7-5df4-4b0d-886a-1cd2e6bfac52","block_type":"box","text":"as the physical effects of climate change (e.g., extreme weather), and can potentially have a material","page_number":253,"box":{"x":116,"y":270,"width":755,"height":13}},{"id":"3c9a94f6-ab02-4d24-ade0-15a42db1dcff","block_type":"box","text":"impact on clients’ investments and portfolios.","page_number":253,"box":{"x":117,"y":286,"width":337,"height":12}},{"id":"4ed3a2ed-bb2a-455b-a21d-873143e249e5","block_type":"box","text":"Decarbonization","page_number":253,"box":{"x":117,"y":309,"width":128,"height":9}},{"id":"25eb16c5-33c6-4b07-a97a-01fd5c2d9b11","block_type":"box","text":": the process of reducing or eliminating emissions of carbon dioxide (CO","page_number":253,"box":{"x":248,"y":309,"width":535,"height":12}},{"id":"b7fdd302-59d1-4169-9ce9-8782b09d521b","block_type":"box","text":"2","page_number":253,"box":{"x":784,"y":315,"width":5,"height":6}},{"id":"7ae630cb-5fdb-4778-b2cc-0a8cdb3b15e2","block_type":"box","text":") from","page_number":253,"box":{"x":790,"y":309,"width":48,"height":12}},{"id":"73980c13-e63e-4791-beb2-dc9ef7a38620","block_type":"box","text":"human activity and removing carbon currently in the atmosphere. This can be carried out by countries,","page_number":253,"box":{"x":117,"y":324,"width":763,"height":12}},{"id":"2553e7cd-5c54-4dbf-bcd8-1a215232ccb3","block_type":"box","text":"companies and even individual consumers. 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